HomeMy WebLinkAbout2002.1113.TCFFM.Minutes TOWN OF FOUNTAIN HILLS
MINUTES OF THE FINANCIAL FORUM OF THE
FOUNTAIN HILLS TOWN COUNCIL
‘1116, November 13,2002
Mayor Beydler called the meeting to order at 6:00 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, Susan Ralphe, Kathleen Nicola, Michael Archambault.
John Kavanagh arrived late. Town Attorney Andrew McGuire, Town Manager Tim Pickering, and Director of
Administration Town Clerk Cassie B.Hansen were also present.
AGENDA ITEM #1 - PRESENTATION BY TOWN MANAGER TIM PICKERING ON THE "TOWN OF
FOUNTAIN HILLS GENERAL FUND — FINANCIAL CONDITION AND ACTION PLAN", DISCUSSION BY
THE TOWN COUNCIL ON THE PRESENTATION AND ALL ASPECTS OF THE TOWN'S FINANCIAL
CONDITION.
Town Manager Tim Pickering gave an overview of the town's financial condition via a visual PowerPoint presentation.
He discussed the town's present financial situation, future revenue projections/expenses, and the causes of the problem.
He proposed various revenue and cost cutting options based on decision factors for Council consideration. He compared
Fountain Hills to other towns with regard to the sales tax rate and property tax. Mr. Pickering presented and explained
how the Council could utilize the decision table. He summarized an action plan in order to facilitate the Council's
decision.
Mayor Beydler thanked Mr. Pickering for his financial overview. Councilman Melendez stated that at the last meeting
Mr. Pickering had mentioned the subscription fire service. He felt it was appropriate to further define what that was. Mr.
Pickering responded that subscription fire service was a volunteer subscription that each individual homeowner selects.
He acknowledged meeting and discussing this option with Rural Metro. He noted that Paradise Valley operated this way,
's did some of the more rural areas. These towns that did not pay a property tax would have each individual homeowner
ay for fire service based upon a rate set by that company. If the town were to decide not to pay for fire service, the bill
that the individual homeowner would receive would be quite large because of the amount of expenditures that the
company had to cover. Rural Metro confirmed they had not done a subscription service in a town that had previously
provided fire service. Councilman Archambault said he had some ideas. Mayor Beydler asked that he hold his thoughts
until after public input. Councilwoman Ralphe assured the public that the Town had not taken out loans to pay operating
expenses.
AGENDA ITEM#2- CALL TO THE PUBLIC.
Carolyn McClure, 16212 Inca Ave.
She proposed that non-essential expenses be cut, volunteers be utilized, new industries brought in to let the middle of the
city build up, and contracts should be reviewed to see if it was cheaper to outsource fire and law enforcement services.
David Hansen, 15759 E. Brittlebush Lane
He suggested the Town use experienced people. He proposed that the four hold over council members resign so that a
new voting majority council could lead the way out of the present problems.
Jerry Miles, 16317 E. Inca Ave.
He offered suggestions: raise the sales tax immediately, settle the lawsuits, cut expenses and ask for help to do so, and
hold a public vote on implementing the property tax in the spring after the public knows that the cost cutting has been
done.
Tim Yoder, 15459 E. El Lago Blvd.
He said the lawsuits needed to be settled. He proposed the replacement of the fire district property tax and establishment
of a fire district. He did not consider fire subscription service a solution. He believed that he and others could arrange a
settlement to the lawsuit with the Fountain Hills firefighters at no financial transfer of money from the town to the fire
fighters. He felt that could be resolved within the district's funding. He offered his assistance to the Council.
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Sandy Zinn, 14250 N. Saguaro Blvd.
She felt the Fire District needed to be reinstated and eliminate the dual law enforcement system in favor of the Marshals
Department as the law enforcement agency for the town. She pointed out that taxpayers already pay Maricopa County
taxes for backup sheriff responses. She echoed the need to settle the lawsuits.
Dennis Regeski,FH
He felt that employees could be cut, as there was less work in the building department. He felt the town was overstaffed
in the area of police. He said the town needed to get rid of one agency. A lot of property was purchased in the
mountains. He said a lot of property tax was raised from homeowners who build million dollar homes vs. those
$200,000-300,000 homes. If the mountain land was opened back up to million dollar homebuilders, additional revenue
would be generated that could help the town.
Ann Duncan, 9627 N. Longfeather
She opposed an increase in property tax. She said she would increase the local sales tax by about .6%, reduce the land
preservation sales tax,cut back on municipal services,and eliminate the sales tax exemptions.
