HomeMy WebLinkAbout2006.0808.TCWSM.MinutesTOWN OF FOUNTAIN HILLS
MINUTES OF THE WORK STUDY SESSION
AUGUST 8, 2006
AGENDA ITEM #1— CALL TO ORDER AND ROLL CALL
Mayor Nichols called the meeting to order at 5:02 p.m.
Present for roll call were the following members of the Fountain Hills Town Council: Councilmember
Archambault, Mayor Nichols, Vice Mayor Kehe, Councilmember Dickey and Councilmember McMahan.
(Councilmember Schlum and Councilmember Leger participated in the meeting through the use of
teleconferencing equipment.) Town Manager Tim Pickering, Recording Secretary Kathleen Butler, Town
Attorney Andrew McGuire.
AGENDA ITEM #2 — DISCUSSION OF POSSIBLE FUNDING OPTIONS REGARDING LOCAL NOT -
FOR -PROFIT COMMUNITY SERVICE ORGANIZATIONS.
Mayor Nichols advised that this agenda item was the result of a request from the Council to staff to look at how
the Town approaches community benefits, especially in the future.
Town Manager Tim Pickering addressed the Council relative to this agenda item and stated that during the
budget presentations, the Council asked staff to discuss the topic of community benefits at a Work Study session
in August. He noted that staff had researched this issue and presented documentation to Council relative to the
processes in place in other municipalities. He noted that staff had provided three different options to the
Council for consideration relative to managing non-profit funding: (1) Keep the process the same. The current
process was fairly simple. The Town receives a letter, places money in the budget and amounts were approved
and provided to the various entities in lump sum payments. Staff had provided a list of past funding allocations;
(2) Recommendation by Committee. A Committee, made up of certain individuals, would review requests from
non-profit agencies and depending upon the criteria set up by the Council, select those organizations that they
believe were worthy of commendation to the Council. The monetary amounts could be based on a flat
percentage of the budget (this was what many corporations do) and that would tie the Committee into making
decisions among the different groups. Staff had provided in-depth criteria as far as procedures and schedules to
be followed (would operate like the previous Community Benefits Committee); (3) Contracts for services. This
option focuses on "what" versus "who." The other two options focus on "who' the Town gives money to but
this option focuses on "what" services the Council desires. The Council would decide what services they want
broken down into the different categories (tourism, arts and culture, youth and social services). The level of
funding would be determined by the market (what the services would cost) because the process would be the
same as that used for other services — i.e. staff would write a proposal describing the services desired, the
proposal would be advertised, submittals would be reviewed and a contract would be written based on what the
Council had indicated they want.)
Mr. Pickering stated that any system would have both advantages and disadvantages, it was not a simple
discussion — there were controls and accountability issues that had to be addressed. Mr. Pickering first
discussed accountability, what the Town received for its money. If the process remained the same, there would
be very low accountability. He acknowledged that the Town trusted those who received the money but was not
assured that the Town was getting the proposed services that had been suggested. A Committee would also
provide low accountability because there was no follow-up to determine what had and had not been provided.
Mr. Pickering stated that contracts provided the highest level of accountability.
Mr. Pickering went on to discuss the political factor as to how active and how controversial the issue could be.
He said that the current situation was a middle ground and had not been too political over the years but that was
slowly changing. He noted that with the Committee process the ramifications could be very high. Mr.
ZACouncil Packets\2006\R9-7-06\8-8-06 Work Study Minutes.doc Page 1 of 7
Pickering expressed concerns regarding the number of requests that the Committee would receive and the
criteria that would be set. He added that more and more applications would most likely be received and he
questioned how the Council would say "no" to very worthy causes. It would put them in a very difficult
position to deny the applicants or limit their funding amounts.
Mr. Pickering addressed the issue of contracts and said that if the Council decided up front what services they
want to provide, they would simply be outsourcing for the services instead of doing them in-house. Politically,
once the Council decided what services they wanted to provide, anyone could submit proposals and that would
eliminates the problem of receiving enormous amounts of new requests since the services were clearly
identified.
Mr. Pickering further stated that the current system was very simple as previously discussed. A Committee
could be complicated. Volunteers would have to meet for long periods of time and participate in an extended
process (applications, schedule of dates, who serves on the Committee, the criteria to determine funding). He
added that it would not be impossible but it would be complicated.
