Loading...
HomeMy WebLinkAbout2005.1213.TCSM.Minutes TOWN OF FOUNTAIN HILLS MINUTES OF THE SPECIAL SESSION AND PUBLIC HEARING OF THE FOUNTAIN HILLS TOWN COUNCIL DECEMBER 13,2005 Mayor Nichols called the meeting to order at 5:03 p.m. ROLL CALL — Present for roll call were the following members of the Fountain Hills Town Council: Councilman Archambault, Mayor Nichols, Councilman Kavanagh, Councilman Kehe and Councilman McMahan.Town Attorney Andrew McGuire,Town Manager Tim Pickering, and Town Clerk Bev Bender. Vice Mayor Schlum arrived at 5:15 p.m. CALL TO THE PUBLIC None. AGENDA ITEM #2— CONSIDERATION OF APPROVING LIFEWISE AS THE HEALTH CARRIER FOR THE TOWN OF FOUNTAIN HILLS EMPLOYEES IN 2005. Human Resources Administrator Joan McIntosh addressed the Council relative to this agenda item and provided a brief overview of the proposed health insurance plan. She noted that the Town had contracted with United Healthcare for employee health insurance coverage during calendar years 2004 and 2005 and said that the company had quoted a 23% rate increase for 2006. She added that although some increase was anticipated, and the Town budgeted for a 20% increase, their insurance broker had been optimistic that the Town could successfully obtain similar coverage for a much smaller premium. She advised that quotes were obtained from every other major insurance carrier in Arizona in an effort to maintain quality coverage with reasonable premiums. The various quotes were taken to the Employee Services Committee for comparison and after extensive discussion, the Committee developed two recommendations for consideration: (1) Remain with United Healthcare but with a lesser benefit and a 16% increase over 2005 rates; or (2) Switch to a dual option plan with Lifewise Health Plan, whereby the Preferred Provider Organization (PPO) benefits remained the same or better than the Town's current plan with a 10.7% increase over 2005 rates and a Health Savings Account (HSA) was offered. Ms. McIntosh informed the Council that the members of the Committee took the recommendations back to their individual departments for discussion and a majority of employees expressed their desire to contract with Lifewise for 2006. She added that Human Resources also met with Mr. Pickering to review the various options and to recommend proposing Lifewise Healthcare for approval by the Council at this meeting. She noted that the Lifewise Plan was a dual option plan. One option was a PPO, which all benefited employees currently had and the second option was an HSA. She added that during enrollment, employees could choose whichever plan worked best for them. Ms. McIntosh stated that the HSA was a fairly new concept in health insurance and was similar to catastrophic insurance whereby there was a high deductible ($2,500/single and $5,000/family with the current proposal) and consequently much lower premiums. She explained.that the plan was based on the members taking an active role in managing their health care costs. The difference between the monthly PPO premium and the monthly HSA premium was deposited in a health savings account for employees (to a maximum of $2,500 each annually). The funds could be used for any out-of-pocket health care expenses. The incentive for employees was that any unused balance at the end of the year rolled over from one year to the next and could be invested. When an employee left employment with the Town, the funds went with them. She said that the HSA option was certainly not a plan for everyone, but worked well for people who did not have a great need to utilize medical services, yet protected them from catastrophic situations. Z:\Council Packets\2006\R1-5-06\Minutes 12-13-05 Special and Executive Session.doc Page 1 of 5 Ms. McIntosh briefly reviewed a table that itemized the Town's annual cost, the employees' annual cost and the total cost for the current United Healthcare Plan, the quoted renewal of United Healthcare and the recommended Lifewise PPO Plan. She noted that Lifewise was a 10.7% increase over current rates. She added that the past experience with companies offering a dual option plan such as Lifewise indicated a 75% enrollment in the PPO and a 25% enrollment in the HSA. Ms. McIntosh said that she would be happy to respond to questions from the Council regarding this proposal. Mayor Nichols asked for a motion regarding staff's recommendation. Councilman Archambault MOVED to approve Lifewise Health Plan as the health insurance carrier for the Town of Fountain Hills employees in 2006. Councilman McMahan SECONDED the motion. In response to a question from Councilman Kavanagh, Ms. McIntosh advised that during the annual enrollment process, employees would be able to switch between the two options. She added that they could also go out of the network if they chose but said that there would then be more out-of-pocket expenses involved. She said that all of the physicians in Fountain Hills were providers and added that overall there were approximately 4200 providers in Maricopa County, including chiropractors, etc. and the company had indicated their willingness to contact any physician the Town suggested who was currently not on the network. She added that they reported a high success rate in getting the providers to join the network. Mayor Nichols commented that the PPO for Lifewise was similar to United Healthcare's PPO. Councilman Kehe asked whether this would include specialists and whether or not permission would be needed to use specialists. Ms. McIntosh responded that specialists were included and no special permission was needed to utilize them. Mayor Nichols commented on the fact that the reaction of the employees contacted by Ms. McIntosh had been very favorable. He added that the coverage