Loading...
HomeMy WebLinkAbout2001.1030.TCJSM.Minutes TOWN OF FOUNTAIN HILLS MINUTES OF THE JOINT SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL AND THE FOUNTAIN HILLS FIRE BOARD October 30,2001 Mayor Morgan called the joint session of the Town Council and Fire Board to order at 7:00 p.m. PURSUANT TO A.R.S. §38-431.02. NOTICE IS HEREBY GIVEN TO THE MEMBERS OF THE TOWN COUNCIL OF FOUNTAIN HILLS, THE FOUNTAIN HILLS FIRE BOARD AND TO THE GENERAL PUBLIC THAT THE TOWN COUNCIL OF FOUNTAIN HILLS WILL HOLD A JOINT SESSION OPEN TO THE PUBLIC ON TUESDAY, OCTOBER 30, 2001 AT 7:00 P.M. AT THE COMMUNITY CENTER LOCATED AT 13001 LA MONTANA DRIVE,FOUNTAIN HILLS,ARIZONA. Present were the following members of the Fountain Hills Town Council: Mayor Sharon Morgan, Vice Mayor Kavanagh and Councilmembers Leesa Fraverd, Sharon Hutcheson, John McNeill, John Wyman, and Susan Ralphe. Also present was Acting Town Manager/Attorney Bill Farrell Present were the following members of the Fountain Hills Fire Board: Chairman Dave Hansen,Commissioners Tammy Rothermel,Bob Travis,John Winters,and Dennis Dowling,Chief Glen Brown. AGENDA ITEM#1. DISCUSSION OF ISSUES REGARDING THE CURRENT RURAL METRO CONTRACT AND THE FIRE DISTRICT AND TOWN COUNCIL ACTIONS. NEITHER BODY IS EXPECTED OR ANTICIPATED TO TAKE ANY LEGAL ACTION. THE MEETING IS FOR DISCUSSION PURPOSES ONLY. L. Acting Town Manager Mr. Farrell gave a brief statement as to what could legally be discussed. He quoted Arizona State Statues 9-500.14 and 16-192.1, which advised that a city or town or a special taxing district could not use personnel, equipment, materials, buildings or other resources for the purposes of influencing the outcome of elections. Nothing contained in this section could be construed as denying the civil and political liberties of any employees as guaranteed by the United States or Arizona constitutions. He quoted from Attorney General Janet Napolitano's opinion on the section that dealt with cities and towns. The opinion said in part that Arizona Statutes 9-500.14 did not prohibit an elected official from speaking out individually regarding matters or measures on the ballot and the use of public resources to investigate the impact of ballot measures on a jurisdiction. He stated that the Council hoped that the Fire Board would feel free this evening to have an unfettered exchange on those issues on which last night they had felt constrained. Mr. Farrell pointed out that since all present were elected officials, all twelve were free to speak out individually regarding ballot measures. He did not think either Board or the Town Council was purporting action tonight. Mr. Farrell said he would not advise the Council to vote on any matters this evening but as individuals speaking out they were free to express opinions even regarding ballot measures. Regarding the use of public resources to investigate the impact of the ballot measures, he felt that was the idea behind the Attorney General's opinion that the citizens were entitled to have their elected officials free to speak out. He was of the opinion that a healthy exchange was in order but he requested that the Council not make a collective decision tonight. Mr. Farrell thought he was safe in saying that the Fire Board's attorneys would probably advise their clients the same way. Mr. William Whittington, one of the attorneys for the Fire Board, agreed that the same rules applied. However, he commented that Chairman Hansen might have some expectations in terms of what he wanted to have covered. That was up to him to decide. Mayor Morgan called on Chairman Hansen. Chairman Hansen commented that each Fire Board Commissioner had a brief statement to make to bring the Council up to date so they would had some Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 1 of 18 understanding of the Board's deliberations so far. He remarked that had they known the issue would generate so much debate, they would have asked to meet with the Council over a year ago to seek advice and to work towards a mutually acceptable transition to in house fire district service or a potential transfer to a municipal fire service. He apologized for their oversight and hoped this would be the beginning of a process that the Board should have initiated some time ago. He outlined their future plans. Some of the issues that they proposed to discuss in detail include: the reasons behind their decision to bring service in house, service specifications beginning December 15th, current financial strength of the district,poor financial performance by the contractor, current contractor's inability to meet performance standards, and options for transitioning and funding to a municipal utility. Chairman Hansen noted that the Board had been working a number of years to prepare for the transition that would begin on December 15, 2001. He acknowledged the council's concerns and stated interests to begin a municipal fire department. He expressed that the Board would like to work with the Council in a collaborative and cooperative environment. He pointed out that the Board wanted to avoid litigation, condemnation, and other quarrelsome and unnecessary divisiveness. Chairman Hansen felt that everyone should be able to work on the issues that preserved the community's cohesion and promote community confidence in both governing boards. He recognized the Council's concerns with regard to the Board offering 3,4,and 5-year severance agreements to new fire personnel. He felt that both governing bodies could have honest disagreements about the size of the package. He pointed out that the current contractor had actively engaged to undermine the Board's ability to provide fire protection and emergency medical services beginning December 15, 2001. Given their efforts to dissuade new job applicants and to undermine the legal authority of District, they had felt it necessary to reassure those men and women who were uprooting their families and moving to Fountain Hills of the Board's commitment to them. The Board was confident that their action would promote the finest quality fire protection and emergency medical services that Fountain Hills ever had. Chairman Hansen was pleased with the caliber of people that they had hired. He pointed out that both Chief Glen Brown and Deputy Chief Tom Knapp were former Rural Metro Fire Chiefs in Fountain Hills. He encouraged everyone to extend a welcome hand. He noted that there were 44 other hires consisting of 6 captains, 18 fire fighters, 18 reserve fire fighters, and 1 administrative office staff. He expressed disappointment that none of the current Rural Metro personnel chose to apply for any of the new positions. The current Rural Metro employees had been told that they would receive preferential treatment. Chairman Hansen expressed that in no way did that diminish the quality and caliber of the men and women that they had hired. He hoped that the council would sincerely consider the Board's offer to establish formal sub-committees and formal study agenda. If it was the Town's desire to begin a municipal fire department,the Board expressed their desire to work with the Council to identify funding sources and operational requirements that both entities could support. He confirmed that over the next 30 days the Board and their attorneys would be reviewing the form and substance of the Rural Metro petitions. If the signatures were considered to be legal and valid, the Board would then work with the County to set an appropriate election date on one of the four uniform elections dates during 2002. He thanked the Council for their time, concern, attention, and willingness to work with the Board on this important community issue. Councilwoman Hutcheson referred to a statement made by Chief Brown at the previous night's public forum where he urged several times that the Council take the time to cool off and let calmer heads prevail. She asked if he had been speaking for the Board. She stated that she agreed with that approach. She proposed that the Board keep the current contract in place with Rural Metro until June 30 and let the voters decide the issue. She said petitions had been filed and there were purported to be approximately 2900 valid signatures. As the Board and the Council were elected governing bodies, the voters deserved an opportunity to vote. Councilwoman Hutcheson said she would abide by the results of that election,and hoped that the Board would also. Chairman Hansen confirmed that the Board would have to abide by it. He responded that the other Board members would bring up as to why the Board took the actions that they did. He asked that they be allowed to bring the Council up to speed whether the Council agreed with their actions or not. Commissioner Bob Travis reviewed the early years of fire service for Fountain Hills. He stated that he had, over the past eighteen years, worked to build the Fountain Hills Fire Department up from regular fire fighters and reserves to fire services that Fountain Hills has today..He noted that over the past eighteen years he had not received many complaints about the services provided. Commissioner Travis stated that over that period he Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 2 of 18 had traveled in and out of the country in an effort to bring new technology to Fountain Hills. He said that while working with Rural Metro he had seen them and the Town grow. He confirmed that this had not been a hasty decision by the Board but was the result of seeing the system break down over the years. He stated that there had been many meetings between the Board and Rural Metro and their corporate office to address the problems but the situation just got worse. He reviewed some of the violations of the current contract: ambulance move ups, chief staffing, Fountain Hills staffing levels, request for documentation that was not delivered in adequate time, increase in contract pricing, inadequately addressing fire protection concerns, improper vehicle maintenance and inadequate spare backup vehicles, and non-compliance with the uniform policy. He commented these violations were some of the reasons behind the Board's actions. Service from Rural Metro had changed. Councilwoman Hutcheson said her question was yet unanswered as to if the Board was interested in a cooling off period as had been suggested by their Chief, Glen Brown, and let the voters decide this issue. Chairman Hansen agreed with a proposed a cooling off period but felt that the Council had just put a caveat on the process by saying that the Board should continue to