Loading...
HomeMy WebLinkAbout2002.0624.TCSEM.Minutes TOWN OF FOUNTAIN HILLS MINUTES OF THE EXECUTIVE AND SPECIAL BUDGET MEETING OF THE ,,. FOUNTAIN HILLS TOWN COUNCIL June 24,2002 Mayor Beydler called the meeting to order at 4:30 p.m. ROLL CALL-Present for roll call were the following members of the Fountain Hills Town Council: Mayor Jon Beydler, Vice Mayor Leesa Fraverd, and Councilmembers Rick Melendez, Kathleen Nicola, Michael Archambault, Susan Ralphe, and John Kavanagh. Also present were Town Attorney Bill Farrell and Director of Administration/Town Clerk Cassie B.Hansen. AGENDA ITEM #1 - PURSUANT TO A.R.S. §38-431.03.A.1., VOTE TO GO INTO EXECUTIVE SESSION FOR: DISCUSSION OR CONSIDERATION OF EMPLOYMENT, ASSIGNMENT, APPOINTMENT, PROMOTION, DEMOTION, DISMISSAL, SALARIES, DISCIPLINING OR RESIGNATION OF A PUBLIC OFFICER, APPOINTEE OR EMPLOYEE OF ANY PUBLIC BODY, EXCEPT THAT WITH THE EXCEPTION OF SALARY DISCUSSIONS, AN OFFICER, APPOINTEE OR EMPLOYEE MAY DEMAND THAT SUCH DISCUSSION OR CONSIDERATION OCCUR AT A PUBLIC MEETING. THE PUBLIC BODY MUST PROVIDE THE OFFICER, APPOINTEE OR EMPLOYEE WITH SUCH PERSONAL NOTICE OF THE EXECUTIVE SESSION AS IS APPROPRIATE BUT NOT LESS THAN 24 HOURS FOR THE OFFICER, APPOINTEE OR EMPLOYEE TO DETERMINE WHETHER SUCH DISCUSSION OR CONSIDERATION SHOULD OCCUR AT A PUBLIC MEETING. (THE COUNCIL WILL INTERVIEW CANDIDATES FOR INTERIM TOWN MANAGER ON MONDAY AND DISCUSS TOWN MANAGER CANDIDATES ON TUESDAY.) Vice Mayor Fraverd MOVED that the Council convene the executive session and Councilman Archambault SECONDED the motion,which CARRIED unanimously. AGENDA ITEM#2-RETURN TO SPECIAL SESSION. Mayor Beydler recessed the executive session and reconvened the special session at 5:45 p.m. AGENDA ITEM #3 - CONSIDERATION OF AUTHORIZING VICE MAYOR FRAVERD TO SIGN AND AUTHORIZE PURCHASES UP TO $20,000 UNTIL SUCH TIME AS AN INTERIM OR PERMANENT TOWN MANAGER IS APPOINTED. Councilman Archambault MOVED to authorize Vice Mayor Fraverd to sign and authorize expenditures up to $20,000 until an interim or permanent town manager is appointed and Councilman Kavanagh SECONDED the motion, which CARRIED unanimously. AGENDA ITEM#4- CONSIDERATION OF APPOINTING AN INTERIM TOWN MANAGER FOR A 30 TO 60 DAY TIME PERIOD. Councilman Melendez MOVED to appoint Sintra Hoffman as interim town manager and Councilwoman Ralphe SECONDED the motion. Councilman Kavanagh questioned if the 30 to 60-day time period was sufficient. Councilwoman Nicola AMENDED the motion to provide for a specific 6-week time period (through August 7th) utilizing her services -days a week and Vice Mayor Fraverd SECONDED the amendment. The amendment CARRIED unanimously. 4100, The amended motion CARRIED unanimously. 6/24/02 Executive and Special Budget Session of the Town Council Page 1 of 22 AGENDA ITEM #5 - REVIEW AND CONSIDERATION OF THE PROPOSED BUDGET FOR THE TOWN OF FOUNTAIN HILLS FOR THE 2002-2003 FISCAL YEAR. ALL ASPECTS OF REVENUES ND EXPENDITURES WILL BE DISCUSSED AND CONSIDERED. accounting Supervisor Julie Ghetti gave an overview of the budget process through the use of a PowerPoint presentation. She acknowledged there were some discrepancies in the verbiage but she assured the Council that the numbers were correct. She outlined the process that was followed. She stated that the tentative adoption of the budget would be Tuesday,July 2, 2002, with the fmal adoption on Thursday,August 1st,2002. She explained that between the tentative and the fmal adoption the Council could only make changes that would reduce the budget, not increase it. The tax levy would be adopted on Thursday, August 15th, 2002. She acknowledged all the participants that helped put the budget together. She recognized Mr. Jim Jenkins who would help her with the presentation if necessary. Ms. Ghetti said she anticipated following the format of starting with the General Fund (general fund summary, revenues,expenditures and then the department summaries). She explained that the General Fund was the Town's operating fund, which included all the services and salaries of the town staff. The other special revenues funds (grants and the debt service and special revenue or restricted funds) were set for a specific purpose and could not be used for general operating costs. Any reserves in those accounts stayed in those restricted accounts. She asked ' the Council to consider voting on the General Fund budget as a whole at the end the presentation. She acknowledged that there were supplemental requests that were not included in the budget. She proposed that those items be dealt with at the end of the budget so that the public could speak to those requests. Ms. Ghetti covered the resources by fund, which were the total resources in each fund and contained all the carry forwards and year-end reserves. She proceeded with a summary of the General Fund Resources. She noted that the $10.4 million was the projected revenue for the Town for the next fiscal year. She stated that the revenue projections were extremely conservative. She pointed out that with the operating revenues and the expenditures the Town had a deficit of$2 million. She mentioned that the Town did have additional resources. Money would be transferred in from Maricopa County for the Fire District($1.1M), a recovery of funds from BNY ($1M), and she expected carry forward of$2.5M left over from this fiscal year. The total of additional resources would be $4.6M. Ms. Ghetti discussed the transfers out: dedicated sales (land preservation $.8M and downtown development$.3M) for a total of$1.1M, which would leave an estimated fund balance of$1.5M at the end June, 2003,in the General Fund. Ms. Ghetti discussed the General Fund Revenues and listed various categories. She stated that she had made conservative estimates on all revenues for a total operating revenue of$10,386,600. She discussed the transfers in (Fire District funds from Maricopa County - $1,070,000; BNY - $1M; the carry forward from 7-1-2002 of $2,483,712; and the transfer in from Development Fees for $137,300. If the transfers in were added to the total operating revenue of$10,386,600, the total funds available become$15,077,612. Councilman Kavanagh clarified that only $1 million of the BNY funds could be put into the budget at this time even though the Council expected to get all of the money back plus interest because that was the amount of money that the Town took out of the general fund last year in order to pay for the Community Center expenses. He restated that the Town expected to get back over $2M. Ms. Ghetti confirmed staff did anticipate the return of all funds from BNY. She explained that the General Fund could only take in what it expended for the Community Center as the money actually belonged to the MPC. The Town would have to submit a request to the MPC for reimbursement for expenses and that amount was approximately $1M. Mayor Beydler asked for clarification as to the amount that Ms. Ghetti showed for funds transferring in from Maricopa County (Fire District Funds). He indicated that he had had conversations with the County Treasurer Doug Todd. Mr. Todd felt the sum would be more in the area of approximately$600,000.Ms. Ghetti said her total reflected what was estimated to be collected in property taxes up through June 30,2002. Mayor Beydler asked if Mr. Todd's office had been consulted and had his office provided this number. Ms. Ghetti explained that this was her estimate based on the property tax bills and estimates as to what the Town's expenses were going to be. Mayor Beydler felt she should recheck that. Ms. Ghetti said she ould. Councilman Archambault asked for clarification of the Fire Insurance Premium Tax listed under the 4410, Intergovernmental Fund. Ms. Ghetti explained that when the Town decided to form their own Fire Department the Town became eligible for a rebate of a portion of the fire insurance premium. 6/24/02 Executive and Special Budget Session of the Town Council Page 2 of 22 Ms. Ghetti discussed the sales tax collections by category. She discussed how the decline in construction activity had caused the Town some difficulty. She briefly talked about General Fund expenditure categories. She "Ynlained that the line item for salaries and benefits did not include funding for any current vacancies. She c..irified in the new budget format there was a chart called"authorized positions". She understood that authorized positions were positions that were funded. She noted that there were several vacancies in the various departments that were not funded. She distributed a listing of all vacant positions that were not funded. She confirmed that the town manager and community development director positions were the only vacant positions that were currently funded. She pointed out that staff was looking at ways to minimize the increasing costs for health insurance. Ms. Ghetti noted that only a 2% merit fund had been included for staff due to the Town's financial situation. She explained that the vacant positions would become unauthorized unless the Council decided to keep those positions open. She clarified that any positions not funded this year would become unauthorized. If the positions needed to be added next year, they would become authorized. She covered that Contractual Services funds were used for outside contracts, such as MCSO and Rural Metro, engineering services and parks and recreation special programs. Repairs and Maintenance fund was for ongoing operating costs. The department heads had cuts these costs to bare bones operating costs. Supplies and Services included things like rent, electricity, insurance, office supplies and some of the bigger items. The transfers out of$1,075,000 represented the projected$.4 sales tax and that would transfer out of the General Fund at the end of the year and into the excise tax fund. The $1,075,000 was based on receiving $4.3M in local sales tax. She reminded the Council that the estimated year-end fund balance of$1.4M was dependent upon whether or not the revenues came in as projected. This was where the Council would place any items that would be added to the budget. Therefore, this amount could change. She asked if the Council had any questions. Vice Mayor Fraverd questioned if the bottom line was that the Town's revenues would be about $10.4M with expenditures at $13M. Ms. Ghetti agreed that was correct. Vice Mayor Fraverd concluded that the Town was approximately$2.5M short. If funding from a couple of other sources wasn't available,what would the Town do? Ms. Ghetti responded that staff had struggled with this issue, as it was their habit to budget one-time revenues. Each department was forced to prepare a bare bones budget. If the Town did not have the one-time transfer of the BNY money the Town would have only had a$400,000 carry forward for next year.That would be if the revenues came in as anticipated. She summarized that it had been a struggle to have the budget come out positive. Vice Mayor Fraverd observed that if the revenues and expenditures were to stay flat the following year without additional revenues coming in, the Town would find themselves in the hole. She proposed that before going through all of the wants of the community and the departments' requests,the Council needed to find their comfort level with this budget. She pointed out that the proposed Town budget would have $1.5M in the General Fund. ' She felt that the Council needed to look at the big picture and decide what carry forward would be needed next year. If everyone was comfortable with the $1.5M, then the Council was already there and there wasn't much to do. If not, then the Council needed to look at further cuts. Perhaps the Council might want to consider a carry forward of$1M,then the Council could add some items. Mayor Beydler noticed that additional resources were used to create this carry forward by including anticipated BNY funds. The reality was that this settlement agreement was not here yet. Town Attorney Bill Farrell agreed that it was not. He hoped that it would be here by July 2, 2002. Mayor Beydler pointed out that Ms. Ghetti had also made the assumption that the Town would be receiving $1.1M from Maricopa county and that was questionable because of information he had through conversations with the Doug Todd in the Maricopa County Treasurer's office. He said there was still litigation in play so he was not sure he was comfortable with the$1.5M carry forward. Vice Mayor Fraverd asked if Mayor Beydler had a number in mind. It was something that the Council needed to talk about and move forward on. Mayor Beydler suggested that the Town might need a balanced budget outside of the soft money, which was the carry forward money. It might be that the Town would have to look at a balanced budget and then anticipate the carry forward coming from the additional revenue stream if it materialized. He expressed concern that he did not want the budget based upon dollars that were not tv ranteed dollars. Louncilman Kavanagh said it was obvious that the Town's budget would have to be tight. He stated there