HomeMy WebLinkAbout2005.0614.TCWSEM.Minutes TOWN OF FOUNTAIN HILLS
MINUTES OF THE EXECUTIVE AND WORK STUDY SESSION
OF THE
FOUNTAIN HILLS TOWN COUNCIL
JUNE 14,2005
Mayor Nichols called the meeting to order at 4:35 p.m.
ROLL CALL:
Present for roll call were the following members of the Fountain Hills Town Council: Councilman
Archambault, Mayor Nichols, Councilman Schlum, Councilman Kavanagh, Councilman Kehe, and
Councilman McMahan. Town Attorney Andrew McGuire, Town Clerk Bev Bender, and Richard Turner
were also present.
AGENDA ITEM #2 — VOTE TO GO INTO EXECUTIVE SESSION: PURSUANT TO A.R.S. 38-
431.03.A.1 FOR DISCUSSION OR CONSIDERATION OF EMPLOYEE ASSIGNMENT,
APPOINTMENT, PROMOTION, DEMOTION, DISMISSL, SALARIES DISCIPLINING OR
RESIGNATION OF A PUBLIC OFFICER, APPOINTEE, OR EMPLOYEE OF ANY PUBLIC
BODY, EXCEPT THAT, WITH THE EXCEPTION OF SALARY DISCUSSIONS, AN OFFICER,
APPOINTEE OR EMPLOYEE MAY DEMAND THAT THE DISCUSSION OR CONSIDERATION
TAKE PLACE AT A PUBLIC MEETING. THE PUBLIC BODY SHALL PROVIDE THE
OFFICER, APPOINTEE OR EMPLOYEE WITH WRITTEN NOTICE OF THE EXECUTIVE
SESSION AS IS APPROPRIATE BUT NOT LESS THAN TWENTY-FOUR HOURS FOR THE
OFFICER, APPOINTEE OR EMPLOYEE TO DETERMINE WHETHER THE DISCUSSION
SHOULD OCCUR AT A PUBLIC MEETING. (SPECIFICALLY, INTERVIEWING THE BOARD OF
ADJUSTMENT CANDIDATE.)
Councilman Archambault MOVED to convene the Executive Session and Councilman Schlum
SECONDED the motion, which CARRIED UNANIMOUSLY. Mayor Nichols recessed the Executive
Session at 4:48 p.m.
AGENDA ITEM#3—RETURN TO THE WORK STUDY SESSION
Mayor Nichols reconvened the Work Study Session at 5:05 p.m.
Present for roll call were the following members of the Fountain Hills Town Council: Councilman
Archambault, Mayor Nichols, Councilman Kehe, Councilman Kavanagh, Councilman Schlum, and
Councilman McMahan. Town Manager Tim Pickering, Town Attorney Andrew McGuire, Town Clerk Bev
Bender,Finance Director Julie Ghetti, Public Works Assistant Director John Morast, and Director of Parks&
Recreation Mark Mayer were also present.
AGENDA ITEM #4 — DISCUSSION OF THE PROPOSED TOWN OF FOUNTAIN HILLS' 20-
YEAR CAPITAL IMPROVEMENT PROJECT PLAN.
Mayor Nichols stated that the purpose of the Work Study Session was to review the 20-Year Capital
Improvement Project Plan (CIP), a 20-year financial plan for the Town of Fountain Hills. He noted that last
year they prepared a 5-year plan and discovered some surprising things in the future as a result of that and
decided at that time to put together a 20-year plan so that they would have some idea of what the future held
for the Town. He said that there were certain things that the Town was going to face in the next 20 years,
such as build-out and revenue issues and noted that they were also in the process of preparing a Strategic
Plan that would be completed by the end of the year. He added that at that point in time, they would have a
better idea of what the residents really wanted as far as amenities and what they were willing to pay for. He
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expressed the opinion that it was incumbent upon the Council to take a look at what they believed the
framework was going to be in the future in broad terms. He pointed out that actions that the Council would
take today,next year, and the year after could have long-lasting effects that could multiply five, ten or fifteen
years in the future. He explained that staff had attempted to look at a macro-vision of what could happen to
the Town over the next 20 years. He emphasized the importance of avoiding any major problems in 2010,
2015, or 2020 and that was why they had taken this first step to review revenue streams and expenses over
the 20-year period. He noted that this evening they would see lots of different projects and said that the CIP
contained everyone's "wish list" for the next 20 years. He added, however, that this did not mean that the
projects had been approved; it was merely a"wish list". He pointed out that this would give them an idea of
what would happen if the various projects were approved and showed what the annexation of State Trust
Land would mean to the Town as well.
