HomeMy WebLinkAbout2000.0803.TCREM.Minutes MINUTES OF THE REGULAR AND EXECUTIVE SESSION OF THE
FOUNTAIN HILLS TOWN COUNCIL
AUGUST 3, 2000
Mayor Morgan called the regular session of the Town Council to order at 5:30 p.m.
ROLL CALL: - Present for the roll call were the following members of the Fountain Hills Town
Council: Mayor Sharon Morgan, Vice Mayor Sharon Hutcheson and Councilmembers Leesa Fraverd,
John McNeill, John Wyman, John Kavanagh, and Susan Ralphe. Also present were Town Manager Paul
Nordin, Town Attorney Bill Farrell, Director of Administration/Town Clerk Cassie Hansen, and Director
of Community Development Jeff Valder.
AGENDA ITEM #1 - PURSUANT TO A.R.S. §38-431.03.A.4., AND A.R.S. §38-431.03.A.7., VOTE TO GO
INTO EXECUTIVE SESSION FOR DISCUSSION OR CONSULTATION WITH THE ATTORNEYS OF
THE PUBLIC BODY IN ORDER TO CONSIDER ITS POSITION AND INSTRUCT ITS ATTORNEYS
REGARDING THE PUBLIC BODY'S POSITION IN PENDING OR CONTEMPLATED LITIGATION
REGARDING THE TOWN VERSUS MCO PROPERTIES; AND DISCUSSIONS OR CONSULTATIONS
WITH DESIGNATED REPRESENTATIVES OF THE PUBLIC BODY IN ORDER TO CONSIDER ITS
POSITION AND INSTRUCT ITS REPRESENTATIVES REGARDING NEGOTIATION FOR THE
PURCHASE OR LEASE OF REAL PROPERTY WITH REGARDS TO THE POSSIBLE ACQUISITION
PARCELS IN THE MCDOWELL MOUNTAIN; RESPECTIVELY.
Vice Mayor Hutcheson MOVED that the Council convene the executive session and Councilwoman Ralphe
SECONDED the motion, which carried unanimously.
AGENDA ITEM#2- RETURN TO REGULAR SESSION.
.r Mayor Morgan recessed the executive session and convened the regular session of the Town Council at 6:30 p.m.
Following the pledge to the flag and invocation by Councilman Wyman the roll call was taken.
ROLL CALL: - Present for the roll call were the following members of the Fountain Hills Town
Council: Mayor Sharon Morgan, Vice Mayor Sharon Hutcheson and Councilmembers Leesa Fraverd,
John McNeill, John Kavanagh, John Wyman, and Susan Ralphe. Also present were Town Manager Paul
Nordin, Town Attorney Bill Farrell, Director of Administration/Town Clerk Cassie Hansen, and Director
of Community Development Jeff Valder.
Mayor Morgan announced that at the request of Councilman McNeill agenda item #9 had been removed
from the consent agenda. She then read the remaining consent agenda items.
AGENDA ITEM #1 - CONSIDERATION OF APPROVING THE MEETING MINUTES OF JULY 6,
2000.
AGENDA ITEM #2 - CONSIDERATION OF THE SPECIAL EVENT REQUEST JUNGLE BELL RUN
SUBMITTED BY KENNY KRELL FOR THREE DISCIPLINES RACING. THE EVENT, A FUND-
RAISER FOR THE FOUNTAIN HILLS HIGH SCHOOL TRACK AND CROSS-COUNTRY PROGRAM
IS FOR A 5K RUN AND 1 MILE RUN/WALK TO BE HELD ON SUNDAY, DECEMBER 17, 2000
FROM 5:00 P.M. TO 7:00 P.M. THE ROUTE WILL CIRCLE FOUNTAIN PARK AND THE AVENUE
OF THE FOUNTAINS FROM SAGUARO TO VERDE RIVER WILL BE REQUIRED.
AGENDA ITEM #3 — CONSIDERATION OF THE LIQUOR LICENSE APPLICATION SUBMITTED
BY JAMES MYCZEK FOR GRAPEABLES LOCATED AT 12645 NORTH SAGUARO BOULEVARD.
THE APPLICATION IS FOR A SERIES#7 BEER AND WINE LICENSE.
AGENDA ITEM #4 - CONSIDERATION OF THE PRELIMINARY AND FINAL PLAT FOR THE 2-
UNIT MONACO CONDOMINIUMS, LOCATED AT 16444 MONACO DRIVE, CASE NUMBER S2000-
027.
AGENDA ITEM #5 - CONSIDERATION OF THE LOT JOIN FINAL PLAT FOR PLAT 102, BLOCK 3,
LOTS 9 AND 10, LOCATED ON THE NORTH SIDE OF LA MONTANA DRIVE AND EAST OF
SAGUARO BLVD., CASE#5200-021.
AGENDA ITEM #6 - CONSIDERATION OF THE FINAL PLAT FOR THE FIREROCK COUNTRY
CLUB PARCEL "L-2" A 4.68 ACRE,SIX LOT SUBDIVISION. CASE#s99-044.
AGENDA ITEM #7 — CONSIDERATION OF THE FINAL PLAT FOR FIREROCK COUNTRY CLUB
PARCEL"M-2"A 17.78 ACRE,22 LOT,3 TRACT SUBDIVISION, CASE#S99-035.
AGENDA ITEM #8 — CONSIDERATION OF THE FINAL PLAT FOR FIREROCK COUNTRY CLUB
PARCEL"P-1"A 15.26 ACRE,21 LOT,3 TRACT SUBDIVISION, CASE#S99-046.
AGENDA ITEM #10 - CONSIDERATION OF RESOLUTION 2000-39 ABANDONING WHATEVER
RIGHT, TITLE, OR INTEREST THE TOWN HAS IN CERTAIN PUBLIC UTILITY AND DRAINAGE
EASEMENT LOCATED ALONG THE NORTHERLY PROPERTY LINE OF PLAT 401-A, BLOCK 7,
LOT 2, (17316 E. ZAHARIAS DRIVE) AS RECORDED IN BOOK 155 OF MAPS, PAGE 11 RECORDS
OF MARICOPA COUNTY,ARIZONA. (DENNIS & MARNIE WRIGHT) EA 00-25.
AGENDA ITEM #11 - CONSIDERATION OF RESOLUTION 2000-40 ABANDONING WHATEVER
RIGHT, TITLE, OR INTEREST THE TOWN HAS IN ALL CERTAIN PUBLIC UTILITY AND
DRAINAGE EASEMENTS WITHIN THE LOT LINES OF BLOCKS 1, 2, 7, & 8, OF PLAT 208, AS
RECORDED IN BOOK 144 OF MAPS, PAGE 4 43CORDS OF MARICOPA COUNTY, ARIZONA.
(TOWN CENTER III) EA 01-24.
AGENDA ITEM#12 - CONSIDERATION OF AWARDING THE BID FOR THE ANNUAL CONCRETE
REPAIR AND CONSTRUCTION CONTRACT TO MARKHAM CONTRACTING IN THE AMOUNT
OF$159,711.
Vice Mayor Hutcheson MOVED to approve the Consent Agenda as read. Councilwoman Fraverd SECONDED
the motion. A roll call vote was taken with the following results.
Councilman Wyman aye
Councilman McNeill - aye
Councilwoman Hutcheson - aye
Councilwoman Fraverd - aye
Councilman Kavanagh - aye
Councilwoman Ralphe— aye
Mayor Morgan - aye
The motion CARRIED unanimously (6-0) with a roll call vote.
AGENDA ITEM #9 - CONSIDERATION OF AN OPTION AND SITE LEASE AGREEMENT WITH
SPRINT SPECTRUM LP FOR THE INSTALLATION OF STEALTH COMMUNICATION FACILITIES
IN THE TOWN RIGHT-OF-WAY AT THE SOUTHWEST CORNER OF SHEA BOULEVARD AND
EAGLE MOUNTAIN PARKWAY.