were only a few items in the supplemental requests that he felt were reasonable. Fortunately the Council did not have to 4110, adopt the final budget until quite sometime from now and the law did allow the Council the opportunity to decrease the budget from what would be tentatively approved today. He recommended that the Council proceed 6/24/02 Executive and Special Budget Session of the Town Council Page 3 of 22 with the tightest budget possible with the understanding that if the BNY settlement didn't go through or there were other problems,the Council might have to revisit the budget and make further decreases. Ms. Ghetti noted that the budget was based upon estimates. She stated that she would be required to monitor the situation on a monthly basis ensuring that the Town did not spend what the Town did not have. She clarified that the budget might estimate the Town's revenues higher and discover that in actuality revenues were less. She reiterated that the Town could only spend what funds the Town had. Councilman Archambault asked if the Council could reduce the budget at any time during the year. Ms. Ghetti said that was correct. Since the Town cannot legally deficit spend, the Town cannot spend what the Town does not have. She would have to literally monitor the expenditures to the point of where no one could spend anything until the Town had the money in the bank. Town Attorney Bill Farrell clarified for Councilman Archambault that the Town could stop the spending at any time during the year but the published budget would be approved in August. Councilman Archambault remarked that the control would be internal with limits placed on individual items. Mr.Farrell said that was correct. Councilman Archambault questioned what caused the decrease in the 2001-2002 Revised Estimate Carry In Balance from $4.7M and $2.4M. Ms. Ghetti explained that last year-when the budget had been adopted it had been budgeted to expend down to $1.5M. The Town was going to spend some of the prior year carry forward. Actually the$2.4 was$900,000 better than what staff had originally thought. She was unsure as to which projects the funds were used for but the Council had approved it. Councilman Archambault asked if$1M had been used to finish the Community Center because of the BNY situation. Ms. Ghetti confirmed that was a part of it. Ms. Ghetti began the departmental presentations. She stated that department heads were present for questions. She suggested that the Council discuss each department and have the department heads answer any questions that they might have. At the end of the General Fund Summaries she proposed an opportunity for public input. The Council could then consider any departmental supplemental requests. She reminded the Council that the supplemental requests were not included in the individual department budgets. Once the Council adopted the General Fund Budget they could then move on to the Special Revenue Funds. Councilman Kavanagh reiterated that the procedure would be that there would be departmental presentations. Once done the Council would make a motion to accept the General Fund. Any council member who wanted to change it could then make amendments. If input from staff was required, they would come forward and answer questions. Mayor Beydler understood that each department head would come forward during their department presentation. They would be available for any questions from the council or the community. Ms. Ghetti said that was correct. Councilman Kavanagh clarified that they would answer questions if questions were asked of them. He did not want to prolong the process if there weren't any questions for the department heads. Ms. Ghetti acknowledged that the department heads were not prepared for a presentation but they were here to answer any questions that the Council might have. Councilman Melendez asked at what point would the public be allowed to comment. Ms. Ghetti said it was up to the Council. She envisioned the questions from the public would come at the end of all the departments' presentations. Director of Administration/Town Clerk Cassie Hansen explained that the.department budgets had been prepared on a bare bones basis. The funds included in each department were primarily the funds needed for the basic operation of each department. The supplemental requests were things that had to be taken out of each department's budget in order to get the budget to the point that it was now. This would allow the Council to get the whole picture of all departments based on their bare bones budgets and then go back and discuss the supplemental requests. She felt that it was at that point many of the people who were present tonight would like the opportunity to address those individual requests. Councilman Melendez agreed that order made sense. Mayor Be‘dler said it made sense except that the Council was dealing with an operating deficit so the bare bones budget .)2M in excess of anticipated revenues. Ms. Ghetti said that was correct. Mayor Beydler said his take was _iat the bare bones might not be bare bones enough. He said it was important that if the Council and community have questions that they have the opportunity to delve into the bare bones budget. 6/24/02 Executive and Special Budget Session of the Town Council Page 4 of 22 Councilman Kavanagh said the Council had a choice. If the Council didn't want to include the anticipated revenues, then the Council would spend an agonizing two nights chopping everything apart. He said the Council -night not have to do that. He would personally rather assume that the BNY was coming and if it was determined over the next few weeks it wasn't coming in as anticipated,the Council could revisit the budget and trim items. Mayor Beydler said he did not want the Council or the community to under estimate the severity of the problem. He quoted from a report submitted to the Council from the prior Interim Town Manager Roy Pederson, which stated that the Town could not remain viable as a municipality unless something was done to finance the budget for fiscal years 2003-2004 and beyond. He stated that the future of the Town was at stake unless a serious and deliberate approach was taken by the Council to deal with the budgetary issues. He pointed out that these were not light words. Mayor Beydler suggested that if the budget review took time and was painful,and the Council had to bring back a plan to not only reduce expenses but to create revenue,then he felt it was the Council's responsibility as elected officials to go down that road. Councilman Kavanagh concurred, but he asked that the Council not forget that this bare bones budget was the same budget that Mr. Pederson had put together as a starting point. Mayor Beydler noted that Mr. Pederson was gone as well. He recommended that the Council allow for input along the way. Councilman Melendez asked for clarification. Mayor Beydler responded that the Council had the first questions or comments and then the public would have the opportunity to make comments on the supposed bare bones budget but not the supplemental. He explained that he was encouraging the public to participate with the Council through the painful process of discovering if the proposed bare bones budget was bare enough. Ms. Ghetti,in an effort to understand the approach that the Council wanted to take,asked if the Council wanted to discuss one department at a time with the department head present to answer any questions. The Council concurred. She began with the Community Center Budget. She briefly reviewed the overall budget totals under the areas of Salaries/Benefits, Contractual Services, Repairs and Maintenance, Supplies and Services, and Capital Expenditures. Community Center Director Jim Willers discussed the various line items in his proposed budget. He stated that under Salaries/Benefits two part-time custodial positions would be transferred from the Administration Department budget so that they could schedule custodial work to be done on an as needed basis.- He announced the presence of people in the audience would like to address the concerns of the tourism request of $100,000 contained in his budget. He clarified that the $120,000 under Capital Expenditure was an accounting entry. This would allow funds that were raised through brick sales to be used for furniture, fixtures, and equipment in the building, although these funds were included in the Town's General Fund. Ms. Ghetti agreed this was correct. Councilman Archambault noted that with an operating budget of approximately $560,000, an expected revenue of only approximately $135,000 was quite a deficit. He asked if there was a projection as to at what point the Community Center would break even. Director Willers responded that for the Community Center to break even would require a significant increase in rates, as the current rates were extremely reasonable. He did not see a break-even point with the operating expenses as compared to these revenues. Councilwoman Ralphe stated this bare bones budget would have to go down even further. She asked Director Willers if it would be possible to remove the capital expenditure of $120,000 this year and use those brick proceeds next year for more furniture. Director Willers felt those funds were dedicated funds for the Community Center but deferred to Ms. Ghetti. Ms. Ghetti explained that if the town did not spend the$120,000,the Town did not get the $120,000. Councilwoman Ralphe understood that it did not help reduce the overall General Fund Budget to remove that line item. Councilwoman Ralphe noticed that there was $100,000 set for tourism. She questioned if this year the Town had to bring the focus closer to Fountain Hills. She asked what would happen if the Council left the $14,102 in the budget but omitted the $30,000 targeted for the Scottsdale Convention Visitor Bureau (SCVB) and the $40,000 that was aimed at the Fountain Hills Chamber of Commerce. Director Willers replied that he felt the Community .er needed as much assistance as possible to get their name out. They worked to bring business into Fountain dills using their resources and marketing ability. This was a building tool for the Community Center. He explained that Fountain Hills simply did not have the staff or coverage that Scottsdale did. Director Willers said it was his opinion that this needed to continue in order to help the Community Center to grow. He explained that the funds for the Chamber of Commerce represented the advertising dollars and the marketing programs that these 6/24/02 Executive and Special Budget Session of the Town Council Page 5 of 22 volunteers from the different hotels had put together. Without that money the Tourism Council would virtually disappear, as they had no other function than to work independently. There weren't any funds to make a cohesive erall Fountain Hills Marketing Plan. He mentioned that his department was withdrawing all supplemental requests in view of the Town's circumstances this year. He felt it would help the Council if they heard from both organizations at this time. Councilman Kavanagh expressed he was not interested in hearing a review of the importance of the program. He reiterated that the Council had to do some major belt tightening. He stated it was a little premature to think the Town would not see the BNY money and start to do major cutting. He proposed that the Council do the major belt tightening now and make mental notes of all additional cuts that could be made. If necessary,in four or five weeks the Council could make deeper cuts. Councilman Melendez agreed with Councilwoman Ralphe that the Town was facing harsh economic times. He did not see anyone in the audience who expected to get what funds they wanted. He felt they knew it was going to be a tight year. He said the$40,000 figure was high and he would like to cut that back. Councilman Archambault asked about the grant contained in the$40,000 request. Director Willers explained that was a matching grant with the Arizona Department of Tourism for the identical figure of$15,898 and was for an advertising campaign that had been submitted to them. Director Willers clarified that this amount was included in the$100,000 total. Mayor Beydler commented that the Council should not lose sight of those programs that could generate income and create revenues in the community. That was equally important as trying to cut expenses. He said he would be supporting those efforts to improve the Town's economic situation. He felt the Office of Tourism performed an important function. Roxanne Boryczki,Chairperson for Fountain Hills Tourism Council She clarified that the Fountain Hills Tourism Council was not connected to the Fountain Hills Chamber of Commerce as they performed separate functions. She stated they were acting as the Town's Tourism Council answering to the Office of the Mayor. She emphasized that this was a program that would generate revenue for Fountain Hills in form of bed tax, sales tax, and restaurant revenues. She explained that they had laid a good