would cost less and was supported by the employees so he viewed ,..4) this is as a"win-win" situation. The motion CARRIED UNANIMOUSLY(6-0). Mayor Nichols thanked staff for their efforts in this regard. AGENDA ITEM #3 — PUBLIC HEARING TO RECEIVE COMMENT ON THE PROPOSED DEVELOPMENT FEE SCHEDULE WITH POSSIBLE DIRECTION TO STAFF. Mayor Nichols declared the public hearing open at 5:10 p.m. to hear comment on the proposed Development Fee Schedule. Town Manager Tim Pickering provided background information relative to the proposed Development Fee Schedule and noted that development fees were those costs that were paid by new businesses and/or residents coming into the community because of the cost of growth. He said that streets might need to be widened or there could be a need for more parks added to the system because of additional residents and this was the basis behind the fees. Mr. Pickering stated that since the last meeting with the Council regarding this issue, the Town's Strategic Plan was adopted and this had narrowed the scope of capital improvements. He emphasized that only capital improvements could be paid for with development fees and staff had taken out and reduced a number of items that were in the original Development Fee Study. He added that reducing the capital improvement items in turn reduced the fees that were being proposed. He noted that the proposed fees for Single Family Residential were approximately $5,220; Multiple Family Residential were $4,818; Commercial were $4,548 and Industrial were $1,825. He advised that the proposed residential rate would be a little more than the average of nearby cities, while the commercial rate would still be below average. Z:\Council Packets\2006\R1-5-06\Minutes 12-13-05 Special and Executive Session.doc Page 2 of 5 Mayor Nichols outlined the process that would be followed and said that the public hearing was being held this evening and another public hearing would take place on January 5th(first meeting in January). He noted that the two public hearings were required by law. Mr. Pickering added that after those were held, Council adoption could take place and noted that the fees would not go into effect until March. He said that typically, a large amount of building permits were applied for prior to the effective date and added that anyone who applied for a permit before March would pay the reduced rate. Mayor Nichols emphasized that no approval would occur this evening; this was simply the first of two public hearings that must be held. Mr. Rick Giardina, Vice President of Red Oak Consulting, highlighted the addendum to their September 2005 Final Report on the Development Fee Study prepared for the Town of Fountain Hills (copy on file in the Office of the Town Clerk). He said that the addendum, as mentioned by Mr. Pickering, was prepared at the Council's request based on the results of the recently completed City Council Strategic Plan. He added that the Plan eliminated a number of future capital improvement projects previously reflected in the fees calculations contained in the September Final Report. Following Mr. Giardina's presentation, the Mayor asked whether there were any citizens wishing to speak on this item. Town Clerk Bev Bender advised that there were none. Councilman Kavanagh questioned why the City of Phoenix was not included in the figures and Mr. Giardina responded that Phoenix was not discussed or considered because it was such a large metropolitan area. Mr. Pickering pointed out the Phoenix had different zones for their development fees and said that it would be difficult to conduct a comparison. He added that capital costs varied in different parts of their community. Councilman Kavanagh referred to the calculation for the residential fee and asked how many additional homes the amount was divided among. Mr. Giardina said that the study extended out to 2025 and the costs were being spread across approximately 4,600 single-family dwellings, not including the State Trust Land. Councilman Kavanagh asked when they did the calculation for the $6 million for the park that would be put on State Trust Land, how many additional homes were added to the 4,600 figure. Mr. Giardina replied that at this time they did not add any numbers associated with that particular development. Councilman Kavanagh stated the opinion that they should estimate how many homes were going to be in the State Trust Land and have those homes bear the burden of the park that was going to be located in their part of the Town. Mr. Pickering said that staff did not have the projection yet but it would not be difficult to obtain. He stated that if the land was annexed, those residents would bear the burden of the fees and added that staff was currently working on that and would provide the Council with information in the future. Councilman Kavanagh asked whether, for the sake of fairness to residents in Town who would begin to pay the fee in March, staff would obtain those figures before the fee was actually set. Mr. Pickering expressed the opinion that they would wait until after the land was annexed before determining any adjustments. He said that if the land did not become part of the Town, there would be no need for the additional park and there would be fewer homes. Councilman Kavanagh concurred and stated the opinion that they should pull the$6 million from the study. Mr. Pickering said that the money was in there in anticipation of those needs and reiterated that he would be happy to look at what the impact of the additional densities would be. He said that they should not begin to collect the monies for the additional homes until everything was properly calculated and Councilman Kavanagh concurred. Mr. Pickering added that they should know those numbers