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HomeMy WebLinkAbout2012.0320.TCSM.Minutesz:\council packets\2012\r4-19-12\120320splm.docx Page 1 of 23 TOWN OF FOUNTAIN HILLS MINUTES OF THE SPECIAL SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL MARCH 20, 2012 * CALL TO ORDER AND ROLL CALL Mayor Schlum called the meeting to order at 5:31 p.m. in the Town Hall Council Chambers. * ROLL CALL Present for roll call were the following members of the Town Council: Vice Mayor Dickey, Councilmember Brown, Councilmember Leger, Councilmember Elkie and Councilmember Contino. Town Manager Ken Buchanan, Town Attorney Andrew McGuire and Town Clerk Bev Bender were also present. Councilmember Hansen was not present and Mayor Schlum arrived at the meeting at 5:36 p.m. AGENDA ITEM #1 – CONSIDERATION OF RESOLUTION 2012-06, DECLARING AND ADOPTING THE RESULTS OF THE PRIMARY/SPECIAL RECALL ELECTION HELD ON MARCH 13, 2012. There were no citizens wishing to speak on this agenda item. Councilmember Leger MOVED to approve Resolution 2012-06, declaring and adopting the results of the Primary/Special Recall Election held on March 13, 2012 and Councilmember Elkie SECONDED the motion, which CARRIED UNANIMOUSLY by those present (5-0). AGENDA ITEM #2 - DISCUSSION WITH POSSIBLE DIRECTION RELATED TO ANY ITEM INCLUDED IN THE LEAGUE OF ARIZONA CITIES AND TOWNS WEEKLY LEGISLATIVE BULLETINS (ISSUES 1-10). Town Attorney Andrew McGuire addressed the Council relative to this agenda item and stated that several requests have been received from the League of Arizona Cities and Towns this year to weigh in on certain bills from the Legislature. He added that since the Council has not given any legislative direction with respect to any broad or specific bills, staff felt it important to provide the Council with an opportunity to consider the proposed legislation that the League has requested input on and provide any direction they wish staff to pass on to the League. He explained that they are referring to the Legislative Bulletins that are received in order to provide everyone with a better of understanding of exactly what they will be talking about. He said that he knows that the ADWR (Arizona Department of Water Resources) bill is one that the League was looking for input on since the Town of Fountain Hills is one of the few communities that does not provide water service or have any mechanism in place to pass such a fee through. He added that otherwise it is up to the Council to decide which topics included in the various bulletins they would like to speak to this evening. Vice Mayor Dickey thanked Mr. McGuire for his comments. The Vice Mayor said that this gives the Council an opportunity to provide input and noted that they receive the updates every Friday and in a way all of the work is done and the list is a very concise, up-to-date one that includes items that are coming forward as propositions or proposals in the Legislature that have to do with cities or towns. She stated that several of the bills are closely related to the Town. She referred to the ADWR funding bill mentioned by Mr. McGuire (Senate Bill 1288) and advised that the Town decided not to write the $30,000 check at this point in time and noted that this bill has been going through the Legislature and has been unanimously approved. It was a Senate bill and tomorrow it will be heard by the House Appropriations Committee. Mayor Schlum joined the meeting 5:36 p.m. z:\council packets\2012\r4-19-12\120320splm.docx Page 2 of 23 Vice Mayor Dickey commented that they were looking at the idea of asking if the Council wanted Mr. Buchanan to go on on-line and weigh in on this piece of legislation. She said that they don't have to weigh in but for something like this that impacts the Town so closely it gives them an opportunity to say, "The Town of Fountain Hills supports Senate Bill 1288." She pointed out that the Chair of the Committee is former Councilmember and current Representative Kavanagh. She added the Council might also want to consider weighing in on the Consolidated Elections Bill (House Bill 2826). She noted that an amendment was proposed to try and take into consideration all mail-in ballots but that did not pass. She advised that the bill was scheduled to be heard in the Rules Committee but was not, so perhaps there are some concerns being expressed and this gives them an opportunity to weigh in on it if they would like. She explained that basically this bill would force all the cities and towns to hold their elections at the same time and the League is opposing this bill. She said that if they had to hold the Town's elections in November they would not be able to hold an all-mail ballot election, which resulted in almost 40% voter turnout the last time. The Vice Mayor encouraged the members of the Council to bring forward any pieces of proposed legislation that they want to weigh in on forward. She stated that she has brought forward the two pieces she would like the Council to have Mr. Buchanan weigh in on, namely support for Senate Bill 1288 and opposition to House Bill 2826 as it currently stands. Councilmember Leger asked what the best process would be in moving forward and noted that in the past when staff has weighed in on certain pieces of legislation, they were ostracized by members of the community for providing input that did not represent the opinions of the entire community. He added that the same thing is true when an individual Councilmember weighs in on an issue. He pointed out that with respect to the ADWR issue (SB 1288), the Council voted unanimously to table that bill to show that the T own was not happy with that particular scenario. He questioned the position that they would be placing Mr. Buchanan in as far as some citizens may be concerned (speaking on behalf of the community) and noted that it is a "Catch 22." Mr. McGuire responded that that is why this item has been placed on the agenda so the Council can have discussion and provide Mr. Buchanan with direction on items that they want him to speak to the Legislature about on the Town's behalf in response to the League's request for input. He noted that if the Council does not provide direction to Mr. Buchanan then no input will be forthcoming from the Town on the various issues. He informed the Council that other Councils address this in a more "global" fashion and at the beginning of the legislative session they provide legislative policy direction to their Intergovernmental staff and give them carte blanche authority to weigh in on anything that the League is weighing in on. He said that obviously that has not been done here and so this agenda item was created to provide the Council with the opportunity weigh in on specific items that they find are necessary to be addressed. He added that the ADWR bill is the one that prompted the item on tonight's agenda because the League requested input particularly from towns like Fountain Hills. In response to a question from Councilmember Leger, Mr. McGuire advised that this agenda item has been written to allow the Council to provide direction and so a Council vote would be taken. Councilmember Elkie said that this is very similar to what the Council did when they spoke out against the redistricting issue; they collectively came together as a Council and said they were not in favor of it and then they voted to allow Town staff to speak on this issue. He added that it goes without saying that no one should speak on behalf of the Council without a majority vote of the Council approving that person to do so. Mr. Buchanan advised the Council that he has participated in a variety of related processes and briefly highlighted his experience over his vast career. He said that since he is not familiar with the processes used by this Council in the past he asked that this item be placed on an agenda. He added that if the Council would like some advocacy/opposition by the Town Council on any legislative proposal or consideration brought to the attention of the Legislature then the items would be placed on agendas and his direction would be the result of the Council's vote. He further stated that this item could be placed on future agendas to explore how the Council would like to address the legislative agenda or not do it at all. He advised that he remembers back in the late 90's that a former Town Manager spoke to the Legislature on a fairly fre quent basis regarding the Council's stance on various issues z:\council packets\2012\r4-19-12\120320splm.docx Page 3 of 23 and said that this is entirely up to the Council to decide and he will carry out their direction. He noted that they could be down at the Legislature a lot or not at all and he is trying to explore what the Council would like to do. Vice Mayor Dickey stated that they don't have the staff or the resources to do that but even being able to weigh in electronically without attending all day hearings would ensure that their voices are heard for the re cord. Mayor Schlum commented that the League advocates broadly on all municipal issues and does most of the ground work. He pointed out that the Town does not have a legislative liaison or expect to have one but issues have come up in the past and the process used, like a vote on the redistricting issue, has worked well. He added that the Council has also discussed the ADWR bill and addressed it. He stated that he doesn't want to get more engaged than that unless and until they are in a position to do so. Vice Mayor Dickey informed the Mayor that the League is requesting input on the ADWR bill because it is going to be heard tomorrow by the House Appropriations Committee and that is why a timely decision and direction is needed tonight. She said that she could make a motion to direct the Town Manager to weigh in to support SB 1288 (mirror the League's support). She stated that it is called the Municipal Water Fees; Repeal; Appropriation. Vice Mayor Dickey MOVED to direct the Town Manager to weigh in to support SB 1288, the Municipal; Water Fees; Repeal; Appropriation Bill and Councilmember Elkie SECONDED the motion. Mayor Schlum stated that this will reverse the proposal to charge a water fee to municipalities that do not control the water. The motion CARRIED UNANIMOUSLY by those present (6-0). Mayor Schlum noted that the Town's support for SB 1288 will be communicated electronically. Vice Mayor Dickey advised that the other item is the Consolidated Election Bill (HB 2826) and said she doesn't know when that will be heard now because the next step for it is the Senate Rules Committee and it did not get scheduled yesterday. She noted that Mr. Buchanan can still weigh in on it and she wanted to know if they w anted to weigh in on it if it gets to the floor. She spoke in opposition to that piece of legislation in view of the fact that it would remove the Town's ability to conduct all mail ballot elections and force them to hold all of their elections in November of even numbered years. She referred to an article that had been provided to the Council and said that the Mayor of Mesa was weighing in on how that could interfere with some economic development plans in the event some kind of a vote had to be taken to move a project forward. She added that it could potentially make the city wait another two years to do that. She informed the Council that it passed the House and now it is in the Senate and she believes it passed one of the Committees. She noted that an amendment was brought forward to change the part that had to do with all mail in ballot elections but the amendment did not pass. Vice Mayor Dickey MOVED to direct the Town