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HomeMy WebLinkAbout2012.0410.TCWSM.Minutesz:\council packets\2012\r5-3-12\120410m.docx Page 1 of 18 TOWN OF FOUNTAIN HILLS MINUTES OF THE WORK STUDY SESSION OF THE FOUNTAIN HILLS TOWN COUNCIL APRIL 10, 2012 AGENDA ITEM #1 – CALL TO ORDER AND ROLL CALL Mayor Schlum called the meeting to order at 5:32 p.m. in the Town Hall Council Chambers. Present for roll call were the following members of the Fountain Hills Town Council: Mayor Schlum, Vice Mayor Dickey, Councilmember Contino, Councilmember Leger, Councilmember Brown, Councilmember Hansen and Councilmember Elkie. Town Manager Ken Buchanan, Town Attorney Andrew McGuire and Town Clerk Bevelyn J. Bender were also present. AGENDA ITEM #2 – PRESENTATION AND DISCUSSION RELATED TO PROPOSED EXPENDITURES BY FUND AND DEPARTMENT FOR THE FISCAL YEAR BEGINNING JULY 1, 2012. Deputy Town Manager/Finance Director Julie Ghetti addressed the Council relative to this agenda item. Ms. Ghetti stated that this is the third budget related Work Study Session and added that staff has distributed to the Council and posted on the Town's website the final draft of t he proposed budget (Available on-line and in the office of the Town Clerk). She noted that some changes were made in the draft that was posted versus the draft of the budget that was presented last week. She indicated her intention to review those changes. She stated that during the month of May staff is dedicated to getting out and speaking to public groups and encouraging citizens to ask questions and provide their input. She pointed out that there is an option on the Town's website for the publ ic to provide their feedback and encouraged the residents of Fountain Hills to take advantage of this opportunity, provide their comments and ask questions related to the budget. Ms. Ghetti further stated that at the end of April there will be three more Work Study Sessions for the Council to ask questions and get into more details relative to the budget. She advised that the goal is to adopt the tentative maximum budget at the first meeting in May. Ms. Ghetti informed the Council that the goal this evening is to present the highlights in the proposed budget and said that each department head will come forward, present the highlights related to their division, and be available to respond to any questions that the Council may have. She added that if staff has missed anything in the proposed budget she would ask that the Council let staff know so that they can incorporate it. She also noted that a Budget Open House will be held on Wednesday, April 18th, from 5:00 p.m. to 7:00 p.m. and added that staff talked to one group yesterday and plans on approaching others if they are interested. Ms. Ghetti highlighted the changes that were made to the proposed budget in response to input/motions made by the Council at the last two budget meetings. She reported that staff eliminated the use of General Fund Reserves to balance the General Fund budget; made some changes to the Full-Time Prosecutor and put that position back in as a full-time position rather than part time; they brought back to the 2011-12 years the Tourism and Community Contracts and increased them; they put into the budget $15,000 for a Posse Program and included in there a Pilot Transportation Program. She further stated that in Development Services/Streets they eliminated the Pavement Management Program based on Council direction. Councilmember Leger referred to the Hockings Report and asked if that was taken out. z:\council packets\2012\r5-3-12\120410m.docx Page 2 of 18 Ms. Ghetti confirmed that it was removed and apologized for not including it on the list of items that were eliminated. Councilmember Leger stated that when they talk about the Prosecutor they use the word "increase" and when they talk about Community Contracts they use the word "increase” as well. He clarified that these items are really not increases -- they are being maintained at the level they were at in Fiscal Year 2011-12. Ms. Ghetti concurred with Councilmember Leger's comment and explained that staff used the word "increase" meaning those items were increased from the first draft of the proposed budget (does not represent an increase from the prior year). Ms. Ghetti reviewed the PowerPoint presentation (Available on-line and in the office of the Town Clerk) and referred to a chart that depicted the Town's Budgetary Funds. She said that there is one General Fund and that is where they pay for most of the Town's operations (Police, Fire, Parks, etc.) and all of the other funds to the right are called Restricted Funds (funds that the Town gets revenue from; a specific source that can only be used for a specific purpose). She noted that they cannot take funds out of the Restricted Fund account and put them into the General Fund but they can always take money from the General Fund and put it into any one of the Restricted Funds. She advised that the total revenue for all of the T own's funds is estimated to be $27.1 million and of that, the General Fund is 51% of all of the revenues. She