Tom Hegna, 15225 E Sundown Drive
He said that it was hard to build homes in Fountain Hills and that needed to change. He proposed being "pro-business"
and relax signage constraints. He suggested capturing more money through a concerted effort by everyone to get
residents to shop Fountain Hills and look at MCO and other businesses as potential partners. He stated additional low
taxes had to be on the agenda in conjunction with cutting expenses although long-term plans should be to cut taxes. He
stated that the Council could not have personal agendas.
Rita Brown, 16738 E. Nicklaus Dr.
She asked that the Fire Board be reinstated.
Tammie Rothermel, 14863 Deerskin
She stated the lawsuits needed to be settled. She was in favor of securing the $500,000 grant that could help beef up the
town police protection and the Sheriff's presence could be cut back. She suggested that $3 million dollars could be taken
out of the Town's budget if the Fire District was returned to service and the lawsuits should be settled. She proposed that
vw the Mayor and Council forgo their salaries. She was against subscription fire service.
Steve Gendler, 14002 Midland
He spoke in favor of accepting a federal grant ($375,000) for the Marshals Department as a means of helping the town
address the law enforcement needs over the next three years. He spoke against reducing or eliminating the Marshals
Department.
Jack Golding, 15446 Richmond
He spoke against a property tax increase on behalf of retirees on a fixed budget.
John Winter,Jr., 11247 N. Inca
He agreed the lawsuits should be settled as the town's legal fees had to be high. He wanted to know what that amount
was. He proposed that an outside auditor be brought in. He thought an outside consultant should be brought in to show
the town how to cut the spending. He spoke against a subscription fire service.
Mayor Beydler asked Town Manager Pickering to address Mr. Winter's question as to how much money had been spent
so far on the fire issue litigation. Mr. Pickering responded from the beginning and through October 2002 the cost was
approximately$165,000.
Bob Travis, 14218 N. Chinook Place
He asked that town staff be reduced with others taking up the slack with town expenses cut. He offered his assistance to
the Council. He was against subscription fire service.
Susan Stolid, 15616 E. Richwood Ave.
She said the town should spend for essentials only. She asked if it was possible to look at the preservation money and if
the bonds had not been exercised yet could it be postponed. If that money were needed, could the preservation money be
used for the current shortfall? She proposed that a reduction in the administration staff in conjunction with Mr.
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Pickering's enhanced revenue sources would give the town approximately $850,000 over that current shortfall. A
property tax would be necessary, which she was opposed to. She wanted to see the Fire District reinstated.
Carrie L. Janeway, 15142 E. Marathon Dr.
illow She stated that she wants to see the town have their own fire and law enforcement departments and get rid of the Sheriff's
Department. She asked that the lawsuits be settled.
Jim Heasley,FH
He expressed he had been disappointed that the cost cutting option was towards the bottom of the list instead at the top.
He was not in favor of a sales tax increase. If it had to be, he wanted to see more of the sales tax revenue devoted to the
town's economic development. He expressed that business activity and economic development in the downtown was
more important for the town's future. He felt that the sales tax revenue would increase if the town invested in its
downtown development.
Hugh Henry, 15731 E. Sycamore
He spoke against increasing property and sales taxes. He pointed out that if the Fire District expense were replaced, the
land preservation sales tax were reduced, and the town's expenses were reduced by 15% that would take care of the $4.9
million deficit. He noted that he also had problems with the building department but then some of those working in that
department were no longer working for the town. He felt things were changing. He pointed out that a year ago the town
was very close to implementing 911 that would be answered locally. He summarized that he wanted to see the Fire
District established while actively reducing expenses.
Sam Trivedi, 17105 E. Shea Blvd.
He proposed that the town's staff be reduced with the workload reallocated among the town's remaining employees. He
asked if the apartments were collecting the bed tax. He did not oppose the raise in sales tax but did not want to see the
increase at the proposed 1.1%. He was in favor of a Fire District and the Marshals Department.
Arnold Van Ruitenbeek, 15215 San Tomas Pl.
He felt that the primary property tax had been rejected because there wasn't any rate cap as in the Fire District tax and
because the revenue wasn't designated for a specific purpose. He would not recommend that approach. The Fire District
Nor had been limited to spending the money for fire fighting and emergency medical services. He thought the Fire District
should be reestablished. He reminded Mayor Beydler that he had campaigned on increasing the tax base but not the tax
rate. He urged the Council to get together as the bickering had been going on too long. He said the town went overboard
on the mountain purchase. He asked the Council to consider finding another purpose for some of that land. He suggested
selling some of the land to a developer.