Maw foundation this year. They needed to continue to build on promoting Fountain Hills as a destination and that was contingent upon receiving these requested funds. Vice Mayor Fraverd asked if they had any other revenue sources. Ms. Boryczki said this was the majority of the funding for the Tourism Council. There were two very small revenue streams coming in: the Fountain Hills Preferred Tourism partners Program,which had earned about $1,800 this year, and the Central Reservations Line for Fountain Hills with a portion of those proceeds being returned to the Tourism Council. She acknowledged that to date that had only generated a few hundred dollars. Mayor Beydler mentioned that later he would be recommending an additional staff member to head the economic development efforts of the Town. He offered that this $40,000 and this position could possibly be moved to a different department in order to assist in funding this program. Councilwoman Ralphe proposed cuts that would affect each department. She explained that if all conferences were eliminated this year the Town would save$36, 075. If travel was cut back,and in some cases eliminated(as in the case of the Council), all requests for travel would be no more than $500 per year. She suggested that the Council get zero for travel. That would bring a savings of$14,200 to the Town. She moved on to dues and publications for all departments. She proposed that the Town could save $50,962 if each department budgeted $200 for this line item except for the Town Council who would get zero. She mentioned that she had eliminated those dues under three parks personnel but had left it in for the department itself. If those cuts were made across the board,the Town would save $101,237. She asked if this was appropriate. Ms. Ghetti remarked that staff had looked at every optional cut. She explained that there were several staff members with certifications (herself included) that required attending continuing education conferences. If staff did not get the continuing education, they would lose their certification. Staff did not need to fly out of state since there were many local conferences. \`;01 those conferences costing between $300-400 she didn't think that the Council would want the employees to ,ardize their certifications for that type of savings. Councilwoman Ralphe agreed. She said she would be willing to add any conferences required to maintain that certification. Councilwoman Nicola noted she was going to bring up the fact that some positions did require continuing education. She encouraged that the education and training remain in the budget but she would support the elimination of conferences and the reduction of travel costs. 6/24/02 Executive and Special Budget Session of the Town Council Page 6 of 22 Councilman Kavanagh noted that the total of these items was high. He liked the idea of staff getting back to the 460, Council with the cost of required conferences. He hoped that any motion to eliminate these items be put off until tomorrow's meeting and then department heads would have time to look at travel and conferences and justify the ones that they felt were needed. Vice Mayor Fraverd asked if that would also include the dues and publications. Councilman Kavanagh and Councilwoman Ralphe agreed it would. Director Hansen asked for clarification on the dues and memberships. She commented that in the Administration Department a number of the memberships were for town wide memberships(such as Arizona League of Cities and Towns, ICMA) and many of the subscriptions were legal based that received annual updates (such as ADA, FMLA and other human resource related issues). She felt the Town might be jeopardized if those types of things were not kept current and up to date. Councilman Kavanagh felt the spirit of the discussion was that a short paragraph listing and describing why the line item was needed would be sufficient. Mayor Beydler asked if the council might not be micromanaging. Councilman Melendez and Councilman Archambault felt they were. Mayor Beydler stated that they had professional department heads that could take the Council's direction and cut expenses further. He noted that if each departmental budget still needed to be cut by about 12.5%, the Council could simply suggest a number and ask each department head to cut additional expenses from their budget. He felt they were professionals and if so instructed, he felt they could make the decisions and tradeoffs between the various line items. In the absence of a Town Manager he felt this would be the professional way to approach this situation. Councilman Kavanagh stated that could create another problem since some departments were leaner than others. He felt that some department heads had been more up front that others when faced with the spirit of preparing their bare bones budget. He felt that the Council would be penalizing those departments who had been honest in their budget preparations. He expressed that he had been pretty content with the bare bones budget,as he believed that staff and Roy had done a good job. He expressed that the Council either had to trust staff that this was a bare bones budget or delve into the idiosyncrasies of it. The Council could not flip back and forth. Councilman Melendez asked if Councilman Kavanagh was saying that some of the departmental budgets were inflated. Councilman Kavanagh said he had been speculating. Councilman Melendez asked then why Councilman Kavanagh had said that the department heads were honest and had put together a bare budget. Councilman Kavanagh explained he had been talking more about Interim Town Manager Roy Pederson who had constructed it. Councilman Archambault suggested that if something stood out at a Council Member then that item should be brought up for discussion. Councilman Kavanagh agreed that was the spirit of what Councilwoman Ralphe had said. Mayor Beydler remarked that one area in the Community Center budget that could be reviewed was the rates. He realized that rates were tricky since the Town was trying to build the use of the Community Center. If the rates were moved too high too quickly, he felt that then the opposite effect would occur. He questioned if Director Willers saw potential areas where rates could be increased that would positively impact revenues for the Community Center and would narrow the budget deficit. Director Willers said this was an area that the Community Center Advisory Commission had asked him to work on for their August meeting. He suggested that • after their review, he could come back to the Council with further information. He felt that was a good idea that had merit and would like to come to the Council with the.information. Mayor Beydler asked if there was a goal or objective in mind. Director Willers responded they were looking more into the commercial area for rate increases over the resident and non-profit area. They felt that was where the greatest opportunity was. He noted that the projected revenues for this year at $135,000 were fairly aggressive but he was confident they would succeed. More competitive rates structures would make the community Center equally viable in the market and not hurt them marketing wise. Mayor Beydler asked if the $135K revenue figure included the anticipated adjustments in t-- commercial rates. Director Willers replied it did not include any proposed rate increases. Mayor Beydler ci the Council wanted to understand what the Community Center's revenue forecast was. Director Willers said he had not looked at a specific number. They had talked about somewhere in the area of a 10%rate increase in the commercial rates. He had not projected that out yet as he wanted to talk with the Community Center Advisory Commission to get their input and support and then bring the proposal back to the Council. 6/24/02 Executive and Special Budget Session of the Town Council Page 7 of 22 Councilman Archambault pointed out that next year's objective was to schedule four major trade shows. He asked Director Willers to describe the type of trade shows anticipated. Director Willers responded they were looking to met some additional flat shows in the building such as the Native American Art Show. He noted that there were already two for that vendor. They counted the Chamber Showcase as a major trade show. They were looking for cooperation with Scottsdale to find shows that were looking for this type of space, roughly 8,000 sq. ft. and that would fit their needs for a one-day show. Mayor Beydler directed Director Willers to come back to the Council with some revised revenue numbers based upon what Director Willers felt was feasible and possible so they could better prepare the budget. Director Willers asked if Mayor Beydler was asking for the numbers at tomorrow's meeting. Mayor Beydler replied yes. Councilman Melendez asked if Director Willers' monthly gross report could include the actual cost of each event. Director Willers said he could prepare that on an event-by-event basis. Councilman Melendez said he would like to see the numbers. Councilwoman Ralphe said she had started looking at the small items for a specific reason. She expressed that she cared about staff as they did a great job for the Town and the Council. She knew that the Council was offering staff jobs this next fiscal year. In talking with other Council Members from other municipalities she knew that was not always true. She felt it was important to offer jobs along with some other incentives that she wanted to talk about later. She thought that would be what employees would value the most. She was trying to make cuts where staff would feel it the least. -- Councilwoman Ralphe MOVED to eliminate all conferences, reduce travel to $500 per department or less, eliminate all funding for Town Council travel, reduce all dues and publication to $200 and eliminate all funding for Town Council. The Council would adjust those figures by absolute needs that staff brought to the Council by tomorrow. Councilwoman Nicola SECONDED the motion. The motion CARRIED unanimously. Councilman Melendez MOVED to cut the Chamber Tourism Council line item to $20,000 and Councilwoman Ralphe SECONDED the motion. Councilman Kavanagh said he wanted to wait to see what happened with the BNY.He commented that he might want to cut that line item to zero. Councilman Archambault asked if the grant amount of$15,898 was included in the original request of$40,000. Roxanne Boryczki clarified that the$15,898 was not included in the $40,000. It was separate from the $40,000 request. Councilman Archambault asked if the Town needed that grant. Ms. Boryczki stated that if they could not match those funds, the grant would be lost. Councilman Kavanagh asked if the $20,000 was being cut from the $105,000 total. Vice Mayor Fraverd stated that it would be cut from the $40,000. Councilman Kavanagh noted that the $40,000 was to have been for the local tourism but would retain the full Scottsdale Tourism fund. Mayor Beydler asked what would be lost if the Chamber Tourism Council's budget was cut in half. Ms. Boryczki responded that the media and familiarization trip planned for December would be cut, as it alone would cost $25,000. They would use the $20,000 for fulfillment and postage to distribute the basic brochures to those who inquire about Fountain Hills. Councilwoman Nicola understood the bulk of the$30,000 for the Scottsdale Convention Visitor Bureau was used for shared magazine advertising. Ms. Boryczki said that was not exactly true. That money was contributed to Scottsdale to go out and market the entire Scottsdale area, which encompasses Fountain Hills and Paradise Valley. She explained that nowhere in that advertising or in the materials was Fountain Hills specifically mentioned by name. There wasn't any brand name recognition with those funds. However, those funds were far reaching because it put Fountain Hills into the international market and the convention market, which Fountain Hills could not compete with on their own. She felt the Scottsdale advertising would benefit the Fountain Hills' hotels and Community Center and bring in those shows that would bring in additional revenues. The money that SVBC was a partnership fund and they in turn brought in leads for which Fountain Hills generated economic revenues off their leads. Vice Mayor Fraverd said she would be supporting the motion. She suggested that the local Tourism Council look f'r come other revenue sources besides the Town. Although the Council was certainly interested in promoting utain Hills, she felt there were a number of businesses that might contribute if pushed, to also help with the ourism Council's promotion of Fountain Hills. She agreed that it would be great to have writers from magazines come into town and show them the town, but she did not think this was the year for it. She felt something more low key and less expensive would be more appropriate. She suggested making a video that would promote the Town even though that too would cost money. Ms. Boryczki clarified that the