HomeMy WebLinkAbout2004.0505.TCWSM.Minutes TOWN OF FOUNTAIN HILLS
MINUTES OF THE WORK-STUDY SESSION OF THE
FOUNTAIN HILLS TOWN COUNCIL
May 5,2004
Mayor Wally Nichols convened the work-study session at approximately 4:30 p.m.
ROLL CALL — Present for the roll call were the following members of the Fountain Hills Town Council:
Mayor Wally Nichols; Vice Mayor Rick Melendez; Councilmembers Michael Archambault, John Kavanagh,
Kathleen Nicola, Susan Ralphe, and Leesa Stevens.
ALSO PRESENT: Andrew McGuire, Town Attorney; Tim Pickering, Town Manager; Tom Ward, Public
Works Director; Mark Mayer, Parks & Recreation Director; Joan McIntosh, Human Resources Administrator;
and Bev Bender,Town Clerk
Mayor Nichols announced that the purpose of the work-study session was to discuss the 2004/2005 Draft
Budget for the Town of Fountain Hills. He advised that the objective of the evening was to have Council's
questions answered appropriately so that adequate time was available for staff research (if necessary) prior to
submission of the budget to the new Council. He requested that the Council work with "major significance"
items as opposed to "micro-managing" the process. He then thanked Town Manager Tim Pickering and
Accounting Supervisor Julie Ghetti for the efforts expended on the draft.
Town Manager Tim Pickering summarized the mission statement adopted by the Town Council in January of
2004 as follows:
➢ Service
➢ Respect
➢ Trust
➢ Stewardship
Mr. Pickering advised that the budgeting process began in January at which time staff anticipated cost estimates.
In March, all department heads were involved in discussions to justify the requested funds. Revenue projections
were prepared, and expenditures were balanced with the revenues. He continued that the budget had been
balanced without the use of reserves, Council goals had been incorporated, and financial stability had been
restored. Additionally, the Town's Aa3 bond rating had been affirmed, and the General Fund reserves were
projected to be at policy levels by 6/30/04. $6.2 million worth of pre-approved projects (including the Civic
Center Phase II Project and the Master Plan at Fountain Park) were included in the budget, with a focus on the
downtown area. There had been no increase in the number of authorized staff positions; skill sets had been
realigned.
Mr. Pickering provided a PowerPoint presentation (a copy of the presentation in its entirety is on file in the
Clerk's office)and reviewed the following:
➢ A surplus of approximately $200,000(revenues versus expenditures) was available in the draft budget.
➢ The seven goals adopted by the Council helped to frame the budget. Among those were the following
budget inclusions:
o Develop an operational contingency plan: $56,000
o Monitor legislation and work on annexation plan for State trust land: $25,000
o Develop a comprehensive information program: $121,000
o Prepare financial analysis of impact of decrease in water supply: N/A
o Possibly prepare revenue ballot measure: N/A
o Complete strategic plan: $160,000
o Prepare a staffing succession plan: N/A
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Mr. Pickering stated that a government budget must be reviewed on a fund-by-fund basis, continuing his
discussion with the following:
General Fund
At $14 million, the General Fund was the largest expenditure in the budget; approximately 50% of the spending
takes place in this fund. This fund is heavily dependent (83%) upon local sales tax. He then noted that there was
an increase of 7.6% in State-shared revenues and compared the draft budget to different revenue sources in the
past years. He added that there was no property tax revenue calculated in the General Fund revenues; there is no
property tax collected for "operations" use, only a small amount for old debt service. He described the various
revenues for the General Fund:
General Fund Revenues:
> The local sales tax of 2.2% accounts for 51% of the total General Fund Revenue ($7,249.767). That
amount has increased due to the increase in retail activity (13% over past two years), as well as an
increase in the sales tax for fire service purposes.
> The State-shared income tax accounts for 13% of the total General Fund Revenue ($1,862.500). This
projection increased from last year and is based on cities and town receiving 15% of the State income
tax.
> The State-shared sales tax accounts for 12% of the total General Fund Revenue ($1,747,300). That
figure is subject to economic fluctuations and is a preliminary estimate by League of Arizona Cities and
Towns projects, an increase of 16.5% from last year.
➢ Building-related fees account for 9% of the total General Fund Revenue ($1,284,750). This revenue
source, Mr. Pickering cautioned, is totally dependent upon the construction industry and was unreliable
in the long-term due to build-out.
➢ The vehicle license tax accounts for 6% of the total General Fund Revenue ($824,936) and is dependent
upon automobile licenses and distributed based on population,thus the need for a special 2005 census.
> Charges for Services accounts for 3% of the General Fund Revenue ($446,066). This includes user fee
for recreation programs, as well as Community Center rentals.
General Fund Expenditures:
> Mr. Pickering noted that at 32%, expenditures for the Administration Department "appear" to be the
largest expenditure in the General Fund, but each year non-departmental expenditures have continued to
be included in that figure, i.e., rent, electricity, legal fees, tax rebates, information technology. Without
those costs,the Administration Department segment would only be approximately 13%.
➢ Fire Department 19%
➢ Law Enforcement 12%
> Parks,Recreation,and Community Center 12%
> Public Works 15%
Mr. Pickering noted that the General Fund was $1 million less than three years ago, and $1.8 million less than
four years ago.