employ a contractor that the Board had chosen to discharge. He felt the Board was operating within their legal fiduciary realm to do just that. He commented that the Board had made the decision and now they were trying to explain to the Council why they made that choice. The contractor had been working hard to ensure that the Board would keep giving them the business. The Board decided that the Town would be better off to have a municipal department but this meeting was their intent to give the Council the Board's logic as to how they had arrived at this point. Councilwoman Hutcheson asked for clarification as to if his answer to her question was yes or no. Was the Board willing to wait and have the voters decide this question in March without canceling the Rural Metro contract? Commissioner Dennis Dowling stated that the previous night's meeting had been very productive. He agreed that the Fire Board should have had similar meetings previously and solicited input from the public and firefighters, but the Board had chosen not to do so. He was in favor of this issue being decided by the voters before bringing on thirty fire fighters from other locations. He would be in favor of waiting until the voters decide once and for all. He commented that all were elected into office and a large portion of the electorate has spoken that they were not happy with the job being done. Commissioner Dowling said that waiting until the voters had a chance to decide would be a good idea. Mayor Morgan asked the Board why there had not be an attempt to get all parties together to discuss their differences. She pointed out that perhaps then the Town could have had their own department with those fire fighters who had been in Town for eighteen years. Clerk Tammy Rothermel responded that from the time that the Board had before them the decision as to whether or not on December 13 they were going to give Rural Metro their one-year notice of termination, public input was sought. From that day forward, public meetings were held on TV, they invited public comment between January and May, presentations were made to the public why the Board was not happy with the service of Rural Metro, and that they were looking at their options. She noted that in the time period of December to September there had not been any active participation from the community. She commented that at the meetings that the public did attend, the Board had listened to their comments and answered their questions. When the Board made the final determination to terminate (during their budget process), there had been a unanimous decision to continue with the process to hire their own fire fighters with the understanding that the current fire fighters would be given preferential treatment to be part of their new department. Mayor Morgan asked when the Board started to hire the new fire fighters. She pointed out that the Board could have met with the Council a long time ago as the Board had known when they terminated Rural Metro's contract that they were going in the direction of the Town having their own department. Mayor Morgan stated that the meeting could have taken place right then and there. Clerk Rothermel replied that there had not been any public outcry. Commission Travis said that ten months ago when the Board voted to terminate the Rural Metro contract, not one council member called him and asked him why the Board was changing. It wasn't until the petitions were signed that the inquiries came. He explained that if the election happened in March and the citizens voted to dissolve the District, the Town would then have to provide fire service, as the District would be out of business Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 3 of 18 and would have the option of contracting with Rural Metro. If the District went operational December 15, which they intended to do because the Board felt the citizens elected them to do the right thing, then the Council would have two options. If the citizens voted to dissolve the District in March then the Council could start their own municipal department with the equipment and manpower already in place or contract with Rural Metro. The Board wanted to prove to the Council that from December of 2001 to March of 2001 that the fire department built by the Fire Board was better than what was in place today. Councilwoman Fraverd asked if the process could be stopped, maintain the status quo, and then jointly look at the situation to determine what the best option was for the community. She noted that Commissioner Dowling had already indicated his willingness to do so. She felt that Commissioner Travis' comments indicated he was not in favor of doing so,but she asked to hear each commissioner's answer. Chairman Hansen responded that the Council had everything to gain and nothing to lose by delaying action. The Town could start right away to negotiate a contingency contract with Rural Metro and then compare that with the operation that the Fire District had put together. This would give the Council a choice. If the Council was to decide to contract with Rural Metro and the Town was in charge of fire service for the community,they could make that choice. If it looked like it was a better low risk and guaranteed safety option for the community to choose a municipal authority, the Council could make that choice. However, if the status quo were maintained, the Council would only have one choice with a sole service contractor. He stated that there wasn't anyone else the Council could turn to for that service if Rural Metro was not used. Vice Mayor Kavanagh acknowledged that both Chairman Hansen and Commissioner Travis stated that if the council allowed the Fire Board to hire the new fire fighters, and if the citizens voted to dissolve the Board because they want to keep Rural Metro, that the choice would be available. He felt that the Board knew something that the council did not because the town attorney had not yet read the contracts. He pointed out that there would be no way for the council get Rural Metro back if that were the will of voters if there were 3 —5 year clauses in the contracts because the Town would then have to pay all of the people that the Board had hired for 3—5 years. He commented that would be a multi-million dollar a year burden,which the Town could not carry. He questioned the Fire Board's attorney that if the citizens voted to dissolve the Fire Board,that the Town would have two choices and would not have to pay the new hire contracts with 3 —5 year clauses. He questioned if the Fire Board went away did the contracts dissolve. Chairman Hansen recanted what he thought would happen. The Fire Board would file suit against the contractor for lack of performance. He confirmed that the board had signed a contract agreement with Rural Metro on June 29`11 that the Fire Board agreed not to press for restitution of public funds paid to the contractor where the contractor hadn't provided the services. In return the contractor had agreed to use full cooperation and full faith best efforts to assist the Fire District in establishing its own municipal fire operation. They would expect to ask for damages that would recover the costs of the additional legal fees, communication services (radio and fire), and severance costs that resulted from the non-performance of their contractor. The contractor told the Fire Board that they had plenty of money, so the Board would expect to recover all of the extra expenses caused by the contractor violating the contract. Vice Mayor Kavanagh noted that the extra expenses would not have been caused by the contractor but would have been caused by the Fire Board's action of signing 47 contracts that had 3 — 5 year life times. He questioned how Rural Metro would be responsible for an action that the Fire Board took voluntarily. Mr. William Whittington, attorney for the Fire Board, responded that the allegation had been made and considered that it was the conduct of the contractor that had brought about the need to negotiate the contracts in question and caused the District to incur additional expenses. If there was a vote to dissolve the District and there was a contractual commitment to satisfy those obligations right then and there, it was not something that they felt that the Town would be responsible for. They felt it was something that would have to settled out of the assets of the District, which would include monies recovered on behalf of the District in conjunction with the action brought. Vice Mayor Kavanagh clarified that the Fire Board 's termination of the contract of Rural Metro was what caused the Fire Board to give new hires 3 —5 year contracts. Mr. Schwab disagreed that was what he had said. Vice Mayor Kavanagh stated that it had been alleged that if the Town did nothing and did not ask the Fire Board to hold up on the contracts, and if the Fire Board signed those contracts, which the Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 4 of 18 council had been told had 3—5 year life times, it had been suggested here that in March if the citizens voted to dissolve the Fire District because their will was that they wanted Rural Metro, the Council would be able to contract Rural Metro and the Town would not have to pay those new hire salaries and would not inherit those contracts from the Fire Board. Vice Mayor Kavanagh questioned if the responsibility passed from the Fire Board to the Town Council if the citizens voted to dissolve the Fire District. Mr. Schwab replied that those would be obligations of the District and those obligations would follow the assets of the District to the extent that there were sufficient assets in the District to satisfy those obligations upon dissolution. He commented that one of the assets of the District could be the damages and recoveries pursued by the District for breach of contract. Vice Mayor Kavanagh felt a judge would not hold Rural Metro responsible because the Fire Board terminated their contract and the Fire Board wrote additional contracts for new employees with 3 — 5 year terms. He did not see how Rural Metro could be held responsible for the Board's action. He felt that the responsibility would pass on to whomever wound up with the responsibility. He concluded that should the Town be responsible, the Town would be stuck with those 3 —5 year contracts. He pointed out that since the contracts might amount to $2 million dollars a year, there wouldn't be any way that the Town could possibly grant the voters their wish of keeping Rural Metro, if at the same time, the Town