proposed $25,000 was not just to 6/24/02 Executive and Special Budget Session of the Town Council Page 8 of 22 bring in the writers. It would also pay for their annual public relations budget,plus bring in the writers,and allow for the follow up to ensure that the articles were written. Louncilman Kavanagh said he was unaware of the trip. He agreed with Vice Mayor Fraverd that it was an extravagance this year. He asked how much the trip was. Ms.Boryczki responded the cost was rolled into the PR budget, but estimated the cost of the trip to be around $15,000. Councilman Kavanagh said the part about the public relations firm was important. Councilman Kavanagh MOVED to amend the amendment to change the cut to the Chamber Tourism Council Budget to $15,000 and award them a budget of$25,000. Ms. Boryczki stated that their only other choice for revenue for the Chamber Tourism Council was to go to a membership based council, which would leave out a number of community participants. She explained that option had been discussed and members felt that many people would not want to contribute at that point. Councilwoman Nicola SECONDED the amendment. Vice Mayor Fraverd asked what the public relations firm would do if they did not have the writers come to Town. Ms. Boryczki responded they would continue to monitor and respond to requests that they received for information. The public relations firm also worked with the Scottsdale and Phoenix Convention Visitor Bureaus, and the Office of Tourism. They take leads from media who were requesting information about destinations. Fountain Hills would just not be able to host them in one big trip and make a big splash and get all of the attention for the Town. Fountain Hills would be competing with the other communities. A roll call vote was taken with the following results: Councilwoman Ralphe Nay Councilwoman Nicola Aye Mayor Beydler Nay Councilman Kavanagh Aye Councilman Melendez Nay Councilman Archambault Nay Vice Mayor Fraverd Aye Cir The amendment FAILED on a vote of 4—3. Mayor Beydler remarked that he supported economic development and everyone had to share in the pain. He stated that this was a difficult situation and the Council was trying to recognize reality. A roll call vote was taken on the original motion with the following results: Councilman Archambault Nay Councilwoman Ralphe Aye Councilwoman Nicola Aye Vice Mayor Fraverd Aye Councilman Kavanagh Aye Councilman Melendez Aye Mayor Beydler Aye The motion carried on a vote of 6— 1. Director of Administration Cassie Hansen suggested that since there were amendments to the Community Center budget that the Council should move to approve the Community Center Budget as amended, which would not include the possible cuts that would come forward from Councilwoman Ralphe's amendment. Mayor Beydler reminded the Council that Community Center Director Jim Willers had been asked to bring back a revised revenue stream if it could be revised based on his analysis of a rate structure change. He questioned whether or not the Council should hold on the motion to approve until that report was complete. Vice Mayor Fraverd pointed out that the�-revenue was not a part of this budget so it would not make a difference. If Director Willers came back stating ae revenue would now be$150,000 that would be terrific, but she did not see how that increase would have a A;aring on the Council approving the departmental expenses. Mayor Beydler said that would probably indicate that the Council would need to cut deeper. Vice Mayor Fraverd indicated her desire to vote on the budget tonight. L 6/24/02 Executive and Special Budget Session of the Town Council Page 9 of 22 Vice Mayor Fraverd MOVED to approve the Community Center budget contingent upon Councilwoman Ralphe's motion. Councilman Archambault SECONDED the motion. Councilwoman Nicola noted that there were 1.5 full time positions included as part of this budget. She questioned if the Council was comfortable with that staff increase. Councilman Archambault said he understood that the employees were being moved from the Administration budget, so they were not new employees. Director Willers said that was partially correct. The two part-time custodians would be moved from the Administration budget but the other.5 was an increase of the Administration Assistant(Sandra Ursini)from part-time to full-time to facilitate office paperwork in a timely manner. Councilman Kavanagh concurred with Director Willers' assessment. The motion CARRIED unanimously. • Ms. Ghetti continued with the Municipal Court Budget. She stated that Pat Dunn, the court administrator was present to answer questions since the presiding judge was now retired. Ms. Ghetti noted that there weren't any personnel changes in the court. The increase was due primarily do to the unknown new judge and what his health insurance benefits would be. Staff had assumed that he would have full dependent coverage. • Councilman Archambault questioned the total wage figure. He had thought wages were being held to a 2% increase and this total reflected a 5% increase. Ms. Ghetti explained that there had been some vacancy savings in this department and that had been included. She affirmed that the proposed budget for 2002-03 included only a 2% merit. She said that if there were a difference, it came from a prior year or from vacancy savings. Court Administrator Pat Dunn added she would look into reducing the conference expense. She reminded the Council that the new incoming judge would need a considerable amount of training and there was mandated training (by the Supreme Court)for all staff as mentioned by Councilwoman Nicola. She stated at this point she was not sure what would be needed for the new judge. Councilwoman Nicola asked if the Supreme Court sponsored the new judge orientation. Ms. Dunn said yes. She understood that the new judge would be able to attend the fall session rather than in January, which would be a plus. She noted that the Supreme Court Judicial Conference had been canceled this year because of budget problems. Councilwoman Nicola asked if the amount of $1,000 for education and training as listed in the Court Budget was adequate for the required continuing education for Ms. Dunn and her clerks. Ms.Dunn felt it was. She noted that the amount for travel could be reduced as well. Mr. Farrell commented that in the area of dues and subscriptions, the legal area was probably one exception that the Council should consider. The Council had mandated that the new judge be a member of the Arizona State Bar and it was traditional that the municipality pay the State Bar dues. The same thing occurred with the cost of maintaining the library of State Revised Statutes. If the annual update fee was not paid, there would be a one-year savings but the statutes would be worthless. He strongly suggested that the Council exempt the judge's bar dues and subscription services (or West Law investments) from Councilwoman Ralphe's motion in order to keep the law books current in the Court. Councilwoman Nicola concurred with Mr. Farrell's comment. She pointed out that Councilwoman Ralphe's motion provided an "as necessary restriction" to these expenses. Councilwoman Ralphe also agreed and stated that the Council was asking for some estimates. Ms. Dunn said she would provide those numbers to the Council. Councilwoman Nicola MOVED to approve the Municipal Court budget contingent upon Councilwoman Ralphe's motion. Councilman Archambault SECONDED the motion. The motion CARRIED unanimously. Ms. Ghetti continued with the Town Council Budget. She stated the only significant item in the budget was funding for an election. She stated that Director Hansen would talk about that. Councilwoman Ralphe questioned the need for the $500 funds marked for Community Outreach. Councilwoman Ralphe MOVED to remove the $500 marked for Community Outreach and Councilman Archambault SECONDED the motion. Director Hansen cl nFed that the Community Outreach fund was a carry over from previous years. Those funds were used when . rmer mayor had coffees and invited the public to attend on a•Saturday afternoon. Mayor Beydler reminded everyone that the Ralphe motion would apply in this case as well for travel,conferences,and dues and publications and adjustments would be made. The motion CARRIED unanimously. N 6/24/02 Executive and Special Budget Session of the Town Council Page 10 of 22 Councilwoman Nicola asked if changes to the budget would eliminate Fountain Hills from attending the League of Cities conference. Director Hansen answered that the conferences as they appear in this budget would be for those conferences other than the League Conference. The League Conference was funded through the Administration Budget. Councilman Kavanagh MOVED to approve the Town Council budget as amended and contingent upon Councilwoman Ralphe's motion. Councilwoman Nicola SECONDED the motion. The motion CARRIED unanimously. Ms. Ghetti continued with the Administration Budget. She stated that Director Hansen was present to answer any questions. Regarding salaries and benefits there were no vacancies that would be filled. She noted that there was one new position that the Council had approved, which was the "undesignated" position. Funding for this "undesignated" position had been included as well as for the new town manager. Councilwoman Nicola asked what the "undesignated position"was. Ms. Ghetti deferred to Mr. Farrell. Mr. Farrell explained that this was the position that had been created to allow the Council and the new town manager some flexibility with regard to Mr. Nordin. Permission was given to carry Mr.Nordin on the payroll and into this year but not as Town Manager. An undesignated classification was created with a comparable pay range to what Mr.Nordin was being paid. Vice Mayor Fraverd added that in the future she hoped this undesignated position would become an assistant town manager position. She was in favor of funding that position. She hoped that once the new town manager was on board that they would take a look at it. She stated there was some need for this. Vice Mayor Fraverd said she had specific responsibilities in mind for an assistant town manager and one would bring some revenue into the Town, although she did not think this was the appropriate time to go into that. She restated that she favored this undesignated position moving into an assistant town manager position. Vice Mayor Fraverd referred to the Contract Services item asking why jail and prisoner fees were listed under the Administration Budget. Director Hansen replied that traditionally it had fallen under the Administration budget because it had to be in a department that was separate from the court. Ms. Ghetti confirmed that jail fees could not be tied to the court. If it were a revenue source that the Court was dependent upon, then the judge would not be considered impartial. Mr.Farrell stated that was correct. Councilman Melendez referred to the Legal Fees item. He asked if those fees included fees for outside counsel. Mr. Farrell responded that there were three separate categories for legal services (page 63). He commented that $215,000 of that$497,000 would be designated to pay outside counsel for litigation that was not reimbursed by the Town's insurance company. He noted that the $215,000 was an estimate. He felt it was a tough guess to make although he thought it might be on the high side. The other two legal services were the town prosecutor and the town attorney. Those two fees were found in the first two line items. He stated there were other legal services for public defender. Bond counsel employment issues were relatively small as was the IRS compliance on the Town's retirement plan. He explained those amounts listed had not been exceeded in the past. Councilwoman Ralphe asked about the Sales Tax Rebate line item listed under Contract Services for $62,500. Who would the Town be paying? Director Hansen responded this was a new line item to accommodate the sales tax rebates in conjunction with the Target project per the development agreement. Councilman Archambault asked about the wage line item. He noted there were 17 full time employees yet the increase shown was a substantial increase of 11%. He questioned why. Ms. Ghetti responded that the undesignated position was included in the numbers and that the correct number of full time employees should be 18. She said she would correct this. Vice Mayor Fraverd referred to the number under Repairs and Maintenance of$102,000. She felt that was a lot of icy. She asked if that amount was for all three buildings. Director Hansen responded no. That amount covered all Town owned buildings excluding the Community Center except for major repairs to the Community Center. Of the $106,000 total, approximately $48,000 was estimated to be used for just these three building. For the Town Center complex the budget was approximately$39,000,for the Fire Department building the budget was approximately $8,000, the two community theater buildings had budgeted $4,000, and the