discussed expenditures by fund and reported that the General Fund's expenditures are about 47% of the total, $31.4 million, with the largest fund being the Capital Projects Fund at 37%. In response to a request from Councilmember Leger, Ms. Ghetti provided a brief explanation of the Open Space and General Government development fee funds. Ms. Ghetti highlighted a list of All Fund Sources and noted that the Capital Projects Fund, $7.4 million, consists mostly of grant funding and stated that if the Town does not receive the funds then it will not be spending the money. She said in case they do obtain the funds, they are required to account for it so the monies are included in the budget. She reiterated that the total of all the Town's funds is $27.1 million. Vice Mayor Dickey referred to the Public Art Fund ($210,000) and asked what staff anticipates will be funding that. Ms. Ghetti replied that the $210,000 is if the theatre is built because there is a requirement that the developer contribute to the Public Art Fund. She added that $10,000 has also been included in the fund for general maintenance. In response to a request for clarification from Councilmember Leger, Ms. Ghetti stated that the developers have an option -- they can either contribute the money to the Town or put in an art piece valued at that amount ($200,000). Councilmember Leger commented that some people are under the impression that the $200,000 is going to be available for the Public Art Fund and it may very well be unless the developers decide to put in a fountain feature of their own and in that case they would pay for their feature and would not donate any monies that would go towards the Public Art Fund. Ms. Ghetti concurred with the statement made by Councilmember Leger and briefly discussed the All Funds Uses chart. She also referred to a chart that depicted the General Fund (the Town's main operating fund) and pointed out that the revenues are anticipated to go up 8%, due primarily to the State's estimate z:\council packets\2012\r5-3-12\120410m.docx Page 3 of 18 of sales tax as well as the Town's local sales tax and the Franchise Fee if that should pass. She added that the expenditures are also up 8% and that is primaril y due to resuming the deferred maintenance of Town infrastructure. She said that these initiatives will be discussed individually as they go through each department's budget. Responding to a question from Mayor Schlum, Ms. Ghetti stated that any expendit ure over $20,000, even if it is in the budget, has to come before the Council. She said that the budget is their planning guide and staff does not have any authority to spend an amount over $20,000 -- those items must be brought before the Council (there is no assumption that if it is in the budget it will be spent). Ms. Ghetti referred to a chart that showed State Shared Revenues (revenues the Town gets from the State -- sales tax, income tax and vehicle license tax revenues). She noted that there are two reasons why the Town has lost income tax -- one is the economy because lesser revenue results in lesser taxes and the second is because the Town lost population. She advised that there is an anticipated increase from the State and since this is based on two years prior that is a good number so that is what the Town will get next year. Ms. Ghetti explained that the State sales and income taxes from the whole entire State make up the State Shared Revenues -- they share in whatever the total collection is for the State (15% of that amount) and the 15% of all the income tax is divided up between the cities and towns based on population. She added that as the other cities grow larger and larger and Fountain Hills is basically landlocked, their piece of the pie will get smaller. She confirmed that none of the cities/towns in Arizona can impose a local income tax. Ms. Ghetti referred to a chart that depicted Local Sales Tax (2.6% local tax rate and 9.9% total including State/County). She noted that of the 2.6%, 2.3% goes into the General Fund, which is an increase over last year when it was 2.2% and that is because they paid off Town Hall so .1% is now going into the General Fund and that's a savings they did for the General Fund last year. She added th at .3% goes into the debt retirement fund (a separate, restricted fund). Ms. Ghetti briefly highlighted the contents of General Fund/Expenditures by Department slide and reported that they are at $12.6 million this year and projecting $13.6 million for FY 2012-13. Ms. Ghetti discussed Personnel & Benefits ($3,356,721) and reported that there is an overall 2% decrease in this category. She said there are no new staff positions proposed in the budget, there are 56.5 FTEs (45 full time and 19 part time). In addition they have realized a 15% savings in health insurance premiums because they shifted more of the costs onto the employees and encouraged them to go into a Health Savings Account where the employees take on more of the burden for their health insur ance. She further stated that the she and the Town Manager included the 2.5% merit/cost of living increase for