had to pay 47 people $2 million dollars to sit around and do nothing. Chairman Hansen corrected Vice Mayor Kavanagh stating there weren't 47 new hires because some were reserves. Vice Mayor Kavanagh responded that the Town couldn't afford even half that number. Mayor Morgan stated that she had heard that the 3—5 year contracts were only valid if the Town took over and were not valid if the Fire District were to continue. She asked for clarification. Mr. Schwab replied that there was a provision in the addendum that provided the severance provisions were only payable upon dissolution of the Fire District. He noted there were two or three contingencies,but could not recall them all at this time. He thought the one that Mayor Morgan was referring to was the disillusionment of the Fire District for any reason, not necessarily by vote,but for any number of reasons under the Statute. He stated that if the Fire District were not dissolved, the contracts would not be paid. Mayor Morgan pointed out that this had been put into place primarily to make it absolutely, hopefully impossible, that the Town would take over. Mr. Schwab responded that would be better answered by the people who made the decision. He stated his description to the Council 411I01, had been what the document said. If the decision for doing so was a political one, the Council should have it addressed by the Board. Mayor Morgan asked for further clarification. Commissioner Dowling commented he had missed the meeting where the severance contracts had been voted on. He acknowledged that if a company that a person worked for went out of business then you find another job,as that was how America worked. He felt the contracts would be a huge burden to be placed on the Town, especially in light of the petitions that had been signed. Clerk Rothermel stated that she had understood that the severance packages would only be triggered upon the dissolution of the District. If the Town were to take over the District and not dissolve it, she did not think that the severance packages would be triggered. Mr. Farrell had made a records request and Chief Brown had provided a sample. He stated that both attorneys for the District had assured him that it was a sample and might be the final language but it was the only copy he had seen. He displayed the verbiage on the screen for public view. He read the second paragraph. In the case of dissolution of the Fountain Hills Fire District or in the case of termination of all employees in favor of contracting for employment services, employees are guaranteed the following severance package. He pointed out that the language that he had seen from both counsels,with the caveat that it might still be work in progress, would prohibit, if nothing were changed after tonight's meeting, the Town from discharging those employees in favor of a Rural Metro contract in March. If the voters were to dissolve the District, it seemed that the employees would have a claim against the assets of the District at that point in time. He understood that the Fire Board was meeting tomorrow and there could be different language. He felt it was his legal opinion to the Council that they would be prohibited for re-engaging Rural Metro without the penalty of severance. Mayor Morgan stated that would be a strong burden to be placed upon the Town. Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 5 of 18 Councilman Wyman said the operative thing was paragraph two as it did not say "and" in the case of termination it said"or"in the termination. If the Town would take it over,it would be a defacto dissolution and the Town would be saddled with the liabilities. If the issue was left with the Fire Board who had been elected to make these types of decisions and the citizens dissolved the Board with their actions on the 12th of March, the Town would be left with the liability. He observed that in either instance, the Town would be left with the liability. Since the Town would have the liability in either instance,he did not think it was an issue to him. On the 12m of March, the way he understood that the ballot language would read, dissolve the Board "yes or no"; not dissolve and hire Rural Metro. The Council could decide to stick with whomever the Fire Board had or deal with the problem, which would be the liability, which would be inherited whether the town took over now or then. One way or the other the Town would have fire coverage for the people of this Town. Mayor Morgan felt that this contract situation and the way it had been set up had been irresponsible. Councilwoman Hutcheson noted that at the last Council meeting Chief Brown had told the Council that these contracts had been executed. At last night's meeting the Council heard the contracts had not been executed. Councilwoman Hutcheson pointed to the meeting that the Fire Board would have tomorrow to possibly execute these contracts. She asked why the Fire Board would have a special meeting tomorrow to execute contracts when they know there is this public outrage. Commissioner Dowling remarked that he was going to ask the same thing. He reiterated Councilman Wyman's statement that the Town would inherit the liability but he noted that the liability was not in place yet. He understood the new fire fighters had signed the contracts, but the Board would have to vote tomorrow to whether or not they were going to execute it from their end. Because of such strong input by the Council, he suggested that the Board table the vote or not have the contracts at all. He questioned why the contracts were needed any way as these new hires had come freely. They knew it was kind of a volatile situation in the Town and they came anyway. Commissioner Dowling said he would be voting against this type of a contract,but he was only one vote. Councilman McNeill agreed with comments made by Commissioner Dowling. The problem described by Councilman Wyman of being saddled with this issue one way or the other only came about if the Fire Board insisted upon going forward with what many of the Council viewed as a rash manner. The words spoken last night had suggested slowing down and proceeding in a more considerate manner. If it were to be implemented in the way that Councilwoman Hutcheson had suggested, it had to be a two way street. He did not think that the Fire Board could go forward with the contracts of the nature described and put the taxpayers of the Town in a position that they would bond themselves. He felt most people viewed the contracts and the severance packages as a poison pill. Chairman Hansen said he found this conversation odd. The Fire Board had the fiduciary responsibility to provide excellent service at low risk for the taxpayers' dollars. If an individual wanted to spend personal money to invest in Rural Metro that would be up to the individual and if it were lost, that would be the individual's problem. He felt that the level of risk had to be considered and the Board had done that. The conclusion was that the level of risk was unacceptable where there was the possibility that they could sacrifice or jeopardize citizens' safety because of the contractor's financial liability. From a fiduciary point of view the lowest risk way to go would be to form their own district just as hundreds of other communities had done. Most communities do it successfully themselves so he did not understand the human cry to the Fire Board as to why they couldn't discontinue the contract. If the Board had done it the other way and through the responsibility into the Council's lap then it would become the Council's responsibility to decide. He posed the question: What should be done with a contractor who decides to minimize or discontinue the fire protection and first responder emergency medical service. He proposed that if Rural Metro lost the Scottsdale contract, that could happen. Councilman McNeill said he had a lot of respect for citizen boards. He gave the Fire Board the benefit of the presumption that they had acted in good faith and had tried to make the best decision for the people. However, the Council was now confronted with over 2900 certified signatures on petitions calling for dissolution of this body and it was a powerful message. Councilman McNeill conceded that the Fire Board knew more about the facts than he did as they had studied the issues. If the Fire Board had confidence in their decision, he asked Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 6 of 18 why they didn't let the voters vote on it. Chairman Hansen replied that the citizens would vote on it if the petition was valid. Councilman McNeill pointed out that the citizens would vote on it after the contracts were signed. Chairman Hansen said it didn't matter. He noted the question of boundaries and if the Fire Board were dissolved where the assets would go. He stated that their legal counsel said the assets clearly went to the County. He remarked it was not clear-cut. He commented that the Board members lived here, they were concerned about the safety issues, and they dealt with this service daily and the Council didn't. He remarked that the Fire Board had seen an unacceptable risk and that was why they had taken this action. Councilman McNeill said the severance would be triggered by the dissolution of the Fire Board. He had read some of the Arizona Revised Statutes on Fire District powers and duties. He quoted A.R.S. 48-805.D. He felt that the amount that would be triggered by the severance packages would exceed the Fire Board's annual budget and therefore,be violation of the State Statute. Mr. Schwab responded that those liabilities followed all of the assets not just a single year's budgeted assets. Councilman McNeill asked if all district assets would be liquidated to satisfy the severance debt and thereby assume compliance. Mr. Schwab said it was his opinion that the Statute required that the assets be used to satisfy the liabilities of the District whenever a district was terminated. Mayor Morgan asked if that was good use of the taxpayer's money. Councilwoman Fraverd reiterated that the Council was asking the Fire Board to slow down and continue with the Rural Metro contract. She felt the Board had the obligation to the voters and if they wanted the Board to have a public hearing again to once again explain it, do it again. She pointed out that the Fire Board answered to the voters. She stated she was still waiting to hear from Commissioners Winters, Travis, and Clerk Rothermel. Clerk Rothermel replied that she was not sure that they or Rural Metro had that kind of