Kiwanis Building had 6/24/02 Executive and Special Budget Session of the Town Council Page I I of 22 an approximate budget of$3,000. In the past the Facility Supervisor had added in an amount of$7,500 for some of the smaller buildings. That number had been a safe number to accommodate any of the repairs that had come 'it,. She explained that this year, the facility supervisor and his assistant went through each building and did a comprehensive assessment as to the minimum the buildings would need. She noted that having his staff perform some of the repairs and maintenance was saving a substantial amount of money. Councilwoman Nicola questioned if there was any way of trimming that expense total. Director Hansen explained that the primary reason that this line item took such a jump was that this was the first year that all of the facilities had been consolidated under one line item. In the past each building had a separate chapter in the budget. Councilman Kavanagh pointed out that the repairs for Town Hall probably went far beyond the amount that had been budgeted. There was a cap for repair costs to the Town because of a reasonably favorable agreement that former councilman Wyman had made with owner of the building,which limited the Town's overall share of the repairs. Vice Mayor Fraverd asked why there was such a jump in uniforms. Director Hansen stated that in previous years there had not been a uniform line item. In order to be consistent with other departments (such as the Community Center,Parks and Recreation, Street Department,and Public Works)the Facilities Division started doing the same thing. Director Hansen pointed out that there was an omission that the Council needed to consider that had to do with the property taxes for these three buildings. The lease agreement that Councilman Kavanagh had referred to included a stipulation that the Town would pay for the property tax in addition to the rent payment. She brought this up because the lease had not been signed since it had been negotiated so the property taxes had not been paid. Staff anticipated the estimated property tax could be up to $100,000 and that figure had not yet been included in the Administration Department's budget. Councilman Archambault noted the total of rent combined with the building expenses came to approximately$537,600 and now there was to be an additional $100,000 to be paid for property tax on these three buildings. He remarked that the Town could build their own building for that. Mr. Farrell mentioned that when the agreement with Dr. Lukenda was made, a 12-month cancellation clause had been included without penalty in the event that this Council or a future Council were to entertain a lease purchase on property that the Town owned. The costs mentioned by Councilman Archambault had been looked at as a break-even point. He noted that the utilities would always be there but a brand new building would be much more energy and maintenance efficient. The lease payments coupled with the property tax would make a new Town Hall easily affordable if the Council wanted to utilize one of the Town owned properties. The Town would not suffer in terminating the lease agreement with the current landlord. The cost of acquiring new property had not been factored in. He suggested that this would probably not be the year to think about it, but if the Council could put up a building and help the downtown development, the Council would have that flexibility. Councilman Archambault asked for that topic to be added to the Council Retreat discussion list. Mr. Farrell said that could be done. Councilwoman Nicola stated that the Council had recently been advised that the Maricopa County Sheriffs Department had offered to loan the Town of Fountain Marshals Department eight (8) portable hand held radios. She noted those radios had been placed in the budget for this year to be purchased as part of a three year communication project. She confirmed with Chief Sheridan that their offer would be good for the entire fiscal year should the Town need to utilize that. She said that would free up $54,000 in the Marshals Department budget. Councilwoman Nicola MOVED to add $40,000 into the Administration Department Budget under the line item called Senior Center Services. Councilman Kavanagh pointed out that Senior Center Services were included in supplemental. Councilwoman Nicola asked if that was something that the Council could consider at this time. Councilman Kavanagh SECONDED the motion. Vice Mayor Fraverd asked that the Council stay on track. She asked for clarification about the change in budget review process at this point. Councilwoman Nicola said this matter was of significant importance and rather than wait until the end after all cuts she would like to en',-:rtain the change now. Councilman Melendez agreed with Vice Mayor Fraverd that the Council should review ;ie supplemental requests at once. He thought the intent was to review each department first. Councilman �.avanagh WITHDREW his second. The motion DIED due to the lack of a second. Mayor Beydler noted that this would be looked at again when the Council reviewed the supplemental requests. 6/24/02 Executive and Special Budget Session of the Town Council Page 12 of 22 Mayor Beydler asked Mr. Farrell to explain what happened last year and why the legal fees were so high. He also asked that Mr. Farrell talk about the amount of rent Mr. Farrell had paid. Mr. Farrell responded that the process civil and prosecutorial services for the Town had been the same since conception. The Town had contracted with attorneys on an hourly basis to provide those services for an agreed upon fee that had been paid equally over twelve months. He reviewed that each month he and the town prosecutor provide a monthly statement showing how their hours were allocated. Regarding the civil services, Mr. Farrell explained that the budgeted amount for his services was $144,000, which was based upon the annual rate of$150.00 per hour for an estimated 80 hours per month for legal services. He said he would provide a bill to the Town at the end of each month to show the council where and to whom those services were rendered. He expressed that last year had been an extremely unique one. On July 1, 2001,because of Mr. Nordin's illness,Mr. Farrell stated that he had assumed the position of acting town manager for a seven-month period in addition to continuing to provide his services as town attorney. It was to have been a three months commitment but the Council at that time had asked him to serve an additional four months. At the beginning of January he had asked to be relieved from those acting town manager duties by the end of January and that was when Mr.Pederson was hired. He stated that because of the Fire District issues, he had expended many hours in October and November and again during the litigation in December followed by additional litigation in January. Mr. Farrell said he had been compensated an additional amount of money ($6,000)for performing the services of town manager while also being the town attorney. During that period from July through January he was receiving $18,000 a month rather than $12,000 a month. At that time he had decided not to bill Fountain Hills for any additional time. He noted that he had provided a breakdown of the hours that he had accounted for during that time period. In February the Council brought in Mr. Pederson and he returned to his duties as town attorney and returned to the agreement by which he would bill for litigation separately. During February through May his firm billed for litigation hours at$150 per hour in connection with the three lawsuits. He had anticipated that with four new council members and a new town manager coming on board, that there would be a need for more legal services this year so he had requested that the council consider 96 hours. He explained he had left his rate at $150.00 per hour so the request would compute to $172,800 in gross compensation. He pointed out that he provided all of his own expenses, such as secretarial, dues, supplies, travel etc. His rent situation at Town Hall was a result of the Town acquiring Building A about two years ago and the availability of space. Mr.Farrell stated that he had signed a three lease on an office in Scottsdale. The Council and Mr. Nordin discussed with him his availability to come to Fountain Hills in order to be a little closer to deliver his legal services. At that time he did not think he would have any trouble sub-leasing his office space in Scottsdale so he had agreed to move out to Fountain Hills. He said he currently occupied four offices adjacent to the Mayor and Council's facility. He explained that he was never able to sub-lease the office space and was still paying well over$1500 per month for that Scottsdale lease, which will expire on the 30th of September. He noted in his proposal that at that point he would start making rental payments equivalent to the current square foot rate that the Town paid to Dr. Lukenda for that space or vacate the area since the Council had indicated some interest in that area. He said that if his contract were renewed he would stay in the Fountain Hills area. Otherwise he would not stay in town since the Town was his only client. He said he would be happy to entertain fewer hours, as he understood the Council's desire to cut expenses. He believed that the proposed hours would be needed in one form or another but he could certainly attempt to restrict some of the billed hours. He said that regarding litigation there was little to control as it was driven by what the other attorneys file. He explained that he had utilized insurance counsel to the extent that he could in order to help control costs. Mr.Farrell suggested a range of anywhere from 80 to 96 hours per month with the Council choosing what they felt comfortable with. He said he would be happy to discuss the request for proposal for competitive bidding. Councilman Archambault asked if Mr. Farrell's portion of the $497,160 would be approximately $172,800. Mr. Farrell said that was correct. Councilman Archambault rationalized that the balance of 324,400 would be spent for litigation. Mr. Farrell replied no as there was $100,000 for the Town Prosecutor's services. Approximately ("r1.000 would be budgeted for specialty representations. Councilman Archambault said that still left over v,000 for litigation. Mr. Farrell replied that he had put a number in there. In the past, the Town had not oudgeted litigation when the Town was especially flush with funds in the miscellaneous section. There had also been years that the Town did not have any outside litigation. When the mountain litigation came along, staff started to look at this as a budget line item because it suddenly became a more serious budget item. Councilman Archambault asked what litigation fees were paid for fiscal year 2001-2002. Ms. Ghetti said she did not have, 6/24/02 Executive and Special Budget Session of the Town Council Page 13 of 22 those numbers with her, but she would be happy to get them for tomorrow's meeting. Councilman Archambault felt that the budgeted litigation figure of $200,000 was awfully high. Mr. Farrell said staff could provide the separate amounts of what was paid to him for litigation and what was paid to outside counsel for litigation. Councilwoman Nicola asked if the Town received an accounting from the town prosecutor as to how many hours were put in. Ms. Ghetti replied yes. The prosecutor was required to submit an itemized billing justifying each hour. Councilwoman Nicola noted that Mr.Farrell had provided a recap of his hours but there was no such recap with the prosecutor's request. She understood that fewer citations had been written so she was wondering if that might reflect at all in next year's prosecutor's bill. She expressed she was looking for a savings. Mayor Beydler asked Ms. Ghetti to provide those hours that the prosecutor billed the Town in 2001-02. Ms. Ghetti replied that she would do so. Councilman Archambault reflected back to when Mr. Farrell was both the acting town manager and the town attorney. He asked if the Town Code provided that Mr.Farrell could not collect two paychecks. Mr.Farrell stated that his position was somewhat unique. He was not a town employee, although he was an officer of the Town. When this was discussed with the previous Council everyone had felt comfortable that it was not a code violation, because Mr.Farrell was also an independent contractor for his services that were provided to the Town. Mayor Beydler asked Mr. Farrell how much money the Town paid his firm for both position in the last fiscal year. Mr.Farrell replied that the Town paid him$144,000 to be the town attorney. He stated he was paid$42,000 over a seven-month period to be the acting town manager. He summarized that his firm received compensation of $186,000 although the 1099 that he had received from the Town was for a higher amount of money (closer to $300,000). He explained that during the mountain litigation he had