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HomeMy WebLinkAbout2008.0415.TCSEM.Minutes TOWN OF FOUNTAIN HILLS MINUTES OF THE SPECIAL SESSION AND EXECUTIVE SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL April 15,2008 CALL TO ORDER Mayor Nichols called the meeting to order at 5:00 p.m. ROLL CALL —Present for roll call were the following members of the Fountain Hills Town Council: Mayor Nichols, Councilmember Kehe, Councilmember Leger, Councilmember McMahan, Councilmember Schlum, Councilmember Archambault and Vice Mayor Dickey. Town Attorney Andrew McGuire, Interim Town Manager Kate Zanon,Town Clerk Bev Bender and Finance Director Julie Ghetti were also present. AGENDA ITEM #1 — PUBLIC HEARING TO RECEIVE PUBLIC COMMENT REGARDING THE TOWN COUNCIL'S INTENT TO ASSESS NEW AND/OR INCREASED TOWN DEVELOPMENT FEES. THE PROPOSAL IS TO AMEND THE EXISTING GENERAL GOVERNMENT, LAW ENFORCEMENT, OPEN SPACE, PARKS AND RECREATION, FIRE, LIBRARY AND STREETS DEVELOPMENT FEES TO INCLUDE A STATUTORILY PERMITTED INDEX TO ANNUALLY ADJUST SUCH FEES FOR INFLATION. Mayor Nichols stated that tonight the Council is holding a Special Session to conduct a Public Hearing to talk about a possible change in policy regarding the Town's development fees. Mayor Nichols declared the public hearing open at 5:00 p.m. Finance Director Julie Ghetti addressed the Council and stated that at the beginning of this year, the Council requested that staff review the existing development fee schedule to determine whether an inflation factor could be included as part of the Town's fee schedule. In 2007, the Legislature made numerous changes to the adoption of development fees, including an automatic adjustment for inflation but with the following condition: Fees may be automatically adjusted for inflation without a public hearing if the adjustment was based on a nationally recognized index applicable to the cost of the public service and identified in the development fee report. The Town had to provide, however, public notice of those adjustments at least 30 days in advance of their effective date. The Town also had to adopt or amend an Infrastructure Improvement Plan (IIP) before modifying any development fees. The IIP may be the municipality's or the Town's Capital Improvement Plan (CIP); however, any changes to the adopted CIP would require a full development fee study. Ms. Ghetti advised that Red Oak Consulting prepared the 2005 development fees and was hired by the Town to calculate the development fee inflation factor. Red Oak was not charged with evaluating or modifying the CIP or the assumptions underlying the current development fees. An updated CIP would be proposed with the 2008- 09 budget as well as a proposal to conduct a new study next year. The Notice of Intention and Public Hearing was published in the Fountain Hills Times and on the Town's website on February 20, 27 and March 5, 2008 and as of this date staff was not aware of any comments or inquires regarding the proposed fees. The IIP, previously the Town's CIP, and the proposed redevelopment fees report are available on the Town's website and on file with the Town Clerk. Ms. Ghetti reported that the inflation adjustment being proposed was 7% and was based on the Engineering News Record 20 City Construction Cost Index, which was a nationally recognized index and reflected the rate of inflation from 2006 to 2008. Looking at the proposed fees, there is a 7% increase for each of the fees and again, that reflected the inflation index from 2006 to 2008. The development fees assessed shall not be effective until 75 days after formal adoption by the Town Council. The proposed schedule was to adopt the fees on Thursday, May 15, 2008 with an effective date of August 1,2008. z:\council packets\2008\r5-1-08\04-15-08 minutes.doc Page 1 of 4 Ms. Ghetti stated that in comparing Fountain Hills to the surrounding communities, when the fees were adopted in 2006, the Town was the third highest next to Gilbert and Paradise Valley. She added that with these adjusted fees and the other cities having made changes to their fees, the Town of Fountain Hills would now be the seventh highest with the new inflation factor. Ms. Ghetti stated that she and the consultant from Red Oak Consultant,Pat Walker, would be willing to respond to questions from the Council. Town Clerk Bev Bender advised that there were no citizens wishing to speak on this agenda item. In response to a question from Councilmember Leger, Ms. Walker explained that staff took the E&R Index and then looked at the point value from 2006 all the way to 2008. They did not break out the percentages between the two years; she did not believe it was a flat 3.5% but she could go back and calculate that. She added that they take the base point like they did the CPI and do the calculations in aggregates. Councilmember Leger requested that Ms.Walker forward that information to Ms. Ghetti for future reference. Ms. Ghetti confirmed that ten communities were surveyed. In response to questions from Councilmember Schlum, Ms. Walker advised that other communities had not done this type of index on the fees overall and adopted them through the IIP, but there have been other communities that had added them to their ordinance so that they updated their study and now they automatically had this fee increase a year later and now all they had to do was notice for 30 days and they did not have to go back to Council to take action and it was indexed out. She added that she had not seen any communities that had done it this way at this point but they were doing it for the next round because they updated their study. She noted that the fees and timing of such are assessed depending upon each community but typically it was on an annual or two-year basis depending upon the construction cost increases that the communities experience. She added that it could be two to three years between updates in some cases but explained that typically an index was done one year and the update occurred the next year. She confirmed that the 7% would cover a two-year period and it would update all of the fees for that