Increases were made in the budget for:
> Wash maintenance
> Street sweeping
> Facility cleaning
> Constituent communications
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➢ State trust land planning
➢ Strategic planning
➢ Special census
➢ 15-year anniversary celebration
Mr. Pickering continued that the General Fund was also reviewed by categories, i.e., salaries, contractual
services, etc. He noted that 28% of the budget was spent on "Salaries & Benefits" ($3,906,927), 44% on
"Contract Services" such as fire and law enforcement ($6,105.651), and 15% on "Supplies" ($2,139,632). This
led to the total General Fund proposal of approximately $14 million. The year-end fund balance was estimated
at$5,609,670.
➢ Salaries and Benefits (28% of General Fund): Mr. Pickering noted the tremendous resource of the
Fountain Hills' staff. He explained that there was no proposed increase in the total authorized positions;
however four proposed full-time positions were realigned with staff skill sets. (The Emergency
Management Coordinator position was expanded to include strategic planning, legislative work, and
grant writing.) There was an overall 4.5% merit increase in the budget, and no "cost of living"
adjustments had been included. (A market analysis is done yearly to adjust each salary range according
to the market.)
➢ Contracts (43.6% of the General Fund): Two large contracts were included in the budget: Rural Metro at
$2.4 million and Maricopa County Sheriff at $1.6 million. Tax rebates were included in the event that
arbitration required those funds. Legal fees, Boys & Girls Club, strategic planning, Red Cross Shuttle,
Senior Services, and tourism were also included under the "Contracts" category. There was a 7.2%
increase from the past year for special programs and public safety contracts.
➢ Repairs, Maintenance, and Supplies: There was an increase of 6.7% from the past year for major
"repair" items such as wash maintenance, median maintenance, and landscape maintenance. The
"Supplies and Services" category increased by 32% due to outstanding building taxes of$412,000 from
the previous year.
Public Works Director Tom Ward addressed the Council and discussed the landscape maintenance contract of
$200,000, a substantial increase due to a proposed change in median maintenance. The 46-acre median
maintenance project included all fountains, water features, and Town-owned facilities (Community Center and
two fire stations). Also included was palm tree trimming, post-emergent/pre-emergent spray for weeds, mowing,
overseeding of grass, irrigation maintenance, and fountain maintenance (a savings of $12,000/year by
performing the project in-house).
Mr. Ward indicated that wash maintenance was budgeted at$130,000 and the purpose of wash maintenance was
to insure better fire safety and drainage. This year the following washes are to be cut: Powder Wash,
Tumbleweed Wash, Aero Wash, Sunflower, and Ashbrook Wash. This will be the first year that the Town will
cut a section of the washes for a second time, Ashbrook Wash. Mr. Ward added that the Town works closely
with the Fire Department on which areas to maintain more vigorously. Also six Town-owned dams are
maintained that are annually inspected by the ADWR. Bridges (aka box culverts and culvert pipes) are also
inspected by ADOT to assure their safety.
Mr. Ward continued that Mow/Landscape Maintenance had been budgeted for$137,800, an in-house service.
Mr. Pickering continued the PowerPoint presentation by discussing the General Fund balance, indicating that it
was a gauge used by the financial industry. He noted that during the years 2001/2002 and 2002/2003 there was a
dip in the fund balance, but that balance was moving upward and was anticipated to continue the move upward.
The General Fund goal for FY 2004 was $4.7 million,and the estimated 6/30/05 balance was $5.6 million.
Special Revenue Funds
Mr. Pickering explained that Special Revenue Funds were funds designated for special purposes:
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➢ HURF (Highway User Revenue Fund), a gas tax used to pay for road maintenance and improvements
(revenue of $1.5 million). He added that the HURF fund was a permanent, federally mandated
groundwater program. Mr. Ward indicated that $490,000 was budgeted for major road improvements:
o Slurry sealing the northwest section of town ($245,000).
o Microsurfacing Palisades and Fountain Hills Blvds. ($106,000).
o Emulsion seal and striping($81,000).
o Concrete curb/sidewalk repairs ($36,000).
o Storm water Management Plan (departmental and public education outreach, Town
participation and involvement, illicit discharge elimination, construction and post-construction
site runoff, and pollution prevention) ($20,000).
o Capital for dump truck and one-ton pickup($120,000).
➢ Sales/Excise Tax funds that are restricted to:
o Bond Repayment for Mountain Bond (0.2% of the 2.6%). This tax fund would create a surplus
of$49,020 with a projected fund balance of approximately $1.8 million on 6/30/05, creating a
possibility for refinance.
o Civic Center Phase II Bonds and Downtown Development Expenditures (0.1% revenue). The
0.1% tax revenue would bring in an anticipated $329,500; the projected fund balance on 6/30/05
would be $800,000. The fund includes a downtown development coordinator who would
promote economic development and enhancement of Avenue of the Fountains. That individual
would oversee consultants and work with the Chamber of Commerce and Fountain Hills
businesses.
➢ Grants anticipated are as follows:
• $68,000 — Federal Emergency Management Association (to equip fire station exhaust
fume collection system)
• $50,000—Prop 202—Tourism
• $1.5 million—Miscellaneous unrealized revenue from Prop 202
• $180,000—Community Center FF&E carryover
Mr. Pickering reviewed the Summary of Proposed Development Fee Revenues and Expenditures and explained
that the Town was mandated to spend their collected development fees. These fees would be spent for law
enforcement, streets,parks,open space, and general government.