Manager to weigh in the Council's opposition to HB 2826 as it currently exists and Councilmember Leger SECONDED the motion for the purpose of discussion. Mayor Schlum noted that the League and he is sure many of the municipalities have voiced their opposition to the current legislation and said that many of the larger cities are req uired to hold November elections now. He stated that the Council has had many discussions on when to hold elections and every time it came down to the fact that Fountain Hills does not want to be thrown in with all of the other cities and towns on a ballot in November. He said that they would like to keep holding their elections in the spring and keep it focused on Fountain Hills and conduct all mail ballot elections, which have resulted in greater voter turnouts. He advised that he is not in favor of th is proposed legislation. Discussion ensued relative to the fact that currently cities/towns below the mandated population threshold can hold elections on any four of the election timeframes (March/May and August/November); the cities that are above the population threshold had to move to even numbered fall elections if they were not already conducting their elections at that time; the fact that the primary concern among smaller communities is the fact that all mail ballot elections would not be able to be conducted and associated negative impacts such as decreased voter turnout and z:\council packets\2012\r4-19-12\120320splm.docx Page 4 of 23 placement of local issues at the end of long ballots in November; the fact that if this passes, the Town will no longer have the choice of when to hold elections and what type of elections are held; the Mayor's comment that he is not sure why everyone would want to be on one ballot. Vice Mayor Dickey repeated the motion as stated above. The motion CARRIED UNANIMOUSLY by those present (6-0). Mr. McGuire advised that going forward, the Council will only have current issues. He said that if any Councilmembers have a specific item that they want to discuss they should let staff now so that the item can be placed on an agenda for discussion and public awareness purposes. AGENDA ITEM #3 - DISCUSSION AND POSSIBLE ACTION RELATED TO THE PRELIMINARY TOWN OF FOUNTAIN HILLS BUDGET FOR THE FISCAL YEAR BEGINNING JULY 1, 2012, INCLUDING PROPOSED REVENUES, EXPENDITURES AND NEW PROGRAMS FOR ALL GOVERNMENTAL FUNDS. Deputy Town Manager/Finance Director Julie Ghetti addressed the Council relative to this agenda item and said that this is the fourth time they have met to discuss the proposed budget. She highlighted a brief PowerPoint presentation relative to this agenda item (Copy is available on-line and in the office of the Town Clerk). She noted that staff is looking for direction from the Council regarding which toolbox items they would like staff to remove and said that they have already removed updating the Stantec Report ($35,000), updating the Hocking Report and deleted any increase in the local sales tax/telecommunications based on previous Council direction. She stated that some of the options that are included in the budget (toolbox items) include: * Decrease recreation subsidy $ 35,000 * Staff reduction (hours, vacant positions) $ 104,000 * Franchise Agreement $ 600,000 * Use of 10% General Fund reserves $ 60,000 * Renegotiation of services of community contracts $ 71,000 * Recruit part-time Prosecutor $ 50,000 Ms. Ghetti said that tonight staff will be looking for ratification on items that the Council would like to move forward with and have further discussion on. She stressed that the action tonight does not make anything final ; it just provides staff direction to move forward and put together the draft budget. Ms. Ghetti reviewed that subsequent to the November Retreat several things had occurred that contributed to closing the Town's budget deficit: * State Income Tax increase of $369,000 * Local sales taxes projected to increase $100,000 * MCSO contract is $127,000 less than November projections * Decreased health insurance costs ($63,000) Ms. Ghetti reported that the most recent update had come from the League this afternoon and the good news is that the State's sales tax projections for cities and towns (the shared sales tax) shows that the Town is expected to receive another $100,000 over and above staff's earlier projection. She added that on the other hand, the Streets Fund (HURF funds) had lost about $200,000 so staff is going to have to go back and revisit that budget to make adjustments. She noted that all totaled the adjustments have provided about an additional $700,000 in the General Fund. In response to a question from Vice Mayor Dickey, Ms. Ghetti advised that the HURF amount is an estimate from the Arizona Department of Transportation (ADOT) and represents an approximate 6% decrease. She noted that the z:\council packets\2012\r4-19-12\120320splm.docx Page 5 of 23 Town will definitely lose the $200,000 and if there is an additional sweep or anything else, that would be over and above this amount. Ms. Ghetti referred to a chart that depicted a Five-Year General Fund Projection (dated November 2011) as well as an updated chart that was prepared following the Council Retreat (as of February 2012). She pointed out that the chart does not reflect the news that was received today. She said that this is a new look assuming that service levels remain the same and noted that it does include the increased maintenance of infrastructure that they have talked about as well as the proposed franchise fee with Chaparral Water Company and did not include the most recent sales tax projections of $150,000. Ms. Ghetti referred to another chart, Toolbox Parking Lot, and noted that the items on the chart are not included in the budget projections. She said that there is an item that staff had previously proposed but would now like to rescind related to the issue regarding charging employees with a larger portion of their health insurance premiums. Ms. Ghetti asked Human Resources Director Joan McIntosh to speak to this item. Ms. McIntosh addressed the Council and said that at the Budget Retreat the Town was looking at an approximate $400,000 deficit going into Fiscal Year 2012-13 and one of the toolbox items offered was to have the employees start paying more for their health insurance costs. She advised that since that time staff has analyzed the premiums and items they were not aware of at the time of the November Retreat. The Town received its renewal for calendar year 2012 and surprisingly the premiums had decreased by 15% and reported that they had a decrease in their enrollment because the number of staff has decreased, a large number of employees are enrolled in the HSA, which is a lower premium and staff assumes more of the risk by paying a higher deductible. With the 15% that lowered the savings they said they would realize a $63,000 savings. When they talked about this in November, they were talking about a calendar year savings of about $121,600 and when they looked at it again they realized that their insurance contract runs on a calendar year basis and of course the budget is on a fiscal year basis so they would not be able to realize an entire year of savings because they wouldn't be able to change the policy until January 2013. They would be looking at $60,800 in savings so if they look at the 15% decrease and only a half a year savings they actually come up with about $2,400 that would be saved. Because of that, staff would like to ask the Council to remove that toolbox item from the list because they do not need that money anymore for those two reasons. If the Council wants to pursue that there are some unintended consequences that were discussed before. One of them would be the disincentive for employees to remain in the HSA and the switch to PPO would result in higher premiums. It would also place a burden on some of the Town's lower paid employees because if an employee making $28,000 (and there are a few) required family coverage their premiums would take up approximately 31% of their paychecks and when you add on 11% for the mandatory retirement fund, even if they were in the 10% bracket for taxes that would account for approximately 52% of their paychecks (a huge hit). Ms. McIntosh advised that she did further research and looked into the Arizona League of Cities & Towns survey and it showed that the Town would be in the minority if they started charging employees 25% of their premium and presented data in support of this statement. She noted that there have been no merit increases going on four years now and discussed the fact that it may affect morale and be difficult to recruit quality candidates for positions if the increase went through. She stressed the importance of remaining competitive among the surrounding cities and towns and requested that this item be removed from the list of toolbox items previously presented. Councilmember Contino pointed out that employees received a 1% raise last year and Ms. McIntosh cl arified that the 1% was not a merit increase -- it was a cost of living increase (or a good will gesture) and explained the difference between the two. Vice Mayor Dickey asked which Ms. McIntosh believes is preferred -- a cost of living increase to keep up with inflation rates or an across the board increase or merit. She questioned how they go about giving merit increases since they haven't done them in so long. Ms. McIntosh replied that it would be hard to say. The way the budget looks right now she would guess that a true merit increase is not feasible but perhaps some kind of an adjustment could be made because of the revenue increase. She said that the cost of living last year increased 3.1% so the 1% did not come close to covering that increase. She reported that a 2.5% raise would cost approximately $69,000. z:\council packets\2012\r4-19-12\120320splm.docx Page 6 of 23 (At this time, Councilmember Elkie advised that he had another commitment he had to attend to and asked to be excused from the meeting at 6:15 p.m.). Councilmember Contino asked what would happen if they gave a salary increase to those employees in the lower salary bracket and not to those with higher salaries. He said that he doesn't think that the staff is hurting at their salaries. Ms. McIntosh advised that she believes it would be unfair and added that it might be a question for the Town Attorney relative to legal ramifications. Mayor Schlum commented that all of the Town's employees are staff and Councilmember Contino clarified that he is talking about the people who are making less than $40,000 and said they are talking about people who would be burdened and asked if the managers are burdened with the salaries that they are currently making. Mayor Schlum stated that there are usually pay scales based on job titles and skill sets. He said that they have addressed those making under $40,000 by adjusting the scale for those jobs and asked when the Council typically looks at that. Ms. McIntosh responded that in the past those things have been looked at du ring budget preparation times when they were budgeting merit increases in the budget. She explained that she would do a survey and if anyone was below the minimum they would receive an automatic adjustment (this was done every year during the budget preparation). Councilmember Leger stated that it sounds to him as though they may have made a premature decision because the data that was provided to the Council at the time of the Retreat has significantly changed. He said that if they go along with what they decided back then they would be netting out almost