Mayor Nichols advised that Mr. Pickering and Ms. Ghetti would provide a presentation on this agenda item
and noted that it was not their intent this evening to look at each of the capital projects and say yes or no.
They were not going to vote or give direction to staff on those projects. They simply wanted to take a look at
what all of this meant so they had an understanding of what would happen if they spent the most money they
could over the next 20-year period. He said that as they were going forward later on with the Strategic Plan,
they would be able to determine whether they would be able to afford the various projects over the upcoming
years. He expressed the opinion that the overview represented "cutting edge" planning for the Town of
Fountain Hills and expressed appreciation and support to staff for putting together this crucial planning tool
Town Manager Tim Pickering thanked the Mayor for his comments and noted that none of the projects had
been prioritized by the Council or the citizens and that prioritizing and determining what projects would be
done would be undertaken through the Strategic Planning Process. He added that they did want to put
together a financial base upon which to base decisions and to know where they stood without capital
improvements and with a large "wish list" of capital improvements. He advised that Julie Ghetti had been
working very diligently on this project and would provide the Council with an overview. He added that
following her presentation, staff would be happy to answer any questions. He concurred with the Mayor's
remarks regarding the fact that they were not here this evening to discuss any particular projects and said that
individual projects would change with the Strategic Plan. He emphasized that they were here to provide an
overview of where they might stand and the impacts of decreasing construction revenue in the future on the
Town.
Finance Director Julie Ghetti addressed the Council and highlighted a PowerPoint presentation of the
proposed 20-year financial overview. She advised that the purpose of the report, as previously stated by the
Mayor and Mr. Pickering, was to do some forward looking and go forward 20 years and project as best as
possible revenues and expenditures and include some capital projects and see where the Town was
financially. She pointed out that a 20-year period of time takes into account a lot of numbers and said they
should not be surprised to see some big numbers and added that nothing had been approved and nothing had
been appropriated as these were simply "wish lists."
Ms. Ghetti stated that the 20-year projection was the first step in planning the Town's financial future and
reiterated that it did not mean that projects would be completed; it was simply a planning tool that would
allow the Town to move forward. She noted that the plan provided a framework upon which to base
decisions during the Strategic Planning process. She added that the plan was flexible and when the Strategic
Plan had been completed and the citizens had prioritized the projects they wanted, they could then fit easily
into the plan. The revenue projection also told them when their one-time revenues, or construction-related
revenues, were going to start to decline. The plan was in its infancy as this was the first 20-year plan the
Town had ever undertaken and once the Strategic Plan was in place it would likely change and the Council
would see it again, probably in December or more likely during the budget for 2006-07. She noted that the
plan also validated the Town's policy to transfer general fund surplus into capital projects and said that the
surplus revenues were going to be short lived; they would not be there every year. Including the annexation
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of State Trust Land would delay the operating deficit, but only for four years. In order to complete all of the
capital projects included in the CIP,new revenue enhancements would be needed.
Ms. Ghetti reported that the results of the projections showed that the General Fund would have sufficient
operating revenues, excluding any capital, for nine years and after that, a new revenue source would be
needed to offset the decline in construction revenues, or else budget cuts would need to occur. If all of the
capital projects were included, a deficit of approximately $4 million would exist by Fiscal Year 2009-10.
Reducing the sales tax rate would create further deficit. In addition, primary deficits exist in streets and park
capital improvements. Ms. Ghetti referred to a chart depicting the General Fund revenues and operating
expenditures (presentation available for review in the Town Clerk's Office) and noted that there were two
scenarios for the revenues: (1)with the State Trust Land and(2) without the State Trust Land. She explained
that as depicted in the chart, by Fiscal Year 2015 without State Trust Land, the Town was going to be in a
deficit situation. She added that with the State Trust Land they would encounter a deficit situation in Fiscal
Year 2019. The expenditures were going to outpace the revenues regardless of the State Trust Land and
another revenue source would have to be identified or they would have to cut the budget.