➢ Street projects account for$365,000 of the fund. Mr. Ward explained the following anticipated projects:
o Saguaro Blvd./E1 Lago traffic signal: $85,000(50% match by developer)
o Shea/Saguaro left-hand turn extension: $30,000
o Saguaro/Monterey left-hand turn lane: $40,000
o Eagle Mountain/Shea signal interconnect: $20,000
o Shea bicycling project and landscaping: $10,000
o Kipling drainage project: $40,000
o Various sidewalks: $55,000
Director of Parks &Recreation Mark Mayer discussed additional development fee capital projects:
➢ Rotary Spray Park ($125,000): The two Fountain Hills Rotary groups have committed $50,000 (total),
and a written commitment was received from Plaza Fountainside for $25,000 with another $25,000
possibility. The park would be located adjacent to the Plaza Fountainside area at Fountain Park.
➢ Skate Park Design and Construction ($206,000 balance remaining)
➢ Street Projects ($365,000)
➢ Trailhead Development($104,100)
Mr. Pickering continued with discussion on the Debt Service Fund:
General Obligation debt would be retired with property tax as follows:
➢ Street Paving $355,000
➢ Lakeside Parcel $132,500
➢ Mountain Bonds $520,000
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> Library/Museum $390,000
➢ Cottonwoods $ 4,228
➢ Eagle Mountain $513,000
Debt retired with HURF and local sales tax was as follows:
> Street Paving $124,000
➢ Community Center $375,500
> Mountain Bonds $595,000
➢ Civic Center $350,000
Mr. Pickering continued with the Pre-Approved Capital Projects Fund explanation. This newly established fund
was for specific projects as a transfer from other funds and used during FY 2004-2005 for the following:
➢ Fountain Park Phase II $ 702,300
➢ Town Center Phase II Const. $5,421,700
➢ Fountain Park Ramada $ 69,670
He reviewed the Town's five-year capital improvement goals (all funds):
➢ FY 2004-2005 $6.7 million
> FY 2005-2006 $5.0 million
➢ FY 2006-2007 $3.8 million
> FY 2007-2008 $4.1 million
➢ FY 2008-2009 $6.1 million
The next step in the budgeting process, Mr. Pickering explained, was to approve the tentative budget and set the
maximum expenditure level at $29.2 million. The tentative budget would then be published twice in the
Fountain Hills Times, placed on the website, placed on Channel 11, and posted in the Clerk's office and the
Fountain Hills Library. The budget could be approved on May 20 or later and urged the Council to pass the
budget early enough to allow time to implement the goals.
Mr. Pickering concluded by indicating that the General Fund was balanced with revenues exceeding
expenditures by $230,000; funds to be placed into the fund balance. The funding of $6.5 million in capital
projects had been approved(Civic Center Phase II Project and Fountain Park).
Mr. Pickering thanked the Mayor Nichols, Council, staff, and volunteers for their contributions to the budgeting
process.
Mayor Nichols invited questions from Council members. Vice Mayor Melendez requested that questions be
taken on a department-by-department basis. Mayor Nichols and the Council agreed to follow that procedure.
Mayor and Town Council: Mr. Pickering noted that there was a decrease in the Mayor/Town Council category,
as there would be no election in FY 2004/2005.
Administration Department: The Administration Department had increased due to the following:
> Taxes were being paid on the building.
➢ Some employees had shifted into the Administration Department from other departments such as the
Street Department or the Law Enforcement Department.
➢ The cost of the strategic plan was included in the Administration Department.
➢ Liability Insurance had increased.
D. Community Benefits had increased.
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Councilman Kavanagh asked if proper funds had been allocated to meet the requirements of senior
transportation to medical appointments/shopping. Mr. Pickering responded in the affirmative.
Councilman Kavanagh then asked if the contract-funding estimate was obtained with contractor input. Mr.
Pickering responded that funds had been allocated appropriately from discussions on pricing.
Vice Mayor Melendez clarified that the strategic plan was included in the budget but would not be discussed
until the next meeting. Mr. Pickering responded that the final vote on the budget would include the strategic
plan,but no payments would be due until after the budget took affect.
Councilman Kavanagh asked procedurally how the Council could "tweak" the budget items. Mr. Pickering
responded that the items in the budget were maximum amounts but needed to be adhered to. He added his
opinion that since there was a grants "cushion", there would be no problem with "tweaking" other items. Mr.
Pickering then asked for the Council to advise him if there were line items that they did not wish to pursue. Mr.
Pickering continued that staffs responsibility was to provide the proposal, and it was the Council's option to
make changes. The budget could be approved anytime after May 20 by law.
Councilman Kavanagh noted that he wanted to cut more items than he wanted to add; so arriving at a cap at the
next meeting would not be a problem for him. He asked if a ceiling had to be set, and Mr. Pickering responded
in the affirmative, indicating that the Council would have plenty of flexibility to make changes.
Councilman Kavanagh voiced his opinion that the new Council should have the final vote on the budget. Mayor
Nichols explained that the purpose of the May 6 meeting was to establish a maximum, only a procedural issue.
Councilwoman Stevens questioned what her role was to be at this meeting and asked for a determination for the
May 6 meeting as to whether or not the budget would be voted upon by this Council. She noted that if the
current Council were to vote on the budget at the May 6 meeting, it would be best to commence discussion
immediately. Vice Mayor Melendez asked that the Council debate the proposed budget at the current meeting.