staff in the proposed budget based on the following reason -- staff "stepped up" during the economic recession and layoffs and continued to provide the same level of service to the citizens of Fountain Hills. Ms. Ghetti said that she believes now is a good time to compensate those employees for their dedication. She noted that with the recovering economy other cities and towns are including cost of living or merit increases in their budgets and if the Town does not remain competitive, they are likely to lose good employees. She reported that the total cost would be $69,000 and that figure has been included in the budget. Ms. Ghetti said that as a service organization, which is what governments are, the delivery of service to the citizens of the Town is dependent upon the number of employees who can perform the service. z:\council packets\2012\r5-3-12\120410m.docx Page 4 of 18 Mayor Schlum commented that last year the Council approved a 1% across the board salary increase for employees and asked if they know what the cost of living increase is and Ms. Ghetti said 3.1%. Ms. Ghetti continued with her presentation and discussed Administration ($2,485,022) and reported that it includes Risk Insurance, Human Resources, IT, the Town Manager, the Town Clerk, Legal (Town Attorney, Town Prosecutor and Public Defender), Economic Development, a portion of the General Fund, Budget, Finance, Licensing, Audits, Customer Service and the Town's Volunteer Program. She noted that the largest division is the Town Manager, which includes a contingency in the amount of $250,000 and that is something new this year. She reported that without the contingency, the Administration budget actually went down (just a little bit under 1%). She added that the IT budget increased by 22% primarily for new computers to resurrect the equipment replacement program, which includes 26 new computers, three servers, computers for the Council and $20,000 for new security cameras at the Community Center. She advised that the security cameras and the system they go with are to protect the art around the Circle. She noted that one incident of vandalism has already occurr ed and the current system cannot accommodate any more cameras. She said the cameras/system will cover the Circle and the parking lot at the Community Center. Ms. Ghetti informed the Council that the Town Clerk's budget decreased 31% since there is only one election projected for next year and the Human Resources budget decreased 7% because of the decrease in the liability insurance. She added that it continues with the Volunteer Program -- that is still included in the budget. She stated that the Finance Department's budget increased by 3%, the Economic Development budget (the General Fund portion) decreased by 3% and it includes integrated marketing strategy, funding for the Incubator Program, design services for marketing pieces and ads. She said tha t half of those costs are included in the Downtown Development budget as well. She noted that the Downtown Development budget decreased by 13% and includes all the things she just mentioned (integrated marketing strategy, etc.). She added that it also includes holiday lighting on the Avenue, a project impact analysis for the downtown and dues to belong to the Greater Phoenix Economic Council (GPEC). Ms. Ghetti reported that the Legal budget includes a full-time Prosecutor and Public Defender as well as the Town Attorney. She said that budget increased 4% to cover costs of any unanticipated lawsuits. Ms. Ghetti indicated her willingness to respond to questions from the Council. Councilmember Hansen commented on the i-Pads for the Mayor and Council and asked why staff thinks they are needed. Ms. Ghetti replied that they are on a rotation schedule for new computers for the whole organization. They have about 82 computers and so they rotate so many a year and the Mayor and Council's computers are on that rotation and scheduled to be replaced with tablets but they don't have to be tablets, they can get laptops just as easily. Councilmember Hansen said that based on the little use the computers get she is not sure they need new ones. Councilmember Leger stated that he had noted this item as well ($7,000 for Apple i-Pads for the Mayor, Council and Department Directors) and said they all pretty much have their own computers that they use and he has a hard time justifying this expense. z:\council packets\2012\r5-3-12\120410m.docx Page 5 of 18 Ms. Ghetti clarified that it is not about buying i-Pads for the Council -- it is more about replacing computers on a scheduled program. She stated that they don't have to replace the Mayor and Council's computers; they can make an adjustment and replace ones that are newer as opposed to replacing old ones or take the schedule out and not replace them at all. She noted that they are trying to get back to replacing things before they break down and laptops or i-Pads are about the same price so there is no savings involved. In response to a question from Councilmember Leger, Ms. Ghetti advised that they are talking about the computers that the Council