time. She again stated that her consideration in voting to terminate the contract with Rural Metro had everything to do with finances. Their independent auditor, Arthur Anderson, issued a "going concern", which meant that they were not sure that Rural Metro would continue to be a going business. This year's financial report was 95 pages and was worse. Commissioner Winters had received some independent research done on this and could highlight the big negatives about Rural Metro. She indicated that it was quite possible that Rural Metro might not make it past December 3`d. Commissioner Winters stated that the Council had each received a copy of Rural Metro's 10k's and hoped they had read them and saw what the Board had seen. He stated that the Board had no idea it was going to be so bad this year. He confirmed that he was a financial consultant in Town and he had not felt it was right for him to give his opinion on this so the Board obtained the financial opinion regarding Rural Metro from an outside independent advisor, Dr. Herbert Robinson. Commissioner Winters distributed to the Council a copy of the information received from their consultant. He reviewed the information. He noted that the financial problems got worse as time went on. He pointed to the major issues facing Rural Metro this coming December. Commissioner Winters said it had been his opinion that the Board needed to start looking at going on their own because he saw how poorly the company was doing and how that affected their servicing. He quoted from their consultant's report. "Obviously the entire future of Rural Metro operations depended on what happened December 3, when lenders were faced with a "going concern" auditor's report and if the lenders felt assured that they would not be exposed to giving greater loss of capital through their continued financing of Rural Metro operations. Few investors knowing all of the facts would take that risk". He said he had tried to do his best by the taxpayers and he had seen a lot of problems with what Rural Metro was giving the Board and that was why he had voted to go out on their own. He thought it was strange that the Board had not heard any public outcry until now since the Board had voted to go out on their own back on December 15, 2000. He asked why the public now chose to come forward in the eleventh hour when the Board almost had an operation going. He said the Board had already hired new people who were in place and that had given up their current jobs and homes to move here. Commissioner Winters remarked that the people crying to the Council had not lost their jobs as they had been guaranteed other jobs over the hill. They would just not be working right here in Fountain Hills. He asked if that was fair to the new hires because those people who were complaining weren't giving up their jobs. Town Council Joint Meeting with the Fountain Hills Fire Board ���rrrr Special Session 10/30/01 Minutes Page 7 of 18 Mayor Morgan responded that 3,000 people who signed the petitions were a few more than the fire fighters that Commissioner Winters was alluding to that were complaining and crying to the Council. She said she had moved cross-country for a job and no one had given her a guarantee. Mayor Morgan felt that was a risk that someone took. She hoped that the new hires had looked into the situation when they were hired. She indicated that one person had changed his mind. Commission Winters said when they held their September Board meeting there had been five commissioners present, Chief Brown, Bob Burns from the Times and no one from the public attended. The next month the petitions came out. He again asked why in the eleventh hour this was going on and why hadn't the public come forward a long time ago? Mayor Morgan replied she did not know why this happened the way it did. She indicated she had attended a few of the Fire Board meetings and sat in the back of the room. She had seen at the call to the public with ten hands go up and only two people allowed to talk. Mayor Morgan said that if she conducted the Council meetings that way, the dais would be stormed. She asked so why should people attend the Board meetings if they weren't allowed to speak. Commissioner Dowling pointed out that in February Randy Roberts came and started asking questions of the Board to see if they were going to have public input sessions. Mr. Roberts had been told that the Board meetings were the public input sessions. Commissioner Dowling said he joined the Board in November. Three weeks later he had been asked to vote to give Rural Metro notice of termination. He stated that it had been quoted that it had been done with a unanimous vote. At that time he had been given assurances that the Board was going to employ Arthur Anderson to lay out a plan of options to consider for forming their own department. The plans were to have included public input groups comprised of citizens and fire fighters and after all input the Board could re-establish the contract with Rural Metro if it was determined to be more effective. He pointed out that those plans had been scrubbed and no public input had been allowed. He felt that had been a huge mistake that had now backfired. He had asked for opportunities to start a dialog with the union and it had fallen on deaf ears. Commissioner Travis reiterated the past actions taken by the Board. After the Board's vote ten months ago, fikir they had met with the fire fighters. At that meeting, the fire fighters had wanted to apply and leave Rural Metro. At that time, the fire fighters had been told that the District did not have their personnel records. The fire fighters were told that they would have to pass a physical, medical, and background check. If the fire fighters passed all three,then the Board would give extra consideration to those current fire fighters working in Fountain Hills. If they lived in Fountain Hills, additional consideration would also be extended to them but none of them applied. Was it because they knew some of them couldn't pass either the medical, the physical, or the background check and they didn't want that exposed? He did not know why. He said the union pressured them not to apply and went around the State telling other fire fighters not to apply to Fountain Hills. At the last minute, with most being fire fighters, people with petitions stood outside of Bashas and Safeway asking the public to sign them. The public was told that if the Fire Board were allowed to continue with what they were doing, there wouldn't be any ambulances in Fountain Hills, as they would have to come from Scottsdale. The public was told there wouldn't be any 911 service. He stated that they got 3,000 out of 11,000 voters in Fountain Hills to sign petitions because they all thought there wouldn't be any ambulances or 911 services. He stated that they knew at the time there would be two ambulances in Fountain Hills and they also knew that the 911 services were not going away. He felt that was stretching the truth and he would have signed the petition if he had not been a Fire board Commissioner because he would not have wanted the ambulances to not be located in Fountain Hills. He noted that many people had called him after finding out that there"would be"ambulance service in Fountain Hills and that they had signed the petition because they had not known that. Commissioner Travis asked why Rural Metro sent their new reserves from the training academy up to Fountain Hills to stand outside of Bashas and Safeway to collect signatures and tell fibs to people. He did not feel that was right and Rural Metro was not a company that he would work for. Clerk Rothermel said people called her and reported that they had been threatened that their homes would burn down if they did not sign the petitions. She offered to give the name of the person who told her this. Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 8 of 18 Councilman Wyman said this issue had to do with the Board's decision and the management of Rural Metro. He stated that if Rural Metro went into Chapter Eleven, they would reorganize and then they would have to come up with a plan to pay creditors, which wouldn't be easy. All the creditors wanted to see, and in this instance it was the taxpayers, was that they would be taken care of. Part of his concern was that the thirty-five honest citizens of Fountain Hills who signed that petition for whatever reason not knowing what a 10k was, let alone what it said, was whether or not they would be properly served. If Rural Metro appealed to that reasoning, they were doing the job that they were hired to do, as they had not wanted to lose the contract. He felt the citizens were properly concerned, but they had not taken into account the financial condition of Rural Metro or what the consequences might be. He had thought that was why a Fire Board had been elected so that they could study the issues and make a decision. He said what he heard people saying, which he felt was improper, was that 3,500 people can't be wrong and that was not the issue. They wanted a Fire District or fire protection and medical transportation if they require it. That was what the public was concerned about. Councilman Wyman said that the Fire Board was charged with,just as the Council was, the proper concern for the fiscal end of it as well. He wasn't sure if the Town would get the liability or not as that depended upon what happened tomorrow. One way or the other the Town had been put in a position where the Council had to bail out this situation. He asked why the public hadn't attempted to recall the Fire Board if they had been so dissatisfied with the action that the Board had taken instead of throwing it to the Council. He questioned if there had been another motive. Was it possible that the motivation behind this was that Rural Metro only wanted to keep their contract? Vice Mayor Kavanagh addressed the question of why now the Council was looking into this issue. He answered for himself but he suspected that the answer probably applied to all Council members. The Fire Board, just like the School Board and Sanitary District, were independently elected political bodies. Some people think that they were like Parks and Recreation or the Planning Commission where the Council appoints and controls them. That was not true as they were independent elected bodies with their own taxing authority, which made them very separate from the Council. He had always avoided public comment on the activities of the School Board, Sanitary issues and, to this point, Fire Board