In response to Councilman Archambault and Councilman Schlum, Ms. Ghetti advised that on the revenue
projections staff did a trend analysis and projected out for some future growth. She explained that it was
difficult to project what retail activity would take place and some of them were taxable while others were
not. She confirmed that staff used a very conservative figure.
Councilman Kavanagh commented on the revenue increases and asked if they were primarily due to
population growth. Ms. Ghetti responded that the increases were based primarily on construction and some
retail. She noted that there were some major projects that were coming up.
Councilman Kavanagh clarified that what he was asking was whether the expenditure increases were
cr primarily fueled by population, inflation, etc. Ms. Ghetti stated that in projecting out the expenditures, staff
used a 5% inflation factor and eliminated all of the one-time costs that were in this budget year. She noted
that the expenditure projection assumed providing the same level of services. She said that increased
services for infrastructure for the State Trust Land had been accounted for.
Mr. Pickering commented on the increase in expenditures and stated that the only real increase the Council
would see in the level of service would be in police, because the more the population grew, the number of
beats would increase accordingly. He added that they also looked at Fire and did not believe they would
need to add any more shifts. In addition, they believed they could handle the State Trust Land without
additional fire services. He noted that ambulance services might increase but that would not be a true cost to
the Town because Southwest would add that service without any additional cost to the Town. He expressed
the opinion that the 5% referred to by Ms. Ghetti appeared to be a good, conservative figure and pointed out
that expenses would slow down after a certain time because like the Town's Planning services, there would
obviously not be as many inspections or plan reviews. He said that there was going to be a balance between
increasing services on one hand with law enforcement services but a decrease in the building services over
time.
Ms. Ghetti referred to a chart that depicted a 20-year projection for development fees and noted that the fees
were derived from building permits. She stated that one line in the chart assumed that no annexations took
place and the other (top bar) took into account the annexation of the State Trust Land. She noted that the
dollars projected use the Town's current development fee ($3500 per permit) and added that they were still
going through the development fee process and staff was not sure whether there would be an increase and if
so how much of an increase would be implemented. She noted that those revenues were driven exclusively
by building permit activity and projects out 20 years and assumed that all of the State Trust Land permits
would be pulled as well as the regular permits for the Town towards build out. She also referred to a chart
entitled CIP Funding Summary (all funds combined) and noted that during the first five years (the plan was
lw in five-year increments) there was a $4 million deficit at the end of that first period and a deficit of $20
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million at the end of the next ensuing five-year period. She reported that after the entire 20-year period, if all
of the projects were completed and there was no additional funding, the Town would have a $59 million
deficit. She stressed that these were all hypothetical and there was nothing to suggest that the Town would
do all of the projects.
Ms. Ghetti discussed a funding summary by fund (excluding operating costs) and reported that at the end of
20 years the General Fund had a $30 million deficit; the excise tax fund was positive; and Parks &
Recreation and Streets had a majority of the deficit. She said that the total was$53 million.
Mr. Pickering called the Council's attention to the chart and noted that there were a couple items that "stuck
out." He said that the General Fund was basically okay up to the beginning of Fiscal Year 2021-22. He
added that if they looked at the development fees for parks, it was obvious that they were significantly under-
funded in this area. He stated that when they looked at the cost of acquiring parkland, as previously
discussed, they were talking about two additional neighborhood parks as well as a community park, and the
acquisition of that land significantly increased this figure. He added that the other deficit was in the Streets
area and said that they were aware of the fact that a deficit existed and this was an issue they were going to
have to deal with. He reported that an extensive had been conducted and the Streets' number was based on
analyzing every street, what the surface was like, when they needed to be redone and the total cost was laid
out and showed what each deficit was. He said that staff felt confident that the Streets' number was pretty
clear. He pointed out that once they began to lose the construction revenue in the later years, they began to
get into trouble.