uses on the dais during Council meetings. Councilmember Leger thanked Ms. Ghetti for the clarification and said that he was unclear on that issue. He said he would "pull back his statement" because he thought it was "in addition to." Councilmember Brown requested that Ms. Ghetti explain how the Town Manager's Contingency can go from $15,000 to $250,000. Ms. Ghetti explained that in the budget for the next fiscal year they have a revenue line item for a Franchise Fee for Chaparral City Water -- they have expressed a desire to move forward with an election and having a Franchise Fee included on the ballot. She said that because they don't know whether that is going to be successful or not they included a $250,000 contingency. She added that if either the revenues do not come in, the Franchise Fee doesn't pass or if they decide not to have an election then that $250,000 is not programmed to be spent -- it is in there just to make sure that they do not budget for the whole amount and then the revenues don't come in. Councilmember Brown thanked Ms. Ghetti for the explanation. Ms. Ghetti informed the Council that Development Services Director Paul Mood will now address the Council relative to the Development Services budget. Mr. Mood advised that the department has realized a fairly large increase in its budget (29%) up to almost $2.1 million. He described the department's responsibilities, including planning, building safety, code enforcement, stormwater management, engineering, the CIP, facilities and GIS. He noted that the department had a $471,000 increase and 75% of that is related to facilities. He said that in the Planning Department, they have included the $30,000 Arizona Department of Water Rights (ADWR) fee for next year and stated that the Legislature still has not made a decision on that so they have to budget for it. He added that they also had a $45,000 Household Hazardous Waste Event. Mr. Mood advised that under Building Safety they added $20,000 in contractual services and said that right now they have one Chief Building Official and one Permit Technician and when the Building Official (who does all the plan reviews and inspections) is on vacation they have to hire an outside contractual company to perform the inspections. He further stated that if they pick up a couple of large projects like the movie theatre, such as a multi-family housing project, it would be very difficult for one person to keep up with all of the work required. He added that the additional $20,000 will help pay for contractual services should that occur. Mr. Mood commented that they also experienced a reduction in salary and benefits and noted that Peter Johnson was the Chief Building Official but he had accepted a job in Colorado and Jayson Field, who was doing plan review and inspections, (and half of his salary was also coming from Code Enforcement) became the Chief Building Official based on his qualifications so as a result of this movement they realized a reduction in salary because they went from 1.5 people down to 1. He reported that Code Enforcement went down and pointed out that part of Mr. Field's salary line item went over to Building z:\council packets\2012\r5-3-12\120410m.docx Page 6 of 18 Safety. He added that they also included $10,000 for abatement in Code Enforcement so if they get a green pool that they can't get a bank to take care of or they have a dangerous building condition that has been abandoned, they do have some money in next year to go and take care of those cleanups and repairs and then lien the property. Mr. Mood said that they also added $20,000 to Engineering's budget for plan review and inspections and stated that they have the Ellman development and are doing a lot of plan review and this is basically a department of one with the Town Engineer so it is difficult for him to keep up with all the Ellman reviews and keep up with his normal activities. He stated that they also have one Engineering Inspector so if the Ellman project does start it is going to be difficult for the Inspector to keep up with his day-to-day activities and that large project. He noted that they also have a large project that could be bid out next year on Shea and Saguaro so they wanted to add in some funding for contractual services if and when they are needed. Mr. Mood informed the Council that they also added $20,000 for increased wash maintenance and reported that the current year's budget was $130,000 and they increased that to $150,000 for next year, which will bring them back to the level of funding they were at for wash maintenance in 2008. He said wash maintenance was completely unfunded in 2009 and they were in a seven -year cycle and staff is trying to get it back into a four-year cycle to maintain the washes. Mr. Mood advised that GIS increased about $25,000 and the reason for that is a new plotter/scanner and a new printer. He stated that they currently do not have the ability to scan plans when they get them in (they have to send them out) and the current plotter and printer are ten years old and they are continually repairing this aging