Mr. Pickering informed the Council that the contract process would be a little more difficult than what the Town
was currently doing, and legal services would be involved to review the contracts. The Council would also have
to decide what the services were and if the services were being met or not. He commented that became more
difficult but not impossible.
Mr. Pickering stated that as far as the fairness issue he believed the current system had the lowest rating because
it was habitual rather than open to other people in the Town. A Committee would be very fair in the sense that
everyone would have an opportunity to submit. A contract requesting services would be fair because anyone in
Town could apply if they feel they could provide the service.
Mr. Pickering discussed elasticity of cost. He emphasized the importance of this factor and said that over time
they could wind up spending too much money on programs that they had not deemed that important but they
had gotten themselves "into a box." The current system was a known but he pointed out it was rising every
year. The Committee system was unknown but the Council could put a "cap" on it especially if they get "in a
box" and received too many requests and they did not want to turn anyone down. He stated that at that point the
tendency was to just "increase the basket." With the contract option, the Council would hold to the amount
because they would look and see if what was submitted was fair (which would be determined by the market).
With a contract and specified services, contracts could be done for more than one year (3 or 5 years) and that
benefits the Town in several ways: they would know what dollars were going to be spent over the next few
years for the services and it would benefit the agencies providing the services because they could "ramp up"
their staffing levels to provide the needed services.
Mr. Pickering indicated his willingness to respond to questions from the Council and stated the opinion that the
discussion should be about "what services" the Council wanted to provide rather than "who' they want to fund.
Councilmember Dickey expressed concerns regarding contracts and the possibility of identifying certain
services that appeared to be predetermined simply because of their nature. In response to a question from
Councilmember Dickey, Mr. Pickering stated that all Town contracts typically had notice clauses that allowed
for cancellations with time -specific dates for both parties. Town Attorney Andrew McGuire added that
contracts were typically for a term of one year or less as a general rule or would contain a clause that states they
were subject to an annual appropriation.
Councilmember Dickey discussed the contract option and asked whether it would be the same as an RFP
(Request for Proposal) where they would have to go with the lowest bidder. Mr. Pickering replied that RFPs
were awarded typically to the most responsible bidder and the most responsible bidder was determined on
several points (history of firm, experience of people, etc.). Often, when proposals were received and reviewed,
bids that were way out of line were rejected because they were determined not to be responsible bidders.
ZACouncil Packets\2006\R9-7-06\8-8-06 Work Study Minutes.doc Page 2 of 7
Pricing was one factor used in awarding a contract but in that discussion, staff brought it back to the Council
with a recommendation from which the Council would ultimately make their decision.
Councilmember Dickey questioned how they could prevent the services they select from appearing political.
She expressed that there was low accountability for a Committee but that required follow-up reports could
remedy this problem.
Mayor Nichols advised that he had served as a member of the Community Benefits Committee for three years
and said that there was low accountability. He discussed difficulties associated with having four or five people
in a room trying to determine who was worthy because everyone who submits a request for money had a cause
and all of them were needy. He stated that what always bothered him was the fact that they, as a Committee,
were giving away residents' money and he questioned whether the residents should be able to decide where they
wanted their money to go and what types of services they wanted to fund. He spoke in favor of the contract
option because it removed charitable contributions and community benefits. The Council would be saying that
the Town would like a particular service and then they would contract for that service rather than simply giving
money. He added that this would allow added flexibility in a fair and impartial manner. He stated that he had
received positive input regarding this option from residents.
Discussion ensued relative to the fact that the "best bid" rather than the "lowest bid" was key and the Council
could make that determination; the fact that legally providers outside of the Town must be allowed to submit
proposals; the importance of selecting the "best provider;" the fact that the Council would identify desired
services during the budget process; Councilmember Dickey's opinion that by selecting what they want, they
were in fact deciding how to spend the monies and this was similar in nature to having a Committee oversee the
process; funding new services or enriching existing ones and the fact that selecting a service to be provided
differs from community benefits and represents a change in philosophy.
Councilmember Archambault said that they need to provide a quality of life for the Town's residents and look at
the different organizations to determine whether they enhance the quality of life for the residents of Fountain
Hills. He said that contracting for services would play a very good role as far as this goes. He added that one of
his major concerns was that when he took office four years ago he believed that $40,000 to $50,000 was being
divided up between different organizations and it had grown to $325,000, which did not include Senior Services.