Al Poma, 14245 Fountain Hills,#1
He felt that some of the problems could be solved if the town went with Tim Yoder's suggestion. He spoke in favor of a
sales tax increase.
Lori Noss, 14603 N. Fairlynn Dr.(Chair of the Committee to Save the Environment)
She stated that any action that would jeopardize the Town's ability to repay the bonds for the preserve should not be
considered. She reminded everyone that the preserve was a valuable resource that benefits everyone. She pointed out
that the Town would not be in such dire need if it were not for the residents who voted against the property tax. She felt
that by taking responsibility for fire protection and reviving the property tax designated for fire service, this problem
could be alleviated. Residents should also take responsibility for the bonds without jeopardizing the town's ability to pay
them off. She reminded everyone that the consultants that were hired to review the law enforcement issue told the Town
that the costs were the same whether or not the town went with all Marshals or all Sheriffs deputies or a combination. She
did not see that saving the town any money. She said the Marshals were needed to enforce town ordinances, as the
Sheriffs Department was not capable of doing so.
John Wyman, 16905 Jacklin Dr.
He noted that when reducing expenses by cutting employee head count, the town manager had to be careful, as some of
the Town's employment was function related revenues. He reminded the public that the mountain preservation tax had
been funded by a tax increase. He felt that sales taxes should be increased to the state average. He felt that the Rural
Ly Metro expense had to be off loaded and anything less than that with a combination of cutting staff head count and raising
taxes was a denial of reality.
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Don Logan, 14061 N. El Pueblo
He suggested using the zero based budgeting approach in order to evaluate the minimum the town had to have to keep
operating was an appropriate way to look at town personnel/expenses, consultants and their expenses, if needed, as well
as any non-personnel related expenses. He suggested that volunteers be used in place of personnel. He noted a lot of
iko, work had been done with regard to preservation (washes/mountains). If the citizens wanted to mortgage the real value of
the Town's future for our children and grandchildren, that could be done; but that would be a sorry thing to do. When the
property tax question was voted down in March, the citizens thought the Town had a sterling financial condition.
Knowing the Town's current condition, citizens might feel differently. He stated if the Town were to turn away from
Rural Metro, the town should do that as a result of an analysis that was financially responsible particularly in a crisis
situation as opposed to emotionally satisfying.
Mr. Pickering announced that a limited number of copies were available this evening. Citizens could request a copy at
Town Hall. Councilman Archambault asked if it could be posted on the Town's website. Mr. Pickering responded that
staff would try to get that done. He said a brochure had been given out, which was a summary of tonight's presentation.
Ken Ulrickson, 16137 E. Ocotillo
He felt Mr. Pickering's presentation was excellent. He noted that Mr. Pickering's presentation clearly showed that the
homebuilders represented 1/3 to t/s of the total revenues of the Town. He pointed out that over the years that the building
permits had decreased. He asked that the Council look at a 10 — 15 year plan and plan for when there wouldn't be any
building revenues.
Cynthia Bonomolo, 15809 E. Cholla Dr.
She felt that the residents needed to be educated on what they were voting for. If they had known what the consequences
of that proposition not passing were, she felt the residents would have voted for it. She stated that insurance companies
would increase their rates because of the Town's inability to provide fire service. She did not view the defeat of the
property tax as a cost savings to residents. She reminded everyone that insurance was not tax deductible where as
property taxes were. She felt that the Marshals Department needed to be improved and until then she favored using the
Sheriff's Department fulltime.
Andi Bell, 15671 Tepee Dr.
lbw She spoke against a sales tax increase but was supportive of increasing the tax revenue base. She suggested the Chamber
and the Town promote bringing people into Fountain Hills for day trips, shopping, site seeing, dining and spa utilization.
She wanted to see an increase in revenue to Plat 208 and proposed utilizing college students (free of charge) as recently
done in Guadalupe.
Councilman John Kavanagh arrived after taking his wife to the emergency room. He announced she was home now and
it did not appear to be anything serious.
Roy Kinsey, 17120 E. Fairway Ct.
He stated that the most important thing that residents could do was to support any tax increase. He said it was essential
since the community has many benefits that must be paid for. Whether or not it was a short-term sales tax increase or a
property tax increase, it was important that the citizens should take on that responsibility as their share. He felt the
Council had enough to do in terms of cutting expenses and implementing the other good suggestions that came forward.
