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HomeMy WebLinkAbout2008.0429.TCSWSM.Minutes 4 • TOWN OF FOUNTAIN HILLS MINUTES OF THE SPECIAL SESSION AND WORK STUDY SESSION FOUNTAIN HILLS TOWN COUNCIL April 29,2008 AGENDA ITEM#1—CALL TO ORDER AND ROLL CALL Mayor Nichols called the Special Session to order at 6:02 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 and Town Clerk Bev Bender were also present. * Councilmember Schlum participated in the Special Session through the use of teleconferencing equipment. AGENDA ITEM #2 — CONSIDERATION OF APPOINTING A CITIZEN TO FILL A VACANCY ON THE STRATEGIC PLANNING ADVISORY COMMISSION(SPAC). Mayor Nichols MOVED to appoint Audra Koester Thomas to fill a vacancy on the Strategic Planning Advisory Commission (SPAC) and Vice Mayor Dickey SECONDED the motion, which CARRIED UNANIMOUSLY (7-0). AGENDA ITEM #3 — ADJOURN THE SPECIAL SESSION AND CONVENE THE WORK STUDY SESSION. Councilmember Archambault MOVED to adjourn the Special Session and convene the Work Study Session and Councilmember McMahan SECONDED the motion, which CARRIED UNANIMOUSLY (7-0). The Special Session adjourned at 6:04 p.m. AGENDA ITEM#4—CALL TO ORDER. Mayor Nichols called the Work Study Session to order at 6:04 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 and Town Clerk Bev Bender were also present. * Councilmember Schlum participated in the Work-Study Session through the use of teleconferencing equipment. AGENDA ITEM #5 — PRESENTATION AND DISCUSSION OF THE PROPOSED TOWN OF FOUNTAIN HILLS' FISCAL YEAR BUDGET FOR 2008-2009, INCLUDING THE EAGLE MOUNTAIN COMMUNITY FACILITIES DISTRICT, MUNICIPAL PROPERTY CORPORATION AND COTTONWOOD IMPROVEMENT AND MAINTENANCE DISTRICT. Mayor Nichols advised that the purpose of the Work Study Session this evening was for the Council to review, for the first time, the Town's budget for Fiscal Year 2008-09, including the Eagle Mountain Community Facilities District,Municipal Property Corporation and Cottonwood Improvement and Maintenance District. He noted that the session would be limited to two hours. He explained that Finance Director Julie Ghetti and Interim Town Manager Kate Zanon would provide an overview of the FY2008-09 operating budget and Accounting Supervisor Mary Martin would provide an explanation of the 2008-09 capital budget. The Mayor z:\council packets\2008\r5-15-08\04-29-08 minutes.doc Page 1 of 7 advised that this was the first time that the Council has really spent any time reviewing the 2008-09 budget; however, the Council planned later on to meet in groups of two or three with Kate Zanon to address detailed, specific questions about the budget. He said that in the past this process had worked very well so the Council wanted to be sure they received all input before the budget went up for final approval in June. He emphasized that there would be time during the Council's individual sessions to obtain answers to questions as tonight was simply an overview to familiarize everyone with the budget's "road map." Interim Town Manager Kate Zanon stated that a meeting would be scheduled between now and May 15th to answer Council's questions and staff would also schedule tentative meetings to be held between May 15th and June 5th in case more questions arise. She thanked Ms. Ghetti and Ms. Martin for their hard work. Mayor Nichols also commended staff for their work on the budget and the actual expenses for the last year. He noted that all of the departments had come in either at or below budget and said that this was an accomplishment that should be acknowledged. Ms. Zanon commented that budgeting was an on-going process and said that work began in October 2007. She added that when they get to June, when the budget was to be approved, it was still a constant process of looking at where revenues were compared to expenditures and doing checks and balances in order to keep the budget in line. Ms. Zanon referred to a slide within the PowerPoint presentation that depicted the Town's Mission Statement and explained that the budget process began formally with the Council's goal-setting Retreat. The Staff Retreat developed an action plan to accomplish the Council's goals. Budget requests were submitted to the Town Manager and prioritized according to available resources. Expenditures were balanced with revenues. A draft budget was presented to the Town Council as they were doing at this time and then a public hearing was held in June before final adoption of the budget. The Mayor noted that this evening the Council would not be entertaining questions from the general public,just from the Council. Questions from citizens would be posed and answered at the public hearing. Ms.Zanon stated that the goals identified by the Council focused on: • Development of the Ellman property • Restructuring the Town's financial policies • Working