Councilman Kavanagh reiterated that the final vote should be held with the new Council.
Councilwoman Stevens acknowledged that the seven goals adopted at the retreat were created by the current
Board and questioned how the upcoming Board would react to a budget based upon those seven goals. She felt
that the current Council should follow through on the budget. Councilwoman Nicola felt that the new Council
should be responsible for adopting the budget, but that goals were not only short-term and should be continued
through more than one Council.
Mayor Nichols' opinion of the work-study was that Council would provide comments to staff for revisions to be
made prior to the May 20 meeting where input would be provided from the public. The first Council meeting
with the new Council would include the vote on the budget.
Vice Mayor Melendez asked specifically when he could debate line items. Mayor Nichols responded that it
would be at the current work-study session - that the May 6 meeting would be only a vote on the maximum
amount of the budget.
Councilman Kavanagh indicated that he would like to distribute $25,000, possibly from development fees,to the
veterans per their request. Mr. Pickering stated that the veterans' request had only been received last week.
Mayor Nichols, Vice Mayor Melendez, Councilman Archambault, and Councilwoman Nicola noted support of
the distribution for the veterans.
Councilman Kavanagh suggested that funds be allocated for a full-time resource officer to be restored at the
high school. Councilwoman Nicola also supported the request at approximately $65,000. She asked that this be
a "dedicated" person and not a "rotated" position within that department. Councilwoman Ralphe supported the
addition of the resource officer and concluded that the parents were ultimately responsible for resolving drug
problems with their children. Councilman Archambault was also in support of the resource officer position.
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Mayor Nichols noted that since both the school district and the Town were able to raise funds, the Town might
use the resource officer position as collaboration wherein the Town could trade that funding for leasing property
for sports fields. Councilwoman Nicola observed that the position would fit into the category of a Prop 202
L., grant and suggested that the position would fit best under the Town's contract.
Vice Mayor Melendez pointed out that in December 2002 the school district indicated that they did not need a
resource officer at the middle school. He added that he felt that parents should become more vocal regarding
issues and supported the resource specialist position. He agreed that parents needed to "step it up".
Councilwoman Stevens asked if the school district had a plan to make headway on the problem.
Councilman Kavanagh agreed that the position should be coordinated through the Sheriff's Department, and he
suggested that the resource officer could facilitate the DARE Program, provide counseling, and use a senior
volunteer program. Vice Mayor Melendez suggested a citizen patrol, where citizens would work with the
schools on the issue.
Mayor Nichols noted Council consensus on the item of a resource officer.
Councilman Kavanagh expressed the need for additional tourism funding and asked for a financial update in that
respect. Mr. Pickering indicated that $50,000 had been budgeted in the past year, and a $50,000 grant was
received from Prop 202. That amount ($100,000) was also budgeted for the upcoming year. Mayor Nichols
asked what action would be taken if the Prop 202 funding did not occur. Mr. Pickering noted that dedicated
funding for tourism would be an upcoming issue for the Council, and the Fountain Hills Chamber of Commerce
was considering a possible food and beverage tax. Mr. Pickering added that tourism should be funded from a
source derived from tourism, i.e., food and beverage taxes or bed taxes. He explained that the tax would need to
be Council approved and then would be dedicated to that fund within a few months.
Councilman Kavanagh indicated that a further tax could be excessive and suggested that a bed tax with a cap
(via Holiday Inn and Hilton) might be the solution. Mayor Nichols clarified that the Chamber of Commerce did
not wish to raise the bed tax, but the food and beverage tax was below competitive bed taxes in the Valley.
Councilman Kavanagh suggested an additional $25,000 for tourism, raising that budget from $50,000 to
$75,000. There was no support from the rest of the Council on Councilman Kavanagh's request.
Mayor Nichols requested additional funds for the restrooms on the trailhead coming from the development fund,
as opposed to the General Fund. Councilman Kavanagh indicated that he felt that$104,000 for the trailhead and
the restrooms was low. Mr. Pickering clarified that the $104,000 was for design fees only. This discussion was
tabled until the proper category.
Councilman Kavanagh advised that he did not support the current Downtown Economic Development
Coordinator at a salary of approximately $50,000, adding that it was unfortunate that the position had already
been filled. He indicated that he had asked Mr. Pickering not to hire the person and then asked Mr. Pickering to
tell the individual that he(Councilman Kavanagh) would ask that the position be eliminated.
Councilman Kavanagh felt that the strategic plan was also unnecessary, and a simple survey would be sufficient.
He felt that if some positions were eliminated, he might favor an Assistant Town Manager. He added that the
Town could save $200,000 by eliminating the strategic plan and the two positions (Public Information Officer
and Public Safety Coordinator).
Mayor Nichols asked if any other Council members did not support the Public Information Officer.
Councilwoman Nicola explained that (1) the Public Safety Coordinator position had been approved and not
filled, and (2) the Public Safety Director position had been approved at a prior meeting when the Marshal's
Department was eliminated, but it was never funded. She continued then that if there was a Public Information
Officer position, it could be combined with a staff position that assisted the Town Manager and oversaw public
safety. She stated that, "Even though a Fire Department was taken on, lost was a Marshal's Department, an in-
house police department that required a great deal of the Town Manager's time and attention". She did not
support the idea of an Assistant Town Manager for a town the size of Fountain Hills with a 33% reduction in
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staff. She indicated her preference for a lesser pay scale and a combined position of Public Information
Officer/Public Safety Coordinator.