Director Valder said this was a lease for the portion of the Shea right-of-way for a telecommunication site. He
L. said staff had also requested that this item be pulled from the consent agenda due to some changes to a paragraph
concerning the rent that the Town would receive from the site. The proposed change would be that instead of a
Town Council Regular and Executive Session 8/3/00
Page 2 of 19
10% increase in the rent for each term of the lease, it would be changed to say the greater of 10% OR the percent
change in the consumer price index for that previous term. The significance would be that if the CPI (which was a
reflection of the inflation rate) was higher than 20% then the Town would want the higher percentage increase
instead of 10%. He said that the applicant had agreed to this language and the lease had been changed. He stated
that staff had wanted the Council to be aware of the change in the lease. Director Valder said that staff
recommended approval.
Councilman McNeill MOVED to approve the lease agreement as presented and Vice Mayor Hutcheson
SECONDED the motion. Councilman Kavanagh said this change benefited the Town and applauded those who
had suggested the change. He asked if there was only one consumer price index or did the Town specify which
index would be used. Director Valder responded that Councilman Kavanagh was correct that there were several
consumer indexes and the lease did specify the exact index that would be used. Councilman McNeill said this
particular lease would represent the best lease rate that the Town had ever received and staff had done a wonderful
job. He said that he wanted the lease rate to keep up with inflation. He applauded Director Valder's efforts.
Town Attorney Farrell said staff members were picking up on Councilman Kavanagh's, Councilwoman Ralphe's,
and Councilman McNeill's interests in these areas and spurred Director Valder to go forward with this lease
change. Councilman Kavanagh pointed out that stealth saguaro would be the look of the new cell tower in
Fountain Hills instead of the ugly poles. Councilman Wyman proposed that natural saguaros be planted around
these stealth saguaros for a more natural feel.
Bill Pape, 16128 E. Emerald
He asked for clarification on the lease wording. Was it the greater of or the lesser of the consumer price index or
10%. If it was the greater of, that would be fine, but if it was the lesser of, the consumer price index had
historically been less than 10%.
Director Valder replied that the wording was the "greater of the total increase of the CPI for a five year term. He
said that the Town would most likely see an increase of greater than 10%, which was the reason for using
Councilman McNeill's suggestion to use the CPI alternative.
The motion CARRIED unanimously.
AGENDA ITEM #13 — RECOGNITION OF RESIDENTS WHO HAVE BEEN ACTIVELY AND
CONTINUOUSLY INVOLVED IN THE TOWN OF FOUNTAIN HILLS ADOPT-A-STREET
PROGRAM SINCE ITS INCEPTION IN 1996.
Mayor Morgan and former Councilman Wally Hudson (program co-founder) read the list of those who had
participated in the program since 1996. The Mayor gave to each of those present a certificate of appreciation from
the Town. (Susan and Pat Harvey, Ann and Wally Hudson, and Cynthia Wharton were present at the meeting.)
AGENDA ITEM #14 — PUBLIC HEARING ON RESOLUTION 2000-41 ADOPTING THE TENTATIVE
BUDGET AS THE 2000-2001 FISCAL YEAR BUDGET FOR THE TOWN OF FOUNTAIN HILLS.
Mayor Morgan recessed the regular session of the Town Council and opened the public hearing at 6:48 p.m.
Town Manager Paul Nordin explained that this was the second to the last action that the Council needed to
consider relative to the 2000-2001 budget adoption process. He acknowledged that the public hearing had been
advertised twice as was required by state law. He said that the budget that the Council was considering this
evening had not been changed from the last time the Council had reviewed it. He stated that those changes
requested by the Council during the budget process had been made. Mr. Nordin said that while it was not possible
for the Council to legally add to the budget in a formal way, it was possible this evening for the Council to delete
items. He pointed out due to the way that the Council addresses and deals with the budget itself as the events
happen during the year,the Council might want to consider some additional funding for one thing or another.
Town Council Regular and Executive Session 8/3/00
Page 3 of 19
There were provisions in the budget for that. But again, formally, the Council was not allowed to add any items
than what had been already discussed. He said staff recommended approval.
Mayor Morgan reconvened the regular session at 6:49 p.m.
AGENDA ITEM #15 — CONSIDERATION OF ADOPTING RESOLUTION 2000-41 ADOPTING THE
TENTATIVE BUDGET AS THE 2000-2001 FISCAL YEAR BUDGET FOR THE TOWN OF FOUNTAIN
HILLS.
Councilman Wyman MOVED to adopt the tentative budget as presented and Councilwoman Fraverd
SECONDED the motion, which CARRIED unanimously.
AGENDA ITEM #16 - CONSIDERATION OF AWARDING THE BID FOR THE ANNUAL ASPHALT
REPAIR AND CONSTRUCTION CONTRACT TO MARKHAM CONTRACTING AS THE LOWEST
RESPONSIBLE BIDDER SUBJECT TO AN OPINION FROM THE TOWN ATTORNEY.
Town Attorney Farrell explained that each year the Council would award an annual contract to assist the street
department and public works in asphalt repair and construction. He stated that staff would annually send out the
Town's requirements and ask for a per unit basis bid to be made and for the Town to have authorization to call on
the contractor to perform any or all of the services as set forth in the bid. He said that this year the Town had
received two bids close in numbers and also a bid protest form, which was enclosed in the packet material. He
noted that the two bids, after tabulation, were extremely close with one bid at $388,212.50 and the other at
$396,569.50. He said it would appear after first reading the bottom line, that the $388,212 was the low bidder.
The protest came in from the slightly higher bidder. He pointed out that Tom Ward and his staff had spent a good
deal of time evaluating the bids after they were publicly opened. There was one item that had a substantial
discrepancy in the amount charged and the extension of the amount resulted in a difference that could be as much
as $16,000. The mathematics was correct and therefore, he rejected the bid protest of the higher bidder. However,
after rejecting the protest he had come to the conclusion that the higher bidder was really the lowest responsible
F bidder. He said this was not an actual error but that the error was compounded by incorrect multiplication. The
actual amount of the bid, were it to be more realistic with market value, would have placed the low bidder in a
higher position. In addition to pure price, the Town Code and bid specifications allow staff to look at other factors
in determining who was the lowest responsible bidder. Although both companies have had experience working in
the Town of Fountain Hills, the Town has had more public work contracts with Markham Contracting than with
the other bidder. He said that staff was recommending two alternatives for Council consideration: one: award the
bid to Markham Contracting in the amount of$396,569.50 as the lowest responsible bidder or, two: reject all bids
and re-advertise.
Councilman McNeill MOVED to award the bid for the annual asphalt repair and construction contract to
Markham Contracting as the lowest responsible bidder as presented and Councilwoman Ralphe SECONDED the
motion.
Councilman Wyman asked why the previous annual concrete repair and construction contract had not been
combined with the annual asphalt repair and construction contract. Was it because there was a larger range of
bidders for one or the other? Mr. Ward said this had often been the practice as there were different forms of work
that needed to be done and in order to keep the lowest price possible, staff liked to have contractors that did that
specific type of work. That way the Town would receive a broader range and lower price. That was the purpose
for separating the two contracts. Councilman Wyman asked for clarification that some contractors do not do both
types of construction. Mr. Ward confirmed that was true.
Councilwoman Fraverd asked if staff had heard from Carume Construction and had they admitted they had made
an error? She inquired if Carume was willing to stand by their bid. Mr. Ward replied that Carume had been
contacted and told about the error. He said that Carume recognized that they had made the error. He said the
letter stating the Town Attorney's opinion regarding the awarding of the contract had been faxed to Carume. Mr.
Ward said staff had not heard back from them since the letter was faxed.
Town Council Regular and Executive Session 8/3/00
Page 4 of 19
The motion CARRIED unanimously.
AGENDA ITEM #17 - CONSIDERATION OF ORDINANCE 00-12 RELATING TO THE PRIVILEGE
LICENSE TAX; AMENDING THE TOWN TAX CODE BY INCREASING THE RATE OF TAXATION
FROM ONE AND TWO-TENTHS PERCENT (1.2%) TO PERCENT ( %); PROVIDING
PENALTIES FOR THE VIOLATION THEREOF; PROVIDING FOR SEVERABILITY; DESIGNATING
AN EFFECTIVE DATE AND PROVIDING FOR APPLICATION OF TAX TO CERTAIN CONTRACTS.