issues as they had their own elected mandate and it was their business. As far they were concerned, he was just a regular citizen and he should not use his position on the Council to amplify that. However, the wall of separation between the Council and, in this case, the independently elected Fire Board was breached. It was breached by approximately 3,000 petition signatures, who said they wanted to decide whether to keep Rural Metro or allow the Fire Board to proceed with their plan to have the Town's own fire department. Based on legal counsel's advice, should the voters decide that they want to keep Rural Metro and dissolve the Fire District, the responsibility would fall upon the Town Council. That was why the Council was no longer separate from this issue and felt they must address it. He indicated that there was a great possibility that the responsibility would fall into the Council's lap. So now it was appropriate that the Council comment on the issues. Vice Mayor Kavanagh stated there were two types of issues. The first issue was should the Town have Rural Metro or have the Fire Board create the Town's own fire department. He was of the opinion that was not the Council's business because, previously to the petitions being signed, it was the Fire Board's business. But the moment that the petitions came in that said the voters wanted to decide this issue in an election, and then it became the voters' decision. He felt that his responsibility as a member of the Council was to do whatever he could to ensure the rule of law and that the voters got to decide whether Rural Metro continued or the Fire Board got their own department. Vice Mayor Kavanagh pointed out that the way to do that was to have the Fire Board extend Rural Metro's contract until June 30th (he thought Rural Metro had agreed to this) and not sign any contracts until the March election. He suggested that between now and March both sides could vigorously debate all the other issues. He remarked there were at least twenty issues that had to be decided as to whether or not they wanted to go Rural Metro or their own department. He did not feel he could decide those issues now. The debate last night had brought interesting charges and good rebuttals from both sides. The only way to get a good decision from the people would be to freeze the Board's action, not hire anyone, extend the Rural Metro contract, and between now and March have forums like this, have the newspaper cover the issues. He felt the letters to the editor would sizzle and the public would be given the information. The 3— 5 year clauses were what he called a dooms day machine. The clauses were put in so that no matter what Lie Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 9 of 18 happened,no sane person would vote to remove the Fire Board and take Rural Metro. No sane taxpayer would commit the Town to $1.5 — 2 million dollars in salaries a year to people they had not hired. He felt that was why the action had to be frozen. He commented it was time to wipe the slate clean,as he did not feel that either L.Lir the Council or the Fire Board should decide this issue. It was a public voter issue. He pleaded with the Fire Board to freeze their contracts, extend the Rural Metro contract, get the information out to the public, and let the better side win when the people vote. Mayor Morgan called for a break at 8:25 p.m. and reconvened the meeting at 8:40 p.m. Councilwoman Fraverd recalled that she had heard from three of the Commissioners and Chairman Hansen that they could not stop things as they were on a forward path and must vote on the contracts tomorrow. Even though it might mean that they would have to sell every asset to pay off those contracts if the severance packages came into play. She understood that they could not stop things because Rural Metro had a lousy financial position and they had not performed on the contract, as they should have. She spoke to the issue of Rural Metro's performance. She pointed out that had she been the one who was unhappy with the service provider she would have given them written notice. She asked if the Fire Board had provided Rural Metro with written notice that they had not lived up the contract before December 13 when the Board decided to sever the contract. Commissioner Travis discussed the issue of non-compliance to the contract as it applied to ambulance move-up service and read a portion of an internal memo changing the policy, which had been addressed to then Chief Roof and not the Fire Board. When he saw this memo, he had responded in writing with his notation on the memo stating that that he needed to discuss the memo regarding move-ups and inquiring if Fountain Hills was to receive less service. He asked that Rural Metro call him before he brought the proposed policy change to the Fire Board and he indicated that he had given both numbers where he could be reached. He clarified that Rural Metro's answer to his request had been an addendum to contract that would have given the citizens of Fountain Hills less service, which he read. He stated that he had not signed that addendum. Councilwoman Fraverd said there was a procedure for contacting Rural Metro if there was a grievance. She asked if the Fire Board had followed the procedure. She noted that the contract called for how they could terminate the contract, ways of terminating the contract (for cause or not for cause), and major defaults. She asked if the Board had a paper trail showing how unhappy the Fire Board was with Rural Metro and how they had defaulted on the contract showing how the Board had not received consideration for the notice given. Chairman Hansen responded that the Board had chosen not to call for a major default but had exercised the part of the contract, which said that the Board could give Rural Metro twelve-month cancellation notice. He said the Fire District Board had communicated on contract issues in their public meetings. He said one Commissioner could not speak for the Board as a whole unless they were all aware and had agreed to it. He explained that in all public minutes there had been many discussions with Rural Metro letting them know of problems. Some discussions had taken place on video. The Board's method of communicating concerns, disagreements or questions on contract compliance had basically taken place within their public meetings and were contained in the minutes of their meetings and videos. Commissioner Winters indicated that he and Commissioner Travis had physically gone to Vice Chairman Lou Jekel and President Ted Bean's office in 1999 and spent approximately two hours going over the problems. The Fire Board had not just written a note or a memo, they had taken time off from their jobs and went to them and discussed the problems asking that they be corrected. Councilwoman Fraverd said that Commissioner Winters had been quoted on September 27th of this year stating that the District provided excellent service to the community. She questioned how that could be since the service was provided by Rural Metro. If the Board had to go to Rural Metro in 1999 because of problems,how was the District providing the best fire service if Rural Metro was so bad that the Commissioners had to take time off from work to them and address problems. Her point was that if the Board was thinking of terminating a contract, they should have considered that a paper trail would be needed. She felt there had been a horrendous miscommunication with Rural Metro and the Board did not have a paper trail to back them up. The Board had terminated the contract without cause and she thought it would be difficult for them to explain to the Lor Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 10 of 18 residents that although the Board thought they had cause to terminate they did not have cause. Chairman Hansen respectively disagreed with Councilwoman Fraverd's assumption. He said it never occurred to the Board that they would report to the Town Council and have to justify their fiduciary duties. A year ago the Fire District's five volunteer non-paid commissioners and one secretary had not had a lawyer with them as the Council did or did they have department heads or people to do things. He said it was a very lean, well run District. He remarked that the reason that the community had received good service was due to the contract conditions and the fact that vendor would not have been paid had they not done what they had been asked to do under the terms of the contract. He stated that even though Rural Metro has tried to take credit for the good service,the beauty of the whole thing was the well-crafted contract in the first place. Councilwoman Ralphe said she had studied the 10-year contract signed in 1993. Yesterday, she had asked for any written notices of major defaults or reports and so on. She now understood why she had not received anything, as they were oral. Had the Board chosen that path, they might have been able to remedy alleged problems,as there was a system for reporting those defaults in the contract but also a system for Rural Metro to respond to them. Chairman Hansen replied he did not understand how she could make those assumptions. He pointed out that the Council was looking back at actions taken by the Board and maybe the Board should have done something different. He again pointed out that the Board did not have the staff or the resources that were available to the Council. Basically they had depended upon discussing the issues in normal Board meetings with Rural Metro so that the entire Board was present. Clerk Rothermel stated that back in 1993 when the contract was being negotiated with Rural Metro, there had been a public outcry from the citizens about actually going with Rural Metro and considering a long-term contract with them. She had been on the citizen committee that had negotiated the terms of the contract with Rural Metro. They had gotten down to the part of termination and they had agreed that there should be a way out in case they wanted to get out for any reason. She asked that everyone keep in mind that she was a citizen at the time and not on the Fire District Board. There had been a very strong feeling on the committee that the Board should have a way out for either party "without cause" if one year's notice was given for any reason. When there were infractions, they had talked with Rural Metro when there were differences in the way they thought things needed to be done. The Board had decided to terminate the contract without filing cause as it was less