Mayor Nichols asked whether they could go out and bond for new parks and streets and Mr. Pickering said
that they certainly had that option. Mayor Nichols added that the next step would be to pay for the debt
service on the bond and questioned whether that would come out of the General Fund. Mr. Pickering
advised that what they had done in the past was "pay as they go" or identify a revenue source to pay for the
debt service. He added that in order to do streets and parks, they would have to come up with a dedicated
revenue source (additional sales tax, a property tax, a vote of the people approving bonding for those
projects). Mayor Nichols noted that during the later years there was not enough surplus in the General Fund
to pay for the debt service the Town would incur if it went out and borrowed in order to take care of the
capital items (parks and streets). He said they would really have to look at identifying additional revenue
sources such as a property tax or additional sales tax and added that that was if everyone agreed to do all of
the proposed capital projects. Mr. Pickering concurred that that would be a decision that the Town and the
citizens would make through the Strategic Planning process.
Councilman Archambault asked whether staff had taken Heritage Grants into consideration when planning
for the parks and Mr. Pickering responded that staff did not assume grants or anything of that nature. He
added, however, that on those individual projects they had been very successful in the past but staff did not
want to assume that this would continue to be the case. Councilman Archambault commented that whenever
they identified a capital project they also had to identify a funding source for ongoing repairs, maintenance,
etc. He asked whether that had been figured into the general budget in the projections. Mr. Pickering
responded that they were included in the projections' overall numbers.
In response to a question from Councilman Kehe regarding HURF funds and their limited financing
potential, Ms. Ghetti explained that HURF revenue funds were limited gas tax revenues (approximately $2
million each year). She noted that there was not a lot of growth or opportunities for those revenues. She
reported that their operating budget was close to $1 million just for maintaining the streets, crack sealing,
street personnel, etc. so not a lot of revenue was available for streets. She confirmed that the proposed
capital expenditures was much greater than the potential HURF income and added that street projects were
extremely expensive and noted that the pavement improvement program, over a 20-year period, was $19
million,the biggest expensive in capital projects.
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Councilman Archambault asked whether staff took into consideration the census and possible decreases in
shared revenues based on the fact that Fountain Hills was landlocked and not going to increase. Ms. Ghetti
stated that this was taken into consideration and she had projected that in Fiscal Year 2006-07, the first year
after the Town's mid-decade census, there was going to be a reduction in the Town's proportionate share of
revenue. She added that the actual revenues probably would not decrease but they would receive less than
what they would have gotten based on their current share. She noted that during each five-year increment,
she reduced that figure somewhat because the other cities were growing faster than Fountain Hills.
Mr. Pickering commented that this situation was only going to get worse because the other cities and towns
were going to continue to grow while towns such as Paradise Valley and Fountain Hills would realize a
decrease that would continue year after year.
Ms. Ghetti referred to a list of the larger projects included in staff's hypothetical future capital projects and
pointed out that the numbers reflected current dollars and no inflation factor had been added to the expenses.
She noted that the pavement management program at $19 million was the largest expenditure over the 20-
year period. She said that each of the Councilmembers had been provided with a very detailed list of all of
the projects and the slide just referred to some of the larger ones. She pointed out that some of the projects
were the result of comments she had received because of the ongoing Strategic Planning process
Mayor Nichols reiterated and emphasized that the list did not represent approved projects and was merely a
"wish list". Councilman Kavanagh referred to the $3.4 million cost associated with the Shea Boulevard
flyover and asked what this was for. John Morast responded to that question and said that a flyover is similar
to a freeway ramp in that it would be a direct connect for left hand turns from Shea onto Palisades or Saguaro
Boulevards and could be needed in the distant future as the traffic on Shea increased significantly.
Councilman Kehe asked whether the available capital funding by fund were based upon the accomplishment
of all of the items on the "wish list". Ms. Ghetti confirmed that this was the case and reiterated that this was
a hypothetical list containing all of the capital projects costs calculated using current dollars. He stated that
they either had to reduce the list or increase the Town's revenue
Mayor Nichols clarified that the list represented the most that could ever happen in the Town and it forced
the current and future Councils to prioritize and revise/update the list every year depending upon available
funding. He emphasized that the list was a"work in progress".