THIS ITEM WILL INCLUDE CONSIDERATION OF ALTERNATIVE FUNDING MECHANISMS SUCH
AS GENERAL OBLIGATION(GO)BONDS.
Town Attorney Farrell reviewed that at the July 6th Council Meeting they had passed a resolution allowing the Town
Attorney to acquire by gift, purchase, or eminent domain an additional 244 acres for a total of 452 acres of
McDowell Mountain property. Another resolution the Council passed was for a road right-of-way, which would lead
to an area in the McDowell Mountains. He reminded the Council that at that same meeting an update from the MCO
consultant was to have taken place but had been removed from the agenda. He said the next item on that same
agenda was consideration of Ordinance 00-12 relating to the privilege license tax and amending the Town Tax Code
by increasing the current sales tax from 1.2% to a yet to be determined rate. After the Council discussed and
suggestions were made, it was decided to table the issue for 30-day period so that the addition of general obligation
bonds could be added to the discussions. During that 30-day period, and for most of the period beginning June 1
when this Council was sworn in, staff made valiant attempts through numerous executive sessions and contacts with
the land owner in question, to reach a non-litigious solution to the development and preservation of the McDowell
Mountains. He said it was important to remember that both development and preservation were always discussed in
an effort to match the private property owners' rights with the Town's rights and abilities to acquire mountain
preservation land. He pointed out it was the last piece of the mountain preservation and not the first piece that was
being discussed. There was already a substantial amount of land that was preserved in the McDowell Mountains
(386 acres + several hundred acres that the City of Scottsdale had acquired in the past and placed into their preserve
area). Since the July 6 Town Council meeting, extensive talks were conducted primarily through the retained
Niro attorneys for both parties but also through conversations between staff members and council members. He said a
written proposal had been submitted at the direction of this Council to MCO Properties that set forth a road map in
order not to have this item on this meeting's agenda. He stated he was sorry to say that the offer had not been
accepted and had been firmly rejected by the property owner. He explained that left the Council with the third
alternative method for land acquisition — eminent domain. Unfortunately, that left all of the responsibility to the
attorneys to prepare the cases and took all of the decision-making abilities away from the Council and the landowner.
It placed it into the hands of the jury to determine what just compensation would be paid to the landowner. He said
the ability to exercise that power was predicated on two fundamentals of the law:
1. The governing body must have the authority to condemn land.
2. The governing body must have the ability to pay.
He said the best legal advice he could give would be to request that the Town have adequate funds available to reach
that goal in the event that the jury came back with a number that caused the Council to reevaluate their position. He
said it was frustrating,as he was unable to give the public or the Council the exact amount that would be necessary to
satisfy the jury's anticipated demands. He explained that he had situated the Council so that they were in the best
possible position that when the jury verdict was returned the Council would have a number of choices.
• Yes,the Town would take all 452 acres and the roadway
• Yes,the Town only wanted to take some of the acres
• Yes,the Town only wanted to take the roadway
• No,the Town did not want to take any of the area as it was too expensive
He also positioned the Town to have available different methods and manners in which to pay those amounts of
money once the Council decided how they wanted to pay them.
• In part from cash reserves
• In part from revenue bonds issued and supported by sales tax
Town Council Regular and Executive Session 8/3/00
Page 5 of 19
• In part from $6 million worth of general obligation bonds for which the Council already had voter
authorization .
He asked the Council to give him a safety net by favorably considering a sales tax increase. He said that at this point
he would not be able to tell the Council how much of the sales tax money he would need from which to issue
revenue bonds. He said he could not accurately tell the Council what the land value would be. As soon as the
appraisers finish, he said he would release to the Council and to the public at what price the Town's appraiser value
the land. He said that shortly the Town would discover at what price MCO's appraisers value the land. He said
neither side could go to the bank with those appraisals, as it would be the jury who ultimately would make that
decision.
Town Manager Nordin gave and discussed a power point presentation. He said it was his opinion that the two areas
with the highest level of interest were the downtown area and the McDowell Mountains. He said it was possible that
the Council would want to pass an increase in sales tax or general obligation bond for other purposes. If that was the
case, he said staff would welcome any direction that the Council gave in terms of other items at which the Council
wanted to look . He discussed the map, which showed the portions of land in the McDowells that were currently
being discussed for acquisition and what was already owned.
Mr. Nordin noted that to begin the discussion of the comparison of a sales tax increase versus a general obligation
bond, staff had to make a few assumptions. In terms of sales tax,he had chosen$0.003 as a potential increase to start
the discussion. He said the Council was well within their prerogative because of the way the item was agendized to
not raise the sales tax rate or raise the rate. He had picked an increase rate of$0.003 in order to prepare a comparison
to funds raised by a general obligation bond.
Mr. Nordin said if the sales tax rate was to be raised to $0.003, the increase would annually raise somewhere
between $900,000 and $1M dollars at the present rate of receipts. He stated it would have a major impact on the
Town's budget. In an effort to make the comparison he asked the Council to remember that general obligation bonds
were used to raise funds for capital expenses and were not an annual reoccurring event — it was a bond issue.
Therefore, in order to make the comparison he had wanted to peg an amount that $0.003 could amortize on the sales
tax option for proper comparison with the general obligation bond. He pointed out that the sales tax rate increase at
$0.003 would comfortably amortize a $10M bond issue. He said knowing that, he made an appropriate comparison
between the sales tax option and the general obligation bond(G.O.)option.
Mr. Nordin explained that if the sales tax rate were to be increased by $0.003, the average family in Fountain Hills
would be impacted approximately $38.10 per year. He acknowledged that this was an estimate and he would explain
how he had derived at this if the Council wanted. He said this amount would, over a 20 year life of a $10M bond
issue,cost the average family$762.00. He said that$762.00 did not include any estimated amount based on the sales
tax receipts from new home construction. If that number were to be included, the $762.00 would increase to$1,660.
Obviously existing homeowners would not pay the new home tax, because that tax was only on new construction.
He said this sales tax would never be a real estate transfer tax. He reiterated that the sales tax would not apply to the
resale of an existing private home and was not a real estate transfer tax. Because the present 1.2% sales tax was
applied on food, he displayed a chart of how a local sales tax increase would impact a grocery budget. He gave the
example that on a$600 month food bill an increase in the sales tax rate of$0.001 would amount to$.60.
Mr. Nordin reviewed points for the Council to consider regarding implementing a sales tax increase:
• Non-Fountain Hills residents would also contribute.
• It would generate substantial money from new home construction.
• A sales tax increase must be approved by the Council (MPC bond).
• It would not impact other users of local property tax dollars—school,fire, sanitary districts.
• It would react to inflation quickly(volatile—but could go"south"with the economy).
Town Council Regular and Executive Session 8/3/00
Page 6 of 19
He pointed out that he had kept the G.O. bonds at$10M in order to make a comprehensive comparison to a sales tax
increase. He said on an average Fountain Hills home valued at $200,000, the annual average property tax increase
would be $52.50 per year for that $10M bond issue or over the 20-year period it would cost the average homeowner
approximately$1,050.00. He said the Town's financial advisors were responsible for providing these numbers.
Mr. Nordin reviewed points for the Council to consider regarding a property tax increase:
• Considered to be the most stable of all revenue sources.
• Requires voter approval (earliest election March 2001).
• Could have an effect on the school's ability to raise revenue.
• Paid by property owners.
• Offered the lowest interest rate.
He stated that in either case (sales tax or G.O. bond) the ultimate amount of bonds issued could be shrunk to fit the
actual land price once the required amount was known. He reviewed that the Town only needed to issue the amount
of bonds necessary to make the payment for the land. He said that in his estimation, the McDowell Mountain
acquisition,regardless of how the Council decided to finance it,would be an everlasting gift for future generations.