two-year period. Vice Mayor Dickey asked whether Senate Bill 1406, which is being proposed in the Legislature, would have any implications on what they are doing this evening. Town Attorney Andrew McGuire stated that there are a number of implications but none that would impact the action taking place tonight. He provided a brief explanation of Senate Bill 1406 (by the Homebuilder's Association — a comprehensive development fee overhaul). Mr. McGuire confirmed that the Bill has not yet been passed. Councilmember Kehe referred to Page 18 of the report (bar graph) and Ms. Ghetti advised that the information was from December of 2005. She added that based on the old data the Town was the third highest and the new data with the updated information that other cities and towns provided showed that Fountain Hills would be the seventh highest. The current ranking was based on new data. Councilmember Kehe referred to a couple of articles that he had saved over a period of time, one dated June 6, 2007 that stated, "higher fees to bump costs for Chandler homes by $6,000" and a July 2007 article that stated, "fees to build a house in Gilbert will increase" and said that based on those articles, the proposed fees for the Town were quite modest compared with surrounding cities and towns. He said it was important for new development to pay for itself rather than by existing residents. He added that an increase of$350 over two years was very reasonable particularly when you consider that new homes in the Ellman development were predicted to cost between $675,000 and $1.5 million. He also noted that all of the homes in Eagles Nest and proposed homes in Adero Canyon are going to cost in the millions. He stated the opinion that there could not be too great an objection from the residents on a$350 increase. He said it was simply a"pass through" by the builder to the purchaser and in his opinion will have no effect on the economy. Councilmember Kehe stated that he supported the proposal and added that they were probably way below where they should be but at least this was a move in the right direction. z:\council packets\2008\r5-1-08\04-15-08 minutes.doc Page 2 of 4 Discussion ensued relative to providing the Council with updated Fountain Hills commercial fee comparisons. In response to a question from Councilmembers Archambault and Leger relative to moving forward with the indexing, Ms. Ghetti stated that basically every year going forward there would be an automatic index increase in the development fees. Ms. Ghetti noted that the Town would have to give public notice (to raise the fees for the inflation indexing) 30 days ahead, but there would not be any Council action provided that another study had not been conducted. She also noted that the development fees were usually based on Capital Improvement Projects, so if the Town did not change the projects related to the growth, then new studies would not be required. She added that typically capital projects change and that would then require new studies. Councilmember Leger stated that if the capital improvement plans were pretty much set then the action would be automatic and move forward with the incorporation of public hearings and Ms. Ghetti confirmed this statement. Discussion ensued relative to index monitoring that occurs. Mayor Nichols commented on the fact that when the index goes down the fees would automatically go down and Ms. Walker stated that she has not seen the index go down but if it did, the Mayor is correct because they are tied to the index,regardless of the way it moves. Councilmember Kehe said that if they find they have gotten "way out of whack" in comparison to other communities using the index they always have an opportunity to conduct another study and Ms. Ghetti confirmed this statement. Mayor Nichols stated that this issue will be placed on the May 15, 2008 agenda for adoption. cow The Mayor thanked staff and Ms.Walker for the presentation and declared the public hearing closed. AGENDA ITEM#2—ADJOURNMENT OF THE SPECIAL SESSION Councilmember Leger MOVED to adjourn the Special Session and Councilmember Schlum SECONDED the motion, which CARRIED UNANIMOUSLY(7-0). The Special Session adjourned at 5:31 p.m. ROLL CALL AND VOTE TO GO INTO EXECUTIVE SESSION: (i) PURSUANT TO A.R.S. §38- 431.03(A)(1), FOR DISCUSSION OR EMPLOYMENT, ASSIGNMENT, APPOINTMENT, PROMOTION, DEMOTION, DISMISSAL, SALARIES, DISCIPLINING OR RESIGNATION OF A PUBLIC OFFICER, APPOINTEE OR EMPLOYEE MAY DEMAND THAT THE DISCUSSION OR CONSIDERATION OCCUR 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, (i) TO INTERVIEW TWO APPLICANTS FOR THE PURPOSE OF FILLING ONE VACANCY ON THE SENIOR SERVICES ADVISORY COMMISSION AND (ii) FOR REVIEWING ONE APPLICATION SUBMITTED FOR CONSIDERATION OF INTERVIEWING THE APPLICANT TO FILL A VACANCY ON THE STRATEGIC PLANNING ADVISORY COMMISSION) AND PURSUANT TO §38-431(A)(4), FOR DISCUSSION OR CONSULTATION WITH THE ATTORNEYS OF THE PUBLIC BODY IN ORDER TO CONSIDER ITS POSITION AND INSTRUCT ITS ATTORNEYS REGARDING THE PUBLIC BODY'S POSITION REGARDING CONTRACTS THAT ARE THE SUBJECT OF NEGOTIATIONS, IN PENDING OR CONTEMPLATED LITIGATION OR IN SETTLEMENT DISCUSSIONS CONDUCTED IN ORDER TO AVOID OR RESOLVE LITIGATION (SPECIFICALLY, A PROPOSED Le TOWN MANAGER CONTRACT). z:\council packets\2008\r5-1-08\04-15-08 minutes.doc Page 3 of 4 Councilmember Leger MOVED to go into executive session at 5:40 p.m. and Councilmember McMahan SECONDED the motion,which CARRIED UNANIMOUSLY(7-0). AGENDA ITEM#4—ADJOURNMENT OF THE EXECUTIVE SESSION Councilmember Archambault MOVED to adjourn the Executive Session at 8:25 p.m. and Councilmember McMahan SECONDED the motion, which CARRIED UNANIMOUSLY(7-0). TOWN OF FOUNT IN HILLS By Mayor y s ATTEST AND PREPARED BY: 4142/ Bevelyn J e er,Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Special Session held by the Town Council of Fountain Hills on the 15th day of April 2008. I further certify that the meeting was duly called and that a quorum was present. Nod DATED this 1st day of May 2008. Bevelyn J. end ,Town Clerk ***1) z:\council packets\2008\r5-1-08\04-15-08 minutes.doc Page 4 of 4