He supported increases in both sales and property taxes. He reminded everyone that if a property tax were to be
implemented, the Council would have to take action the first of January, as it was not something that could be put off or
the Council would miss another year of tax revenue.
Gene Peters, 14262 FH Blvd.
He spoke on behalf of those on fixed or reduced incomes, as they could not afford a tax increase. He stated the town
needed to economize more and reduce expenses. He asked that everyone think"outside the box"as there was bound to be
solutions that had not been looked at yet. He suggested that the Council take a business approach because the political
approach didn't seem to be working.
Arlena Mannila,P.O. Box 18942 FH
She declined to speak at this time.
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Tom Young(Plaza Fountainside)
He stated the town needed to address a decrease in expenses. He wanted the lawsuits settled. He felt local businesses
were the lifeblood of the community and he did not want to see them taxed further. He felt the residents should support
the businesses by shopping in Fountain Hills.
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Edwin Kehe, 16620 N. Agate Knoll
He said it would have been more appropriate to list in the preliminary options the Preservation Sales Tax as a diversion to
the General Fund, as this was not a reduction in tax and would be utilizing a portion of that designated tax along with a
proposed 1.1% sales tax increase. The land Preservation Sales Tax was currently used for debt service on the mountain
purchase so it was a functioning tax and was a covenant between the government and the governed that specified the
accumulated monies would be used for funding preservation and downtown development in the designated ratio. These
issues were deemed by the community to be valuable purposes. He noted that what separated Fountain Hills from the rest
of urban Phoenix was its environment. He commented that this was a quality of life issue and would be for generations.
He stated that to use those fund for other than there intended purpose would be a breach of public faith. He urged the
Council not to divert those fund from their designated purposes.
Mary Pilarinos, 13810 N.FH Blvd.
She proposed that the town's staff be reduced as well as their salaries including the town manager's.
Carol R. Coates, 15559 Golden Eagle Blvd.
Since the Town was approaching build out, she proposed that some town services could be out sourced.
Mayor Beydler recessed the special session at 8:15 p.m. and reconvened the meeting at 8:27 p.m.
AGENDA ITEM #3 - POSSIBLE COUNCIL DISCUSSION OF ACTION PLAN, SUGGESTIONS, RESEARCH,
DIRECTION AND PRIORITIZATION OF OPTIONS.
Mr. Pickering commented that staff wanted to know how comfortable the Council was with the information as well as
as to how much more research would be needed. He reminded the Council that if a meeting runs too long,
Lirection
ffectiveness could be lost. The Council was in agreement with Mr. Pickering's suggestion.
Councilman Archambault made his presentation of cost saving ideas. He noted that the town would have a $4.9 million
dollar shortfall beginning January 1, 2003. The town would, at that time, start using the reserve account at a rate of
$300,000 per month. He proposed the following ideas as changes to the budget:
• Diminished use of town buildings by 1, thereby reducing rent, property tax, building operating and maintenance
costs, condensing staff and perhaps utilizing part of the Community Center approx. $200,000 savings
• Reduce employees 401K contribution to 7.65% from 11% approx. $133,300 savings
• Reduce the town's portion paid for employees' health insurance to 50% approx. $318,114 savings
• Utilize the federal grant for the Marshals Dept. and diminish the MCSO by 1 beat approx. $435,000 savings*
*Must deduct for funds needed for matching funds
• Initiate a town recycling and waste disposal service
Revenue estimate: $4 per household+50%of recycling less expenses
• Remove restrictions on the Marshals Department,enabling them to provide unrestricted traffic control
Revenue estimate: $80,000
• Reduce the cost of operating the Community Center by contracting with an outside promoter.
Councilman Melendez stated that Mayor Beydler had suggested a possible lease or management arrangement for the
Community Center. Councilman Melendez said he had received a fax from the President of the Scottsdale Cultural
Arts Council. There was a possibility that Fountain Hills could have a management group operate the Community
Center for a profit. The Community Center's proposed operating expense for 2003 was $660,000 and was an area
that the Town could cut. If a better way could be found to manage the Community Center and keep the same services
enhanced programs, as the Scottsdale Cultural Arts Council has done, it would be of great benefit to the community.
He felt it would be a challenge to the town manager to look into this option. If this could be done it would result in
savings for the town and perhaps a profit for the Community Center.
,,�ouncilman Archambault continued with his presentation. Other ideas included closing the sales tax loopholes and
exemptions,remove the undesignated administration position, and perhaps look for opportunities to use the Town's street
sweepers to generate revenues.