Mr. Pickering commented that the Town was going through a Strategic Planning process and the citizens
would have to prioritize as well and once that had been done and the Strategic Plan was adopted, they would
revise the plan and associated numbers to reflect the citizens' priorities. He added that the proposed list was
basically just a model and during the next Fiscal Year staff would "plug in the numbers" from the Strategic
Plan.
Mayor Nichols said that staff did not intend to bring this report to Council and ask them to adopt it, it was
merely a model that showed what the deficits would be if they decided to do something such as this.
Mr. Pickering advised that staff prepared the bar chart which did not include any capital costs and said that
staff wanted to show that to make sure that everyone was aware of what the deficit numbers would be even
without any capital costs as time went on because they knew revenues were going to shrink.
Councilman Kavanagh expressed the opinion that it was important for the public to realize that right now the
Town's sales tax was so high that it could not go any higher and one benefit of that, in a macabre way, was
that they could not authorize any municipal bonds by the vote of four Councilmembers. He noted that any
type of capital projects such as this could only be approved by a vote of the people who were the ultimate
strategic planners.
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Councilman Kehe added that in the projected 9 to 15 years all of their construction revenues would be lost so
they were not only talking about whether to raise or lower the sales tax, the big question was how were they
going to make up for that loss in construction revenue.
err Councilman McMahan said that that could happen very early in the game and expanded retail would make
up for some of the loss but not enough.
Mayor Nichols advised that remodeling would offset some of the loss and some of the older homes would be
torn down and new homes would be built. He stated that this was a good project because they had always
asked staff to let them know when they would realize the decrease or elimination of new construction and
this was the first step to identify the answer to that question.
Councilman Kehe asked whether staff took into consideration the prospect of redevelopment and Mr.
Pickering said that the report contained a minimal amount of construction revenue. He said that they would
see commercial buildings coming on line but nothing close to the current levels. He agreed that there would
be aging homes torn down and new homes built on the parcels but stated that this would not generate a major
revenue source.
Councilman Kavanagh requested a list of the park acquisition projects and Mayor Nichols pointed out that
the last page of their report had a listing of those items. Mr. Pickering reiterated that the major deficits
would occur in Streets and Parks.
Ms. Ghetti referred to a chart that listed a project summary (not including on-going operating costs) and
reported that it totaled $113 million over a 20-year period. She reiterated that the number was based on
current dollars and added that it was a list of projects by category rather than individual projects. She added
that the list assumed the annexation of the State Trust Land, which was the acquisition of new parks ($18
Ly million in years 2016 to 2020). She reported that the total operating cost for all of the projects was
approximately$14 million over the 20-year period in addition to the$113 million.
Ms. Ghetti outlined suggestions that staff had determined as a result of their study and said that they assumed
that the sakes tax rate would remain at 2.6%; there would be no legislative reduction in State shared
revenues; there would be a decline in proportionate share of revenues in FY07 with new census; State Trust
Land was included in all of the projections; beginning in FY2015, expenditures would exceed revenues
without State Trust Land and by 2019 with State Trust Land; development fee revenue has been projected at
the current rate; and the reserved fund balance would remain at$6.4 million.
Councilman Archambault asked whether staff calculated an increased reserve fund balance and Ms. Ghetti
responded that she maintained the reserve level at the$6.4 million, which was well above the Council policy
of$4.9 million. She added that the Council had the option to add to that every year if they so desired. She
reported that the projections for the 20 years began with Fiscal Year 2006-07 and so budget year 05-06 that
was approved by the Council was not included in the projections. She said it goes out through the years
2024-25 and the inflation level of 5% and the existing level of service with no increase in services. The
capital projects were in current dollars and before staff projected out with the 5% increase they eliminated
the one-time costs that were included in the 05-06 budget that would not be repeated again. The forecast also
did not incorporate any unanticipated policy decisions or adjustments to spending priorities as directed by the
Council. Almost all of the capital projects have been included or mentioned in the Strategic Planning
process. Ms. Ghetti said she would be happy to respond to questions from the Council.
Councilman Archambault commended Ms. Ghetti and staff for their efforts in developing a fantastic report
that would serve as a crucial planning tool for the Town.