Mr. Nordin addressed the development of the downtown area. He said it was possible for the Council to increase the
sales tax and designate a portion of it for the downtown also. Or the Council could authorize a general obligation
bond to raise capital money for some downtown improvements. He discussed where funds could be used.
• Plans under discussion include cooperation with downtown property owners on types of improvement districts.
The Town could decide to participate.
• Parking would be a critical long-term issue. The Town will be asked to participate in a parking solution, which
would include the purchase of land,construction,etc.
• Operation and maintenance costs would come with these activities.
• Lineal Mall, which would be the link between Fountain Park and the new Community Center/Library. The mall
would require both capital costs and on going operation costs.
cry • Vital interest in a viable and successful downtown area.
Councilman Kavanagh asked about the cost of the G.O. bond paid for by property tax to the average homeowner.
Would it be fair to assume that because sale tax was not a federal and state tax write-off, and because property tax
was, the additional monies paid on property tax would be an advantage for the average homeowner. As a tax write-
off, the cost of the G.O. bond would then bring the money paid in by property tax closer in line with what would be
collected by a sales tax increase.
Mr. Nordin said that in the opinion of the Town Attorney many of the residents in Fountain Hills file a 1040 form.
He said the statements would be potentially correct for those residents who file that form. He felt that the tax offset
would depend on the family situation in terms of what that discount would be. He said in some cases it could be
substantial and in others much less. Councilman Kavanagh said most homeowners who pay mortgage payments
could itemize deductions.
•
Councilman Kavanagh asked if the Town would have a problem funding parks, schools, and the theater if all
property tax funding mechanisms were used up on one single issue. Councilman Kavanagh explained his question
by referencing that a .003% increase in sales tax would raise the level of sales tax pretty much up to a level that
couldn't again be raised without making Fountain Hills one of the most expensive taxing jurisdictions in the area.
Mr. Nordin said he had data on sales taxes imposed by surrounding municipalities. He said the Town's current rate
was 1.2% and he compared the Town's rate with a displayed summary listing of cities and towns in Maricopa
County(23 cities and towns). He noted that the mean sales tax rate was 1.68%, median sales tax rate was 1.5%, and
the modal sales tax rate charged was 2.0%.
Town Council Regular and Executive Session 8/3/00
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Councilman McNeill said Mr. Nordin was showing figures from 1999. Mr. Nordin agreed. Councilman McNeill
said he had recently attended a seminar put on by the League of Cities and Towns and he shared updated
information. As of June 2000 Phoenix's sales tax rate was 1.4% and Gilbert's rate was 1.5%. Councilman
Kavanagh said he had wanted to point out that a .003 increase would put Fountain Hills over the sales tax rates
charged by some of the surrounding cities and towns. Mr. Nordin noted the increase would put Fountain Hill above
some but still below others.
Vice Mayor Hutcheson said the sales tax figures calculated on Mr. Nordin's charts were estimates and would vary
between families as some shopped less in Fountain Hills. Mr. Nordin said that between a sales tax base versus a
property tax base there were a number of profound differences. He said his tax figures given to the Council were to
try to draw an appropriate comparison. He reiterated that a number of assumptions had to be made when making that
comparison. He said the discussion had highlighted a number of the difficulties and all points made he would have
to agree with. He explained that individuals could determine how much sales tax they would pay by the purchases
made. However, the individual would not have that option once property was purchased and would be fixed
according to the formulas presently in place.
Vice Mayor Hutcheson MOVED to approve Ordinance 00-12 by increasing the sales tax rate by a total of 0.004%
and designating .003% for mountain preservation and designating 0.001% for downtown development but not to
be expended without the Council's approval and Councilwoman Ralphe SECONDED the motion.
Councilman Wyman recognized that the $10 million was used just for the sake of comparison purposes. He
thought Councilman Kavanagh had made a valid point regarding the deductibility of a property tax increase. His
concern was that preservation was a capital improvement and part of the Fountain Hills residents' quality of life.
If the people were asked to vote on a general obligation bond and they clearly said they wanted it, the bonds could
be issued for less of the land and could be purchased for less. Then there wouldn't be a question about it because
the election would make that point. His concern with regard to a tax increase was that if no one anticipated future
expenditures there could then be a financial emergency. He pointed out that his calculation with regard to sales
tax revenues became less over a 5-year spreadsheet projection. He said it might be possible in the coming years
that the Town might have to raise the sales tax rate just to meet the Town's overhead obligations, which include
the cost of staff, paving the roads, own police force, and supporting Parks and Recreation facilities. He did not
want to encumber the Town with a 20-year bond, for example, that would keep the Town from being able to raise
the sales tax to meet whatever the emergency was. He preferred and suggested that the residents be asked to vote
on the General Obligation bond and that that this option protected the Town's financial options just in case
additional monies needed to be raised. He referred to the November Election issues that could affect the Town's
finances.
Councilwoman Fraverd said that the property tax would have to be voted on and couldn't be voted on until the
March election. If the condemnation lawsuit was settled in January, the Town would probably not have enough
money. It would take the $6 million bonds already passed and the $1.5 million set aside in the budget as well as
stripping every available penny from the budget. She was not willing to take that gamble and the Town could not
afford to take that gamble. Councilwoman Fraverd said the Town needed to make sure that the necessary
resources were available should the condemnation hearing be settled early. She felt the increase in the sales tax
would allow the Town to know they had the money available.
Mayor Morgan said she was in favor of a sales tax increase. She said it was not fair to saddle what everyone
enjoys, the views, the vistas, and the ambiance of the mountains, on the property owners. The people that rent
enjoy the same vistas. The people that visit enjoy the same vistas. She did not want the property owners to be the
only ones who pay.
Councilman McNeill said he was in favor of funding mountain preservation through sales tax revenues and would
support the motion. He said the Town was trying to acquire the 452 acres for the preserve, which had been
recommended through the hard work of the McDowell Mountain Preservation Commission and endorsed by not
Town Council Regular and Executive Session 8/3/00
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only this Council but also unanimously by the prior Council. A major step towards achieving that goal had been
taken last month when the Council authorized condemnation action to acquire the rest of the land wanted. He said,
as the Town Attorney had explained, that if a condemnation action was brought forward the Town had to be
prepared to fund the acquisition. Councilman McNeill agreed with Councilwoman Fraverd point that the funding
might be needed before March 1 and the Council might find they did not have time to have the election on the
bond issue. He felt the Town needed to be prepared if the case went to trial quickly. He said there were two
methods available to raise funds. He said during his campaign, he strongly supported preserving at least 452 acres
as recommended by the MMPC. He noted that those people he had talked to then understood it would take more
than the $7 million, now $7.5 million, that had been committed to acquiring the preserve and that $6 million of
that was likely to be paid through the property taxes that were already authorized. In talking with the public as to
how they preferred to pay for the acquisition, the preference for a sales tax increase was overwhelming. In his
campaign he had clearly stated that a sales tax increase was preferable as opposed to continuing to increase the
property tax. He said he understood those newly elected Councilmembers and the Mayor favored the land
acquisition paid for by a sales tax increase. He said the fact that they were elected spoke loudly for preservation to
be paid for by a sales tax increase. He stated he also favored development of the downtown area and he realized
that it would also take some investment by the Town. He supported a portion of the sales tax increase for that
purpose. He said Mr. Nordin's response to Councilman Kavanagh's inquiry as to where the Town's sales tax rate
was in relation to surrounding municipalities was helpful, but he also had looked at all 87 cities and towns in
Arizona listed by the League of Cities and Towns. He summarized that of those 87 only 6 had a sales tax rate
lower than Fountain Hill's current rate of 1.2% and 64 out of the 87 had a sales tax rate of 2.0% or higher. He
noted that many had a rate of 3.0%. He felt that by setting the Town's sales tax rate at $1.6% with .003% for
preservation and .001% for downtown development would keep Fountain Hills far below the average of towns the
size of Fountain Hills and competitive with much larger neighbors.
Mayor Morgan added that during her campaign she also asked if it meant preserving and developing the
downtown, which would be the preferred method of funding - a property tax increase or a minimal sales tax
increase. She said no one, over a period of five months, said that they wanted their property tax increased.