stressful, or it should have been. Commissioner Travis acknowledged that at every Board meeting there was a contract administrator from Rural Metro Corporation who attended. Councilwoman Fraverd pointed out that the contract allowed the Board to give notice to Rural Metro and they had 20-days to comply. The Board should not have had to go through month after month of problems. She did not think that they would have had to hire an attorney as it only needed to be some kind of a letter giving them notice according to contract specifications and after five they would be out. She asked why wait a year. Chairman Travis responded that the Board had to wait to get five things against them. Councilwoman Fraverd said the Board had provided a list of ten to fifteen things that they were unhappy with, why wait a year. She agreed with Chairman Hansen that it was easy to look back and say what the Board should have done. She noted that the Board answered to the public. She did not need the paper trail although it would be easier for her. She was trying to explain it herself and the public. Why the Board couldn't go along with Rural Metro for another four months? She did not have anything to show the public to confirm why Rural Metro had to be dumped. Commissioner Travis responded they gave Rural Metro a year's notice because the Board knew it would take them a year to organize and put together a fire department. He commented that Rural Metro had signed the contract and agreed that they would work with the Board for a year in order to allow the Fountain Hills Fire District time to go on their own. Councilman Wyman said on the issue of termination the contract had been bilateral in the sense that either party could terminate without cause. He felt the Board terminated according to the terms of the contract and did so because of good business practices. He did not think that the Board should apologize for their actions. Councilman Wyman said that the Board had been working on this issue for quite a time and were small staffed. They worked on the issues on behalf of the Town, made their complaints to Rural Metro, met with Rural Metro,and came to the conclusion it would not work any more and they exercised their right to terminate. The Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 11 of 18 Board gave the required year's notice and asked that Rural Metro work things out. He noted that was also in the contract. ,,,,. Councilwoman Hutcheson asked how many other Fire Districts in the State of Arizona gave 3, 4, and 5 year severance contracts. Chief Brown said he had no idea. He noted that Rural Metro offered severance packages. Councilwoman Hutcheson asked if it were true that this Fire District had reserved some apartments for the new people. If that was true she wanted to know how many other Fire Districts in the State of Arizona did that. Chief Brown responded that he did not know any Fire Districts in the state that did that and neither had this Fire District. What had happened was that an apartment complex approached the District and offered a benefit to the employees, as they knew there were 32 full-time and 15 part-time employees moving to the community. The deal offered was first and last month rent free with a small amount of move in costs and the monthly rent discounted $20. He understood that already 20 employees had rented apartments from that complex. He said the District would pay the employees and they would rent an apartment like anyone else. He said a lot of the information coming from Rural Metro that everyone was hearing was untrue. Councilman Wyman asked how many fire districts were in Arizona. Chief Brown replied he thought there were over 160 fire districts. Councilman Wyman asked how many contracted with Rural Metro. Chief Brown stated he thought there was one full time (Rio Verde) and a small one in Pima County. Councilman Wyman asked if the President of the Arizona Fire District Association Jan Powell would know how many. Mayor Morgan noted that she was present but could not call upon her tonight. Councilman McNeill asked why go with such an unusual severance clause. Chief Brown confirmed that all of the employees had been brought on prior to the severance packages being offered. He felt that there had been a misnomer that the employees had made their decision to come to Fountain Hills Fire Department based on the fact that they would receive severance and that was untrue. All came prior to the severance agreements being offered. The severance came about after two things happened. A captain had rescinded his agreement to come work for the Board and part of his reasoning had been based on some of the actions that were going on here from Rural Metro. The second reason was because of the actions going on with Rural Metro. The Board had tried to look at a way of taking care of those employees who had agreed to come on board. Chief Brown indicated that there had been some discussion during the break by the Board members. The Board questioned if the Council would be willing to allow the Fire Department to start up on December 15 and have the issue go to a public vote if the petitions were found to be valid, if the severance packages were removed from the table. Councilwoman Ralphe asked Rural Metro and the Commission to discuss their performance during the Rio fire. It was noted that Rural Metro was not available. She then posed the question to the District. She asked if the fire protection was handled appropriately or were there deficiencies. Chief Brown responded they might do differently. Councilwoman Ralphe asked if there had been any issues in that fire that had carried over in some way that lead to the termination of the Rural Metro contract. Chief Brown replied no. Mayor Morgan asked if a political committee had been formed and was a political committee formed before the ads had been taken out. She asked if the funds were coming out of the Fire District to pay for the ad. She asked why it did not state who was paying for the ad. Chief Brown said he placed the ad. He assured the Council that in their opinion it had nothing to do with a political committee and there wasn't any political activity involved with the ad. He said they had held a discussion with the Times that any ad taken out by government entity had that line on the bottom. In fact, they found ads taken out by the Town announcing functions that on the bottom say paid for by the Town of Fountain Hills. He did not believe that they were acting in any type of political action committee to do that. He acknowledged that he was aware of a political action committee, which was in the process of forming a committee to take the opposing side of the current Rural Metro sponsored political committee. Mayor Morgan asked if the opinions of the Attorney Generals office and the Board of Elections were invalid. Chief Brown said there had not been any opinions rendered only notification that there was an investigation. Personnel from the Fire District discussed the issue with the Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 12 of 18 Election Department verbally and were told that the Election Department would continue to look into it although they did not necessarily believe that anything had been violated. The District's attorneys sent a letter back to the Elections Department and Attorney Generals' office stating that District did not believe that announcing a public function was a violation of the election laws. Commissioner Winters said that one of the problems with Rural Metro was with the billing for ambulance service. He stated that the District paid $85,000 annually to provide free ambulance service to residents. He noted that there were many instances where citizens were being billed. He noted that 30 residents this year had been billed for ambulance service. He explained that the District advertised on Channel 11 that the service was free to notify the citizens and advise them that they were not to pay for this service. Commissioner Winters said this issue had been brought up to Rural Metro many times even though they don't have a paper trail on this issue. Councilwoman Hutcheson questioned if the Department of Health Services had approved the new ambulance. If not, she asked if someone could explain what the approval timetable was. Chief Brown asked if Councilwoman Hutcheson was inquiring if the District had a certificate of necessity to provide ambulance service. Councilwoman Hutcheson asked if she were to call the Department of Health Services now, would they tell her that the District was approved to use the ambulance. Chief Brown said no. He reminded the Council that the Fire Department did not start until December 15 but the Department of Health Services prior to that date would inspect the ambulance and equipment. He said he had conversations with the head of Department of Health Services and he said they would be allowed to transport with vehicle on December 15 when the District starts their operation and they would not be allowed to bill for that service. Councilwoman Hutcheson asked for assurance that the Department of Health Services that on December 15 the new ambulance would be approved. Chief Brown stated that the Council could call Ed Arnijo with the Department of Health Services to confirm their conversation that the District would be allowed to transport with that vehicle beginning December 15 as long as they did not bill. Commissioner Travis asked Chief Brown to explain when their ambulance would be used. Chief Brown stated 4160 that the District's ambulance could not technically be referred to as an ambulance as it was a rescue unit. The rescue unit would be used as a backup or an insurance policy. He stated that Rural Metro had sent to them a letter of understanding that they would be basing a paramedic level ambulance inside Fountain Hills, which would be the primary ambulance. If that ambulance was to transport,they believed Rural Metro would work to send another ambulance up to Fountain Hills on move up. The only time that the rescue unit would be used would be if they were in a situation where the patient needed to be transported prior to the time that the primary ambulance had told them it took to get to the resident. He noted that they had a procedure then where they would be contacting the base station, hospital, and if they advise them that the medical condition of the patient constitutes that they do not wait for whatever the response time was of the primary ambulance,then the rescue unit would transport. He explained that there were a number