with local schools • Evaluating a pavement management analysis • Implementing an environmental policy • Improving economic development and business vitality • Expanding the reach of the Town's communications Ms. Zanon reported that General Fund expenditures were down 8.0% from last Fiscal Year; overall revenues were down 7.9% from the previous year, and overall expenditures were down 9.5% from the previous year. She referred to charts that depicted Council goals and budgetary impacts for Fiscal Year 2008-09 and discussed the Government Fund Structure. Finance Director Julie Ghetti addressed the Council stating that current revenues (where the Town currently was in this Fiscal Year) as of March 31, 2008 were$12.8 million. She stated that staff believed that revenues for the Fiscal Year were going to end up as projected. She noted that development fees were a lot less than what was projected. She explained that the fees were generated by building permits, so with the drop in building permits there was also a drop in development fees. She added that grant revenues were also less because staff had budgeted $1.5 million for unanticipated grant revenues (if they did not budget for the money, they could not spend it) and so far the Town had not received any large grants. j z:\council packets\2008\r5-15-08\04-29-08 minutes.doc Page 2 of 7 / Ms. Ghetti also discussed General Fund expenditures and reported that as of March 31, 2008, expenditures totaled $11.1 million. She said that staff had been very cautious to ensure that they did not spend more than 1/410, what was taken in. Discussion ensued relative to all fund revenues and expenditures (major revenue sources); the fact that the General Fund made up 57% of total expenditures; 20.3% of the total would be spent on capital projects; the fact that the General Fund was the only fund not restricted for use; the fact that expenditures for all funds equaled $28.4 million but each fund should stand on its own; 84% of General Fund revenue was from local sales tax and State Shared Revenues; a decrease in State Shared Revenues of 2.6% over the FY 2008 budget; a decrease of 5.9% in local sales tax due to construction and retail sales declined and the fact that a property tax, if approved by the voters, would be in a Restricted Fund. Ms. Ghetti provided a brief overview on shared revenues (a 10-year review, State Shared Sales Tax Revenue) and local revenues (a 10-year review, Vehicle License Tax Revenue) and local revenues (a 10-year review, charges for services/recreation user fees). She noted that car sales were definitely off. Additional discussion ensued relative to transfers between funds and the fact that transfers may appear in the budget more than once but the expenditure was made only once; building permit projections/projects anticipated to come on line next year; General Fund expenditures by category (total General Fund budget was $16,142,395) and by Department/Division and the following budget highlights: • No new staff requests • Council goals incorporated throughout the budget • Wages and benefits increased by only 4% from last fiscal year • Contractual services decreased 25% • Repairs and maintenance decreased 11% • Supplies and services increased 7% • Capital expenditures decreased by 31% • Overall expenditures decreased 8%for all funds Ms. Zanon highlighted the following individual Department Division budgets: • The Town Council • Municipal Court • Administration • Public Information • Public Works • Planning&Zoning(Including Building Safety) • Parks &Recreation • Community Center • Law Enforcement &Fire Ms. Zanon also addressed Special Revenue Funds, which included the Highway User Revenue Fund (HURF) restricted for maintenance and improvement of roads; sales/excise tax restricted to bond repayment for Mountain and Civic Center Phase II bonds and Downtown Development expenditures and Federal, State and local grants that were restricted to a specific purpose and said that miscellaneous grants were unanticipated awards that might not occur. Ms. Zanon noted that the Street Department was proposing a budget in the amount of$2,207,284 and listed the projects that they planned to implement. She also discussed sales/excise tax fund revenues and Economic/Downtown Development. z:\council packets\2008\r5-15-08\04-29-08 minutes.doc Page 3 of 7 Ms. Ghetti referred to a list that outlined the total amount of Town debt at the current time ($22,668,228) and provided information on the annual payment for issued bonds,and other restricted funds. Accounting Supervisor Mary Martin provided the Council with a brief overview of the Capital Improvement Budget and highlighted a list of capital projects (along with descriptions and projected costs). She also provided information on vehicle replacement for both the Fire Department and Senior