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Councilman Kavanagh commented that he found some of Councilman Archambault's ideas intriguing. He stated that the
town had a lease on the town buildings and he did not know if the Town could get out of the lease. He asked John
Wyman if that was a possibility. John Wyman answered that could not be done. Councilman Kavanagh expressed
concern for double hits on the employees by taking a part of their 401K and their health insurance. He stated he would
l vant to see the actual impact per employee before that was done. He felt staff should look into the terms of the federal
grant. He was concerned that there would be a one-company monopoly with regard to the recycling idea so that would
need to be checked into. He thought the community center idea was interesting. If a managing company was given 33%
commission on all income in order to make up the $450,000 in savings they would need to generate $1.3 million in rental
income a year. He questioned if that could be done. With respect to the summons,by law a government could only cover
court costs and could not make income. The only extra revenue that could be realized from traffic summons was not
being paid and as he understood it, that the court now paid for itself. He felt some of the ideas had portions that should be
pursued.
Councilwoman Ralphe lent her support to staff looking into all of the items that Councilman Archambault outlined. She
felt this was the time to look at all options. With regard to sales tax loopholes and exemptions, she requested that staff
look into any possible revenues for special events that occur on town owned property. She commented that there were
town expenses connected with the big special events, such as streets and law enforcement needs. She did not want to
compromise the big events.
Councilman Melendez spoke about removing restrictions on the Marshals Department. He confirmed he was very
concerned with public safety. He commented that citizens have asked when the Marshals dedicated to traffic enforcement
would be back on the streets for safety purposes. He noted that approximately 70% of drugs arrests come out of traffic
stops. As far as he was concerned he wanted law enforcement out on the streets no matter what color uniform they wore.
He said that was another subject for another meeting.
Vice Mayor Fraverd said that the town had $6.5 million dollars for which revenue or cuts were needed in a year and one-
half. She appreciated Councilman Archambault's ideas but that was only $2 million. She referred to a poll recently
published in the newspaper. It showed that 33% of those involved in the poll thought the state's budget problem should
be solved by budget cuts and tax increases, 32% thought the budget should be cut except for education, and the other third
'as divided for other things. She did not see that Fountain Hills was any different. She felt 2/3 of the citizens were
Ilibrooking for budget cuts. Vice Mayor Fraverd stated she wanted to see half come from the Town and that was a major
challenge for Mr. Pickering. She was not sure it was the Council's place to tell the town manager where to find those
cuts, as Mr. Pickering was the expert. She acknowledged that the residents would have to bear the balance of the costs in
the form of taxes(sales taxes and property taxes) so that everyone bears some of the burden. With regard to the reduction
to the Preservation Sales Tax, she pointed out that she had pledged to support that tax that it would go for mountain
preservation. Vice Mayor Fraverd confirmed she would not back down on that. Therefore, she would not support a
reduction in that tax. She was interested in increasing fees: permit fees, license fees, and user fees. If the sales tax rate
were to be increased then the construction industry would be hit again so she did not want to see them take a double hit
with any increase in fees affecting them. She felt that the utility franchise fee was an interesting option.
Councilman Archambault encouraged Mr. Pickering to look at all of the items that he had presented and at least explore
them and see what the feasibility was. He commented that the majority of the citizens who spoke this evening talked
about replacing the Fire District. He asked staff to explore that avenue and see what type of costs would be incurred. He
asked Town Attorney Andrew McGuire to contact Tim Yoder and find out what he was talking about.
Councilwoman Ralphe asked staff to look into the long-term idea of purchasing the Sanitary District and the water
company so that the town would have the real estate valuation of those two entities plus the associated income. She felt
there was economic benefit in having all of the essential services under the Town's umbrella. Councilwoman Ralphe
stated she did not want to see any of the dedicated Preservation Sales Tax diverted to other uses. She felt that one of the
main reasons that people came to Fountain Hills was the beauty of the land. If that were compromised, she felt housing
valuations would decrease as well as business profits. Preservation of key assets was not only an environmental matter
but it had everything to do with the economic success of this Town.