technology that needs to be replaced. He further advised that Facilities was the major increase and said that the Council received a memo with a very large spreadsheet on March 22nd going over what was included last year and what staff is proposing for next year. He pointed out that the Town has put off a lot of routine maintenance and repairs (i.e. for the Communit y Center last year they had General Building Maintenance programmed at about $1,700 and next year it is $48,000 -- repairs to the ballroom doors, the parapet wall, the roof, a lot of window replacements, etc.). He added that plumbing went from $6,000 to $18,000 and HVAC went from about $1,300 to $11,000 and that is pretty much for all of the buildings. Mr. Mood stated that that is a brief overview of the Development Services Department's proposed budget for the upcoming fiscal year and indicated his willingness to respond to any questions. Mayor Schlum thanked Mr. Mood for his presentation. Vice Mayor Dickey commented on landscape overgrowth around some intersections and medians and asked where that fell. Mr. Mood responded that they have contractual services in the Streets Department budget (Artistic Landscape Management) and the Town has a contract with them and two workers maintain just under 70 acres of medians and rights-of-way. The Vice Mayor asked if they have had to cut back on that or is this pretty much what he would expect and Mr. Mood stated that he would defer to the Streets Superintendent but he believes they had three crews of two or two crews of three for a total of six workers in the past but this has been cut over the years. z:\council packets\2012\r5-3-12\120410m.docx Page 7 of 18 Councilmember Leger referred to the maps and graphing program and replacing the plotter and printer and asked Mr. Mood if the rationale behind that is that it is more cost effective to replace the equipment than to continue to repair it. Mr. Mood said that is correct -- the equipment is ten years old and they cannot scan plans so that has to be sent out. He reported that they are spending anywhere from $2,000 to $3,000 a year just sending out plans to be scanned and having repairs done. He said they are not sendin g a lot of stuff out to be scanned -- if they had the ability to do it in-house they would be able to do a lot more. He confirmed that the purchase of new equipment would enhance productivity. In response to a question from Councilmember Leger, Mr. Mood stated that he believes the first Hazardous Waste Event the Town held was in 2009-10 and it was a tremendous success. He added that he spoke with the manager of the Fountain Hills Sanitary District about some cost participation because this type of event would help their type of facility out as well (people won't be pouring hazardous materials down the drain) but he doesn't know if the manager has addressed this with his Board yet or not. He said that Mr. Rees has been searching for grants and talking with other municipalities and to date has not been able to find anything out there. Councilmember Leger thanked Mr. Mood for the detailed spreadsheet that was forwarded to the Council and said as they look at the budget they are seeing an increase of about $1 million over last year but most of the expenditures are level. He added that it appears that a majority of that $1 million is going towards facilities, repair and maintenance and the contingency (about $900,000). He stated that some of the costs listed on the sheet seem high to him and he is hoping they can realize some savings as they go through them, particularly some of the external paint jobs (the fire station, etc.). He asked how the costs are arrived at. Mr. Mood said that the previous Facilities Manager put a lot of this together based on past experiences and some things he did go out and get quotes for. He agreed that some of the prices could be a little bit high and said they have a Manager's Contingency but they do not have a contingency in facilities so if something occurs they "rob from one line item to pay for something in another." Councilmember Leger noted that in the past staff has done a great job containing costs and he sees some significant opportunities here. He pointed out that the exterior paint job related to the fire station is $30,000 and that seems pretty high. Mr. Mood assured Councilmember Leger that when staff is going to get something like that done they do go out and get bids to ensure that they are getting the most "bang for their buck." Councilmember Leger stressed the importance of keeping on top of costs and ensuring that the work will be done at the best possible cost. Vice Mayor Dickey commented that the Council received a report that showed a lot of activity occurring during the month of March. She reported that there were 246 calls to Fire Station #1 and 73 calls to Fire Station #2 during that same period. She said as they move forward she knows that there was some discussion about buildings the Town owns that they might consider selling in the future. She stated that the $13,000 they spend on maintenance of Fire Station #2 is not very much but