Everyone that she had talked to favored a minimal sales tax increase and designation of the funds for particular
purposes.
Councilman Kavanagh clarified that the cost of mountain preservation would be significantly more than $38.10 a
year. $38.10 would simply fund the latest$10 million addition to the bill. It did not factor in paying off the initial
$6 million dollars and did not take into account that the Town would not have the $1.5 million already set aside by
the Council available for other things.The Town might still need more money. He did not want the public to think
that the cost of preservation would only be $38.10 a year per household as it was more than that. Councilman
Kavanagh said downtown development should not be an issue. He said the $10 million was for preservation and
the extra quarter of a percent would be for downtown development. He said he was primarily discussing the $10
million that was now being considered to add to the existing monies for preservation.
Councilman Kavanagh said he did not oppose downtown development and during his campaign he was a
promoter. He said he was one of the first who stated that it was imperative that the older downtown area be linked
to the new development. He said that a .001% sales tax increase did not need to be passed to guarantee that as that
money would be there as the downtown area was the heart of the area. He did not think anyone would let that
happen. He did not want to see the preservation issue linked to the downtown development. To build the lineal
mall that had been alluded to, the latest estimate that he had seen was $1.5 million. He stated the Town would not
pay that amount as the Town would only pay one-third of the cost, which would put the Town's cost at more like
$.5 million dollars. He said therefore, the sales tax did not have to be increased to raise $.5 million dollars for that
project. He pointed out that the cost of the remaining projects to bring the entire downtown area together was
unknown because the new downtown had not been architecturally designed. He noted that conceptionally and
time wise he did not see how the development of the new downtown area could be brought up at all right now that
he promised and pledged would be taken care of. He said this project would not be abandoned if the sales tax rate
Softy was not increased.
Town Council Regular and Executive Session 8/3/00
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Councilman Kavanagh clarified that the statement saying sales tax made everyone pay whereas property tax only
burdened the residents. He said over the last week he had worked with the Town Manager trying to get a handle
Lie on the relative expenses of property tax and sales tax. He acknowledged that they had gone back and forth at least
fifteen times, because every time they thought they had a lid on it, something new came up. He noted it was so
complicated that he did not think anyone could state which funding mechanism was cheaper for residents.
Mr. Nordin reiterated that the assumptions that were made to develop a reasonable comparison were as prudent as
they could have possibly been given the assignment. However, it was an exact science if the process could be
called a science. He agreed with Councilman Kavanagh that the information that the Council was reviewing at
this meeting was the result of their work and many conversations. He acknowledged that the estimates were the
best that could be done and he would stand behind the results. He pointed out that Councilman Kavanagh and
Vice Mayor Hutcheson had raised some valid points and those points were well taken. He noted it had been
difficult to determine what was "average". He had made the very best attempt that he could and it could be
debated.
Councilman Kavanagh said a fact that surfaced was that a property tax would capture a non-resident's money. He
gave the example of the Town offices, which were owned by a man in Canada. That way the non-resident
property owner would also be paying for the mountain property. He compared that to a sales tax, which would
also be paid for by residents and non-residents. He said if a property tax were to be passed, the partial year
residents(snow birds) would also pay their fair share and they would only pay sales tax a part of the time. He said
those were just a few of the complexities that had been discovered.
Councilman Kavanagh clarified that because there were cities and towns that had a higher sales tax rate than
Fountain Hills, this was not a justification that Fountain Hills should impose a higher sales tax. He pointed out
that Fountain Hills did not compete with Lake Havasu for retail sales. He said Fountain Hills competed with
Scottsdale, Mesa, and Phoenix and it would be those cities that Fountain Hills would be above if the sales tax rate
were raised .004%. He said in some instances Fountain Hills would be above their rate as those cities or towns did
not tax basic food necessities. He said the issue of driving the residents out of town and further burdening the
retailers was important.
Mayor Morgan said citizens from Rio Verde and Scottsdale had expressed their desire to see Fountain Hills
dedicate some tax money to preservation and then they said they would feel compelled to do some of their
shopping in Fountain Hills.
Councilman Wyman stated there were two types of money: someone else's money and mine. He acknowledged
there were those who would be pleased to think Fountain Hills should dedicate sales tax money to preservation.
He invited them to shop in Fountain Hills as Fountain Hills could use their sales tax revenues.
Vice Mayor Hutcheson shared concern for an adequate cushion for future expenses should the need arise.
However, conversations with the Town Manager assured the Council many times that an adequate cushion existed
to protect the Town from most emergencies. She said no one had an adequate cushion to protect themselves
against everything and that did not mean that the Town stopped doing business. She said an important feature of
the General Obligation bond was to give the voters the opportunity to vote on the issue. She noted that the voters
had approved preservation many different times. They voted overwhelmingly for a general obligation bond a
number of years ago and just recently for a general obligation bond for land by the lakeside. The citizens have
shown at the last couple of elections that preservation was a number one consideration for them. She felt the issue
of preservation had passed the test of time. She called sales tax a "user and a chooser" fee because sales tax was a
fee that an individual could choose to avoid if they wanted to. She agreed with the Mayor as she had also had
conversations with Scottsdale and Rio Verde residents who would share in increased property values because of
the preservation in Fountain Hills. She said that so far Fountain Hills had funded over$7 million dollars for Parks
and Recreation and approximately $7 million for the Community Center/Library-Museum project. She pointed
out that there had been a lot of talk about preservation and now it was time to walk the walk. She said the public
Town Council Regular and Executive Session 8/3/00
Page 10 of 19
has said they want it and it was important that the Council had the courage to preserve the perimeter and develop
the downtown area.
Councilwoman Ralphe said she had been working for preservation almost from the first day they she moved to
Fountain Hills. She said the downtown center development was important and was becoming increasingly urgent.
She said the plan needed to be formulated, finalized, and financed. She believed in being a good steward of the
public's money and felt that was what a good portion of the Council's job was all about. She said she believed in
fiscal conservatism. She recognized that the Town had done some big ticket spending and if the Council approves
these two new types of financing it would be two more big-ticket items. She said these items were right on the
mark. She noted that the Councilmembers had received a letter raising concern for senior citizens on fixed
incomes. For those who were concerned about big spending, she stated she was committed to encouraging fellow
Councilmembers to limited spending on other kinds big-ticket items for a specific time.
Councilman Kavanagh asked if there was a mandate to spend additional monies on preservation without voter
approval. The question was how far beyond the $6 million dollars previously approved by voters was there for
this Council to spend without additional voter approval. The sales tax increase to fund a MPC bond would not be
approved by the voters so the Council had to believe there was a mandate present to spend additional money
beyond the $6 million that the people voted for. He did not believe there was a mandate to spend anymore than a
small amount of money beyond the originally approved $6 million. It was his opinion that the reasons given by
those who favor a mandate were flawed. The first flawed argument given to support the existence of a mandate to
give a blank check to preservation was that the voters overwhelming approved the preservation bond in 1997.
While it was true that 67% of the voters voted for that preservation bond, that was only a $6 million dollar bond.
It was not true that there was any mandate for significant spending beyond the $6 million. Just one week before
that bond election, then Mayor Jerry Miles had been quoted as saying that the $6 million dollars should put the
Town very close to the McDowell Mountain Preservation Commission's plan to preserve land. Clearly those who
went to the polls in November of 1997 thought that the $6 million that they were approving, based upon the
Mayor's own statement, was going to buy the preservation they wanted. He pointed out that was not true, but the
fact was that the chief executive of the Town told the voters one week before the election in the Times, that the $6
million would pretty much fund it all. He did not think going to the polls thinking that the $6 million that the
voters were authorizing would buy the whole thing was now a mandate to spend more money. He said if the
Council approved spending the $10 million as discussed on top of the $6 million already approved and on top of
the $1.5 million set aside that was $17.5 totaling almost $18 million for preservation. He did not think going to
the polls in 1997 thinking that spending $6 million would buy all the land preservation could be used to justify
spending three times that much.