Councilman Kavanagh felt multiple solutions would have to be enacted to get the Town out of the current financial
situation. He said budget cuts needed to be done first and he felt that would be Tim's biggest challenge as those would be
,lard and difficult decisions. Councilman Kavanagh agreed with the hiring freeze but confirmed that Mr. Pickering had a
free rein in terms of cuts. By the same token, tax increases could not be avoided. He felt Fountain Hills was low with
regard to the current sales tax rate and property taxes. He did not see any solution but to increase those taxes with the
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idea not to become the highest taxing town, but average. He hoped sales tax increases might be short term. He wanted to
see a termination clause in any proposed sales tax increase. Councilman Kavanagh pointed out that $5 million could not
be cut from the Town's budget so there have to be tax increases. He wanted to keep those tax increases reasonable. He
said it was obvious that the fire tax was needed and he felt now citizens knew that to be true. The old fire board could not
konwprovide fire services for free and neither could the Town. He was agreeable to reasonable increases to permit and user
fees. The elimination of sales tax exemptions was a reasonable option to look into. He asked the town manager to look
into the utility franchise fee and he wanted to know if neighboring cities and towns were imposing this tax. He expressed
his opposition to subscription fire service and the selling of Town assets.
Mayor Beydler asked where the signed lease was between the Town and Dr. Lukenda. He asked to see it. He stated he
would not support a sales tax increase. He also asked staff to look into the feasibility of Councilman Archambault's ideas
contained in his presentation. He did not want to recommend any funding mechanism for fire at this time. He reminded
the public that the Council had voted to establish a "blue ribbon" committee and this committee was to look into all
options for financing fire services. He wanted to allow the committee to do its job and report back to Council. He noted
that recommendations and suggestions have been made by the public to settle the lawsuits. Mayor Beydler stated that if
$2+ million could be cut from the current budget, and if a funding mechanism could be found to pay for fire services that
costs $3 million with a revenue generated measure,then the needed $5 million dollars had been found. He acknowledged
that another $1.5 million was needed to build up the contingency fund. He acknowledged that what was needed was a
diversification of generated revenues such as closing sales tax loopholes and a utility franchise fee. He noted that some of
these items were diversification of revenue that did not generate a tremendous amount of money all at once but did build
as time passes in order to build up the contingency fund. Mayor Beydler suggested that diversification be looked at as a
means of building the "rainy day" fund. He went on record that he would support Vice Mayor Fraverd and
Councilwoman Ralphe and others that the Town not participate in any interesting or creative internal accounting
regarding the preservation fund. He felt that investment should be protected and that the voters should be given what they
expect as that money had been allocated for preservation. He stated it was important to protect that covenant with the
community.
Councilman Melendez said he was pleased at the public turnout. He took exception to a comment made by John Winter.
He affirmed that he and the other councilmembers care. He felt the question was how was the problem to be corrected.
le asked the town attorney to respond to the statement made by many in the audience. Can the Council legally bring the
re district back? Town Attorney Andrew McGuire replied that issue was one of the cruxes of the plaintiff's case in the
Hoffman-Robinson trial. He explained that it was the position of the Town and Maricopa County that there wasn't any
way to bring the district back. The resurrection of the district was an impossible feat that would never happen. He stated
that the County had committed itself to whatever fight it takes to make sure the fire district would not be resurrected from
what was last year. He confirmed that was as far as he could go until after the trial was over.
Councilman Melendez addressed law enforcement. He acknowledged that this was a big concern to him. He did not
believe that Fountain Hills could afford a dual enforcement system. He stated that the council would have to struggle
quickly as to how to change this to a one-service organization. He acknowledged that was a subject for another meeting.
Councilman Melendez commented that he did not think that the Council had the luxury of waiting for results from this
blue ribbon committee. He asked how many people had applied for this committee. Mr. Pickering responded two.
Councilman Melendez encouraged the citizens to come to join this worthwhile effort.
Councilman Archambault encouraged all citizens to take a proactive approach in helping the Council with the current
deficit problems by offering their ideas,expertise and in a proactive way help this Town get back on its feet.
Councilwoman Ralphe thanked the citizens for attending the meeting. The Council listened and she had heard the words
"cut expenses" and so she asked town staff to focus on cutting expenses and once that was done then look at revenue
increases. She invited citizens to come to the Council with any comments or suggestions, as they wanted to hear from
many citizens on this fiscal matter.
Councilman Kavanagh reminded everyone that even though these were dire fiscal times for Fountain Hills, the Town
would come out of this. Fountain Hills happened to be one of the most beautiful communities and one of the most
affluent communities in the state of Arizona. He felt that Fountain Hills had many interested citizens who contribute to
the community and who in the end will step up to the plate and do whatever was necessary. He acknowledged that the
iiib,zouncil and staff would do their share by cutting expenses and he hoped that everyone else would recognize their
responsibilities. He acknowledged that it would be a bit painful for a couple of years.