Councilwoman Stevens supported maintaining all the positions, including the Assistant Town Manager position
that she felt could pay for itself by pursuing grant monies. Councilwoman Stevens noted that a significant
amount of the cost of the Civic Center Phase II Project could have been funded with grants. Unfortunately, no
one was available to pursue those monies. She added that the Assistant Town Manager would also coordinate
the Public Safety Commission. Councilwoman Stevens also supported the Public Information Officer, as
information had been misquoted often in the newspaper. She felt that accurate information would build trust
with the residents.
Councilman Archambault agreed with Councilwoman Stevens in that a grant writer, Assistant Town Manager,
would have a multi-tasking responsibility. He felt, however, that a Public Information Officer and Economic
Development Coordinator were also needed, urging the Council members to consider their "return on the
money". He reminded the Council that development fees needed to be used before they had to be returned, and
an individual was needed to assure that those fees were used for appropriate projects. The Economic
Development Coordinator, he added, would determine what drove the businesses in the town, concluding that he
supported all the positions,as well as the strategic plan.
Vice Mayor Melendez asked Mr. Pickering to define "economic development". Mr. Pickering responded that,
"Economic development was a program designed to encourage businesses to locate in a town and existing
businesses to remain in the town". He explained that Chocofin, a Fountain Hills company, felt more secure
about being in Fountain Hills with the Economic Development and Downtown Coordinator. Economic
development, he continued, would also coordinate the downtown. Money was dedicated for that, and a new
staff person had begun to determine what businesses were doing, when projects were undertaken, and what the
town was doing for those businesses. He concluded that other successful towns have entire departments that
serve economic development functions only.
+ Vice Mayor Melendez noted that he had made numerous phone calls asking random people for the three most
important subjects for the Town. The consensus was that the Council was spending too much money. He also
spoke with each of the former mayors, and each indicated that he/she was concerned about the speed at which
expenses were placed into the budget. Their recommendation was to be cautious on expenditures.
Councilwoman Ralphe voiced her opinion that an Economic Development Coordinator should be accessible to
assist the Town to move forward, not backward. She noted her support for the Assistant Town Manager and
Public Information Officer, as well as the Accounting Clerk positions. She felt that it was the proper time for
adding new positions, as the new budget actually would hold the line on the total number of positions. She
added that a Public Information Officer was needed by the people to aid in their understanding local government
actions, identified at the retreat as something desirable for the Town. She felt that the Assistant Town Manager
and Public Information Officer positions were key to creating a strategic plan, which she also favored. She
added that another retreat goal was to establish a staffing succession plan, and the Assistant Town Manager
position would meet that goal.
Mayor Nichols agreed with Councilwoman Ralphe and Councilman Archambault and added the comments that
the Public Information Office was critical and that tourism was dependent upon the right information being
disseminated into the Valley. Instead of placing an additional $25,000 in the tourism fund as previously
suggested by Councilman Kavanagh, Mayor Nichols indicated his preference that tourism also be a
responsibility of the Public Information Officer. He informed the Council that the new Economic Coordinator,
Gracie Burton, had proven capable of joining businesspeople together, such as in a recent meeting with the
Holiday Inn owners. He also added his support of the strategic plan and an individual to lead the process.
Councilwoman Nicola supported retaining the Economic Development Coordinator and creating the strategic
plan. She was, however, not in favor of a full-time Public Information Officer/Public Relations individual for
the Town of Fountain Hills. She supported a public information program, but she felt that it could be combined
with the Assistant Town Manager position. She noted in the summary of administration expenditures that
Salaries/Benefits in 2001/2002 were $831,000; in 2002/2003 they were $940,000. They were budgeted at
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$830,000 in 2003/2004 (expecting to expend $665,000); and in 2004/2005 they were budgeted at $1.1 million.
She asked for an explanation for the jump, also noting that contractual services had increased significantly over
the years.
Councilman Kavanagh stated that he felt that the Town was hiring too much, too easily. He felt that a Public
Information Officer did not serve the Town. He added that the Town was a very open government, and
individuals could watch Council meetings on television or on the Internet, as well as in-depth coverage with the
local newspaper. He felt that Council members had been easily contacted, and he saw no reason to hire an
individual for that position. As far as the Economic Development Coordinator was concerned, he felt that the
Town's Economic Development Coordinators were the realtors promoting their land and developments, not an
employee hired to hold business owners' hands. He concluded that he was open to an Assistant Town Manager
position -but not the other positions.
Concerning the strategic plan, Councilman Kavanagh continued that the Town was young but almost totally
built out, and there was not that much to do with development. He felt that the needs of the Town were obvious
and clearly requested, i.e., Desert Vista Park, downtown development, and Civic Center Phase II Project. He
suggested that the Town could use a community pool and performing arts center, but he felt that it was not
necessary to spend an additional $100,000 to determine what few options existed. He felt that the Town's needs
could be determined simply by town meetings and a survey.
Mayor Nichols summarized that the consensus of the Administrative Department was not to make any major
changes to the proposed budget.
Information Technology Department: No comments.