Services for the upcoming year and explained the program's requirement criteria. Ms. Zanon stated that at the May 15th Council meeting, the tentative budget would be voted on by the Council and this would set the maximum amount at $28.4 million. Expenditures and line items could be exchanged but could not exceed the maximum amount; the tentative budget would be published twice and also made available to the public on the Town's website and through the Clerk's Office as well as the Library. A public hearing would be scheduled to be held on June 5, 2008, and the final budget could be approved at the June 5th meeting. The goal was to pass the budget early enough to allow time to implement the goals. Ms. Zanon advised that in summary: • The General Fund was balanced • Council and strategic goals framed the proposed budget • Funding was being proposed for$5.7 million in capital projects • No increases in staff level were being proposed Ms. Zanon thanked the Mayor, Council, Commissions, Volunteers, Department Directors and all staff for their contributions to the budget process and indicated her willingness to respond to questions. Councilmember Kehe asked what projects were being delayed in the capital projects fund and Ms. Zanon responded that the Saguaro mill and overlay project, two joint park sites with the schools (McDowell Elementary and the high school) and some of the smaller projects related to storm water and dam maintenance. She said that the impact of less median maintenance should not be too noticeable; it meant that bushes would not be trimmed as frequently and pre-emergence would be done but post-emergence would not be done as aggressively. In response to a question from Councilmember Kehe, Ms. Zanon stated that staff had planned to do regular street maintenance in the next Fiscal Year and take on the Saguaro mill and overlay project. That project was taken out of the budget proposal and they were just doing the regular street maintenance. They were continuing to maintain the streets but some of the bigger projects, where they had to actually go in and redo the streets, would not be done. She added that over a six-year cycle staff was trying to work over the next few years by tackling some of the bigger projects to bring the streets up to that 70% threshold that was discussed at the Work Study Session. They were still gearing up for that but not"tackling it in one big bite." Public Works Director Tom Ward stated that putting the $3.1 million for the overlay on Saguaro was a "blessing" for them. When they had their utility company meetings this year they all wanted more time to look at Saguaro because it was such a large project. At the same time, staff saw a lot of things and thought it would be good to "buy themselves another year" to put in more drainage structures and make more improvements before they actually did the mill and overlay. He said that staff believed they could make the cuts and still have a beautiful Town and be more efficient in what they do. Discussion ensued relative to the fact that as far as rain damage and potholes on Saguaro, staff would continue to make repairs and ensure that the street did not completely fall apart; Vice Mayor Dickey's comment relative to matching funds for grants to cover work that had begun in some parks (Desert Vista Park) and Ms. Zanon's response relative to the fact that the park project began earlier this spring and monies had been put in the budget to finish that project in the early part of the next Fiscal Year; the fact that the project was not in jeopardy as it was currently proposed in the budget; the fact that no new staff would be hired for traffic signal maintenance ,,,„„) (additional staff had not been added but there were two street maintenance positions in the Street Department z:\council packets\2008\r5-15-08\04-29-08 minutes.doc Page 4 of 7 that they were asking to convert to signal maintenance technicians); and decreases in contractual services and staff's opinion that what was being proposed as far as the Public Works projects would not be detrimental to the i Town. kily Vice Mayor commented that relative to budgets, she when had worked at the Senate, a legislator had said, "We should budget our values" and that same phrase had been recently that heard from one of the Town Manager finalists. She noted that as the Council went through the budget process, including the contracts and contracted services she realized that with the MCSO contract she shared that philosophy although she recognized that values varied depending on the person. She remarked that in the past when she had reservations on certain issues, Captain Kleinheinz had been receptive to addressing her concerns. She gave the example of in 2006 when her reticence over stuff about kids, youth and town had been discussed at a public meeting and he