at zero and, because of unintended consequences, this move in the long run could wind up costing the Town more money and Ms. McIntosh concurred. Mayor Schlum thanked Ms. McIntosh for her comments and commented that health insurance is expensive and said that with more people going with the higher deductible as long as they remain health y there will be less costs for them. He added that it doesn't appear to be something that the Council should consider at this time. Mr. Buchanan noted that there are a multitude of projects that need to be vetted and he is doing his best, working with Ms. Ghetti and staff, to get up to speed on them. He said that they are trying to plan these projects at the same time they are trying to budget for these projects and sometimes those two do not jive. He stressed the importance of talking about the budget and its priorities. He stated that he does not have a lot of constructive advice for the Council tonight other than what Ms. Ghetti has stated. He added that he supports what was said in the presentation. Vice Mayor Dickey asked if they could talk about toolbox items that the Council does not want to go forward with before they start talking about other things. Mayor Schlum asked Ms. Ghetti for her thoughts and Ms. Ghetti stated that staff would like to get an indication of the Council's thoughts as a whole body -- how they feel about staff taking this out of the toolbox so that it doesn't come back again. She added that whether that is a vote or Council consensus staff would like to know so they can follow the Council's wishes. Mayor Schlum said that it sounds like a motion and a vote. Councilmember Leger stated that he is not suggesting that the Council vote on every little thing before them but the toolbox is something that has been batted around like a volleyball and he thinks they need to make some decisions on that. Mayor Schlum advised that they need to balance the budget and spend as little as they have to. He added that every item that they move one way or another affects perhaps the decision on the next item so even if they vote on items tonight, such as this item, they still may have to revisit it in the future. z:\council packets\2012\r4-19-12\120320splm.docx Page 7 of 23 Councilmember Brown said that if the information is correct and he assume s that it is, he would like to know why they don't just move the $121,610 from the yes to the no column and leave it in the toolbox instead of removing it in its entirety. The Mayor said he believes that is a good idea. Vice Mayor Dickey stated that with something like this that doesn't appear to make any sense to leave in she would be okay with voting to remove it from consideration. She added that there are probably other things on the list that they would never do as well so it is okay either way but if possible she doesn't want any more resources or discussion to take place unless they find themselves in a dire need. Councilmember Brown MOVED to remove the item relative to increased health insurance premiums for the Town's employees from the list of toolbox items and Vice Mayor Dickey SECONDED the motion. Town Clerk Bev Bender advised that two citizens wished to speak to the Council. Linda Bordow addressed the Council and said that she has met extensively with Ms. Ghetti and is doing her best to understand the budget. She stated that she believes that most of the savings are predicated on the $1,000 telecommunications tax being passed. Upon a response from the Council, she said "that is not true, okay." Ms. Bordow commented on the jail item and said she is not sure that spending that amount of money, $215,000, at this particular time is a good idea. She expressed the opinion that there are a lot of things that have to get done an d added that Mr. Mood has shown her a whole list of things (infrastructure, wash maintenance, the roads, etc.) that need to be accomplished and are more important than the jail. She advised that she researched the Citizens' Satisfaction Survey ($35,000) and said that it is a statistically valid survey and is random and she understands that it includes a $5,000 overview for a post-mortem on the bond that Mr. Buchanan was responsible for bring up and she believes it is a great idea. She stated that she und erstands that the last survey was done by ASU and she took the liberty of getting a hold of several people who do this type of work and added that they could let the population in Town know they are going to do this via Channel 11 and by placing articles in the newspaper (as well as other communication methods) and they could ask 15,000 households multiple questions and it could be broken down anyway the Town wants and it would provide consultants to go over whatever metrics are set up in order to understand the total. She said that this would provide actual figures and the total cost would be $7,000, five times less expensive than the Citizens' Satisfaction Survey. She advised that for the road bond election they had between 5,000 and 6,000 responses during that election cycle and stressed the importance of getting an accurate count of the people and determining why they said no. She reported that they have significant statistical deviations from north Fountain Hills, the seasonal visitors, and they also have an age population that is a little bit older than the average as well as a more diverse political affiliation so she stressed the importance of ensuring that everyone is represented. She stated the opinion that asking virtually everyone to participate in the survey creates community involvement and results in a more accurate picture. Gene Slechta addressed the Council and advised that in November he sent an e-mail out containing a suggestion about this very building. He noted that it was planned, designed and built at a time when the economy was in much better shape than today and when it was built it contained probably twice the amount of staff that it houses today. He expressed the opinion that the building is underutilized at the current time and he doesn't expect that that will change in the near future. He commented on the building's location and said that if this was a vacant lot right now and they were talking about the theatre that they just approved next door they would certainly think abou t this spot being a major commercial facility of some type. He noted that this is one of the two anchors on Avenue of the Fountains commercial district (Saguaro and La Montana) and stated the opinion that probably if they had to do it over they wouldn't place Town Hall where it is today. He stated that they have to look real hard into the future and decide what this facility could or might be. He added that perhaps they could use only part of the building for Town staff and utilize the section that faces the Avenue as retail or commercial. He discussed downtown Scottsdale and noted that it is all commercial and the municipal building is about a block away and the same with Tempe. He said that now that they are talking about a potential jail they really should discuss whether they really want to do that and think about the Town Hall building going forward into the future. He also discussed fees and z:\council packets\2012\r4-19-12\120320splm.docx Page 8 of 23 said he is not sure what the fees will be for the Town this year but he believes there is some inequity as far as fees. He commented that they certainly want to help out the business community, and they have, and requested that the Council take another look at how the fees are structured. Councilmember Leger noted that when the second graphic (February 2012) was displayed Ms. Ghetti stated that it included certain things but not others and asked if it included the State income tax increase ($369,000), the local sales tax projected increase ($100,000), the MCSO savings ($127,000) and the decreas ed health insurance costs ($63,000). Ms. Ghetti replied yes and confirmed that the chart as of February 2012 includes everything except the information that was received today ($150,000). Councilmember Leger stated that the new information, including today's, took them from a deficit to a very small surplus and Ms. Ghetti concurred. Councilmember Brown requested that the charts be updated as quickly as possible because they show how fragile their budget truly is and is a tool for them to use as they continue to look harder at the budget. Ms. Ghetti advised that staff would do so as quickly as possible. There being nothing further to discuss on the health care item, the Mayor called for a motion. The motion CARRIED UNANIMOUSLY by those present (5-0) with Councilmembers Hansen and Elkie absent. Ms. Ghetti continued her presentation by going over the new items proposed in the FY 2012 budget and said that if staff has included anything that the Council does not want to be in there, they would appreciate th e Council's direction at this time. She noted that staff will have lots of opportunities to add things that are not in there now. She reported that the total for the new items amounts to $728,000 (they are included in the chart and does not result in a deficit). Mayor Schlum referred to a chart that showed a 6.8% increase in revenues and noted that it includes things that they cannot count on -- it doesn't include the things that were just shared as part of the update. He asked if the $13.5 is still accurate (not including any franchise fee). Ms. Ghetti advised that the figure does include the franchise fee (includes everything in the toolbox except what was presented today). She reported that staff included $300,000 for the franchise fee because they assumed that whenever Chaparral wanted to have their election it is probably only going to be a half a year or less. Staff also included on the expenditures side a contingency of $250,000 in the event that there is no election or it doesn't pass so it washes itself out but it is included as a re venue but it is also included as a contingency, meaning it cannot be spent on anything else. She said that as of today the Town is looking at a surplus of about $350,000 for next year. Vice Mayor Dickey advised that she wanted to eliminate the recruitment for a part-time prosecutor ($50,000) from the list of toolbox options. Ms. Ghetti stated that the part-time prosecutor option came up in November when they were looking at a deficit of $400,000. She added that it was something that staff was looking at as an option for the Council to consider. She noted that it would be a Council-appointed position; it was included in the toolbox options by a majority of the Council. Mayor Schlum noted that Councilmember Elkie was not present and said that he would ass ume that he would like to have some discussion on this. He stated that it is not going to be gone completely because they want to honor him and be able to talk about it if that is what he wants to do. He added that he is not sure that the Council has a l ot of desire to consider this more seriously unless there is new information. He noted that the Council talked a lot about this last year and it didn't seem to make sense. He added that the dollar savings didn't seem to be there and z:\council packets\2012\r4-19-12\120320splm.docx Page 9 of 23 things appear to be working well. He asked if there are items that should be factored in now that indicate that they would save $50,000. Ms. Ghetti responded that staff recognized that there would be a reduced level of service and perhaps a different level of service. The idea was that they would have someone not in-house but here and available for four hours a day every day for a total of 20 