of fire districts that utilized that same procedure. Clerk Rothermel asked Chief Brown to explain that an ambulance did not necessarily mean that they were the service provider and how the engines were equipped with paramedics to send to a scene. Chief Brown explained the process. He stated that the fire trucks all had paramedics on them and they would be able to provide medical service to citizens prior to an ambulance or rescue unit's arrival. He commented that on December 15 there would be more fire trucks with paramedics on board than currently provided by Rural Metro so the District felt that they believed that they were increasing the services at that time. He noted that their paramedics would be the initial contact with the patient most of the time. He stated that there were a number of ways that medical service delivery systems were done. Vice Mayor Kavanagh reiterated that it had been suggested that there was a possibility that the contracts could be signed without the 3—5 severance agreements. He stated that while that was a step in the right direction, it still put the council in a very bad situation should the citizens vote in March to dissolve the Fire District. If that were to occur,Rural Metro would still be leaving in December and the Council did not know if they could get them back in March should the vote go that way. The real problem was that then the council would have the Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 13 of 18 distasteful task of firing 47 people hired by the District. He did not relish doing that. He felt that the Council's request to freeze the contracts and extend Rural Metro's contract to June was the best way to go to avoid that type of distasteful ending. Chief Brown said he felt there was a misconception that the employment agreements had not been accomplished. He explained that the only thing that had not been accomplished was the transition of the severance agreements from verbal to written form. He stated that the employees had all been offered and accepted positions a long time ago. Chief Brown said there were 32 full-time employees and 18 reserve part- time employees. He noted that was a done long before everything came to light with the petition drive. The severance agreements were approved and authorized by the Board approximately a month ago. What was being talked about being done tomorrow at the Board meeting was the approval of the written form of the severance agreements. He commented that there had been a legal argument, which he had discussed with Bill Farrell, that verbally the contracts had been executed but written they had not been executed. He pointed out that verbal contracts were just as binding in this state as written contracts. Chief Brown clarified that tomorrow the agreements would transition and language was being approved. So there was an argument to be made that the agreements were already done. Many of the employees had moved to the community based upon those decisions and he did not think that there was possibility that those agreements would be revoked. It was the severance agreements that were what the Board had discussed during the break as possibly being revoked. He said that the employments were done and it was the severance agreements that were being transitioned into written language tomorrow if that were to go through but verbally the agreements had already been done and approved by the Board at their last meeting. Mr. Farrell expressed surprise at these statements. He stated that he had repeatedly asked for employment contracts and all he had been given was the severance agreement. He said this was the first time that he had been told by the District that there were 47 employment contracts. He stated that he had not seen them. He said that he had been dealing in good faith on this issue and he reiterated that he has not seen an employment contract and had never been told that they had been signed a long time ago. He had filed a public request and he received three sheets of severance agreements that were unsigned. He said that he could not comment on whether an oral contract had been made or a written contract had been made or whether or not it had been breached or what the terms were on something that he had not seen. Chief Brown responded that the miscommunication was on written versus verbal. He restated that the verbal agreements were already done. The employees were hired after they had gone through a hiring process and the employment offer was made. He noted that a written employment contract had never been promised to the employees or done. He pointed out that what Mr. Farrell had requested had been provided to him and they would continue to provide information in good faith. The written portion became the severance agreement that was being added. Chief Brown stated that when he started he had not been offered an employment contract. It simply was a letter of agreement stating what his salary was. Chairman Hansen commented that Mr.Farrell would recognize that the District has had three attorneys working on this. Clerk Rothermel said another part of her decision and consideration was bankruptcy should that happen to Rural Metro. In that case a judge would be appointed to take over the affairs of the corporation who had filed Chapter 11. She made reference to the bankruptcy case of Midway Airlines heard by Judge Small. She said it was a possibility that if a bankruptcy judge deemed that that fire protection in Fountain Hills only deserved one station, two trucks, and five men that it was a possibility that it could be reduced. Fire protection could be based on the population of Fountain Hills. She said that presently Fountain Hills had over two to one coverage, which was greater service than was offered elsewhere in the valley because the District had felt the people deserved it. She remarked that this was a possibility and she was not saying this would happen, but it was possible that a judge could cut back on town services because he would deem them not cost effective. It was something that needed to be considered and was part of the reason that she had based her decision on to cancel Rural Metro's contract. Chairman Hansen corrected Clerk Rothermel by reading from an article in the Wall Street Journal dated Friday August 24th,2001. It stated that it was with rare exception that Chapter 11 of the U.S. Bankruptcy Code makes Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 14 of 18 no provisions for parties other than debtors, creditors, and shareholders. Occasionally people harmed by dangerous products such as asbestos have had their say in bankruptcy court but only because they were Loo considered creditors. Instead most bankruptcy decisions were made with no formal role where other people with real stakes in the outcome, which would mean people depending upon fire and ambulance service. Councilman McNeill discussed a different and less alarmist view of bankruptcy. He was not going to say contracting with a party on the brink of operable bankruptcy was something that he would suggest to do. He noted that everything that he had heard from Rural Metro would lead him to believe that they believed Fountain Hills to be a desirable market and a profitable contract. If that were true he was certain that would be the type of contract that a bankruptcy judge would favor keeping in place. Chairman Hansen said that he too had substantial experiences with bankruptcy issues. He asked if Councilman McNeill was suggesting that there wasn't any risk. Councilman McNeill suggested that if there was a contract the court had the power to accept or reject that contract but did not have the power to unilaterally modify on the non-bankrupt party any number of changes to the contract that was to the detriment to that party. He noted it was not a perfect situation but was not the end of the world either. Commissioner Winters said the issue was life and death and people's security. He noted that strange things could happen in bankruptcy and referenced the experience that the Council had gone through earlier this year. He said that the board was trying to avoid problems and to do the job that they had been elected to do by the people. Clerk Rothermel said that an opinion had been enlisted from the District's attorney about what would happen if the contractor did go bankrupt and how they would have to function in a bankruptcy situation. Mr. Bill Bennett replied that they had never issued any opinion on this. Vice Mayor Kavanagh said there had been an allusion to the PG&E bankruptcy as somehow supporting the notion that Rural Metro should be dumped. But the PG&E example was an argument that you didn't have to worry, because as far as he knew everyone being served in California was still getting electricity. He asked if anyone know of any public safety company that had gone bankrupt where the people had been abandoned and where service stopped. He felt the situation referred more to the people who own shares or who had debt. IOW Chairman Hansen said no it referred to ratepayers. Vice Mayor Kavanagh remarked that it was his understanding from the Town's counsel that they weren't bound by that and that the contract could not be unilaterally changed. Mr. Farrell acknowledged that he did not specialize in bankruptcy but he agreed with Councilman McNeill that if Rural Metro were to seek protection under any of the chapters of the Federal bankruptcy laws specifically #11, that there was every reason to indicate that the contract would continue so long as there was payment. He thought that if there were any unilateral attack by the court to change that action that the Town would have grounds for further appeal. Vice Mayor Kavanagh asked if the Fire Board was going to remove those 3 —5 year contracts. Chief Brown reiterated that during the break there had been a discussion among several board members and him. The Board was trying to determine if the 3—5 year contracts were to be removed from the table, would the Council allow the Fire Department to start up on December 15 and allow the issue to proceed to an election if the petitions were found to be valid. He noted that it had been a question posed to the Council from the Board that had not been answered. Commissioner Travis said it was his personal opinion that if the Council would agree to let the Board start operation on December 15 and allow them to operate until the election to prove to the public that what they were doing was in the best interest of the public and then let the public decide when it came time for the vote