retained the services of Willdan Engineering firm as an expert witness to him rather than as an attorney to the town. He was paying Willdan's bills and he was paying other experts through his firm so that their reports would not be made public information to the other side. Mayor Beydler asked if Mr.Farrell's firm was paid extra for litigation over his monthly fee. Mr.Farrell confirmed that he had received a small amount and he could provide that information. Vice Mayor Fraverd pointed out that information was written out in his request. Mr. Farrell estimated his litigation fees to be approximately $15,000. He said he would provide the exact amount tomorrow. Councilman Kavanagh asked what Mr. Farrell's hourly rate was for litigation. Mr. Farrell responded he billed litigation or non-litigation at $150 per hour. Councilman Kavanagh asked what outside lawyers usually charge. Mr. Farrell said they varied but that no one billed as low as $150 per hour. In defense of that, he said that was a government rate. He said that cities and towns generally did not want to spend a lot of money for legal services unless heavy weight expertise was required. Mr.Farrell remarked that other attorneys and those with 30 years bar experience would charge anywhere from$250 to$400 per hour. Councilman Archambault expressed that he had a problem with legal fees being 1/5 of the total Administration budget. He thought that was out of line. Mayor Beydler agreed it was. Mayor Beydler again asked what Mr. Farrell's total compensation was. Mr. Farrell said he would provide the exact number tomorrow,but he estimated it was around$200,000. Mayor Beydler questioned the terms of Mr.Farrell's contract with the Town. Mr.Farrell responded that he had never had a written contract. He stated he charged$150 per hour for a total of$144,000 per year divided by twelve months, with litigation fees submitted separately. Mayor Beydler asked what the cancellation clause was. Mr. Farrell responded it would take four votes of the Council to discontinue his services. He stated that he would ask for 60 days to vacate since his office was located within the Town Hall in order that he could find a new place. Mayor Beydler asked when the contract was due for renewal. Mr. Farrell replied this was really not a contract. If the Council did not put any money in the budget for attorney fees or if a different attorney's firm were to be hired, he would stop submitting bills a day after the day the Council asked him to leave. He reiterated that he would ask for 60 days to leave his offices and find a new office location. Mayor Beydler clarified that Mr. Farrell would stay on for a period of 30-60 days if the Council so desired. Mr. Farrell agreed he s,r--d at the Council pleasure. It would be normal that when changing attorneys to have a transition period as vere files, pieces of litigation, and on going projects to turn over. He stated that he has pledged in the past ,nat he would never leave this community high and dry or walk away from it and have it in any legal trouble. He would assist the Council to the extent that they wanted him. If the Council wanted him to leave, he would do so. Mayor Beydler asked how long Mr. Farrell had been with the Town. Mr. Farrell answered since the Town's inception. 6/24/02 Executive and Special Budget Session of the Town Council Page 14 of 22 Vice Mayor Fraverd asked when the mountain litigation had taken place, this past year or the year before. Mr. Farrell reviewed that was the year before. The Town settled during the litigation in June, followed by the bond sale in October to pay the litigation and up through December. Mr. Farrell stated that he was finishing the mountain settlement agreement litigation at the same time as the Fire district issues began. Vice Mayor Fraverd again asked if there were legal fees this past year that were part of the mountain issue. Mr. Farrell said absolutely. Vice Mayor Fraverd reminded the Council that the Town had faced two major issues this past year,which had cost the town. She noted that one issue had been settled and she hoped to settle the other and move on. Councilwoman Nicola asked if Mr. Farrell's hours were true hours that he had worked and the legal assistant would be separate. Mr. Farrell replied no. Mr. Farrell noted that he had hired a legal assistant during that period of time, Jennifer LaFortune directly from law school. Although she offered 40 hours a week very often almost exclusively to the Town of Fountain Hills,he had chosen not to bill many of her hours at all. He had offered them to the Town gratuitously because he was receiving$6,000 in additional compensation as the acting town manager. He pointed out that about$4,000 of the $6,000 was paid to Jennifer as salary. Mr. Farrell stated the hours billed were for hours that were worked. He often worked seven days a week during that period. He said he would be able to give the Council a detailed break down. Councilman Kavanagh clarified that Mr. Farrell's hourly rate of $150 was a gross rate from which Mr. Farrell had to pay for all office expenses and staff salaries. Mr. Farrell said that was correct. Councilman Archambault MOVED to direct staff to prepare a request for proposal for legal services. He felt it was time to see what other firms might bid for legal services or perhaps look for the Town's own in-house attorney. Councilwoman Nicola asked if part of the motion was to direct staff to look into the feasibility of an in- house attorney vs. contract services. Councilman Archambault said staff could get bids both ways in order to lay out some options. Councilman Melendez asked Councilman Archambault if the motion was in the spirit of cost savings to the Town. Councilman Archambault responded yes. Councilman Archambault felt there were attorneys out there just as good that would be willing to bid to become Fountain Hills' attorney on a full-time basis or at the hours needed. Mayor Beydler asked if Councilman Archambault accepted that point of clarification. Councilman Archambault replied yes. Mayor Beydler asked if Councilman Archambault would entertain adding vw to his motion that the Council not move forward with the requested 96 hours per month at this time in view of the fact that the Town would be going out for bid for legal services. The Town would keep the current flat fee of 80 hours. Director Hansen asked to deal with the original motion if a second to the motion was obtained. Councilman Archambault restated that his motion was to direct staff to prepare a request for proposal for the legal services of a town attorney with the hours set at 80 hours per month and to look into the feasibility of an in-house town attorney vs. contract services. Mr. Farrell understood that Councilman Archambault wanted both options. He explained the problems with trying to run an ad. He offered that staff or someone independent from his office could provide the Council with budgets from law offices of comparable size communities with municipalities that have one civil attorney, one civil secretary,a criminal prosecutor and one or one and one half clerical people in the prosecutor's office because of the volume of paperwork. He said that municipal budgets could be obtained so that the Council could get some idea as to what an in-house attorney would cost. He felt to run an ad for a full-time in- house attorney with the other option that they could bid for providing legal services at 80 hours a month would be confusing. Councilman Archambault felt the Council should just go with the bid for contract services at 80 hours per month. Mr. Farrell restated that staff could provide costs for in-house operation. Councilwoman Nicola SECONDED the motion. Councilman Kavanagh said he did not know how an RFP process could be put together within any reasonable time within this budget period. He proposed that this could be looked at for next year. He stated that Fountain Hills did have an in-house attorney in Mr. Farrell. He was constantly available and the great thing about this in-house attorney was that he charged a flat $150 per hour. The Town did not have to worry about paying employee b . :-clts. He stated that attorneys provide a professional service and the idea of bidding legal services was ous. He asked what price should be placed on the experience that Mr. Farrell has. He pointed out that Mr. arrell has been involved with the Town since day one and has been involved with all of the litigation. He expressed that the Town was currently involved in serious litigation that would probably take a new lawyer 200— 300 hours worth of billable hours to get moderately up to speed without being close enough to win the case. He restated that at this point with all the legal cases facing the Town he felt it would suicidal to try to change lawyers. 6/24/02 Executive and Special Budget Session of the Town Council Page 15 of 22 He questioned if changing lawyers now would be akin to ending any chance that the town had of winning the Fire litigation. He seriously wondered if that was part of what was behind this motion. He would support retaining the services of Mr. Farrell. Councilman Kavanagh restated that he did not want to low bid something as important as legal services and would oppose this motion. He concluded that he did not have a problem with any Council Member researching this type of option for next year. Councilman Archambault said he took offense that he was trying to sabotage any legal issues going on. He said it would be fmancially responsible to go out for bid. Mayor Beydler said that the legal services that were being provided had cost the Town a lot of money. If winning the mountains at the expense of$14M a victory then he could count 2,600 people that would take issue with that. Mayor Beydler said that due to Mr. Farrell's advice that the Town was in litigation at this time. Vice Mayor Fraverd pointed out that the mountains were $13M not $14M and could have cost a lot more in the long run. She felt Mr.Farrell was a bargain at the price of$150 per hour. She said it was unfortunate that some of the new Council Members didn't realize that. The more seasoned Council Members certainly realized what an asset he is. She said it was bad timing as the Town was in a lawsuit with Rural Metro and a new town manager would soon be coming on board. She stated that Mr. Farrell was the Town's point person for continuity. Without Mr. Farrell guiding the new manager she felt the Town would really be lost. She felt this was the wrong year and time to be dealing with this. She expressed that she was upset that this has come about at this particular time. She agreed that eventually the issue of an in-house attorney should be looked at but not this year. Councilman Kavanagh responded to comments made that Mr. Farrell gave bad advice on the mountain litigation. He acknowledged that he was the only member of the previous Council who had screamed about spending the money for the mountains. He remembered discussing it at almost every meeting, in public areas, and he had written letters of objection to the paper. He noted that all the current council Members lived in town when that was occurring but he was the only one who screamed about it. What happened with the mountains was not Mr. Farrell's fault. He acknowledged that Mr. Farrell had done a great legal job even though he had not been in favor of the mountains. Mr. Farrell gave good legal advice that in the end turned out to be the best legal advice the Council could have received. Councilman Kavanagh said that even though he was the odd man out on that issue, Mr. Farrell always kept him totally informed about the pros and cons about that case. He stated that Mr. Farrell always gives the Council 100% of his legal services no matter which side the Council Member is on. He found this was a trait that few lawyers had and was one of the reasons that Mr. Farrell was the best lawyer and the only lawyer he would consider for this Town. Councilwoman Nicola commented that she had done research on various positions by using the Arizona League of City Annual Survey. When doing so, it had come to her attention that Fountain Hills was spending more for legal services than any other city or town in that population range,perhaps even more than some of the larger cities and towns. Councilman Kavanagh asked if she was referring to the hourly rate. Councilwoman Nicola responded the survey listed it as a monthly rate. She said the Town seemed to need the assistance of an attorney much more than other cities and towns of the same size and complexity. Councilman Kavanagh pointed out that the hours billed were out of the control of Mr. Farrell. That was up to the Council or the people who chose to sue the Town. Councilwoman Nicola said she was just noting the bottom line of their monthly costs for legal services. Councilman Archambault said at 80 hours per month, the Town was paying $12,000 per month. Councilman Kavanagh said that was correct, but the amount of time Mr. Farrell has to spend was determined by lawsuits. Councilman