hours a week and that was as far as staff went with it. She explained that staff was trying to come up with $400,000 in savings. Vice Mayor Dickey suggested that if something is desired as far as service goes perhaps they could continue discussions among the players who are involved with that. She said that going forward if there is a problem or some kind of challenge she would hope that it could be worked out that way. Councilmember Contino commented that the proposal would result in completely reduced services because the hours worked would be four hours a day. He questioned what would happen if they had an emergency -- would they call the Prosecutor back in and pay him? He said that right now what he understands is that their Prosecutor is working for less money per hour than anybody else (they are on call 24 hours a day and can work seven days a week). He expressed the opinion that they would not get anything out of a part-time Prosecutor and urged everyone to use common sense regarding this issue. Councilmember Leger advised that he agrees with his peers and stated that this is similar to the discussion they had on the telecommunications tax that reared its head when they didn't want to go down that road. He said that he is hoping that they can put this thing to bed. He noted that if they are looking at 20 hours a week at 52 weeks that is 1,048 hours a year and he took the lowest caseload they have had over the last ten years and that amounted to 841 cases that were prosecuted. He added that looking at the data the average prosecution case takes approximately an average of three hours and that is a minimum caseload. He said th at this would be penny wise and dollar foolish and it would not only lower the level of service -- in some cases there would not be any service. Mayor Schlum stated that he believes most of the Council here agree but added that there are other members of the Council so he doesn't want to remove it completely -- rather, remove it as completely as they can at this point out of respect for the members who are not here and who might want to add something that perhaps they are not aware of. Ms. Ghetti commented that she is hearing that the part-time Prosecutor is a toolbox item that the Council wants to remove and staff will do so if that is the direction. Councilmember Contino MOVED to remove the part-time Prosecutor from the toolbox and Councilmember Leger SECONDED the motion, which CARRIED UNANIMOUSLY by those present (5-0) with Councilmembers Hansen and Elkie absent. Councilmember Leger advised that he would like to suggest that they also remove the 20% reduction in community contracts from the list of toolbox items. He explained that the Council made that motion when they believed the Town was facing a $400,000 deficit. He added that as a Council he believes they managed their way very well through the downturn in the economy and when they looked at the various community contracts, they reduced them commensurate with their reduction in revenues. He pointed out that the revenues have leveled off and are "ticking upwards" and they have a savings of $71,000 there and when you look at 20% and redo the numbers, he believes that number really comes down to $57,000. He said that he believes this too would be penny wise and dollar foolish because the 20% takes $20,000 away from tourism and they have talked about leveling tourism where it is at and also negotiating and expanding the scope of service. He recalled that at a tourism presentation a couple of months ago some of the comments were "this is good stuff and we need to expand it." He suggested that at this point they level those contracts where they are at and then as they meet with the vendors negotiate scope of services. He added that as far as making up that money, removing the Stantec Report and the Pavement Management Report comes to $60,000 so there is a wash there. Councilmember Brown concurred with Councilmember Leger's comments and said he believes that the $71,000 is not quite that painful; it is more like $56,500 that they will be adding back into the budget. He stated that he would z:\council packets\2012\r4-19-12\120320splm.docx Page 10 of 23 like to come back to at least being level and then he would l ike to hold some serious discussions with the vendors because the Tourism Board, in his opinion, knocked the ball out of the park for them and they need to recognize that. Mayor Schlum clarified that the Council is looking at not reducing community contra cts from last year's numbers (basically remaining level). Vice Mayor Dickey noted that the $30,000 ADWR fee probably will not happen. Councilmember Leger MOVED to remove the Renegotiation of services of community contracts out of the list of toolbox items and Councilmember Brown SECONDED the motion. The Vice Mayor asked Mr. McGuire if she can vote on this item and Mr. McGuire stated that it is not actually approving the budget, this is just more about what is goin g to be considered, but added that if the Vice Mayor wanted to recluse herself she could do so and they could still achieve a majority vote of the Council. Vice Mayor Dickey advised that she would not vote on this item. The motion CARRIED UNANIMOUSLY by those present and voting (4-0) with Councilmembers Hansen and Elkie absent and Vice Mayor Dickey abstaining. Mayor Schlum referred to the toolbox item Staff Reduction (hours, vacant positions for a total of $104,000) and asked how that is made up -- are there positions that would not be filled, how many FTE's does that include, etc.? Ms. Ghetti replied that one of the big ones is that they would not replace (hire) a Chief Building Official; that is a position that went away. In addition, some savings would be realized at the Community Center by reducing hours. Mayor Schlum referred to the use of General Fund reserves ($60,000) and asked for more details and Ms. Ghetti advised that again this was a toolbox item that she probably would not recommend now because they don't like to use reserves. She added that at the time staff was looking at a deficit so that was an option that was proposed. She noted that it is up to the Council as to whether they want to continue with that option. Mayor Schlum said that that item made him think about what they did with their construction revenues/sales tax revenues -- the percentage being changed to get them through one time. He added that maybe that is something they can consider going back to -- a more dramatic split, with one-time revenues going into the capital plan rather than something like this. In response to the Mayor's comments, Ms. Ghetti agreed that it is a good idea for one-time revenues to be used for one-time projects. She stated that putting it back up to 80% where it was before is probably the thing to do. The Mayor said that he believes that that would be a good thing to do if they can and perhaps they can keep this in mind and consider doing that with next year's budget. He stated that he doesn't think they need to address it this evening. He asked the Council if they wanted to vote on the use of 10% General Fund reserves ($60,000) and keep that $60,000 over the five years in reserves. Councilmember Brown MOVED to eliminate the Use of 10% General Fund reserves in the amount of $60,000 from the list of toolbox items and Councilmember Contino SECONDED the motion. In response to a question from Vice Mayor Dickey, Ms. Ghetti explained that when staff initially brought this up, they stated that they had adequate reserves and would not jeopardize the Town's bond rating. She noted that that would still remain the same, however, the reserves are based on revenues and when revenues come back up they are going to need to build up the reserves. She said their position should always be if they can avoid using reserves do so. She advised that she would never recommend using reserves unless they were in a situation where they had very few other options. z:\council packets\2012\r4-19-12\120320splm.docx Page 11 of 23 The motion CARRIED UNANIMOUSLY by those present (5-0) with Councilmembers Hansen and Elkie absent. Ms. Ghetti referred to the Franchise agreement ($600,000) that Chaparral Water needs and said that they put the money in the budget because if they went forward with it and there is an election and it passes th en staff has to account for that in the budget. She added that staff is not counting on spending that money. Mayor Schlum asked what the timing would be if Chaparral Water wanted to move forward with a franchise agreement -- when would the Town start to see any revenues. Mr. McGuire advised that in terms of the 2012-13 budget there would be an insignificant impact because the earliest election they could have would be in November. He noted that the Town would have to enter into an agreement with the utility and that could be a fairly long process. He added that the earliest date would more likely be March of next year. Mayor Schlum pointed out that they talked about this during the goal setting Retreat but they haven't considered the franchise as a body in any significant manner. He said that he believes more discussion should take place and assuming they do have the discussion and they want to move forward he would like to know what their discretion is and how would it work. Mr. McGuire reported that according to the Arizona Constitution the Town is actually prohibited from granting the right to use the Town's rights-of-way without a franchise. He noted that the oddity they have here is created because that same Constitutional provision is not in existence for Counties and so Chaparral pre-existed the Town and existed in the rights-of-way prior to the Town's incorporation. He said that what should have happened at the time of incorporation is a franchise election should have been held to address this (to allow them to continue utilizing the rights-of-way). He explained that the franchise with the County was no longer valid and nothing happened. In response to additional questions from the Mayor, Mr. McGuire advised that in order to operate in the Town's rights-of-way, Chaparral requires authority and there are only two ways for the Town to grant that authority -- the fairly unique way created by the Legislature for Cox which receives the same authority via a cable license but this provision is not carved out in the statutes for a water provider so the default is to have a franchise agreement. He pointed out that there is no authority for Chaparral to be there today. He further stated that Chaparral should be the one to petition the Council and ask for a franchise agreement for the authority to operate in the Town's rights -of- way. Discussion ensued relative to the fact that at some point in the near future Chaparral is going to have to re-engage the process of establishing their CC&N and expand that throughout the entire Town, which has not been completed yet; the fact that discussions have been on-going for a while but a franchise agreement has not been proposed by Chaparral; Mr. McGuire's statement that franchise agreements are typically months long processes, particularly in a case like this; Councilmember Contino's comment that the Council needs to look into this in greater depth; the Mayor's remark that they will have some good discussion on this item; and Mr. McGuire's explanation regarding lease payments, various aspects of franchise agreements and what has happened in the past. Councilmember Contino stated that he would like to have the Town's State Representative Kavanagh provide input on this issue. He noted that they are talking about water that they have already paid