had been sensitive to it and he had reassured her they would take appropriate action. In light of the recent press coverage, specifically regarding the interaction between the Sheriff's Office and the Mayor of Guadalupe, the Trib had reported that Sheriff Arpaio had given the Mayor of Guadalupe 180 days notice to decide whether their decades-old contract would continue. Channel 12 had indicated that it was 90 days. She had found that concerning. She stated that at this point she felt that any questioning or disagreement as she had done before might not be acceptable as it appeared that the Sheriff did not seem to hold municipalities in such high esteem and she was concerned that any talk of disagreement or questioning of things might be considered cause, which was something in the Town's contract. She expressed that she had been struggling with this since last fall when we had that detail down the street. She acknowledged that this was a complex issue. She pointed out that although the Town contracted with the MCSO for local public safety the MCSO also had jurisdiction and authority on the County level regardless. She acknowledged that Sheriff Arpaio was a Fountain Hills resident, all the give and take that these types of relationships had, and stated that it was difficult to know what to do. She expressed that as they went through the budget that she would have more specific question on this and other budget issues and that she looked forward to the open discussion as they moved towards the budget's adoption. Councilmember Leger said that he looked forward to the process and stated that he noticed in the Senior Services budget under contractual services that in 2007-08 they had budgeted $118,000 and a majority of that went towards programs. He noted that the figure had now been reduced to $66,965 and asked for input regarding the reduction. Ms. Zanon explained that for last year's budget, staff brought in a proposal that would have cost approximately $88,000 to put on the programs for Senior Services and at the budget meeting it was determined that they should be given a little extra money in order to ensure that all of the programs they were requesting would be accomplished. She said that that explained the jump to $118,000. She added that the difference between what was actually proposed and planned for and what was actually accomplished was only about $15,000. She commented on some of the policies and procedures that have been put into place such as all the trip programs and noted that they still offered the same number of trips and the same number of activities but they were no longer pre-purchasing tickets. She explained that people register and then tickets were purchased based on the number of registrants and if they did not achieve a sufficient number of people registering (about half the van), then the trips did not take place during the past Fiscal Year. She stated that they were working towards setting up programs that people want to participate in. Additional discussion ensued relative to the fact that Ms. Zanon attended a Senior Services Commission meeting yesterday and she highlighted the budget for the members and explained the proposal; the fact that she did not receive many questions from the members and they appeared to understand the rationale behind the proposal; the importance of making Fountain Park a"jewel" and in doing so making the grass in that park pristine(a high profile issue) and the fact that the budget did not contain any funds for a sod replacement program; Ms. Zanon's comments relative to the fact that although in the Parks budget they had cut back a little bit on the mowing and maintenance (a minor reduction, 4%), in terms of actual turf maintenance the budget had actually increased to accomplish the goal and Ms. Zanon's intent to provide the Council with additional information relative to the cw actual plans and expenditures related to this complicated issue. z:\council packets\2008\r5-15-08\04-29-08 minutes.doc Page 5 of 7 Councilmember Kehe asked how long the Town could cut internally before they impacted externally and Ms. Zanon stated that the original revenue projections for the budget were about a half million to $600,000 less than what they were seeing tonight. She said that finding that money was difficult and all of the departments had under gone a "painful process" to reduce their budgets. She added that she thought that the cuts would impact the citizens this year, but they got a little more "breathing room" and said that staff was gearing up for the impact to occur next year. She anticipated that at that point in time the quality of life in Fountain Hills would be impacted. Vice Mayor Dickey commented on a Legislative amendment that was placed on the floor to cut State Shared Revenues by $200 million but said that it did not