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Councilwoman Nicola acknowledged those who came to the meeting and gave his or her input. She stated that the
Council was listening and that she agreed with the majority of what she heard this evening. She said it would take active
measures from the town manager and she felt Mr. Pickering had his list. She thanked her colleagues for their input.
ayor Beydler said this pain was a national problem. He agreed with Councilman Kavanagh's statement that the
financial problems would pass. In the interim, Fountain Hills had to do what everyone else was doing which was
tightening the belt and figuring out a way to get through the pain until it subsides. He noted that time was of the essence.
He felt the Council would agree that they needed to move forward with this process. Mayor Beydler said he would like to
see staff present more specific options for the Council based upon the input received from the community and the Council
this evening possibly by putting more true and financial forecasts to some of these anticipated cost savings or revenue
generating ideas in some broad category so that the Council could look at them in an understandable way. He felt the
Council would like to reconvene in a couple of weeks in a more informal meeting setting. He did not want to have the
Council on the dais but on the floor as they reviewed the numbers along with the verbiage. He wanted to be able to free
flow as opposed to the formal approach so that the Council could get a better feel as to how to bring this set of solutions a
step closer to becoming plans that the Council could consider acting on at a formal meeting.
Councilman Archambault envisioned a series of round table discussions, perhaps seven. Mayor Beydler agreed that was
possible depending upon the number of broad categories that the town manager could bring back on which they could
focus. That way they could hone in on what the pluses and minuses and cost savings might be so that groups could write
up a policy statement in order to move closer to something that the Council could actually consider. Councilman
Archambault was agreeable.
Councilman Melendez stated that was a positive thought. However, he did not feel the Council had that luxury of time.
He said there had been three or four strong points made: law enforcement, fire district services, cutting the budget. He
felt that the Council needed to step up and make a decision. He liked the idea of having another meeting but did not feel
the Council had that luxury and they needed to move forward.
Vice Mayor Fraverd asked to hear from the town manager as she felt it was his place to be making recommendations to
the Council. She felt the time frame should come from him. Mr. Pickering said that if the majority of the Council felt
tat the budget passed was not the budget that they wanted to implement, then that needed to be changed and the Council
NI/Weeded to take that action with direction in form of a motion to take those steps. As far as to how that would proceed, he
confirmed that there were some things that could immediately be reduced but he stated it was not a short-term process to
reduce costs. That would take anywhere from six months to a year to implement, as it would depend upon contracts and
when they could be renegotiated. That could take quite a long time. He proposed that if the Council wanted to move
forward on certain options, one of those being cutting expenses, he suggested that the Council take that action. He
acknowledged that then staff would do the work the best they could within the timeframe that best met what the Council
had suggested. Staff would do a quick job and that meant that their decisions might not be based upon facts, as it would
be quick snap shot. Or staff could, within the timeframe decided by the Council, and if the timeframe were reasonable,
then staff would be able provide more facts. He suggested that if the Council wanted staff to take those steps, then they
must make the motion and let staff take those steps.
Vice Mayor Fraverd asked if Mr. Pickering meant the motion should come at a formal meeting since the Council had
given him direction to cut. Mr. Pickering said yes; the motion would be at a formal meeting. He reminded the Council
that they had previously passed this budget as a formal action. He acknowledged that he needed more than just general
direction. He explained formal action was needed from the Council stating that the Council wanted to see the budget that
had been approved three to four months ago reduced. Mr. Pickering said he would be making very difficult decision over
the next few months if that was the way the Council wanted to go. He clarified that those decisions would impact many
of those items that everyone cared very deeply about. In order to do that, he felt he needed the unified direction from the
Council that they wanted to see those tough decisions made.
Councilman Kavanagh asked the town manager to prepare for the Council two variations on the current budget for the
first meeting in December, one with a 10% cut and the other with a 15% cut. He asked for an information session at the
first meeting in December with the issue agendized for action at the second meeting in December.
Mayor Beydler stated that the town manager was telling the Council that they had to walk away from the current lawfully
approved budget as the expenses could be reduced but they could not be increased according to law. The Council would
tkow.iave to formally vote to take that direction forward. He asked the town manager if that was what he was proposing. Mr.
Pickering replied yes, that was what he was asking for. Mayor Beydler asked the town attorney if that was required. Mr.