for, which is their right, it is not a franchise agreement, and this is just another tax. Mayor Schlum advised that they will have further discussion on this and will ask Representative Kavanagh for his input as well. Vice Mayor Dickey asked if Cox had something on their bills relative to the license so customers know they are paying for the license fee and Mr. McGuire stated that he has not looked at the Cox bill but he knows on his bill there is a license fee pass through and it looks to be about one of nine pass throughs on the bill. z:\council packets\2012\r4-19-12\120320splm.docx Page 12 of 23 The Mayor reiterated that they will have further discussion on this and he was just trying to determine how much the Town would be getting and it appears that it will not be very much at least in 2012-13. Ms. Ghetti informed the Council that she would now like to go over some new programs /projects that the Council has not seen or approved in the budget. She noted that the first one is the volunteer program for CARE and that is through the Fire Department. She explained that the proposal for this year is to add (and this is not in the budget) $24,000 to the Rural Metro contract to allow them to hire a person to coordinate the CARE program. She said that Fire Chief Scott LaGreca and Assistant Fire Chief Randy Roberts are both present to respond to any questions on this issue. Chief LaGreca addressed the Council and reported that for almost the past five years they have been going down the road with the CARE program and said that it has been tremendously successful even though they are a quiet organization because they have to be in view of the situation they are in with the people who are going through their most vulnerable times. He advised that they can't have them share those moments and issues with the public and there are laws that must be abided by in this regard. He reported that since the organization has been up and running they have had direct contact with 440 citizens in Town and have provided over 404 hours of service to those citizens. He stated that each year they have met the benchmarks that he put before them because he was a little hesitant to give them carte blanche and then have the program fall apart because of the service they are in. He added that this is not unique to Fountain Hills. He advised that two years ago they started carving out little pieces of the Rural Metro contract to help pay for their services like fuel, office supplies, advertising, etc. (about $2,200). He reported that they have used very little of the money because they are a non-profit and they do bring in funds but like other non-profits they are finding it more and more difficult to obtain grants and awards to replace money and pay for things like cell phones and radios. Chief LaGreca informed the Council that they are at the point now where they are depending on one person to run the program and if she decided that she's had enough (she claims she is nowhere near thinking that but situations can change) they will be in a bad situation. They got to thinking that if they had to replace that position it would be difficult to replace as a purely voluntary position. He stated that they discussed with Ms. Ghetti that they would like to make that a part-time paid position and they would like to bring it into the Fire contract (it would be cleaner if she reports to the Fire Department, to him), they are totally dependent on the Department for dispatch and if they made it a Town position it would be a little bit more cumbersome and so they felt it would be easier if she stayed under the direct control of the Fire Chief and was part of the contract for Rural Metro of Fountain Hills. He noted that the Town Manager has control over that contract on a daily basis. Chief LaGreca further stated that it is their intent to add her on board at a $24,000 a year salary (a part-time employee) and emphasized that she certainly puts in more than 20 hours a week. He said that he feels comfortable starting this out as a part-time position and then whatever happens down the road they can re-evaluate the program to see if they want to continue in that direction or take it in a new direction. He added that it is his hope that they can do that by increasing the Rural Metro contract by $24,000 to include her as a Rural Metro employee who works under the direction of him and the Town Manager. He indicated his willingness to respond to any questions. Mayor Schlum thanked the Chief for his overview. Councilmember Contino asked if the person would be on call and Chief LaGreca responded yes and Councilmember Contino added that he understands that one time she went out at night and another time very early in the morning and the Chief said that is true as well. Councilmember Contino commented on the fact that no one really knows when they are going to need her services. Chief LaGreca noted that not only does she respond at night there are also five other people who are volunteers and provide service. He said that they also do welfare checks and she works days and nights and looks for some relief on the weekends. In response to a request from the Mayor, Chief LaGreca outlined a variety of the work that these volunteers carry out (taking them to hospitals to visit loved ones and family members, finding them shelter in fire situations, etc.). The Chief noted that the volunteers and trained and certified and are passionate about what they do. z:\council packets\2012\r4-19-12\120320splm.docx Page 13 of 23 Mayor Schlum commented that they also make expenditures out of their own pockets and the Chief agreed and added that they try to reply upon grants and contributions but those are getting leaner and leaner. Councilmember Leger agreed that the services they provide are valuable and falls into the area of crisis management. He asked when they go out for a new contract if this would be an integral part of that contract and the Chief replied that if the Council approves this request prior to or just after this fiscal year budget this will have to be added into the contract (an amendment). The Chief confirmed that if this is pulled into their contract it would represent one half of a position. Councilmember Leger commented that if the Chief's organization operates in the same manner as the Town from a resources perspective -- i.e. if a part-time person works more than 20 hours -- then the Town is obligated to pay them for those hours. He said this is something that needs to be considered because there may be an issue if that person exceeds 20 hours unless there is a voluntary situation that changes that employment law. He asked Human Resources Administrator Joan McIntosh to speak to this issue. Chief LaGreca advised that the Town does not get billed for extra overtime hours that may be put in ; the Department absorbs that. Councilmember Leger said that he is aware of that but he just has questions about how this would apply to the new position. If the person works more than the 20 hours and needs to be compensated for that and Rural Metro is paying for that it's all fine and good but he is just trying to understand it logistically because they run into this a lot with their employees. Ms. McIntosh addressed the Council and stated that she would suggest in a situation like this that the person be made a salaried position because she does make independent decisions and works a lot on her own. She explained that she would be put on salary and then it would not make any difference how many hours she worked. Chief LaGreca agreed and said that that is how it should go in the budget, as a salaried position. He added that if Rural Metro chose to use her above and beyond that then it would be on Rural Metro's dime. Vice Mayor Dickey commented that the contract that the Town has with Rural Metro has an automatic index that goes up and reminded everyone that last year they didn't do that so there is some flexibility and she woul dn't want to shy away from this. Chief LaGreca concurred and noted that since the Town re-negotiated the new contract in 2009 with Rural Metro, the Town has saved $350,000 to date. Mayor Schlum stated that the Council thanked them then and they will thank them again now for helping the town through a very difficult time. He also thanked the Chief for his comments. Ms. Ghetti said that she would like to let the Council know, for full disclosure purposes, that this would be a new program and with that program there are additional costs as well. She added that for this program there is a vehicle, a new charge would be added to the budget to set aside the money that they do every year to buy a vehicle (she believes a new vehicle will be needed in 2015). She stated that they currently have a vehicle and the Town pays for the gas and confirmed that that would be the replacement program. Councilmember Brown MOVED to approve the $24,000 CARE package to be added to the budget and Councilmember Contino SECONDED the motion, which CARRIED UNANIMOUSLY by those present (5-0) with Councilmembers Hansen and Elkie absent. Ms. Ghetti informed the Council that at the Retreat discussion took place regarding some funding for the MCSO Posse but she never received any indication as to whether any funds were associated with it. She stated that she wanted to bring that up to see if that was something that should be continued or something that they will not move forward with. z:\council packets\2012\r4-19-12\120320splm.docx Page 14 of 23 Mayor Schlum noted that the Posse's contributions have dropped to a very low level and so there are more Posse member volunteers wanting to do what they do so well. He said that they have talked about the great services that the Posse provides and pointed out they have to invest $2,000 of their own money to purchase uniforms and obtain training (the Sheriff's Office pays for their fuel). Many Posse members would like to do more but they can't afford to change the tires, maintain the vehicles, etc. He added that the Council had some discussion on this and whether to consider making it a matching program and pointed out that despite fundraising efforts the need still exists. Ms. Ghetti advised that she did not get an indication from the Council of how mu ch they might be considering but she thinks what they would talk about is contracting for a service rather than donating money, which they cannot legally do. She noted that for example they have purchased a golf cart and are doing patrols in the parks dur ing the day and that might be a service that the Town could purchase from the Posse. Mayor Schlum stated that he believes they were talking about something in the area of $10,000 to $30,000 or something like that. Vice Mayor Dickey said that she would like to know what services the Town would specifically want the Posse members to provide and suggested that Captain Joe Rodriguez come forward and discuss this issue. Ms. Ghetti noted that staff would come back to the Council with something on what the program would look like. She added that if staff has some indication of how much to put in the budget then they can come back with an overview of the proposed program. Captain Rodriguez addressed the Council and advised that Town Clerk Bev Bender is passing out copies of an e- mail he received from Jeff Halmekangas, the Posse Commander, and said that this will provide the Council with a brief overview of the services that the Posse provides to the citizens and the Sheriff's Office (a copy is available in the office of the Town Clerk). He pointed out that they donate over 12,000 man hours to the Town on an annual basis (about 1,000 hours a month). He stated that this frees up the Deputies to do their job and respond to the various calls for service. He noted that they transport inmates down to the jails and they do traffic control and work special events, etc. He advised that they provide great value to the Town and as far as numbers, he would not want to short change them but also thinks that with the program being somewhat new, he would recommend that the salary figure be somewhere between $18,000 and $24,000. He reported that $1,500 to $2,000 a month is about their average operating expense to keep the vehicles maintained, cover office expenses, electricit y, etc. He stated that that would keep them out on the road and the funding that would come in through their fundraising efforts would allow them to perhaps purchase the uniforms for their members and buy ammunition and things like that that they pay for themselves right now. He added that the amount he proposed will cover their monthly expenditures. Mayor Schlum thanked Captain Rodriguez for his input. Councilmember Leger said that they are housed in a trailer on Saguaro Boulevard and asked if they own the trailer or rent it. Captain Rodriguez replied that the trailer belongs to the Sheriff's Office and they use it for storage right now. The Posse has the building behind it, sort of a garage, and his understanding is that MCSO donated that building a nd the use of it so there is no mortgage or rent to pay on it. They do pay for utilities and maintenance of the building as well as some minor office expenses. The majority of the expense goes towards the maintenance of the vehicles and they are getting up there in age and they do have to purchase those vehicles as well. Councilmember Leger stated that in order to make a decision on this he believes the Council needs to know more, particularly when they are talking numbers. He noted that the Posse participates in vacation watches and they do an awesome job. He said that some of the members have told him that they might have to discontinue providing this service because of budgetary and manpower constraints. He asked whether they have ever considered ch arging a fee for that service. He added that they are talking about private citizens who more than likely could afford this z:\council packets\2012\r4-19-12\120320splm.docx Page 15 of 23 type of service. He pointed out that $96,000 is budgeted for incarceration and transportation downtown and said he doesn't quite understand what part of that MCSO and the Posse engage in (how are those dollars utilized). Mayor Schlum asked if they had additional Posse members able to work and cars that they could drive whether they would be able to reduce costs associated with transportation (is that something that might benefit the Town on the other side of the expense equation?). Captain Rodriguez replied that he would have to look into that part of the contract to determine exactly how they are defining that portion. He said that they talking about the fee services that the Posse could perform and he thinks that the issue there is since they are a non-profit organization they cannot go out and solicit for profit. He added that they can ask for donations but to specifically charge a fee for a service is prohibited. Councilmember Leger reiterated that he is not opposed to any of this -- he is just trying to understand how they are set up financially and stated that it is possible that that could be structured within a 401(C). He said that he noticed that when they have recreational events staff budgets for traffic control, security, etc., MCO officers are present as well as members of the Posse and asked if the Posse members get paid individually for their services in that regard. Captain Rodriguez explained that typically for those events the Posse receives a donation from the event's sponsor or promoter at a negotiated rate, which is typically a very reduced hourly rate based on the manpower provided. He emphasized that the Posse does not get their authority unless they have a Deputy Sheriff present so they have been working within different organizations like the Chamber in an effort to try and find a balance where the Posse can work as much as they can but they still need the supervision of a Deputy Sheriff. Councilmember Leger clarified that he is just trying to determine the Town's expenses related to the MCSO contract and how they may in fact overlap the work that the Posse performs. Vice Mayor Dickey advised that they discussed vacation watches last year during the budget and the Budget Committee came back and suggested that perhaps they could cut some of the patrols ($200,000 and the ramification of that was the effect on some of these services) but the cut was not mad e. She said that she would want a more specific scope of work and added that it is important that the work being performed is absolutely and totally local, concentrated only on Fountain Hills. Captain Rodriguez stated that if the vacation watches by the Posse stopped then the burden would fall on the Deputies. He added that if the Posse does not take care of something that the Deputies will. He advised that if they want more visibility and proactive patrols from the Deputy Sheriffs then tasking the Posse with other responsibilities would free up the Deputies to provide that scope of service. Councilmember Leger commented that that was the point that he was trying to make and noted that if the Posse patrolled the parks with the their new golf cart that would free the Deputies up from having to do that. He said that they do have a number of issues down at Golden Eagle Park so that is a valuable service. Mayor Schlum thanked Captain Rodriguez for his input and said that they will revisit this issue. Mr. Buchanan asked if he was hearing that the Council would like to bring back information in a community contract format to talk about the deliverables that the Posse would perform for a certain fee (and staff would propose a fee for the Council's budgetary consideration)? Mayor Schlum stated that he is not sure where that would fall as far as reporting and perhaps they need to know more about how the Posse is associated with the Sheriff's Office -- are they reporting to the Town Manager now? He said he is not sure what they could do as far as a contract. Mr. Buchanan replied that he is not familiar with this issue and he was wondering if they should talk about potential agreements, whether it should be part of the MCSO contract or a separate community contract, etc. z:\council packets\2012\r4-19-12\120320splm.docx Page 16 of 23 The Mayor said "or some kind of a match." Councilmember Contino stated that the thing he thinks they have to take a look at is the amount of savings that MCSO has been providing and he believes they could work out something on that basis. He added that they are not really going to be paying a lot more if they go back and look at the things they are giving us in the contract now, which he believes would level it out. Mayor Schlum said that the point is not to ask the Sheriff's office to do a lot and save the Town money because everyone would like to have as many Deputies around as possible to mitigate crime, etc. He added that they would like the Deputies to be doing as much of the "heavy lifting" that they are trained to do rather than things that the Posse could remove from their workload. In this way the Deputies could do more of the things they want to do and the Council wants them to do. Councilmember Brown commented that he views this as a community type service contract as well and wo uld like quite a bit more input as far as the job description and at least a scope of the dollars they are talking about so they can try to get their arms around it, massage it and try to come up with something that will be really beneficial. Captain Rodriguez stated that he would do that and get together with the Commander and have him put that package together for the Council's consideration. The Mayor said he is sure they will get together with the ad hocs that have been doing fundraising in an effort to get their input as well. Ms. Ghetti continued with her presentation and reported that from what she just heard she will put a dollar amount into the budget so that they have something to move forward with. She pointed out that the goal is the get the budget out before April 1st so there is time to get it out to the public so staff will put a figure in and it will come back to the Council. She noted that the numbers are not final anyway and after citizen input during the month of April there may be other changes so she will just put a dollar amount in at this time. Councilmember Contino recommended putting in $18,000 to $24,000 and Mayor Schlum stated that Ms. Ghetti will work with them and put in what they think is best. Mr. Buchanan said that they could start with that range and the Mayor said okay. Ms. Ghetti discussed the proposed jail concept and pointed out that this started out as a revenue producer (people would stay there instead of going to Tent City and they would charge them rent). She i nformed the Council that a lot more work needs to be done on this and what they have in the CIP budget is the cost to retrofit the building but they do not have the operating costs associated with it but there are still a lot of pieces that need to be work ed out before they decide whether to move forward with this project. She asked for feedback from the Council as to whether this is something that they want staff to explore or is it "dead in the water." Councilmember Contino said that it is his understanding that there will be about a four year return on the investment (before they can start breaking even) and right know he thinks they are about one or two light years ahead of themselves. He expressed the opinion that right now they should scrap this project for now and wait until the next budget to consider this proposal. He stated that they don't know all the factors so he would like to see this tabled and taken out of the budget for this year. Councilmember Contino MOVED to remove the Jail CIP budget for $215,000 until the next budget year or later and Vice Mayor Dickey SECONDED the motion, which CARRIED UNANIMOUSLY by those present (5-0) with Councilmembers Elkie and Hansen absent. Ms. Ghetti addressed the Centennial Circle and reported that staff received a request subsequent to their meeting with the Council for an additional $28,000 from the Fountain Hills Cultural and Civic Association (to put z:\council packets\2012\r4-19-12\120320splm.docx Page 17 of 23 landscaping in the event circle). She noted that this has not been included in the budget and is being brought forward for Council consideration. Mark Mayer addressed the Council relative to this issue and said that a number of months ago Mr. Miles was present at a meeting and presented a concept plan for the Centennial Circle. He reported that a t that time the Council approved an expenditure to cover the cost of the paving. He noted that subsequent to that, Mr. Miles came back and requested that the balance of the remaining funds (some were left over) be used for landscaping. He said that there was enough money left to put the trees in but not enough to complete the landscaping plan consisting of shrubs and bushes. He stated that there are approximately 245 proposed shrubs and bushes in the plan as well as the trenching and drip lines to feed them. He summed it up and advised that this would finish out the plan for the Centennial Circle with two exceptions -- they backed up on the low retaining walls because of the expense