Public Works Department: Vice Mayor Melendez asked if the town could coordinate wash maintenance with
use of the Maricopa County jail inmates, as Sheriff Arpaio had commented to him that he would like to assist in
that regard. Mr. Pickering responded that Sheriff Arpaio had recently provided trash service to the medians on
Ly Shea Blvd. with that program. Mayor Nichols agreed with Vice Mayor Melendez that this was a good idea.
Councilwoman Ralphe opposed the idea of prisoner assistance with wash maintenance, indicating that it was not
only a landscape knowledge issue but also a safety issue for some residences close to washes.
Councilman Kavanagh asked how the eastbound left-hand turn lane on Shea, west of Saguaro, would interface
with the left-hand turn into McDonalds. Mr. Ward indicated that those are two separate elements and that the
two projects did not overlap.
Councilwoman Nicola asked if staff would look into the possibility of grants available for newer street sweepers
that were more environmentally friendly. Mr. Pickering agreed staff could look into this.
In that regard, Councilwoman Stevens suggested a hazardous material dumpster that could be utilized by the
Town twice a year, an opportunity for proper disposal of those materials. Mr. Pickering responded that he would
investigate the possibility, but the service was normally provided by contracted private entities. Councilwoman
Nicola asked if it would be possible to contract for such services. Mr. Pickering responded that most of the
companies provided that service.
Building Safety Department: No comments.
Street Division: Councilwoman Stevens asked for a description of slurry-seal, micro-surface, and emulsion seal.
Mr. Ward explained that micro-surfacing was the highest quality product; a slurry-seal was below that and less
expensive; and emulsion seal is for streets that were seven to ten years old. Councilwoman Stevens questioned
who applied the crack sealant and Mr. Ward replied the Street Department.
Planning Department: No comments.
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Parks, Recreation, & Community Center: Councilwoman Nicola asked if the revised pay plan and schedule of
authorized positions would be open for discussion.
Councilwoman Ralphe asked how much funding was proposed for capital improvements in parks and how much
would be taken from impact fees. Mr. Pickering responded that all capital projects were coming from
development fees.
Councilman Archambault asked if more parking could be budgeted for Four Peaks Park, as fewer than 100
parking spaces were available at Four Peaks, compared to Golden Eagle at 223 parking spaces. Mr. Pickering
suggested that Councilman Archambault note that a large amount of money was budgeted for parks under
capital projects goals.
Mayor Nichols noticed that the number of recreation programs was going down for youth/teens and asked why
the currently vacated position needed to be filled. He suggested that there was a need for more security to
prevent vandalism rather than filling that position. Mr. Pickering responded that the possibility would be
researched.
Mayor Nichols also asked why $13,400 was in the budget for youth basketball referees. He added that the Boys
& Girls Club was implementing a full-time gym with a basketball program and questioned the need for two
basketball programs. Councilman Kavanagh inserted that the Boys & Girls Club could not compare to the town-
wide Fountain Hills program.
Councilwoman Nicola expressed her sorrow for losing another long-time employee and asked why the Town
continued to reduce the number of programs for youth/teens. She felt that even though the Town subsidized the
Boys & Girls Club and the Senior Center, the Town of Fountain Hills should have its own recreation. She
voiced her support in hiring more Parks workers for recreation.
• Mayor Nichols noted an inconsistency with fewer parks and recreation programs but the same number of
employees. Mr. Pickering explained that (1) staff had been cut, and (2) programs were cut when there was less
than required participation. Mr. Mayer explained that the decrease in programs began with the 15% budget cuts,
which caused the youth and teen programs to suffer disproportionately as they brought in little or no revenue.
All special events were eliminated at that time as well, and the position responsible for running programs was no
longer included in the current(or next year's)budget.
Mr. Mayer expressed his concern that funds were spent on drug issues/truancies that perhaps might be better
spent on programs that would prevent drug issues/truancies from occurring. The total number of programs had
been at 100, and it was now at 50. Additionally, he noted that valuable time was spent from staff to recruit
sponsors for programs. He added that staff was instructed to create a concerts program, but sponsors had to be
recruited. He added that he would like the department to offer programs for a broad age spectrum, not only
youth programs.
Vice Mayor Melendez noted that his three most important park-related points were: (1) completion of the
walkway around the fountain, (2) completion of the performance pad, and (3) reconstruction of the children's
playground. He noted that the Parks & Recreation Department had requested an additional $150,000 for a Skate
Park facility and asked if those funds were to meet 50/50 funds raised by one of the Town's citizens. Mr.
Pickering responded in the affirmative, and Vice Mayor Melendez indicated that he did not support committing
$150,000 to an informal funds matching agreement.
Councilman Kavanagh asserted that there was no certainty as to the amount of funds necessary for a Skate Park,
as the consultant had not yet rendered an opinion on the design of the facility. He noted that $150,000 might be
sufficient funds, and if some funds were not budgeted, no one would donate funds, dooming the project to
failure. He added that if the matching money were not received, the project would be completed when the
appropriate funds were received through the budgeting process, and the promise of a Skate Park would be held.
He concluded that the funds were development fees to be spent.on parks.
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Mayor Nichols voiced his opinion that the promise was to give the town a Skate Park, not a $400,000 in-ground
facility. He concluded that spending $400,000 for an in-ground facility for a town the size of Fountain Hills
made no sense. He suggested alternatively placing the money in the budget for a resource officer or for the
veterans. He agreed with Vice Mayor Melendez to remove the $150,000 from the budget for an in-ground park,
as it would not fund the type of park requested. He reiterated that the matching funds should be raised, and then
the park should be placed in the budget.