McGuire said there were two issues. He did not know if this agenda contemplated this type of direction from this
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meeting. More importantly, staff had to have something more definitive for the Council to act on. It was difficult without
some direction tonight to bring back something definitive to the Council in December. He asked the Council to keep in
mind the election deadline was January. Mayor Beydler understood that there was an item coming forward at the first
me o in December where the council would be asked to approve a new benefits package. Mr. Pickering confirmed that
the .th insurance was up at the end of this year. Mayor Beydler said that if the Council gave specific direction that
to
Councilman Archambault's idea had merit to cut back on the co-pay or the percentage that the town pays why couldn't
that be incorporated at that time. Why would it take six months to make that type of decision? Mr. Pickering confirmed
that issue would not take six month for a decision as that would be one of the immediate cost cutting measures. Staff
would present the recommendation at that time.
Councilman Kavanagh asked if direction to prepare a revised budget with 10% and 15% cuts had to agendized for the
next meeting. He did not understand why that was what the Council wanted to see. Mr. McGuire said specific direction
to staff did not have to be on the agenda if the direction was to bring specific options for Council discussion at the next
meeting. He felt that type of direction was fine. The direction needed to be definitive enough so that staff could put the
information together. Councilman Kavanagh said if he wanted to see options to cut 10%— 15% from the budget ready for
presentation and public comment at the first December meeting so that an action item could be on the second December
meeting, would that comply with the spirit of the agenda. Mr. McGuire felt that would be within what was agendized for
this evening. Councilman Kavanagh said he wanted to give that direction. The consensus of the Council was to give that
direction to staff.
Councilwoman Nicola suggested that staff not invest too much time on subscription fire service, selling assets, and
utilizing the designated sales tax in any manner than for what it was designated. She reminded staff and Council that any
voter action or measures such as replacing the former district tax with the primary property tax would need quick action
by the Council by January as well as the utility franchise fee.
Councilwoman Ralphe asked if staff could include the venues for saving money and revenue suggestions made by the
Council. Mr. Pickering said staff would look at all options yet some of those factors might take more time and research
by staff. He stated that he would need to see Councilman Archambault's presentation material before staff could review
them. He stated some of those things would be estimates and some would not be cast in stone. He reminded the Council
that f was looking at less than a month to complete the research, which he felt was very very fast. Mayor Beydler said
the Migncil needed to expedite plans. He asked Mr. Pickering if public employees should have by default better benefits
than those in the private sector or was it reasonable to expect that both should have sort of equal benefits. Why were there
better benefits for public employees than those in the private sector? Mr. Pickering explained that the benefits were the
way he had attracted employees, as the pay was not as high. He knew of private companies that had better benefits than
the Town's. He felt a balance was needed. He acknowledged that the employees knew that the town would not continue
with the current health provider as the costs were prohibitive. Mr. Pickering stated that it came down to does the Town
have the revenues to pay the type of benefits that were in place. He confirmed that he would be looking at those benefits.
He acknowledged that salaries and benefits were the Town's largest costs.
Councilman Melendez said there was a sense of urgency from the Council and the public. He felt the town manager had
been given strong direction to act quickly. He noted that he had never had those types of benefits while working for the
oil industry or when he owned his own company. He said sacrifices had to be made across the board and the Council
wanted some results. He stated research was good, but he did not feel they had the luxury of time. He again urged Mr.
Pickering to act quickly.
Mr. Pickering asked the Council to concentrate on this matter, as there were other issues out there that come up that
require staff time. He asked that the Council realize that staff would become quite involved in this process and to give
staff the leeway to concentrate on this matter and to not be derailed on other subjects. He said he would appreciate that.
Mayor Beydler asked the Council if they had any difficulty with suggesting that this was the number one issue that the
Council needed to focus on and to allow staff the free rein to go after. Mayor Beydler thanked the public for their input.
AGENDA ITEM#4-ADJOURNMENT.
Mayor Beydler adjourned the meeting at 9:45 p.m.
L
TOWN OF FOUNTAIN HILLS
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By: r . t . •
sn Beyd1= Mayo,
ATTEST: ciAadA.A.4)
Cassie B. Hansen,
Director of Administration/Town Clerk
PREPARED BY: / �
Bev Bender,Executive Assistant
CERTIFICATION
I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Financial Forum held by the
Town Council of Fountain Hills on the 13th day of November 2002. I further certify that the meeting was duly called and
that a quorum was present.
DATED this 5th day of December 2002.
L
Cassie B. Hansen,
Director of Administration/Town Clerk
44160,
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