and as far as the benches, they are now using the surplus they had at the park because they cannot fill all the requests for donations and dedications of benches for loved ones. He reported that at least five of them will transfer over (providing 5 of the 18 proposed benches for the Circle). Mayor Schlum asked on last year's budget, what the overall figure was for this and how much was spent on Centennial Circle expenditures Mr. Mayer replied that there are no dollars left. They had to do some additional work because the as builts were not accurate so both water and electrical had to be brought in and that cost additional dollars. Everything that was left over after that was applied towards the trees. The Mayor asked if they received any assistance from the Library Association as far as the Centennial Circle area and Mr. Mayer advised that they paid for the signage on one of the monuments. He added that they might have done something else but he is not aware of it. In response to a question from Councilmember Brown, Mr. Mayer advised that the low -voltage lights are included in the $28,000 and confirmed that this would totally complete the project. Mr. Mayer stated that he does not have a rendering of what the Circle would look like with all of the plants and shrubs but said it was in the original proposal that Mr. Miles presented and the Council approved. Councilmember Brown advised that he would like to see this project finished because it is certainly a centerpiece to their Library and Community Center and would add a lot. Councilmember Contino asked when all of the electrical will be put in and whether this will be used for events. Mr. Mayer replied that the request in this year's budget for $20,000 was to put the electric into the site and said that right now all they have is low-voltage lighting. Actually, there is a solar panel that actually turns the water on and off to water the trees. They need to bring power in to the site and extend it over to the electrical boxes in the center. He stated that the $20,000 will cover pulling the wires and putting in boxes. There will be power in power in four of the eight gravel areas. Councilmember Contino asked if they will have to remove blocks to get this work done and Mr. Mayer responded no, most of it has been sleeved. Vice Mayor Dickey asked if the downtown fund comes into play at all (or would they want it to) and Mr. Mayer responded that that would be a Council question and not something that he could answer. The Vice Mayor questioned as far as the CIP goes whether this would make them forego anything and force them to make a choice on things. She asked if it was worth looking into the other funds for it. Mayor Schlum advised that he would like to see a much smaller number here but he also wants it finished because it is a municipal piece of the property and so it is appropriate for it to be funded through the Town rather than the downtown fund. He said that this is his initial thought but they can look at other options. z:\council packets\2012\r4-19-12\120320splm.docx Page 18 of 23 Councilmember Contino questioned whether this was part of the downtown area and the Mayor said yes. Councilmember Contino stated that then they could use the downtown funds. Mayor Schlum stated the opinion that they should talk about the dollar figure tonight. Councilmember Brown MOVED to put $28,000 into the budget to finish the landscaping and the low-voltage lighting at Centennial Circle and Vice Mayor Dickey SECONDED the motion and the motion CARRIED UNANIMOUSLY by those present (5-0) with Councilmembers Elkie and Hansen absent. Ms. Ghetti continued her presentation and discussed transportation out of the Special Revenue Fund. She explained that this is not something that is budgeted but the Town has an opportunity to apply for LTAF ll funds that can only be used for transit. She said that staff would like to talk about a pilot program and noted that a few years ago the plan was for Valley Metro's transit bus that stops at Mayo Clinic to bring it into Town by 2014 but that got pushed back to about 2019 because Valley Metro ran out of money. She reported that the Town is eligible for $63,000 that they could use to have transit into Town extending the bus that stops at Mayo Clinic into Fountain Hills. She said that she had a couple of maps and proposals and noted that it would require 25% matching funds from the Town's General Fund. Ms. Ghetti referred to maps/charts that depicted Option A (Mayo Clinic to Avenue of the Fountains) four trips a day for a year for a total of $101,000 with the Town's contribution being approximately $25,000 and Option B, which is less money ($63,000) for four trips a day for a year from Mayo Clinic to Target. She explained that this would be a regular RPTA or Valley Metro bus and would be public so there would be a fare involved. She stated that if the Town does not do this type of program they would not a pply for the LTAF II funds, because they can only be used for transportation and both options are with Valley Metro and would have a fare (one would extend into the downtown area and cost more money). The Mayor asked if the $63,000 would be available next year and Ms. Ghetti replied and said that if they applied the Town's first distribution would be in this fiscal year (it could be carried over because they are not prepared this year) and it the Town could apply every year for the LTAF ll monies, which come from the lottery. She explained that the amount is dependent upon lottery sales. She added that because this is one of the funds that the Legislature swept last year, got taken to court and had to put back in, it is likely that this would continue wou ld but it isn't a "known." She said that they don't even know if there is a demand for this so that is why staff is proposing a pilot program. Mayor Schlum asked if the $63,000 could be used for other things and Ms. Ghetti reiterated that the funds can o nly be used for transportation. The Mayor said that if they wind up going with a pilot program the routes might change depending on what makes the most sense. Councilmember Contino advised that he likes the first option (Option A) because it would bring people all the way into Town and added that a stop at Target would be a tremendous plus and the Mayor agreed. Councilmember Contino stated that it might generate more traffic and bring people into Fountain Hills. In response to a question from Vice Mayor Dickey Ms. Ghetti advised that there would be four stops. The Vice Mayor asked if there would be public outreach and whether Valley Metro would help with that and Ms. Ghetti replied that she would assume that they would but she did not have that specific conversation with Valley Metro. Vice Mayor Dickey asked if they would also be able to use that money to supplement the Give a Lift program and Ms. Ghetti said they could, as long as the end result is transportation oriented. The Mayor stated that the question tonight then is whether the Council wants to include the money in the budget and Ms. Ghetti concurred ($63,000 plus matching funds in the General Fund -- 25% or $15,750). z:\council packets\2012\r4-19-12\120320splm.docx Page 19 of 23 Vice Mayor Dickey MOVED to approve a $63,000 budget item for transportation and Councilmember Brown SECONDED the motion, which CARRIED UNANIMOUSLY by those present (5-0) with Councilmembers Elkie and Hansen absent. Vice Mayor Dickey pointed out that they skipped the item that included the Household Hazardous Waste event and requested more information on this item. She said they don't have to do it tonight but she would like to know if Scottsdale is doing something like that and what the amount covers. Director of Development Services Paul Mood addressed the Council and advised that since incorporation the Town has held one Household Hazardous Waste event (in 2009) and the line went out the door. He said that it cost approximately $45,000 and staff obtained a grant that paid for half of that. He noted that although staff has looked into those types of grants they have not been able to get one to cover the entire amount. He reported that Mr. Rees has contacted Scottsdale and other municipalities and there is a lot of liability involved with hazardous waste so the other municipalities do not want to take hazardous waste from other cities/towns. He added that staff has contacted the Sanitary District to see if they would want to partner with the Town but they have not heard back from them yet. He stated that they are really trying to avoid people pouring stuff down the drain that would ultimately end up in the Sanitary District. He reported that $45,000 would cover the cost of the event if the Town funded it fully. Vice Mayor asked if they have contacted the Department of Environmental Quality (DEQ) to see if anything was available and he said that he will check with Mr. Rees but is sure that he was pretty thorough in his research. Councilmember Brown asked if anyone has talked with Republic Services about participating and helping the Town with this and Mr. Mood said that he is not aware of any conversations but will check with Mr. Rees. He noted that the landfills will not take hazardous waste and he does not know of any service to handle this offered by Republic Services. Ms. Ghetti indicated her intention to review some of the items that were left unfinished and said that they could then go back and discuss other items if the Council desires. She referred to the Infrastructure Maintenance Fund and advised that staff proposed to pay for that with a dedicated sales tax (increasing the telecommunications tax) and since that option is now off the table staff has come up with a couple of other recommendations to fund that. The first would be based on the information today from the State, and it is that they use the existing surplus to cover this fund. She said they would just use it to pay for the major things that are going to be needed in the future over a 20-year period of time, similar to what they do with their Vehicle Replacement Fund (they plan for those things and put money aside so when they need it the money is there). She added that they need some place to charge it to in order to get the money. She outlined the opt ions as follows: The CIP/General fund - pay as you go ($500,000 up front and $275,000 in contingency per year); a Dedicated Sales tax (accumulate and pay as you go); a General Fund appropriation - transfer to maintenance fund and pay as you go; One time revenues (construction sales tax, building permit fees) -- accumulate and pay as you go and Debt Financing - voter approved or MPC bonds (needs dedicated revenue source to repay). She informed the Council that they don't have to do this tonight. Ms. Ghetti further stated that staff put the community contracts back to what they were and want to start moving forward with the groups and talk about what they want them to do. She noted that there were several initiatives that came forward at the Council Retreat that were tourism related (Tourism Bureau to promote Town trails, a bicycle system, etc. She said that there were several initiatives that could be included in the Touri sm contract and if they are going to move forward staff will start meeting with those groups and come up with a scope of work. Ms. Ghetti advised that they could go back to the proposed expenditures and the Mayor asked if there were any more toolbox items that they need to get through and there were none. Ms. Ghetti informed the Council that these are new items and staff is happy to talk about anything in the budget that isn't new. z:\council