pass this time but it could happen in the future and that could significantly impact cities and towns. She stated that she received an e-mail about a month ago from a gentleman relative to Fountain Park(a senior playground facility). She said she knew that staff was looking into placing benches in the park and asked staff to contact the person and find out where the idea came from in an effort to best utilize the park. Ms. Zanon stated that staff would pursue this issue and pass this on to the Senior Services Advisory Commission. Councilmember Archambault commented that when the citizens begin to notice the impact regarding reduced services (quality of life issues) it was too late. In response to a question from Councilmember Schlum relative to actual spending versus actual revenues, Ms. Ghetti reported that total expenditures were $11.1 million and total revenues were $12 million. She noted that they currently had almost a million dollars in excess funds but said that they had another three months left of this fiscal year and staff would have to watch to ensure that revenues continued to come in as projected. Staff did not believe they would spend everything that had been budgeted. Councilmember Schlum stated that in looking at the streets, they have to make sure they had a plan in place and said that they would delve into issues such as this during the upcoming meetings. He commented on the fact that the General Fund was being decreased by 8% in FY 2008-09 from FY 2007-08 and that included public safety contracting, which increased every year. He said that this was a concern in light of the fact that they had to have such a dramatic cut in the General Fund that paid staff and funded programs. He added that this was a significant cut and commended the team for coming up with those numbers and "drilling down" to that extent but added that it was troubling when public safety and some other programs continue to increase. He also noted that building and zoning was 9% of the General Fund and thanked staff for their presentation and hard work. In response to a question from Councilmember Leger, Ms. Ghetti advised that fire and law enforcement costs were inflating more than others (they had less control over them). The Town currently had a contract for fire protection that said the increase would be 5% and the law enforcement contract that ran through 2010 had limits on how much it could increase as well unless the Town requested extra services. She stated that when those contracts expired they would have to take a look at the value. Councilmember Leger pointed out that current fire and law enforcement represented 38% of General Fund expenditures and when salaries were on placed on top of that there was not much "wiggle room" in the General Fund. Mayor Nichols stated the opinion that the Town had done very well as far as contract services for public safety by only having a 1% increase in the Sheriff's contract and a 5% increase in the Rural Metro contract. He said that the increases in that area were less than the increases in the Town's salaries, which were going up approximately 4%. Councilmember Schlum noted that the public safety budget was 38% of the General Fund budget and 62% of the Town's budget had decreased overall while 38%had increased. Councilmember McMahan stated that he would pose questions at the upcoming meetings and thanked staff for the outstanding job they had done on the budget. z:\council packets\2008\r5-15-08\04-29-08 minutes.doc Page 6 of 7 Mayor Nichols asked Councilmember Elect Hansen if she had questions on the budget to which she responded ,,L no, not at this time. Ms. Zanon stated that in response to a request from Vice Mayor Dickey, she would forward something to the Senior Services Commission and follow up on that direction. Ms. Zanon said that discussing the budget with the individual commissions was the responsibility of the Department Director and most of the Directors had given their commissions an idea of where they would be going during the next Fiscal Year. Mayor Nichols thanked Ms. Ghetti, Ms. Zanon and staff for their excellent work on the budget and informative presentation. AGENDA ITEM#6—ADJOURNMENT. Councilmember McMahan MOVED to adjourn the Work Study Session and Councilmember Archambault SECONDED the motion, which CARRIED UNANIMOUSLY (7-0). The Work Study Session adjourned at 7:29 p.m. TOWN OF OU IRAIN HILLS By 12:11alti Mayer W. y Nichols ATTEST AND Loy, PREPARED BY: Bevelyn J. nd 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 Work Study Session held by the Town Council of Fountain Hills on the 29th day of April 2008. I further certify that the meeting was duly called and that a quorum was present. DATED this 15th day of May 2008. Bevelyn J. en er,Town Clerk fkilaw z:\council packets\2008\r5-15-08\04-29-08 minutes.doc Page 7 of 7 J