Kavanagh noted that the Town could not stop people from filing lawsuits against the Town so he did not think Mr. Farrell could be blamed because there were many billable hours. Councilman Archambault responded that he was not talking about the lawsuits that Mr. Farrell was billing for independently of his hourly rate. He was talking about what he billed the Town to confer with the Council and the Town employees. He restated that 80 hours per month was higher than most of the other cities and town require. Councilman Kavanagh di=1 not think that was true. Councilman Kavanagh MOVED to table this item until next year's budget. He felt this was an extremely dangerous time to change lawyers. The Council would need more than a couple of weeks to look into the options 1/460 available. He said the present litigation would be jeopardized and would be exposing the Town to possible losses 6/24/02 Executive and Special Budget Session of the Town Council Page 16 of 22 that could cost million of dollars. He asked the study to proceed without action until that time. Vice Mayor Fraverd SECONDED the motion. A roll call vote was taken with the following results: Councilman Kavanagh Aye Councilman Melendez Aye Councilman Archambault Nay Councilwoman Ralphe Nay Councilwoman Nicola Nay Mayor Beydler Nay Vice Mayor Fraverd Aye The motion failed on a vote of 4—3. John Wyman,Jacklin Dr. He agreed this was a crisis budget. He spoke in favor of retaining the services of Mr. Farrell. Mayor Beydler noted that Mr. Farrell was a defendant in the lawsuits and that was the reason for third party counsel to represent the Town in these cases. Mr.Wyman said the Town did have third party counsel but he did not see how the Town would get through this without out someone orchestrating this for the Town. To lose the experience that Mr. Farrell brings to table when the Town does not even have a town manager concerned him. Mayor Beydler recessed the special session at 9:20 p.m. and reconvened the meeting at 9:35 p.m. Mayor Beydler asked that the meeting be kept civil at all times. He stated that aggressive behavior would not be tolerated. The public was not allowed on the dais. He noted that he had asked the law enforcement officer to maintain civil order. Beverly Kinsey,Fairway Court She felt the discussion just held was disrespectful towards Mr.Farrell. L. Sharon Hutcheson,Tumbleweed She expressed concern at the discussion that she just heard. She noted that three of the Council Members openly campaigned on issues that had to do with settling this lawsuit and openly supported attorneys for the other side. She found that very disturbing as they were sitting on the other side as Council Members and were making a decision on the Town's attorney. She suggested that those Council Members look at the ethics involved and admit to on going conversations with the people with whom the Town was in litigation as well as their attorneys and reconsider their decision. Sharon Morgan,Mustang Dr. She asked what would happened if the 80 hours were reached before the end of the month. Would the Town be lawyerless? She said in-house attorneys could not be found cheaper than$150 per hour. Roy Kinsey,Fairway Court He said out of courtesy to the Council he recognized their statements and actions towards the town attorney as being made out of naïveté. He stated that the Town could not afford to consider an outside counsel or replacement counsel at this time in this town. There was too much going on that involved the security of this town. The Council was working on a budget and the proposal to look at the expenses of the town attorney must be looked at with regard to the actual law cases and legal advice that the Town had required. He noted that the past negotiations with MCO had taken a minimum of two years. He countered the statement that 3,000 people felt the mountains weren't worth it with the fact that more than half of them were happy to have preserved the mountains. If the mountains had not been purchased, today's price would have been twice what the Town paid for them. He felt it had been a bargain. He favored retaining the experience and knowledge of Mr.Farrell. ally Hudson,Town of Fountain Hills Risk Manager and President of Risk Retention Pool He stated that the risk pool represents 65 Arizona cities and towns and had hired many attorneys. For the ten years that he has been president,the name of William Farrell has been high on the list of the Risk Pool as one of the best , land attorneys in the state. He said to change attorney would be a very poor thing to do legally and would not consider the best interests of the people. 6/24/02 Executive and Special Budget Session of the Town Council Page 17 of 22 Phil Gaziano, 14946 Sierra Madre He noted that when a Council Member states he or she wants to settle a lawsuit, they mitigate the case of the Town. He said what he had heard at the last marathon Council Meeting was that the Council wanted to settle the Fire issue. He said that told the Town's opponents that the Council was weak. He pointed out that the Council had the fiduciary responsibility to the Town people and not to themselves and their position on the issue. Mayor Beydler acknowledged that change was always a difficult thing. He mentioned that he had personally interviewed five different law firms in the valley who all have municipal law experience. He stated that he has done his research, talked with them for a number of hours, entertained proposals from them and it was not by happen chance that they have the ability to serve at a price that was equal or less than the Town was paying. He reminded everyone that they had been elected by a majority of the voters to make decisions that affect this community. He said it was to those people who voted for them as well as the community at large that they had a responsibility because now they had to make decisions that would affect the future of the Town for a long time to come. He asked the public to keep in mind that there were bigger issues at play here and the Council was trying to do what was right for the community. Councilman Archambault responded to some of the comments made. Everyone seemed to assume that Mr.Farrell would not be the winning bidder. He felt Mr. Farrell would entertain bidding to provide legal services. He noted that everyone says the cost of an in-house counsel would be absurd but what did they think the Town had now. He stated there was an attorney that was accessible all the time. He said the problem that he saw was that there were staff members going to the lawyer burning up those hours on things that they could probably handle themselves or could be handled by a ten minute phone call to his office instead of drinking coffee in his office and shooting the breeze with him. Councilman Archambault suggested that this be put out for bid on an 80-hour month. That would mean,in his opinion,that the attorney would not be in-house but would be available when needed. He felt that 80 hours would be sufficient unless the attorney was in house like the Town had now. Councilwoman Ralphe said it was unfortunate that a personnel issue was being discussed in this room tonight. She summarized it by saying it was time for a change. Fountain Hills was not a few thousand people any more with a town government that walked hand in hand with one large developer. Fountain Hills was a town of 20,000 people and it was the Council and staffs responsibility to represent that varied group. Councilman Melendez said it was very hard to be critiqued in public under any circumstances. He wanted to pay tribute to Mr.Farrell for listening and being a gentleman. Vice Mayor Fraverd was not sure any cost cutting was going on at all. If the Council really wanted to cut costs, why not just reduce the hours to 60 a month. She felt certain council members felt it was time for a change and they were entitled to their opinion. Her opinion was that this was another major mistake and that this was the absolute wrong time for a change. She said she would not be supporting this. A roll call vote was taken on the main motion with the following results: Vice Mayor Fraverd Nay Councilman Kavanagh Nay Councilman Melendez Nay Councilman Archambault Aye Councilwoman Ralphe Aye Councilwoman Nicola Aye Mayor Beydler Aye The motion CARRIED on a vote of 4—3. .yor Beydler commented that the Administration Department was one of the largest budget areas that the Council could look at in terms of expense cutting. Councilman Archambault referred to the electricity line item. He asked if Fire Stations 1 and 2 were included in that figure. Ms. Ghetti replied that Rural Metro paid for the utilities. Director Hansen pointed out a correction that was made in the budget. The summary sheet reflected a different total than what was listed on page 66. Director Hansen confirmed that the $170,700 was the correct 6/24/02 Executive and Special Budget Session of the Town Council Page 18 of 22 figure. She noted that on that same page the statement appeared that Rural Metro and the Community Theater pay for their own electricity. Councilman Melendez asked if the prisoners in Fountain Hills were kept here in the Town's holding facility for a short period of time and then transported to the Scottsdale Police Department's holding facilities. He asked if the budget line item under Jail and Prisoners reflected that. Director Hansen agreed that Scottsdale charged Fountain Hills on a per diem basis and was included in this line item. Councilwoman Nicola made a statement with regard to jail and prisoner fees. She said that it had been the municipal court's goal to recoup those fees. She asked if Ms. Ghetti could provide the Council with how that was going as an offset to the expense. She brought to the public's attention that on August 22, 2002, a new law would go into effect mandating that. As long as the defendant was financially able to repay the jail fees, it was the defendant's responsibility for the completion of the sentence. Ms. Ghetti asked if Councilwoman Nicola wanted to know if all of the defendants that were sentenced to jail had their fees recouped for the cost of their prisoner fees. Councilwoman Nicola replied not necessarily but maybe just as an informational point. Councilwoman Nicola referred to the accounting report that she and Ms. Ghetti had previously discussed - the court line item revenues. She stated that there was a line item for jail fees. For informational purpose perhaps Ms. Ghetti could educate the Council on how much the court did recoup for the General Fund for jail fees. That might bring a comfortable level to the Council as to what the Town was currently paying for those fees. Ms. Ghetti said she would be happy to. Mayor Beydler asked Director Hansen to discuss the personnel count. Director Hansen corrected the number to 18 because of the undesignated position the Council approved. Mayor Beydler asked what the salary level would be for that position. Director Hansen responded that the range would be between $80,000 to $120,000. Mayor Beydler acknowledged that there had been several ideas regarding what that position would be used for. He asked for clarification as to how it was currently used. Mr. Farrell responded it was for Mr. Nordin. Mayor Beydler confirmed that was correct. Mayor Beydler noted that Vice Mayor Fraverd had brought up that the position could possibly be used for an assistant city manager. Mayor Beydler said he would like to see money carved out of this Administrative budget so that the Council could make room for an economic development director. He felt that was something that this community really needed. He noted that there had been some discussion as to how that particular position might be able to handle both objectives. Mayor Beydler stated that an individual had been interviewed who was an assistant city manager now that was directly responsible for economic development in their community. He realized that there were limited monies but he was questioning if there was a way that the Council could come to an agreement on perhaps blending the two positions. Vice Mayor Fraverd said that was certainly a possibility. She had three areas of responsibility in mind for the assistant town manager. One would be that of a grant writer. She felt the Town was in desperate need of someone to coordinate the efforts of grant writers currently on staff as some of the departments do a terrific job and some don't do anything at all. The second would be to deal with personnel issues. Vice Mayor Fraverd said there was a need for someone to coordinate the employees, to be there for them, and to help iron out problems, as well as make sure that everyone was on track. The third responsibility would be that of a public information officer in order to get the word out on issues. She was not sure that the Compass Newsletter could be utilized. She had those specific duties in mind for an assistant town manager. She agreed the Council could add an economic development element into that position. The Council could write into