Mayor Nichols said that the $50,000 figure was incorrect because it did not include the theater, the Boys & Girls
Club and tourism, which were separate line items in the budget. Councilmember Archambault stated that his
concern was that the amount continued to increase and questioned whether they allow the amount to "float" and
remain as was if they go with contracting for services or would the Council set a dollar amount. He agreed with
Mayor Nichols and said that the citizens would be more supportive if the Council was contracting for services
because then the Council could demonstrate what they were getting for the taxpayers' money. He stressed the
importance of talking about a dollar amount or a percentage of the operating budget, not the total budget (for
quality of life issues). He stated that they always had the opportunity to fund an event in the Town and open
that up to non -profits to participate in and reap the benefits. He added that Mr. Pickering had talked about the
"Iron Man Event" and opening that up to non-profit groups and letting those non -profits who want to participate
reap the benefits. The drawback to that was staffing and it might require the hiring of another staff member,
which might not be the way to go, but it was another option.
Vice Mayor Kehe stated the opinion that some of the services such as tourism were a direct contract service, like
a marketing or advertising agency where you expect a tangible economic benefit that could be outsourced under
the contract system. But there were other groups that had intangible benefits that they did not expect a direct
economic return from (community theater, Boys & Girls Club). He spoke in support of a citizens' Committee.
Councilmember Schlum referred to Page 3 of staff's report dealing with what the Town had done over the past
w few years and noted that the amounts had not changed much and the organizations they had funded seem to line
up for services that they might consider contracted services or an investment of sorts. The percentages to the
ZACouncil Packets\2006\R9-7-06\8-8-06 Work Study Minutes.doc Page 3 of 7
actual general budget had fluctuated from 2.1 % to 2.9% and 2.1 % was budgeted last year as far as the percent of
the general fund going towards the organizations. He stated the opinion that it would be good to decide on a
policy to handle this but said that it was also pretty clear that they had been consistent in that they had given
based on need. He advised that he was comfortable with the level of investment the Town had made and spoke
in support of accountability. He added that the contract option would give him a greater level of comfort in that
they would have the accountability. He said that the contract route would be fair and non -political would get
them to the same place with some parameters that were better understood. He stated that perhaps they could
extend beyond one year so that organizations could benefit and not enter into an unknown zone every year. He
said that he would rather base funding on the Town's need for services rather than the social approach to what
churches or the Rotary's do although the requests that had come in were commendable. He said they had to be
responsible for the dollars that they were asked to monitor and make sure that they were being used to their
fullest potential to benefit the entire Town. He thanked staff for their work on this issue.
Councilmember Leger asked whether if they go the contract route they should limit it to local vendors and Mr.
McGuire reiterated that according to law they could not restrict this area.
Councilmember Leger agreed that it was important to narrow the scope to receive maximum benefit on a need
basis and said that the contract basis would allow them to do that. He added that it would also be good to create
a "cost scope" when they look at the services they desire. He thanked staff for the options and research and
stated that he likes a "hybrid" option (Option 2 and Option 3) and said when it talks about Review of Proposals,
staff's report mentions "Town staff." He asked whether submittals could be reviewed by a Committee
combined of staff members and citizens. He clarified that Council would still determine the scope of the needs
but as they start to review the RFP's, a Committee could be put together (similar to Option 2) to help in the
evaluation process.
Mr. Pickering said that Councilmember Leger's suggestion (a review of the proposals would be done by a
Committee made up of staff and citizens) and stated that this could be accomplished.
Councilmember Leger added that he also liked the idea of having the people who were submitting come before
the Council to make a presentation to justify their needs and outline their qualifications. He added that he would
also like citizens to be involved in some of the decision making process.
Mr. Pickering indicated that he understood what the direction from the Council was so far and that it could be
accomplished. He said that the change could be made, the Committee could review the proposals and when it
came time for the awarding of the contract, the vendors could make presentations to the Council.