packets\2012\r4-19-12\120320splm.docx Page 20 of 23 Mayor Schlum requested that they go back to the top of the toolbox items (Increased Recreation Subsidy) and asked if the Council moved on that. Ms. Ghetti advised that they did not specifically talk about that; it was something that philosophically some of the programs that the Town runs will have a decreased subsidy -- not youth programs but other programs that are pretty popular -- they are going to charge a little bit more so that the citizens aren't subsidizing every recreational program (about $35,000 a year to level it off a little bit). Mayor Schlum requested that Ms. Ghetti speak to the Citizens' Survey brought up by Ms. Bordow. He asked if staff knew where that dollar amount came from. Ms. Ghetti stated that that was an initiative that came out of the Strategic Planning Advisory Commission (SPAC) and they came up with the dollar amount ($30,000 based on the last survey the Town had done). She explained that the goal is to mirror the first one so they can gauge how the Town has improved/changed. She said that the additional $5,000 was the number staff put in for the road bond post mortem but they can do that with a simple Survey Monkey that won't cost anything. Mayor Schlum asked if they wanted to move forward with a survey what the process would be to determine what kind they would like they would like to do. He advised that they might move forward with one but not until they determine what the Council would like the survey to accomplish and what it is going to look like and reach out to. He said that they have to find out whether the Council wants to consider a survey that would also include the post mortem. Ms. Ghetti informed the Council that if money is included in the budget for this, the Strategic Planning Advisory Committee would move forward with it and it would come before the Council for their input. Councilmember Leger noted that they used ETC previously out of Kansas City. He ad ded that a citizen this evening talked about methodology and said that ETC has conducted municipal surveys for forty years and he is sure that they can incorporate any type of methodology. He added that they did phone calls on the last one as well. Mayor Schlum commented that technology is constantly changing and there are many ways to obtain information. He stressed the importance of the final product being statistically valid and they will get more information on who to choose and that sort of thing. Ms. Bordow readdressed the Council and said she would be happy to contact the company and get a detailed outline and price. She added that she gave them a high figure so the Council would know what the worst case scenario would be ($7,000). She said that she will dig a little deeper and provide the Council with a proposal in writing. Ms. Ghetti stated that she doesn't know whether the Council wants to review the other items one -by-one but the biggest is the Major Facilities Maintenance. She asked whether the Council would like Mr. Mood to provide all the details or if there are items that the Council would like to remove. Mayor Schlum said that it is difficult to determine where they are going to wind up so he doesn't want to spend a lot of time on a number of those items until they know where they are going to be at based on the previous discussion and direction provided this evening. Ms. Ghetti informed the Council that the $350,000 figure is already in the budget and they pretty much have a balanced budget. Mr. Mood addressed the Council relative to this issue and indicated his intention to place spreadsheets in their mailboxes that will show everything that they did last year and what is being proposed for this year. He said one good example is Building Maintenance Repair at the Library/Museum. They had a $175.00 budget last year and now they are looking at about $33,000 and this includes carpeting for the Library, replacement of card access, etc. z:\council packets\2012\r4-19-12\120320splm.docx Page 21 of 23 He advised that they are proposing to do work that has been put off and the Council will need to review about 15 pages of information line-by-line to check out the differences. He clarified that carpet will be replaced in the Library but not the Museum. Mayor Schlum thanked Mr. Mood for his input and said that the Councilmembers will review the spreadsheet he is going to forward to them. Ms. Ghetti noted that there are proposals for some increased toddler/teen events, parks' parking lot maintenance, a cost-of-living/merit and stated that staff would propose that it be a merit increase rather than a cost-of-living increase. The Mayor indicated that he would like to talk about the cost -of-living/merit proposal and noted that the Council approved the 1% last year despite the fact that it was difficult to afford and added that they are not in a much different place today. He said that he recognizes that the staff is doing more with less and they are valued greatly -- by the Council and the citizens -- but he does not think they are quite at the number yet where they can consider a merit. He stated the opinion that they are going to have to consider more of a flat increase (not a merit) and it will be a lesser amount because they are not out of the woods yet. He noted that not a lot of other communities ga ve increases to their staff (not that they can compare the Town's great staff to staff in other municipalities). He added that they are going to have to consider a smaller, flatter amount. He said that that is his opinion but he knows that there are lots of things to consider about that item such as the importance of being competitive and the fact that the economy is coming back. He reiterated that the Town has a great staff and the Council wants to mitigate negative impacts as much as possible and be smart at it. Vice Mayor Dickey asked if the projection out to 2016-17 includes raises and are they continued. Ms. Ghetti replied that the projection out to 2016-17 takes the current year's budget and next year's budget and includes a 3% inflation factor (3% in each divisional budget). She said that as far as a merit increase, she totally understands the importance of public perception and the state of the economy but said that the economy is picking back up, the Town has a completely balanced budget and surplus and her concern is that they are going to start losing people because other communities are hiring at higher rates than the Town is paying. She added that other municipalities were a lot further behind the Town as far as cutting -- the Town cut staff and budgets early -- so they didn't have to dig into reserves. She noted that the other municipalities are still catching up with what the Town has been managing all along. She expressed the opinion that the Town will likely lose staff if they are not given some type of a merit. Mayor Schlum said that he can appreciate Ms. Ghetti's comments because they are getting into a more competitive market and it is important that the Town remain competitive and provide decent salaries and a good benefit package. He stressed the importance of putting everything into balance and being smart about it (being frugal with their dollars). He reiterated his support relative to providing employees a flat, smaller increase than the 2 1/2% that is being proposed (a 1% or 1 1/2% flat increase). He stated that this is something to consider as they go forward and added that they will have more discussion on this issue at future meetings but he wanted to let everyone know his thoughts. He noted that there are other things to consider as well and he looks forward to hearing Mr. Buchanan's thoughts on this when the discussions take place. Vice Mayor Dickey asked if a 2% increase would cost about $55,000 and said that she thought she would be okay with a flat 2% increase especially since the cost-of-living has increased by 3.1%. Mayor Schlum reported that the 1% flat increase last year amount to approximately $28,000 (it was under $30,000) so 2% would be double last year's amount. With the Council's consensus he said that they would talk about this in greater detail at the next discussion. Ms. Ghetti advised that staff will leave the proposed amount in ($69,000) and there will be further discussion on this item. She stressed that staff wants to put the budget together by April 1st. z:\council packets\2012\r4-19-12\120320splm.docx Page 22 of 23 Mayor Schlum commented that he would like the Council to have more to think and talk about as far as how the Council makes that decision for the staff and for the Town. He said that a lot of good information was shared this evening and perhaps something could be put together and forwarded to the Council for consideration. He added that he would like to see some information as far as what other cities and towns are doing and whether there are other innovative ways to address this. Vice Mayor Dickey stated that it would also be helpful to receive any available information on grants and things like that which they know the employees are directly responsible for obtaining for the Town. She said she believes this would be relevant information to consider as well. Mayor Schlum advised that he things the Council did a good job last year and even the year before recognizing those efforts and agreed that those efforts and resulting benefits to the Town are hard to ignore but it's really not about the value of the Town's employees -- that is a known -- it is about what they can afford and making responsible decisions. He agreed that the employees are worth more than the Town can pay them and said he recognizes that they have gone without raises for quite a while (the 1% was less than the increased cost-of-living). Ms. Ghetti stated that they have reviewed all of the items brought forward by staff and thanked the Council for their input. She reiterated that staff's goal is to have the budget (the planning document not the final budget) in place by April 1st. She noted that they will have three Work Study Sessions in a row the end of April to go over the budget in detail again and then hopefully adopt it tentatively by the end of May with final adoption in June. Mayor Schlum expressed his appreciation to Ms. Ghetti and said that she helped manage this and, with her great staff, put this together thus far in addition to serving as the Interim Town Manager. He commended Ms. Ghetti and her staff for their excellent work in this regard. He also expressed appreciation to the Executive Budget Committee and some of the Commissioners who provided input. He emphasized the importance of having "everything on the table" and stated that he thinks staff did a great job in bringing all of the items forward for discussion and consideration. Ms. Ghetti thanked the Mayor and agreed that the Town does have a great staff and everyone has put a lot of hard work into the budget document. AGENDA ITEM #4 - ADJOURNMENT Councilmember Contino MOVED to adjourn the meeting and Councilmember Brown SECONDED the motion, which CARRIED UNANIMOUSLY by those present (6-0). The Special Session adjourned at 8:20 p.m. z:\council packets\2012\r4-19-12\120320splm.docx Page 23 of 23 TOWN OF FOUNTAIN HILLS By __________________________ Jay T. Schlum, Mayor ATTEST AND PREPARED BY: _________________________ Bevelyn J. Bender, 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 in the Town Hall Council Chambers on the 20th day of March, 2012. I further certify that the meeting was duly called and that a quorum was present. DATED this 19th day of April 2012. _____________________________ Bevelyn J. Bender, Town Clerk