Councilman Kavanagh pointed to those who thought there was a mandate to spend more money because of the last
election in which the "preservation candidates" swept the election. He said he was sensitive to the fact that they
did not want to be thought of as "one-issue" candidates. He pointed out they were not "one-issue" candidates.
However, the dominant issue of the last election was preservation and if they were thinking that their election to
office was a mandate to spend $18 million dollars, it needed to be discussed. He pointed out that although all three
were swept into office, the percentages were small. He had recently asked the Town Clerk for the election tallies.
He said the difference between the "non-preservationist", the "moderate-preservationist", and the"preservationist"
was only a few percentage points. He did not feel that showed a mandate for preservation. He said it was his
opinion that the election showed there was support for preservation but the amount above the $6 million was
questionable and there was no mandate to spend an additional $12 million based upon an election that was close.
Councilman Kavanagh said he agreed there was a mandate for preservation and he supported it. He believed the
citizens should spend as much or as little money on preservation as they wanted but they had to make the decision.
He said the mandate to use a non election approved sales tax increase to fund a non-voter approved MPC bond
based upon a highly questionable mandate to spend an additional $12 million was not there. He concurred with
Councilman Wyman that if the citizens wanted to spend $12 million more, then let the people decide by a vote.
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Mayor Morgan asked how the amount of the original $6 million was determined. Mr. Nordin explained that at that
time the analysis was to use the amount of funds that were going to be soon retired from the old road district
bonds. Mayor Morgan clarified that if the amount of the soon to be retired bonds had been $ 8, $10 or $18 million
by using the former analysis that would have been what the bond issue would have been (bonds that would be
retired).
Councilman Wyman agreed with the Mayor and Mr. Nordin that the $6 million dollar figure was arrived at that
way. He said it sold to the public that it would not cost the people anything because when the road bonds were
retired the Town would simply have the new bond issue take over and therefore the public would not have an
increase in their taxes. Mayor Morgan said the original bond issue had been $6 million because that was the
amount of the soon to be retired road district bonds.
Vice Mayor Hutcheson said when that original $6 million dollar bond issue was sold to the public it would hardly
be a blurb on the public's property taxes. She stated if it was looked at today, because of the rising property
values, it would be significantly less than what it was then. Mr. Nordin confirmed that was true.
Vice Mayor Hutcheson respectfully reminded Councilman Kavanagh that the Council had expended a significant
amount of money through an MPC for the Community Center, which was a project that had not been voted on by
the public. She had not considered having a mandate critical for that project because by the same process, through
polls and public input, the Council had determined it was a significant factor in adding to the quality of life in this
Town. Councilman Kavanagh said one of the key cornerstones of his campaign had been that the Town should
conduct a professional survey to find out how the people feel, not only about preservation but all of the wants and
needs that the public might have. He pointed out that at the debate the idea had been scoffed at and when the joint
meeting was held with the Parks and Recreation Commission two days ago, the idea of a professional survey to
find out how people felt about these wants and needs resurfaced. He said he had been thrilled that there was
support for the idea. He said at that joint meeting he had proposed that the question of preservation be asked on
the survey, which met cold opposition. He felt if the Council was going to ask the public to go beyond the original
$6 million by $12 million, based upon support from past polls, the Town's survey by ASU should include the
question of if the public wants to spend additional funds on preservation. He said he would spend whatever the
public wanted, but he needed to know what the public wanted to spend.
Mayor Morgan drew attention to the fact that the discussion of $12 million more being needed was only an
assumption. Councilman Kavanagh agreed but said that he had a simple policy of not funding $18 million to
spend on mountain preservation when the public only approved $6 million. Why should he vote to spend $18
million when the $12 million had not been approved by the voters. He said that was not fair and he had limits to
what he would spend without the public's permission. He said he would never spend $12 million of the public's
money without their permission. He asked Mayor Morgan if she would spend that much money. Mayor Morgan
responded she did not know what amount would be needed.
Councilwoman Ralphe said the $18 million amount being discussed by Councilman Kavanagh was a figment of
someone's imagination. She stated that none of the Councilmembers knew what figure the jury might place on the
land. She suggested that the Council not throw figures around that were not accurate. She urged that the
discussion be limited to the funding that needs to happen if the condemnation was to go ahead. She said the Town
Attorney had said that this must happen. She asked that the Council wait to talk figures until the jury's verdict was
in as that was the appropriate time.
Councilman McNeill said he resented any implication that he was ready to spend $18 million for land in the
McDowells. He explained what he wanted to do was to give the Town the ability to respond when the jury makes
a determination in the condemnation case. He noted that he did not know what the price would be but he said he
did not want to pay $18 million for that land, as that price was too high. He said it was absolutely essential that
the Town have the tools in place before March 2001. He stated the case could go on a fast track and fully
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Town Council Regular and Executive Session 8/3/00
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determined before March 2001. Town Attorney Bill Farrell agreed the case could come before the jury before
March 2001.
Mayor Morgan concurred with Councilman McNeill and she alluded to the fact she also had a maximum price.
which she would not divulge out loud at this time. She did say it was not the figure that Councilman Kavanagh
was purporting in the discussion.
Councilman Kavanagh said that if the expenditure of$18 million was not a possibility then why were members of
the Council trying to raise $18 million dollars. Mayor Morgan asked for clarification. Councilman Kavanagh
reiterated that the Town had the original $6 million bond, also$1.5 million in budgeted funds, and the Council was
discussing a $10 million bond issued now and those totaled approximately $18 million. Mayor Morgan again said
the $10 million was the example used. Councilman Kavanagh said that was what the .003% sales tax increase
would raise. Councilman Kavanagh said he did not understand.
Mayor Morgan reviewed that it was not a fact that $10 million would be raised. Councilman Kavanagh asked Mr.
Nordin if the sales tax rate were to be increased by .003% to fund preservation, would the Town raise $10 million.
Councilman Wyman said the Town would raise a potential of $10 million in borrowing power. Town Attorney
Farrell said that until the Council authorized the municipal properties corporation to go out for a bond issue the
Council had not spent any of that money in question. He confirmed that the .003% could raise between $900,000
and $1 million to go into the general fund if the sales tax projections held steady. If the Town were to need an
amount of money,the Town would then have choices of using cash reserves, issuing general obligation bonds, and
issuing revenue bonds in amounts to be determined and set by this Council. Councilman Kavanagh asked if the
tax would go into effect immediately and thus give the Council the ability to spend $18 million. Mr. Farrell said it
would give you that ability if you were all replaced by seven people who wanted to build a stadium for the Los
Angeles Dodgers. He said it was a true statement that the Council would have those funds in the Town budget.
Those funds would not be spent except by an affirmative vote of the Council. Councilman Kavanagh wanted to
make the point that if the sales tax rate were increased by .003% there was the potential to spend $18 million
without taxpayer approval.
Mayor Morgan said the rate increase gave the Town the "potential" to raise $18 million, but it remained to be seen
if the funds would be spent. Councilman Kavanagh stated if the Town had no intention of spending the money,
the Council should not be collecting it. He said suggested that the percentage should be lowered to reduce the
amount of money collected.
Councilman Wyman explained that the .003% dedicated to preservation would fund the annual servicing of the
debt of up to$10 million. He agreed it was not that the Council would bond to get that much money as that would
depend upon what monetary amount the jury decided to award. He reviewed that was what the annual $900,000 to
$1 million sales tax revenue would do and that would come from the .003% increase. He said the Council would
simply not issue the bond if it were not needed. But the general obligation bond would also accomplish this; thus
both funding mechanisms would accomplish the same thing.
Lori Noss, 14603 N. Fairlane Dr.
She spoke on behalf of the Committee to Preserve the Environment. She urged the Council to approve the sales
tax increase dedicated solely to mountain preservation.
Mark Van Boeckel, Cabrio Dr.
He was in favor of the sales tax increase. He expressed concern that the mountains would be platted and built
upon if the Council did not act now.
June Post, 17014 E. Rand Dr.
She was not in favor of paying for the land in the McDowells and asked that the Council to work with the
landowner.