whether or not that the District should go away or stay,then Town would have the option of continuing the service under new management with the same employees or say the employees should go away and contract with Rural Metro and the Town would not be taking on the liability of those severance packages. Councilwoman Hutcheson said the problem with that scenario was that there were 2,900 validated signatures that were saying that they wanted the chance to vote on whether Rural Metro stays now. The other thing was that if the voters in March decided they did want to retain Rural Metro or dissolve the Fire Board, the Rural Metro fire fighters would have been placed in other jobs and the Town would be placed in the situation of terminating the new hires and assuming the District with a lot of money spent and probably duplication of ‘111•0 Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 15 of 18 services. She said it was not a fair vote. If the District wanted to make it fair and they wanted the public to have adequate input, she requested that the Board do what they were being asked to do, remain status quo. If the Board's point was valid, she said that the Board would have time to make their point and to then formulate their own department. Mr. Schwab referred to statements had been made that the election had to do with whether Rural Metro serviced or the District served. He clarified that the petition language had to do with to dissolve or not dissolve the Fire District. He said the Council's response was slightly incongruent because it would not be possible to see how the District operated their own service if Rural Metro were in place. He reiterated that the election had nothing to do with whether or not Rural Metro stayed; it only had to do with whether or not the District went away. Vice Mayor Kavanagh pointed out that what brought this issue about was the issue of Rural Metro. Regardless of what the wording was on the ballot, he felt that in the voters' minds they would be walking in to vote on if the Fire Board were to be dissolved or was Rural Metro to stay. If the voters didn't dissolve the District, they endorsed them and wanted them to continue. He asked if Rural Metro was not the issue, then what were those 3,000 signatures about. Commissioner Travis felt the signatures came about from what they were told by those collecting signatures outside of Bashas and Safeway that there would be no ambulance or 911 services because the Fire District was beginning their own operation as opposed to having Rural Metro. Vice Mayor Kavanagh asked then was Rural Metro the issue? Commissioner Travis thought that those 3,000 people should be asked again now that they know the truth. Vice Mayor Kavanagh said that would be a physical impossibility and the only way to tell for sure was the ballot box. He stated that you can't second-guess people. Commissioner Winters wanted to know how the public was going to judge that if they didn't have the opportunity to see what their own fire department was like. Vice Mayor Kavanagh felt that both sides would argue and talk about the issues. He said the public was very confused as to what was going on and what they signed. Mayor Morgan said that if people blatantly signed the petition and didn't read it, then shame on them. Clerk Rothermel said the language read should the Fire District be dissolved. She pointed out that they would never know what was in the signers' minds or hearts or what they were lead to believe. Commissioner Travis said if the people who signed the petition had wanted to leave Rural Metro in place,the proper thing to do would have been to recall the Board and that had not been done. Mr. Farrell said the technical effect of the petition was to dissolve the Board. Mayor Morgan said that if the petitions were to dissolve and the Rural Metro contract expired December 15, 2001 with the next election not to be held until March 2002, she questioned what was left in place for service. Councilman Wyman said he was having a hard time understanding this. He said there had been a lot of discussion about the severance contracts. The Board proposed that if the Council would let them prove to the public that they could hack it with this new group of people, maybe the Board would withdraw the severance contract issue. He described that action as calling for the Council to let the people make that decision on the 12 of March at which time the Council would inherit a fire department. Councilman Wyman asked what the issue was now that the Board had offered to remove the severance contract issue. Chairman Hansen stated that the Board would have to make a decision on that issue. Councilwoman Fraverd said perhaps the petition signers were saying that there shouldn't be a Board or commissioners. Commissioner Travis said he would have signed such a petition if he hadn't been a Board member and knew the difference. He felt that all this began when the fire fighters wouldn't go through the three tests that the Board asked for because before that all had been ready to leave Rural Metro and to go to work for the District. Councilwoman Fraverd asked if the Board would consider that the people were not happy with the any of the Board members. Commissioner Travis said that was possible but the majority had signed the petition because of what they had been told. He asked again for the opportunity for the District fire department to prove themselves to the public. 1/411111,0 Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 16 of 18 Councilwoman Hutcheson said it was a travesty to insinuate that public of Fountain Hills made a mistake in not doing a recall petition when 3,000 signed it. She said the people were entitled to do a recall petition and apparently they were also entitled to do a petition to dissolve the District although the District might not like it ‘1411,,,,,. or agree with it. That was what they decided to do and they were within their rights. The District would have to live with that. Maybe the 3,000 did not know what they were voting for, but she did not think that would they would have signed the petition if they had been happy with the changes proposed by the District. She said that if the District kept status quo and the Rural Metro contract, which was what apparently what provoked all this regardless of the language, the district would have an opportunity to see how many of those 3,000 people felt they had been mislead or agree with the District. She stated that between now and March that if the public felt that they had been lied to then it was the District's obligation to educate them and let them know that. Chairman Hansen said he was getting the feeling that the Council's positions were set in stone,either hire Rural Metro or else. He said that left the Fire District with a super problem. They had been on their way to start their own system and a lot of money had been spent. He asked what was wrong with their proposed six-month trial. If the voters then wanted to vote them out,then fine. He stated that the District was willing to sit down with the Council if they wanted the town to run the fire service. They did not object to that at all. They wanted to make it the best for the taxpayers and the citizens needing emergency services. They wanted to sit down to work it out and try to solve the problems. If the Council was adamant that it was Rural Metro or nothing, then maybe the district was wasting their time. Mr. Farrell advised the Council that with regard to the boundary disputes it was important to be aware that if nothing happens and the voters voted to dissolve the District, it was not a fore gone conclusion that the Town inherits the mess. There was a case that could be made that Mr. Stapley and the county would inherit all of the assets and would sell them off to pay off the debts and the Town would not have any buildings or equipment or fire department. He said that was another alternative that the Council needed to keep in mind. He noted that there had been some healthy disagreements about the validity of the District's boundaries. If a court were to determine that the boundaries were different and the District was larger than the Town, there wasn't any guarantee that under the State Statutes the Town would inherit the mess. The Town would only inherit the loss of assets and no other obligations. Councilman Wyman asked if that issue had not been put to bed. Mr. Farrell said no as each side has legal opinions. Chief Brown interjected that the Fire District's opinion was that same since it has not been resolved. He said that also impacted the decision if the Town took over the Fire Department now. He said the Town had the ability to start up a fire department but only received the assets if the boundaries were the same. He said the boundary issue had not been decided. Mayor Morgan proposed that the Town would not have to take over the liabilities then either. Chief Brown stated that the council would have to start from scratch. Vice Mayor Kavanagh stated that he did not want the public to leave here thinking that it was the Council's position that it was Rural Metro or nothing. That was not true. The position of the council was that the voters should have the ability to make an unencumbered decision in March. Extension contracts or the hiring of a new department that the Town would be stuck with if the people removed the Fire Board were encumbrances, which were a hindrance to a free and open vote. It was not Rural Metro or nothing or for our own. He did not know at this point. He knew that the people have to be able to make a decision without all sorts of anchors attached to it that would cause results that they did not want regardless of which way they vote. AGENDA ITEM#2. ADJOURNMENT Mayor Morgan adjourned the meeting at 10:05 p.m. Town Council Joint Meeting with the Fountain Hills Fire Board Special Session 10/30/01 Minutes Page 17 of 18 TOWN OF FOUNTAIN HILLS }� By- Sharon Morgan,Mayo ATTEST: (.444..t.A. !�C J Cassie B. Hansen, Director of Administration/Town Clerk PREPARED BY: A2 /./ 41 Bev Bender,Executive Assistant CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Joint Meeting held by the Town Council and Fire Board of Fountain Hills on the 30th day of October 2001. I further certify that the meeting was duly called and that a quorum was present. DATED this 15th day of November 2001. )24-4"L4---/ Cassie B. Hansen, Director of Administration/Town Clerk L fit, Town Council Joint Meeting with the Fountain Hills Fire Board ire Special Session 10/30/01 Minutes Page 18 of 18