fairly quickly and that was why they had tried to work some of it in. He agreed that the extra densities had to be looked at and said staff would pursue that. Councilman Kavanagh requested that prior to voting on the actual fees that the Council be presented with two fees, one with and one without. Mr. Pickering and Mayor Nichols concurred with this suggestion. Mr. Pickering said that perhaps they would adopt one fee if the land is annexed and one fee if it were not. Councilman Archambault referred to Table 3 and asked why multiple-family residential had less impact than single-family residential. Mr. Giardina explained that the foundation of the fees was based on trip generations, which was data compiled by the Institute of Transportation and was based on surveys and trip data. He noted Z:\Council Packets\2006\R1-5-06\Minutes 12-13-05 Special and Executive Session.doc Page 3 of 5 • that multi-family residential units had less impact on the roadways. Mr. Pickering emphasized that this was based on each unit and each multi-family unit would pay that amount. Councilman Kehe commented that infill lots also constituted growth. Mr. Giardina concurred with Councilman j Kehe's statement that most communities that adopted development fees did not generally have strategic plans going on concurrently. Councilman Kehe said that the listed community priorities were current and could change in the future and expressed concern that they might be "shooting themselves in the foot". He noted that the Town's senior citizen community was going to grow a lot and it was currently at 48% and said they were going to have problems handling the senior situation. He spoke in support of not precluding options. Mr. Giardina advised that the Council would need to regularly review the fees and priorities and said that fee changes could be made based on the consistent updates. He said that they could change them as rapidly as they wanted as long as they were in accordance with State Statutes, which takes 120 days. Councilman Kehe stated that the process was time consuming and said that growth would be paid for by current citizens rather than growth paying for growth because of the delays. He reiterated that the 120-day process must be followed and added that it should not take 18 months to effect change, it should be completed within a 3- month period plus the 120 days for adoption. Councilman Kehe questioned whether the inflationary increase in construction costs should be considered and they should establish a two-year study (one year inflationary and 1 year study). Councilman Archambault commented on the fact that a Strategic Plan was adopted and said that the Council was charged with following along with what the citizens of the Town wanted. He said that there was always a "trade-off' and in this case the Town needed the fees but the citizens did not want the capital improvement projects so the "trade-off' would be that things compound as they went down the road. The safeguard was that they got to review the fees every five years so they could adjust them and if the presence of mind at that time was to include new projects, the citizens would agree to pay for them. He said that citizens had to know that if they did not want the projects now but did want them down the road, they were going to have to pay more to get „ow) them. Councilman Kavanagh said that he would recommend against a 2-year review and said that the Council's policy had been to not bind future Councils. He added that they could not legally bind a future Council to any action. He noted that they recently created a commission that would champion the Strategic Plan and said that they would let the Council know if a review was necessary. Mr. Pickering noted that development fees were not the only funding source and a lot of the other capital items residents would be asked to pay for themselves through a sales tax,property tax, or other fee. Councilman Kehe clarified that he did believe that they should adhere to the Strategic Plan but reiterated that at this time the residents indicated that they were not willing to pay for certain projects but said that as needs increased, as they probably would, in order to meet the demands they might have to go back to the community and said they might need to issue a bond for a particular project. He stated that development fees were not the only way to raise money but it was a good way and would help the Town deal with future capital,projects that might appear on the horizon because of growth. He added that he wanted to make sure that they would be in a position to meet the needs. Vice Mayor Schlum expressed the opinion that the Council was mandated to review the fees in five years. He said that it would be a significant assumption to add more CIP dollars in the interim before the next time they addressed the current five-year plan. Mayor Nichols thanked everyone for their input and said that the next public hearing will take place on January 5th, 2006. Z:\Council Packets\2006\R1-5-06\Minutes 12-13-05 Special and Executive Session.doc Page 4 of 5 • AGENDA ITEM#4-ADJOURNMENT Councilman McMahan MOVED that the Council adjourn and Councilman Archambault SECONDED the motion, which CARRIED UNANIMOUSLY(6-0). The meeting adjourned at 5:50 p.m. TOWN OF F ILLS By ally chols,Mayor ATTEST AND PREPAREDE� BY: Bevelyn J., eiW r,Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Special Session and Public Hearing held by the Town Council of Fountain Hills on the 13th day of December 2005. I further certify that the meeting was duly called and that a quorum was present. DATED this 5th day of January 2006. Bevelyn er, Town Clerk L Z:\Council Packets\2006\R1-5-06\Minutes 12-13-05 Special and Executive Session.doc Page 5 of 5 J J