Mayor Nichols concurred and said that the report would serve as a living document that would help them
determine what they could afford as far as capital improvements in the future. He added that he did not
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believe that they would go forward with a sales tax increase but if people really wanted the projects and were
willing to pay for them, this would help them to model what a property tax increase would generate revenues
Lir over a period of time in order to determine whether that would provide a sufficient revenue source to pay for
the capital projects desired by the citizens.
Councilman Kavanagh requested that the individuals participating in the Strategic Planning process be
provided the "price tag" for all of the different items, if not the entire report. He said that this would help
with the prioritizing of projects.
Councilman Kehe commented that the citizens of the community would be provided a price tag for the
various items and could decide what they liked and what they were willing to pay for.
Mayor Nichols stated that he had heard comments that the Town wanted to annex the State Trust Land
because it would take care of all their financial problems forever and ever. He pointed out that it would help
for a few years but it was not the end all solution to the problems.
Mayor Nichols asked whether overall staff would agree that this was a very conservative report and Ms.
Ghetti said that the revenues were extremely conservative and the expenditures might not be conservative
enough but were indeed conservative.
Councilman Kehe advised that although the State Trust Land annexation would not take care of all the
Town's problems, it would provide some control as far as future development and the one-time funds would
help offset residential development deficits.
In response to an additional question from Councilman Kehe,Ms. Ghetti reported that the plan was to update
the proposal each year utilizing current costs.
Councilman Kavanagh requested that based on staffs revenue projections, that with respect to the State
Trust Land, he be provided(over the next few days)a figure representing the number of homes they assumed
would be built and the total sales tax and development fee revenue projections. Ms. Ghetti responded that
she did have those numbers, provided by Planning & Zoning, and she would be happy to forward that
information on to Councilman Kavanagh.
Mr. Pickering estimated that there were going to be approximately 2200 lots/5,000 people, a middle of the
road projection. He added that he did not know the dollar amounts.
Mayor Nichols discussed the acquisition figure for the three parks and said he believed as far as the
community park, they wanted to get the land donated by the developer. He asked how this would affect the
$18 million figure. Mr. Pickering answered that it would go down approximately $12 million. The Mayor
also discussed the other two parks and stated that if it was possible for the Town to obtain a long-term lease,
he would like to know the impact on the cost. Mr. Pickering stated that staff calculated that using
approximately $400,000 per acre for acquisition and approximately $200,000 per acre for build-out of the
parks. He noted that they were looking at two 15-acre parks and one 30-acre park. He added that hopefully
the numbers would change.
Mayor Nichols stated that he appreciated the conservative approach taken by staff.
Councilman Kavanagh said that he believed all of the parkland in Town had come from developers and he
believed that was true of every town in the Valley.
Mr. Pickering commented that as far as the community park, he believed that that was very "doable" but the
acquisition of the other two parks might occur if they worked with the School District but otherwise they
would have to purchase the land.
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Councilman McMahan noted that the School District owned a number of parcels that they would never use
and which could be converted to parks very easily.
Mr. Mark Mayer stated that the issue was not the availability of the land but where they were located. The
need for exists both the western part and the southern part (South of Shea Blvd) of town, which is not where
the School District's parcels were located,as far as he was aware.
Mayor Nichols stated that the list of capital projects opened his eyes to things he never even thought about
that they had to spend money on, like the skyway or washes. He noted that they were looking at spending$7
million in wash improvements alone over the next 20 years.
Mr. Pickering said that those were all areas that they knew would have to be addressed in the future in order
to help flooding and improve drainage.
Mayor Nichols advised that after the end of the Strategic Planning process he would like to obtain a list of
the projects that the residents wanted to do and were willing to pay for and at that time he would like to
revisit this project. He also stressed the importance of identifying the capital items that they had no choice
about,ones that they simply had to do. He added that they had to prioritize the "have to"list, such as streets,
washes, etc. so that they could develop a plan that would contain those items as well as the items the
residents wanted to have done. Then the"wish list"could be addressed.
Mr. Pickering concurred with the Mayor's comments and said that numbers could be put into or taken out of
the proposed model.