Councilman Kavanagh suggested that removing the $150,000 would prevent a modular park from being built.
He reiterated that if a Council member did not like the end design and did not want to spend the funds, they
should vote against the expenditure; however, by removing it entirely made no sense to him.
Mayor Nichols indicated that $60,000 was currently in the fund, and it would meet the needs for an
aboveground park. Councilman Kavanagh again asked that the Council await the decision of the consultant
before considering removal of the funds. Mayor Nichols felt that leaving it in the budget was committing
$250,000 to the project.
Vice Mayor Melendez indicated that his reluctance to leave the Skate Park funding in the budget was that he felt
uncertain that the matching funds could actually be obtained, as there were many sources competing for funds in
the town. Councilman Kavanagh clarified that the money being budgeted was not in competition with other
operations. They were park development fees, and other areas of usage were not being shorted.
Councilwoman Nicola added that the funds could be used to fix the broken irrigation system at Fountain Park.
Councilwoman Stevens supported leaving the funds in the budget, but she did not particularly support an in-
ground skate facility. She felt that funds had been expended to obtain a recommendation from a consultant, and
that should be given an opportunity to be completed.
Councilman Archambault indicated that Mr. Mayer had advised that an aboveground park could be
implemented for$60,000, or$60,000 could be budgeted for the design of a more expensive park. He added that
a commitment had been made to the youth to put in a facility, and the money needed to remain in the budget,
though not necessarily for an 18,000 sq. ft. in-ground park. He did suggest making a decision as to whether or
not to create a temporary structure at this time. Mayor Nichols clarified that the funds were development fees
and could be used somewhere else if required.
Community Center: No comments.
Law Enforcement: Councilwoman Ralphe asked when the fire and public safety contracts would be available for
the Council's review, and Mr. Pickering indicated that the contracts would be available at the May 20 meeting.
Councilwoman Nicola commented that while she appreciated the Town Manager's efforts in keeping the
contracts low, the assistant chief position had been cut, but no additions were made into the contract. She was
concerned that with the increase in administration costs, positions continued to be cut in park maintenance,
roads, and code enforcement. She believed that problems would continue in the community, even though the
crime rate was lower than other areas.
Councilwoman Nicola continued that in the adoption of the budget, a third code enforcement individual was not
even considered. Only two code enforcement individuals currently exist (long-time employees) who both have
the benefit of vacation time, sick time, and holidays throughout the year. She felt that with benefits
consideration, there was essentially only one code enforcement office for three months out of the year. She
continued to receive complaints that there was no Sunday support or support after 5 p.m. or 6 p.m., citing the
example that ordinances stated that there would be no parking between 9 p.m. and 6 a.m., but there had been no
staff available to enforce that ordinance. In summary, she felt that while some areas of enforcement were being
pro-actively handled, the Town of Fountain Hills deserved a 24/7 schedule. Vice Mayor Melendez agreed with
Councilwoman Nicola that a third code enforcement officer was needed.
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Mayor Nichols informed the Council that the Town had taken the advice of the consultant who indicated that
two officers were sufficient. The efficiency was being monitored in this area, and if warranted, the Council
could increase staff in that area. He then asked Mr. Pickering if surveillance cameras could be taken out of the
development fees. Mr. Pickering indicated that he would research that question.
Councilman Kavanagh advised that if the new fire district option were to fail, the Town would continue to
provide the fire service. He continued that the Town would need an additional fire station to meet response
times, with the opening of new MCO subdivisions and the possibility of State trust land. He asked if there were
development fees available in the budget to commission the process. Mr. Pickering indicated that the process
was currently being undertaken, and fire service would be one of the main adjustments to the development fee
review. The development fee review must be undertaken, however, as justification for the fees.
Councilman Archambault questioned the $56,613 budget expense for developing an operational fire
contingency plan, asking Mr. Pickering if that expense was categorized with the fire expenses. Mr. Pickering
responded that the funds were in the Administration budget under"Assistant Town Manager".
Municipal Courts: No comments.
Mayor Nichols asked if there were any opportunities in the upcoming year to refinance debt. Mr. Pickering
indicated that the subject would be addressed through a financial planner.
Mayor Nichols asked Mr. Pickering the purpose of the Eagle Mountain administrative fees of $54,000. Mr.
Pickering responded that the $54,000 was the CFD policy, a reimbursement for the Town and a percentage of
total cost. He indicated that he would further explore that cost and report to the Council.
Councilwoman Nicola agreed that the percentage charged to Eagle Mountain was high due to the fact that it was
previously done at no charge. She suggested revising the administrative fees to be closer to the actual cost to the
Town.
Lor
Development Fees: Vice Mayor Melendez asked if there was a written commitment from the Rotary Foundation
for the Spray Park. Mr. Mayer responded that Four Peaks Rotary would contribute $255K, the Rotary
Foundation$25K, and that they had a written commitment for another$25K from one of the co-owners of Plaza
Fountainside, and finally a verbal commitment for another$25K from the other co-owner,for a potential total of
$100K, plus the $125K that the Town currently had in the proposed budget. This would yield a grand total of
$200K to$225K for the project.
Mayor Nichols asked that the $50,000 figure for Open Space/Public Restrooms be increased to $75,000.
Councilman Archambault asked if the $50,000 was the Town's share of the restroom or the total cost, and Mr.