Additional discussion ensued relative to the importance of involving the citizens and having vendor
presentations; the fact that it would be more difficult for recipients selected by a Committee to be held
accountable because there would not be written contracts in place outlining what would happen if services were
not provided as desired; the fact that Committee selected organizations could be subject to some type of
agreement but that would represent a contract; the fact that with contract option, the Council would not be
lobbied at the point of decision at the same time because before the RFPs were even issued, the Council would
decide what services they wanted; the importance of helping community organizations that helped the
community and concerns that pre -established categories might give the appearance of "already made decisions"
Vice Mayor Kehe said he would like to keep it simple and expressed that the approved process contain the
following elements: (1) knowledge of the organization (a thorough description); (2) when someone asked for
money the Council had to ask what it was going to be specifically used for and how the community would be
served; (3) there had to be some accountability (have they done with the funds what they promised they would
do) and (4) there had to be a past year financial report and a budget for the current fiscal year.
Councilmember Archambault clarified that they were talking about next year's budget and said that the dollar
amounts before them now had already been approved in the current budget. He asked whether they were going
ZACouncil Packets\2006\R9-7-06\8-8-06 Work Study Minutes.doc Page 4 of 7
to determine this evening how they were going to distribute those funds or were they leaving it the way the
distribution currently exists. Mr. Pickering responded that the Council had approved three out of the four
requests in the budget and the letters were coming to the Council to authorize payment of the dollar amounts.
He added that he was talking about the upcoming fiscal year (07-08). He said that he had not addressed the
$50,000 because he was trying to set up the process first of how they attack the problem in the future and stated
the opinion that it would be shortsighted to concentrate on the $50,000 and ignore the rest.
Councilmember Archambault said that contracts would address a lot of the concerns that the Council had. They
would be able to justify to the citizens how their money was being spent and there would be a high level of
accountability and it would be less political as well. He spoke in support of determining the services that the
Town needed and said that during the next Strategic Planning process they should ask the citizens what services
they wanted.
Discussion ensued relative to the fact that outside vendors could submit lower bids than local organizations; the
fact that it was up to the Council to decide the best providers who would enhance the Town's overall quality of
life (most responsible bidder); the fact that RFPs cannot contain language that restricts outside bidders; the fact
that a local preference would be "by default" — someone else could not provide the needed service; the fact that
it was possible that an outside vendor could provide the most responsible bid and that the Council would then
weigh the quality of life to be provided to the citizens and the fact that it would be up to the Council to define
the services needed and the vendors would then have to define the amounts needed to accomplish the goals.
Councilmember Dickey stated that she was uncomfortable with the contract option and would prefer the
Committee option. She added that if specific criteria to be followed were developed, accountability and results
would be achieved. Mayor Nichols said that a Committee was not the "end all" and when he served, there were
many issues.
Councilmember McMahan said that with a contract, the pressure would be on the Council rather than an
appointed Committee and spoke in favor of a Committee for the non-profit organizations. He stated that they
could allocate funds each year; set up a system of criteria and cost -benefit ratios; set up an application
procedure; the applicants would then submit applications to the Committee for discussion, evaluation and a
decision; and then the Committee would prepare their recommendations and send them on to the Council for
consideration. He added that the Committee could be made up of three (3) members of the public and two (2)
members of the Council.
Councilmember Archambault said that he supported the contract option in that instead of working with dollar
amounts that could grow as they go down the road, they identify the services they want. If the Boys & Girls
Club provided a list of the services, the Council could identify, select and specific which ones they wanted.
Councilmember Dickey suggested that they keep the dollar amount at 2% and Councilmember Archambault
responded that it would be dangerous to allocate a specific percentage of the budget.
Vice Mayor Kehe expressed concern relative to the contract option and said that whatever way they go, he
believed that the elements he previously discussed should be considered.
Mayor Nichols commented that the Council appeared to be split on this issue.
Councilmember Leger said that there was no perfect solution but he liked the contract option because it allowed
the Council to be flexible while creating parameters. He said that in defining the scope of services in many
cases they wanted people who were familiar with their community (vendors that had experience providing those
types of services). He said that his earlier suggestion was not a split between Option 2 and Option 3; he was just
taking a few considerations from Option 2 and integrating them into Option 3. He expressed the opinion that it
was important to get citizens involved at some level in the decision making process and it was also important to
ZACouncil Packets\2006\R9-7-06\8-8-06 Work Study Minutes.doc Page 5 of 7
get the vendors involved by bringing them before the Council. He added that he was leaning more towards the
contract option with a few variations on the theme as presented.