Town Council Regular and Executive Session 8/3/00
Page 13 of 19
Becky Garcia,Executive Director of Scottsdale/Paradise Valley YMCA
She said she was representing the Fountain Hills YMCA. She requested that a portion of the proposed sales tax
increase be earmarked to directly benefit the children, families, and adults of Fountain Hills. She said there was an
overwhelming need for a multi-generational facility to include a swimming pool. She said they were there to help
meet the needs of the community.
Nancy Land, new property owner
She asked the Council to move as quickly as possible to have the funds available. She pointed out that the Council
did not have luxury of time to implement a property tax. She asked that the motion include an amount to be set
aside for the youth or community center.
Dale Noss, 14603 Fairlane Dr.
He said he represented the Save the Mountains Committee and they endorsed the option of a sales tax increase of
.004%.
Jane Bell, 9655 Burkemo
She said she was in favor of a sales tax increase for mountain preservation. She pointed out that Scottsdale also
paid tax on their groceries.
George Post, 17014 E. Rand Dr.
He said he was against spending any money and asked that the Council look at imposing impact fees.
Jerry Kirkendol, 11405 Cameron Court
He said the mountains were not going anywhere. He was against a sales tax increase and would prefer the citizens
vote on it if they wanted it. He wanted to see the Council focus on the development of the downtown area.
Pen Mower, 15951 Ponderosa
He asked that the Council look into multi-generational facilities. He suggested that the Council wait until the cost
of the 452 acres was known and continue the funding discussion once the lawsuit was finalized.
Bill Pape, 16128 E.Emerald
He asked that the Council amend the motion to increase the sales tax an additional .001% to facilitate a multi-
generational facility, which was desperately needed.
John Martin, 12033 Organ Pipe
He said he was against the taking of private property. He felt he should be given a vote on the issue and would
prefer a bond issue.
Roy Kinsey, 17120 Fairway Ct.
He proposed the people of Fountain Hills give $50 a year as a gift. He said the Council had the responsibility to
make the decision.
Zachary Hall, 14001 Shiloh Way
He was against the allocation of any taxes to purchase land in the McDowell Mountains.
Cynthia Wharton, 16862 Duce Ct.
She was against increasing taxes, as the land was too expensive.
Edwin Keye, 16620 Agate Knoll
He was in favor of a tax increase.
Town Council Regular and Executive Session 8/3/00
Page 14 of 19
Councilman Kavanagh summarized that he was opposed to a sales tax increase or any tax increase at this time for
two reasons.
A. The financial future of the Town was uncertain at this time due to the upcoming September and November
elections. He said there were four crucial financial issues that would come before the voters:
1) An initiative to abolish the state individual and corporate income tax — state revenue sharing would be
drastically cut.
2) Governor Hull's "Growing Smarter Initiative" was on the ballot and if passed the state sales rate would
be raised by .006% to fund education.
3)The Town's initiative regarding the Target shopping center was on the September ballot—creating less
of a potential for sales tax revenue.
4)The Sierra Club's initiative would also be on the ballot.
He suggested that if these uncertainties were added to the pending loss of home construction sales tax
revenue and the present threat of a reduction of state shared revenues it was apparent that any major
financial decisions, like raising the sales tax to .004% at this time, was premature. He stated it could be
fiscally dangerous. He proposed waiting until after the November election so as to have a better idea of
what the Town's fiscal condition would be.
B. The Council did not know the complete future financial picture of the Town. He did not want to rush into any
commitment to spend or raise money could harm a lot of people. He was concerned for the merchants and
senior citizens on fixed incomes if the sales tax rate was increased. He reviewed the pending tax
increases. If the Council spent as much as $18 million on this issue and without having a full Town
financial picture, how would the other public needs be impacted.
Councilman Kavanagh said the Town needed to outline all of the needs and wants, make reasonable
projections of what the cost of items were, and prioritize them with public input. He said that Parks and
Recreation was helping with that project. He then proposed that the Town Manager and staff make
reasonable conservative projections of the Town's income over the next ten years. He said at that point it
would be determined what could be afforded and the financial impact. He pointed out that such a plan did
not exist now. To start financing individual items one at a time made him uneasy. He wanted a complete
financial picture after the uncertainties were cleared up.
C. There was no provision for voter approval of additional funds.
Councilwoman Fraverd pointed out that the Town could not be put on hold until after the November election. She
noted that MCO was not putting their plats on hold and MCO was progressing along. She agreed with
Councilman Kavanagh that a financial plan was needed for big-ticket items in the Town's future plans. She felt
the public had spoken for preservation many times. She noted that she was disappointed as to how the
negotiations had gone with MCO. She had thought that with good faith on both sides, an agreement could have
been reached for $6 or 7 million. Since then she had learned otherwise, which now finds the Town looking for
additional funds. She reiterated that the Council had the opportunity to walk away from the purchase if the land
costs became too high to perhaps buy the connecting portion between the two portions that the Town already
owned. She noted that that portion would not be available if the Town waited and the Town would be stuck with
two separate preservation areas and no way to connect. She supported the sales tax increase option. She felt the
property owners would need to be approached for the Parks and Recreation Commission's plan up to the amount
of$20 million. How many times can property owners be asked for more money? She hoped by voting for her the
citizens were looking to hear about more creative ways of raising money for things that the Town seemed to want.
She said the increased sales tax was one way to do just that. She acknowledged that the Council and staff were
looking into implementing impact fees.
Vice Mayor Hutcheson said she was also concerned for the financial future of the Town. She thought of herself as
a fiscal conservative and she liked to think that the Town had a good financial advisor. She stated that the Town
Manager said the Town was in fine shape. She pointed out that she supported the sales tax increase because it was
a user fee. She said even though the increase would put the total sales tax rate a little over Scottsdale, she did not
know anyone who would abandon paying for amenities or supporting the Town to save $.20 on $100 but the
choice was theirs. She assured the public that the Council was not talking of funding the preservation or the
Town Council Regular and Executive Session 8/3/00
Page 15 of 19
downtown development to the detriment of other projects. Vice Mayor Hutcheson noted that "preservation" was
one of the five priorities currently designated to receive a portion of the sales tax through the budget. She
suggested that money could be freed up along with the other money designated from the current sales tax money
that goes to Parks and Recreation and other things. She acknowledged that there might be other sources of
funding for those types of programs when they can be presented to the Council with fiscal responsibility and a
complete plan. She said she was interested in looking at that and she stated there would be money available for
that. She pointed out that buildings become outdated and need to be remodeled but the mountains would stand up
and become the legacy for future generations. She felt the question in twenty years would not be why did you
save those mountains but why didn't you save more.
Mr. Farrell asked that the Council to add an effective date to the motion. He said staff suggested November 1,
2000 as the effective date.
Councilman McNeill AMENDED the motion to add the effective date of November 1, 2000 and Vice Mayor
Hutcheson SECONDED the amendment, which CARRIED on a vote of 5 — 2. Councilman Kavanagh and
Councilman Wyman cast the nay votes.
A roll call vote was taken on the original motion as amended with the following results.
Councilman Kavanagh- nay
Councilwoman Ralphe— aye
Councilman Wyman nay
Councilman McNeill - aye
Councilwoman Hutcheson - aye
Mayor Morgan - aye
Councilwoman Fraverd - aye
The motion CARRIED on a vote of 5 -2. Councilman Kavanagh and Councilman Wyman cast the nay votes.
Nola., Mayor Morgan called for a ten minute recess at 9.30 p.m. Mayor Morgan reconvened the meeting at 9:40 p.m.
AGENDA ITEM #18 — PUBLIC HEARING ON ORDINANCE 00-15, AMENDING THE ZONING
ORDINANCE FOR THE TOWN OF FOUNTAIN HILLS, SECTION 9.02, TO ALLOW FOR A SPECIAL
EVENT FACILITY AS AN ACCESSORY USE TO A GOLF COURSE CLUBHOUSE, IF CERTAIN
CRITERIA ARE MET. CASE NUMBER Z2000-11. (STAFF RECOMMENDED A CONTINUANCE OF
AGENDA ITEMS 18 AND 19.)