the job description anything that they wanted. Councilwoman Nicola asked about the last pay resolution. The human resources position had been reclassified to administrator or director. She asked that staff restate what the job title was. She remembered that there had been a $20,000 increase for that position. She was unclear as to what direction the Council was going in regard to the personnel issue. Vice Mayor Fraverd answered that she was going in the direction of someone that would look at employee evaluations. She believed the current human resource staff member did not do that. Councilwoman Nicola asked if this individual would sign off on the evaluation. Vice Mayor Fraverd replied yes. :acilman Kavanagh wanted to make sure that everyone understood that any plans for this new position were contingent upon making accommodations for Mr. Nordin's position also. Mayor Beydler said he understood that. He asked if the Council could move forward and direct staff to create a proposed job description for this position for Council to review. Vice Mayor Fraverd felt that the Council could give preliminary input, but she felt that the assistant town manager would answer to the town manager. It should be the town manager that would interview 6/24/02 Executive and Special Budget Session of the Town Council Page 19 of 22 and appoint in order to ensure that he or she had someone on board with whom they were comfortable. She respectively requested that the Council not go too far with this until there was a Town Manager on board. Director Hansen proposed that the Council might want to consider that would be a good item for the Council Retreat because by then the town manager would be in place. The Council concurred. Councilman Melendez suggested that Mayor Beydler might want to report on the progress of the Council's search for a town manager. Mayor Beydler said that the Council had been moving quickly to address several issues. The Council hoped to have final interviews for the new town manager this Thursday. Interviews would be held with the Council and the department heads, which would be followed with a reception for the candidates and their wives. The Council hoped to be able to make their decision by Friday morning of this week for a new permanent town manager that would be able to start the first of August. Councilman Kavanagh MOVED to set the time to adjourn tonight's meeting at 10:30 p.m. and to so advise those present for the supplemental budget that it would not be discussed tonight. Councilwoman Nicola SECONDED the motion. The motion CARRIED unanimously. Councilman Archambault asked about the employees' health insurance. He stated that the Town paid 100%of the health insurance. Ms. Ghetti responded that the Town paid 100% of the employees' premium. Councilman Archambault asked if employees added spouses and/or family members, would the employee pay for those additional premiums. Ms. Ghetti explained that if the employee has dependents (a spouse, children or both) the Town contributed half towards the difference. He felt that was off balanced for those that were single. Ms. Ghetti said no and noted that employees had the option to be married or to have children. Councilman Archambault said that explained why there was such a variation when looking at health costs between departments. Councilwoman Nicola expressed concern that even though there wasn't an increase in the town prosecutor's budget she knew that there had been a decrease in activity. She was hesitant to approve this line item until the Council saw what they had paid last year. Mayor Beydler clarified that Councilwoman Nicola and the Council wanted to see the number of hours so it could be determined whether or not the $100,000 equated a reasonable hourly rate based upon use. Councilwoman Nicola moved to table the prosecutor's contract as part of the adoption of the Administration Budget until tomorrow. Ms. Ghetti suggested that the Council consider approving the Administration Budget as it is. If tomorrow the Council felt they needed to make a change after reviewing the numbers,the Council could then revisit the issue rather than"having to revisit"if there wasn't a need to change it. She stated that would be the Council's decision. Councilwoman Nicola WITHDREW her motion. She stated for the record that there was a request for$100,000 for prosecutorial fees. She noted that the Town hardly ever saw Mark(the town prosecutor)and most people would not recognize him. The town attorney fees were$164,000 and it had been very publicly noted that Mr. Farrell provided a significant service to the town. She was still uncomfortable with that and it would be revisited tomorrow. Ms. Ghetti said she understood and would provide all the information tomorrow. Councilman Archambault asked what year was the Town in with regard to the lease. Director Hansen replied that on July 1, 2002, the Town would start its third year. Councilman Archambault noted that the lease had not yet been signed. He referred back to the $100,000 in property tax that the town might owe. He asked if that amount was accumulative for the last two years. Director Hansen said no. Staff was projecting that amount to be for fiscal year 2002—2003. Councilman Archambault asked if the town was liable for that amount since they did not pay last year's property tax. Mr. Farrell responded that someone would be and that issue had not been settled in the negotiations during the year in which the tax was due. Mayor Beydler asked Director Hansen where additional cuts could be made. Director Hansen said that she would work on the list as per Councilwoman Ralphe's motion for a reduction in conferences, dues, and memberships. She explained that the Administration Budget also supplied support services and operating expenses for all of the +n's other departments. She gave an example: copy paper. She pointed out that the Town's departments used a lot of copy paper and that entire copy paper budget for all departments lived in the Administration budget. She reiterated that the resources in this budget were not strictly used by just the Administration Department, as it was used town wide. 6/24/02 Executive and Special Budget Session of the Town Council Page 20 of 22 Ms. Ghetti reminded the Council that the annual property for the lease in the amount of$100,000 should be added to this budget. She stated that the actual lease would be $375,000 plus the annual property tax. Councilman Archambault clarified that that amount was not included yet. Ms. Ghetti responded that was correct. She restated that the electricity would be reduced as discussed earlier by$29,300 but the rent would go up. Councilman Melendez asked if part of the motion for this department could be the discussion of adding an assistant town manager when the full-time manager was on board. Director Hansen stated that the direction on that point was that item would be discussed during the Council's Retreat. Mayor Beydler reminded staff there was the stipulation that they would provide the number of hours on the prosecutor's work for the last year and the Council's evaluation of those numbers. Ms. Ghetti proposed looking at that issue first thing tomorrow. Vice Mayor Fraverd asked what the number would be in the budget for legal fees. Mr.Farrell responded$136,800 for the legal services of the town attorney if the hours were frozen at 80 hours per month. Vice Mayor Fraverd asked if the $136,800 would cover any additional legal fees that the Town might have. Mr. Farrell replied that litigation expenses would be billed against the $215,000 amount. Regular civil services at 80 hours would be charged against the $144,000 of which $136,800 would come out of Administration and 5% would come out of the Street Department budget. Councilman Kavanagh AMENDED the motion with respect to the RFP for legal services to specify that any attorney hired by the Town either maintain an office in Town Hall or within the Town itself so there was ready access to the attorney as opposed to having to travel outside Fountain Hills. Councilman Melendez SECONDED the amendment. The amendment CARRIED on a vote of 5 —2 with Councilwoman Ralphe and Councilwoman Nicola casting the nay votes. Councilwoman Ralphe MOVED to approve the Administration Department Budget as discussed which would include the addition of $100,000 for property tax contingent upon the Councilwoman Ralphe's motion. Councilwoman Nicola SECONDED the motion. The motion CARRIED on a vote of 6 — 1 with Vice Mayor Fraverd casting the nay vote. Ms. Ghetti continued with the Information Technology Department Budget. Ms. Ghetti stated that the salaries and benefits for this department were within the Administration Department. Information Technology Administrator Peter Putterman stated that this budget was put together from requests by the individual departments and compiled into a unified budget request and then presented to the Council. All requests were identified as a single line item on a project basis. He noted that all departments were cooperative in keeping their requests down. He discussed what was covered in the budget. He stated that weren't any new capital items in the budget this year. Councilwoman Nicola asked why the education and training line item was not spent last year. Mr. Putterman explained that last year all servers were upgraded. He stated that staff has not had any training with regard to the upgrade. He had originally requested a half time network administrator and web developer but in an effort to decrease this year's budget he had removed that request as he was looking for that person to have the required skill set to handle the software upgrades. He had then put in money to put those services out for contract next year but he also had pulled that out of the budget to bring the total down. He acknowledged that if the staff did not get training on the server upgrade,the Town would be placed in precarious situation. The decision was made to leave the education and training budget in because this was the cheapest way to get a required skill set in-house to handle the needs of the network. Councilwoman Nicola asked if there would be travel costs. Mr. Putterman responded that those expenses would be included in the training or conferences line items. He discussed what types of items were listed in his budget under Dues and Publications. Councilman Archambault asked for breakdown of what was covered in the $78,000. Mr. Putterman described those items. Councilman Archambault recapped that amount covered all phone services for all town offices. Mr. Putterman said that was correct with the exception of some cellular charges that were billed to departments ectly. Councilman Melendez asked if there were any other areas that could be cut. Mr. Putterman said during the new year he would be looking to see if any services could be delivered at a lower price. If so,there might be a savings during the year. He said this was a bare bones budget. 6/24/02 Executive and Special Budget Session of the Town Council Page 21 of 22 Mayor Beydler asked about Repairs and Maintenance. Mr. Putterman noted that there was very little money in this line item. Mayor Beydler noted that it was higher than last year's budget. Mr. Putterman noted that this line cly item contained a lot of things that weren't necessarily a repair. He listed the items contained in this account. Mayor Beydler asked how much money was spent to upgrade software. Mr.Putterman replied none except for the 2002 vehicle models. He reiterated that he was maintaining contracts, some of which would provide automatic upgrades. He stated if the contract lapsed for the software that the Parks and Recreation Department used, the catch-up costs would be approximately three times what the Town would expend this year. He commented that he had looked at that possibility. Councilman Archambault asked if there was any way to bid the communication service out in an effort to cut costs. Mr.Putterman said the town only had one provider at this time and he would welcome competition. Councilman Archambault MOVED to approved the Information Technology Department Budget as presented with Councilwoman Ralphe's motion. Councilwoman Nicola SECONDED the motion. The motion CARRIED unanimously. AGENDA ITEM#6-ADJOURNMENT. Councilman Archambault MOVED to adjourn the meeting and Councilwoman Nicola SECONDED the motion,which CARRIED unanimously. Mayor Beydler adjourned the meeting 10:20 p.m. TOWN OF FOUNTAIN HILLS L By: . 14li I. "on Beydler Ma . A 1-11,ST: Cassie B.Hansen, Director of Administration/Town Clerk PREPARED BY: 4/0—'106.44_0(Dt...1 Bev Bender,Executive Assistant CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Special and Executive Budget Session held by the Town Council of Fountain Hills on the 24th day of June, 2002. I further certify that the meeting was duly called and that a quorum was present. DATED this lst day of August 2002. Cassie B. Hansen, Director of Administration/Town Clerk 6/24/02 Executive and Special Budget Session of the Town Council Page 22 of 22