when they do consider future plans she would like them to keep this in mind. z:\council packets\2012\r5-3-12\120410m.docx Page 8 of 18 Mr. Mood agreed and advised that staff did not include a lot of the maintenance items in Fire Station #2, the Kiwanis building and the theatre building as well just because they don't know what is going to be happening with those buildings. Ms. Ghetti informed the Council that the next item, Community Services, which is Parks & Recreation and the Community Center, will be presented by Community Services Director Mark Mayer. Mr. Mayer outlined the responsibilities of his Department, including maintenance for trails and parks including trails in the Preserve and The Overlook, recreation including special events, Community Center operations, Senior Services and public art. He noted that they have included funds for additional maintenance and said they are trying to do some things that they have not been able to do for a number of years due to the downturn in the economy. He stated that they plan to do some re-striping and resurfacing of parking lots and, in addition, under maintenance for trails they are looking for some signage on The Overlook Trail (requested by users of the trail and the Homeowners Association). He said under Parks, not only is staff looking to redo the parking lots, they also are proposing an additional "bump up" in fertilization and herbicides, especially at Fountain Park that they have had to back off of over the past couple of years. Mr. Mayer further stated that they are proposing to rebuild the Fountain cla-valve at Fountain Park (an apparatus that allows the pumped water that is being generated to actually go out to the Fountain itself). He reported that there are three of them, one on each of the motors, and staff had hoped to do this replacement this year but there were not enough funds to accomplish this. He said if approved they will have three new pumps and three new cla-valves. He added that repairs and restriping of the parking lots have not been done for a number of years and almost all of the $42,500 budgeted for that will be needed (with a little extra in there for contingency). He discussed Community Center bond payments and said that the Council may recall that those were re-financed a few years ago and they were able to drop the amount they were paying on an annual basis from $387,000 to $193,000 (more than half). He stated that he took a quick look at the numbers on usage from last year and he thinks it is important to note that 55% of the usage from the Community Center last year, which would have generated potential revenues, was a free activity based on either the Town or some other organization or local group utilizing the facility. He said it gets a substantial amount of use and 55% of that usage was on a free basis. Mr. Mayer stated that he would like to go through some of the variances -- including an increase in meal costs for home-delivered meals. He noted that this is the third and final year before the Town renegotiates the contract. He pointed out that the number one increase was the Level One Background Check requirements that came through and totaled more than $17,000. He added that some additional staff time has been allocated to assist with the maintenance of the art pieces and some additional work that is being done by the Parks staff so they were able to reduce the landscaping contracts for the parks. He advised that in the past barricading and signage for special events was included under the Streets Department and is now included under Community Services. He pointed out that Facilities has taken over responsibility for the janitorial and all the supplies at the Community Center s o that line item was reduced in their budget. Mr. Mayer indicated his willingness to respond to any questions from the Council. Mayor Schlum thanked Mr. Mayer for his presentation. The Mayor referred to the Professional Fees line item (a $22,000 increase listed on Page 170, Community Services Expenditures/Summary/General Fund) and asked what this takes into account. z:\council packets\2012\r5-3-12\120410m.docx Page 9 of 18 Mr. Mayer replied that he believes the major portion of that is the $17,000 associated with the Level One Background Check requirement. Vice Mayor Dickey noted that they have received a request relative to establishing a small budget for the McDowell Mountain Preserve and she knows that some of it they can't do but Mr. Mayer had mentioned that they could purchase some tools. She added that some of what they were asking for was a media presentation so that more people would know they had it and it covers a lot more items like the branding and letting people know that we have these trails. She stated that Mr. Mayer will be possibly working with the School District on that. Mr. Mayer informed the Council that one of the things that is being discussed is if they are in a position to upgrade the equipment at Town Hall for meetings held here that the existing equipment be potentially provided to the School District and then they could partner with the School District