Mayor Morgan recessed the regular session of the Town Council and opened the public hearing at 9:41 p.m.
Director Valder stated that staff was requesting a continuance on both the public hearing (Agenda Item#18) and
Agenda Item#19 until the September 7th Town Council meeting.
Mayor Morgan reconvened the regular session at 9:42 p.m.
AGENDA ITEM #19 - CONSIDERATION ORDINANCE 00-15, AMENDING THE ZONING
ORDINANCE FOR THE TOWN OF FOUNTAIN HILLS,SECTION 9.02,TO ALLOW FOR A SPECIAL
EVENT FACILITY AS AN ACCESSORY USE TO A GOLF COURSE CLUBHOUSE, IF CERTAIN
CRITERIA ARE MET. CASE NUMBER Z2000-11.
Vice Mayor Hutcheson MOVED continue agenda items 18 & 19 until the September 7th Town Council meeting
and Councilwoman Ralphe SECONDED the motion, which CARRIED unanimously.
AGENDA ITEM #20 — PUBLIC HEARING ON ORDINANCE 00-16 AMENDING THE ZONING
.. ORDINANCE FOR THE TOWN OF FOUNTAIN HILLS, SECTION 5.18, TO PRESCRIBE A REQUIRED
NUMBER OF COMMON TRASH ENCLOSURES FOR MULTIPLE FAMILY DEVELOPMENTS OF 5
Town Council Regular and Executive Session 8/3/00
Page 16 of 19
OR MORE UNITS, COMMERCIAL, INDUSTRIAL, AND INSTITUTIONAL DEVELOPMENTS, CASE
NUMBER Z2000-12.
Croy Mayor Morgan recessed the regular session of the Town Council and opened the public hearing at 9:43 p.m.
Planner Dana Burkhardt reviewed that staff needed some tangible criteria to establish a number of trash enclosures
or receptacles. He noted that the Planning and Zoning Commission supported this action and staff urged and
recommended approval.
Councilman Kavanagh asked how other jurisdictions handled this problem and brought the code in line with
common practice. Mr. Burkhardt said the Town of Gilbert and a couple of other towns had a required number of
receptacles and enclosures for a subscribed number of multi-family units and commercial users within a
development. He said, for the most part, it was left up to the user as to specify the type of use and the type of trash
produced by the user. He explained that this ordinance would allow the Community Development Director the
discretion to make the determination as to the number of receptacles that would be required in a development.
Councilman Kavanagh said if only a few multi-family units were not taking care of their trash business properly,
wouldn't it be more prudent to have the law enforcement officer cite those who were not in compliance. Then the
other multi-family units who could get by with the small receptacles continue to avoid the expense of the nine
cubic foot receptacle.
Planner Burkhardt said it was the new developments that were only providing one receptacle and staff needed a
way to monitor if it was sufficient in size. This would allow the Community Development Director the discretion
to review the size. Councilman Kavanagh clarified that the ordinance was only requiring an enclosure that would
accommodate a nine-cubic foot receptacle, but if the development could get by with a smaller receptacle that
would be ok. Planner Burkhardt confirmed that was correct.
Mayor Morgan reconvened the regular session at 9:47 p.m.
AGENDA ITEM #21 - CONSIDERATION OF ORDINANCE 00-16 AMENDING THE ZONING
ORDINANCE FOR THE TOWN OF FOUNTAIN HILLS,SECTION 5.18,TO PRESCRIBE A REQUIRED
NUMBER OF COMMON TRASH ENCLOSURES FOR MULTIPLE FAMILY DEVELOPMENTS OF 5
OR MORE UNITS, COMMERCIAL, INDUSTRIAL, AND INSTITUTIONAL DEVELOPMENTS, CASE
NUMBER Z2000-12.
Councilman Wyman MOVED to approve Ordinance 00-16 as presented and Councilman Kavanagh SECONDED
the motion, which CARRIED unanimously.
AGENDA ITEM#22 - CALL TO THE PUBLIC.
George Post, 17014 Rand
He asked the Council to consider a 10% impact fee on all building and to repeal the sales tax placed on food with a
redirection of the sales tax on real estate. He asked Council to consider giving relief to the retired people who have
lived in Fountain Hills awhile earning under$20K a year by helping them pay their taxes.
Jody Knapp,Monterey
She expressed concern that the proposed strip mall would detract from the downtown development.
Bill McGivern,Monterey
He asked if the Town had to pay sales tax on the purchase of the mountains? He cited the censorship of information to
the public by not allowing an open discussion of the strip mall on the Town Council's agenda. The Town Attorney
had advised him that issue could not be raised at the meeting. He requested that the Council include a comprehensive
discussion of the strip mall on their next agenda.
Town Council Regular and Executive Session 8/3/00
Page 17 of 19
Town Attorney Bill Farrell stated that under the new open meeting laws, the Council may respond to criticism after all
citizens have spoken who wish to participate in the Call to the Public. He said the Council could direct the Manager to
place an item on a future agenda for discussion or the Council may direct the Manager or staff to respond to a
{ particular item. He acknowledged that he was not sure what the word criticism meant. He said he had not found the
remarks made by the last three speakers hostile but the Council could interpret the remarks to be a criticism. He stated
the Mayor could recognize a member of the Council if they wanted to respond to any of the remarks made.
Mayor Morgan responded to Mr. Post's question of impact fees. She asked if staff was currently studying the issue of
impact fees so that a factual presentation regarding impact fees could be made in the near future. Mr. Farrell
responded yes, a draft of an impact fee study (development fee) would come before the Council on September the 7"'.
Mr. Farrell confirmed that the Town Manager had correctly stated that it was against State law to tax the transfer of
real property other than the sale of new homes. He said the same held true for the sale of vacant land.
Councilman McNeill responded to Mr. McGivern's comments. Councilman McNeill said it was his understanding
that the current law set severe restrictions on the Town's ability to provide a forum for a proponent or opponents of an
issue that would be on the ballot. Mr. Farrell replied he understood the speaker's frustration and appreciated his
comments. He said he had issued a legal opinion so that everyone was clear that the employees, facilities, buildings,
equipment, and supplies could not be used to influence the outcome of an election. He said that was a law that the
state legislature had passed for cities and towns. He said therefore, the issue of the strip mall would not be a proper
subject for the Council to address or provide a forum in the public building for those advocates for and against the
strip mall. He acknowledged that staff had attempted to work closely with the organization by answering questions so
that they had information. He noted they had been encouraged to use the media and other non-governmental forums
but the Council Chambers could not be made available for that type of material until after the election. He said that
after the election results were known, there were significant decisions regarding that strip mall that the Council might
have to make.
Councilwoman Fraverd asked Mr. Farrell if it was all aspects of the project that the Council could not discuss at a
public meeting or only the rezone. Mr. Farrell said that with the election so close, if the Council or the speakers tried
to influence the outcome of the election, he felt that would be a violation of the law. He said he was respectfully
asking the Council to refrain from discussing those issues at a public forum in this building until after the voters had
spoken. Councilwoman Fraverd concluded that meant any discussion on the issue. Mr.Farrell agreed.
AGENDA ITEM#23-ADJOURNMENT.
Vice Mayor Hutcheson MOVED to adjourn the meeting and Councilwoman Fraverd SECONDED the motion,
which CARRIED unanimously. Mayor Morgan adjourned the meeting at 10:04 p.m.
L
Town Council Regular and Executive Session 8/3/00
Page 18 of 19
TOWN OF FO TAIN H
By:
Sharon Morgan, May
ATTEST: ''-46
Cassie B. Hansen,
Director of Administration/Town Clerk
PREPARED BY: / _ , c.
Bev Bender, Executive Assistant
CERTIFICATION
I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Special
Session Meeting held by the Town Council of Fountain Hills on the 3rd day of August 2000. I further
certify that the meeting was duly called and that a quorum was present.
DATED this 7th day of September 2000.
L/1_: 3
Cassie B. Hansen,
Director of Administration/Town Clerk
Town Council Regular and Executive Session 8/3/00
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