Mayor Nichols stated that the plan was a great first step for the Council and noted that they now had the one-
year budget,the five-year plan,and now the 20-year CIP plan. He added that this would help keep the Town
from getting into trouble because they would be able to forecast ahead of time and provided the Council with
NW adequate information on which to base"no"decisions.
Mr. Pickering advised that one of the reasons staff put this together was that at the initial Town Hall,
residents asked "why were we worrying about such and such, we have plenty of money?" He explained that
they knew they would be losing revenue from construction but did not know when so this entire process had
been extremely worthwhile.
The Mayor said that oftentimes during the coffee chats that were held with the public, they often got
comments such as "this as a surplus year for the Town and were we going to reduce sales tax"? He said
these remarks came from a number of merchants. He stated that now they could tell them "we may have a
surplus this year, but in our five-year plan or 20-year plan, we see that we need money to repair the streets,
work on the washes, etc". He added that they would have the opportunity to explain that they were
practicing good fiscal management by taking the surplus from this year and putting it into a capital fund to
pay for those things that were going to come up in later years.
Councilman Kavanagh complimented staff on their hard work.
Mayor Nichols asked whether staff had forecasted a build-out outside of the south side of the Avenue of the
Fountains, the retail that was going to be going in there (the retail sales tax revenue). Ms. Ghetti replied that
staff had included a retail sales tax projection but added that in order to remain conservative, they did not go
out too far in that area. They based the numbers pretty much on a trend analysis and did not make any huge
jumps for any expected retail activity. Mayor Nichols concurred with staff's thought process and noted that
there might be some potential revenues generated when that site gets developed. Ms. Ghetti added that they
projected some growth in retail but not a lot.
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Mr. Pickering reiterated that staff was not looking for the Council to adopt anything this evening; this was
simply an initial model that they wanted to share with them. He expressed the opinion that it was important,
as Councilman Kavanagh stated, that the dollar amounts and the impacts were shared with the people who
were looking at the Strategic Plan. He advised that he had already provided copies of this report to the
members of the Technical Advisory Committee and said it would probably be included in the report that the
participants in Town Hall II would receive.
Ms. Ghetti stated that the report would be included with the final Fiscal Year 05-06 budget that was
submitted to the Government Finance Officer's Association for certification. She pointed out that one of the
things they looked for was the Council's forward thinking and future planning. She added that this would
help them get more points for doing so. Ms. Ghetti clarified that the plan would be included as a document,
a 20-Year Financial Overview,but not an adopted CIP. She stated that Moody's would give the Town credit
for doing the plan and said that the issue came up during a recent conference call with Moody's on rating the
Town's General Obligation and Municipal Property Corporation bonds. She noted that they specifically
asked about the plan and when they heard the Town was doing a 20-year projection, it was obvious that it
absolutely helped the Town's rating.
Councilman Kehe stated that the information provided by staff was extremely valuable and thanked them for
their efforts. He agreed that it was a good idea to provide the Town's Technical Advisory Committee with
copies as well as the members working on the Strategic Plan but suggested that the information be put into a
reduced format. He added that he would like to see the information available for the next Town Hall. Mr.
Pickering responded that staff could certainly do so. Councilman Kehe added that one of the interesting
pages was page seven where staff addressed how one might improve the long-term financial picture. He said
that this would have to be part of the overall strategy as well.
There being no additional comments, the Mayor thanked staff and the Council for their helpful input and
co comments.
AGENDA ITEM#5-ADJOURNMENT
Councilman Archambault MOVED that the Council atdjot}4n and Councilman McMahan SECONDED the
motion, which CARRIED UNANIMOUSLY. The r eetin'g adjourned at 6:00 p.m.
TOWN 0 AIN HILLS
By I
Wally Ni ols,Ma r
ATTEST AND
PREPARED BY:
Bevelyn J. end ,Town Clerk
CERTIFICATION
I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Executive/Work
Study Session held by the Town Council of Fountain Hills on the 14th day of June 2005. I further certify
that the meeting was duly called and that a quorum was present.
DATED this 7th day of July 2005.
Bevelyn J. nd , Town Clerk
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