In response to a question from Councilmember Dickey relative to staff and legal ramifications associated with
proceeding with the contract process, Mr. Pickering stated that he did not have that information at this time. He
added that the writing of proposals was not that difficult and it was more about meeting with the Town's current
vendors to lay out a matrix that they could put in a proposal, not eliminating anyone from the ability to submit
but attempting to gain a better understanding of what their services actually were. He stated that that would take
some time. He said that the Town Attorney had a standard contract and would handle that aspect of it.
Mayor Nichols asked whether Mr. Pickering needed more direction. Mr. Pickering responded that it was a very
difficult decision to make and because of that he had presented different options in this situation although
typically he was very clear in his recommendations. He said that he had direction that they were going to start to
go the contract route and he was to write a draft covering the services that, after meeting with the potential
vendors, would list the types of services the Council wanted. He said that he would bring that list back to the
Council before going out for a RFP. He added that the Council then could decide upon the services they wanted
before the proposal went out since some would be different than those provided in the past. He acknowledged
that he had not addressed the $50,000 and what would be done with that and said that could be accomplished at
a later date or even now if the Council desired to do so.
Mayor Nichols asked whether that could be accomplished with a Committee and Mr. Pickering stated that it
could be done however the Council wished.
Vice Mayor Kehe asked that before Mr. Pickering went too far along on this that he bring something before the
Council because there were some questions yet to be answered and he would like to have more information
(examples, approaches) so they could make an informed decision.
Mr. Pickering stated that the next step would be to bring the Council a list of services that would be included in
an RFP (not contracting or going out to bid).
The Vice Mayor noted that members of the Council might change their positions and Mr. Pickering agreed that
the matter was not "set in stone."
Councilmember Archambault commented that he thought when this issue was moved to the Work Study Session
that the Council was going to address all of the budget items and the $50,000. He added that if the Council were
willing, he would like to address the matter of the $50,000 at this meeting.
Mayor Nichols pointed out that that issue was not agendized. Mr. McGuire clarified that the agenda was broad
enough to allow this to occur.
Mayor Nichols said that he did not have sufficient information upon which to base his decisions at this point in
time.
Councilmember Dickey stated the opinion that it would be appropriate for them to decide how they were going
to decide. She added that there were people who had no idea that the monies would be allocated this evening.
Mayor Nichols concurred. It was decided that this issue would be discussed at a later time.
Mr. Pickering discussed the Council's options. He stated that they could take the $50,000, set up a Committee
that would be "sunset", put out an ad asking for funding requests to be submitted, have the Committee review
those requests submitted, and they could decide who gets what. He added that the Council could award part of
the $50,000 tonight to the one applicant (Extended Hands Food Bank) and the second applicant that just came
on board, Golden Eagle. The Council could decide not to award any money and hold the money until next year
when the service list was put together.
ZACouncil Packets\2006\R9-7-06\8-8-06 Work Study Minutes.doc Page 6 of 7
Mayor Nichols advised that he would like to provide the public notice of the fact that $50,000 was available in a
fund and people could apply for it by a certain date. He added that a Committee would be formed to go over
that and additional requests might be received. He said that in this way, no one could say that they did not have
a "shot at the money." He stated that if they did not publicize that the funds were available and the Council just
went with the two agencies that had submitted requests, people could say that the process was unfair.
Vice Mayor Kehe commented that he would support the Mayor's position and said that they should not talk
about putting the monies into a fund for next year because it might be unfair to those who were not aware of the
situation. He added that the middle ground as described by the Mayor was the correct way to proceed.
It was the consensus of the Council that they proceed as outlined by the Mayor.
AGENDA ITEM #3 — ADJOURNMENT
Councilmember Kehe MOVED that the Council adjourn and Councilmember Dickey SECONDED the motion,
which CARRIED UNANIMOUSLY (7-0). The meeting adjourned at 6:33 p.m.
TOWN OF FOUNT.
N
ATTEST AND
P RED BY:
�;Z
Bevelyn J. enV' , Town Clerk
CERTIFICATION
I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Work Study Session
on the 8th day of August 2006. I further certify that the meeting was duly called and that a quorum was present.
DATED this 7"' day of September 2006.
ZACouncil Packets\2006\R9-7-06\8-8-06 Work Study Minutes.doc Page 7 of 7