Pickering responded it was the total cost. He added that the original discussion was whether to include the
restroom and HOA Sales Office in the land available for development. At the time there was discussion that
MCO would allow the Town to use the restrooms at no charge; then MCO asked for $20,000, and recently the
estimated cost request had risen to$50,000.
Councilman Archambault asked if the restrooms were dedicated for the public using the parking. Mr. Pickering
responded that the public could use the restrooms and the HOA office would be equipped with their own
restrooms. Mr. Pickering added that a maintenance agreement needed to be formulated for care of the restrooms.
Mayor Nichols clarified that the $75,000 budgeted for the restrooms would be used from the development fees
and not the operating budget.
Regarding the Schedule of Authorized Positions, Councilwoman Nicola commented that when the layoffs
occurred, the remaining staff assumed more duties, titles changed, and positions were reclassified. As some
maximum salaries had been reduced, she suggested that those maximums be restored to the previous amounts,
err unless a particular position was actually doing less work. She noted that 24 of the 76 employees' maximum
salary ranges had been reduced. Mayor Nichols responded that her suggestion was not a Council responsibility
but a function of the Human Relations Department. Councilwoman Nicola indicated that she had spoken with
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the Town Manager and Accounting Supervisor and she respectfully disagreed that the subject was not a Council
responsibility. Mayor Nichols reiterated that the Council did not have the skills to make the analysis and
resulting determination for salary maximums. Councilwoman Nicola responded that the same Human Resources
professional had researched the issue two years ago and asked why it had changed. Vice Mayor Melendez
Le agreed with Councilwoman Nicola, indicating that morale was critical, as turnover was very expensive to
business and government.
Councilman Kavanagh voiced his interest in the salary maximum process but added that there was actually no
impact made, as most employees were not at the top of their range. Human Resources Administrator Joan
McIntosh indicated that only one person was at the top of their salary range and it takes approximately nine
years for the normal employee to reach that level of compensation. Councilwoman Nicola noted an example of a
chief building official position whose salary maximum had been cut by $8,000. Mr. Pickering clarified that the
salary maximum decrease was not a reduction in salary of$8,000, as the chief building inspector did not make
close to the maximum for that position. Mr. Pickering added that the employee would not be affected by the
decrease in salary max and each year that salary max would change.
Councilwoman Ralphe reviewed a listing of capital improvement projects from 2005 — 2008. Regarding the
approval of a strategic planning process (public participation in the planning process), she asked if the page
should be modified to show only dollar amounts per year as opposed to planning information. Mr. Pickering
responded that all information should be shown (including dollars amounts), or no information should be shown
(including dollar amounts). He reiterated that the list included "goals" and was flexible. It was formulated to
prepare the Five-Year Financial Plan and added that the strategic plan could definitely change it. Mayor Nichols
suggested that staff attach the information as an addendum to the Five-Year Business Plan, not the One-Year
Operating Plan. It was the general consensus of the Council to leave the information omitted of the One-Year
Operating Plan.
Councilman Kavanagh's opinion of a five-year capital improvement plan was that it had a shelf life of two
years. That, he added, was the reason why he was pessimistic about spending money on so many plans.
Councilwoman Nicola questioned why administrative wages had increased from$600,000 to$1.1 million in one
year. Mr. Pickering responded that:
> The three new positions.
> The Emergency Management Coordinator position had not originally been included in the budget, so
the estimate was much lower.
> Salaries would increase, as staff took on more responsibilities.
> Much of the difference was moving from a category of Law Enforcement to Administration — all of
which were still part of the General Fund.
Mr. Pickering added that salaries were less a percentage of the General Fund than the previous year,but the total
number of positions was the same. Mayor Nichols requested that Mr. Pickering reconcile the items for
Councilwoman Nicola. Councilwoman Nicola concluded by indicating that the building safety salary had
consistently gone down, but the other positions had not changed.
When asked by Councilwoman Stephens if he would give the same presentation at the May 6 meeting, Mr.
Pickering responded that only an oral presentation would be given. The Council's purpose would be to approve
the maximum expenditure. Based on the evening's discussion, he would bring a revised figure to the Council on
May 6. The presentation would be on Channel 11, and a public hearing would be held on May 20. Mayor
Nichols indicated that he felt the total figure did not need to be adjusted, as there was enough flexibility if
certain grants were cut. He then added that there was a surplus of$230,000, but Mr. Pickering clarified that the
surplus was not budgeted to be spent.
Mayor Nichols thanked Mr. Pickering, Julie Ghetti, and the department directors for the work they had done on
the budget and noted that financial stability had been reached; however, the Town must be conservative as they
Illy moved forward as to how items were added back into the budget.
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Councilwoman Stevens MOVED to adjourn the meeting. The motion was;SECONDED by Councilman
Archambault and PASSED unanimously. The meeting was adjourned at 7:45 p m.
,. TOWN OF FOUNTAIN HILLS
By:
` l /�
W. J. Nic Is,' ayor
ATTEST AND
PREPARED BY: : /'(*(;�(/'A'
Bevelyn J. Bepderi Town Clerk
CERTIFICATION:
I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Work-Study Meeting
held by the Town Council of Fountain Hills on the 5th day of May 2004. I further certify that the meeting was
duly called and that a quorum was present.
DATED this 20th day of May 2004.
By: Z/V C/ .
Bevelyn J. Bee-,
, own Clerk
L
L
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