to develop a video. He said that they are also checking to see what it would cost if they had to use an outside person to do that work. In response to a question from Councilmember Elkie, Mr. Mayer confirmed that a majority of the $17,000 required for the Level One Background Checks will come from a grant. He advised that the deadline for spending those grant funds is the end of this fiscal year. He explained that when staff put this budget together they were not aware of that grant program and they also didn't know how many people would be available to go through that program and get the background checks done before this next fiscal year. He reported that it is possible that the amount can be reduced but the concern at this point is they have a promise regarding the funds but they haven't yet received any of the funds so staff included the entire amount in the budget just to be cautious. He stated that this is still very much "a work in progress." He added that he believes they will see a much lower cost each year just to replace people who go off the program. Mr. Mayer discussed the Background Checks and paperwork/fingerprint process that must be done and said that 99 times out of 100 fingerprints are rejected simply because of smeared fingerprints but efforts are being expended to work people through the program pretty quickly and if people prefer to go to a local vendor to get this done they can do that as well. Discussion ensued relative to the fact that the grant will cover $13,500 out of the potential $17,000; the fact that staff anticipates that they will lose some people who carry out this work; Councilmember Leger's reference to Page 165 of the Community Services budget, under Variance, and said they talk about the reallocation of wages to other programs and Mr. Mayer's reply that this is the second or third year of doing program budgeting and it became clear that there are parts of the program (such as boards and commissions) where they were drastically underestimating the amount of time that it takes to work with those particular groups (his time, the Executive Assistant's time and that of other staff members as well); the fact that estimates have been reallocated based on their experience to date and a lot of "twe aking" went on this year; Councilmember Leger's comment that they are basically "robbing Peter to pay Paul" and Mr. Mayer's concurrence with that statement and his comment that overall the number of FTEs went down. Councilmember Leger referred to Page 180, Professional Services, and asked what that consists of (the lake consultant)? Mr. Mayer said yes, that is the bulk of that and there is also an additional amount if they were to acquire any treatment. Councilmember Leger added that he noticed there is $250,000 in the Capital Budget for possible enhancements to lake quality management, the plan they are working through with the Sanitary District. z:\council packets\2012\r5-3-12\120410m.docx Page 10 of 18 Ms. Ghetti advised that Chief Scott LaGreca will now address the Fire & Emergency Medical budget. Chief LaGreca reported that the Council will notice a 3% increase in the budget and stated that at the beginning of this fiscal year they will be starting the third year of their four-year contract with Rural Metro Corporation. He noted that the first two years of that contract Rural Metro forgave the 3% automatic escalator but this year they are not able to waive the 3% again so that accounts for the proposed increase. He stated that when they look at the $3,255,335 and then the Rural Metro contract, which is just a little over $3 million they will ask where the $201,000 is going. He said that the Council at the last Work Study Session approved potentially putting $24,000 into the Rural Metro contract for the CARE part-time position. He said with the recent receipt of a $21,000 grant they were able to slash their equipment line item by $21,000 and slash their equipment repair budget by $2,000. He stated that basically CARE became a "wash" because of the grant process although they asked for $42,000 and received $21,000. He reported that they kept $10,000 in there because they still need to buy one more power plant. Chief LaGreca advised that some of the other things that are included in the budget and make up the $201,000 are equipment maintenance, parts, fuel, breathing apparatus, etc. He pointed out that the department is going to go out for a grant for breathing apparatus. They were hoping to have their equipment last two more years but when they did they inspections for certification they got the bad news that the units not only are not being made any more, parts for them are also no longer being made and none are available. He added that they do have enough units and if they have to they can get through the next year but they are hoping to get some money from the grant. He stated that they have a depreciation schedule for their equipment so when it has to be replaced the money is in a savings account. He said that the dollar amount every year has averaged right around $115,000 so that too is a big piece of the $201,000. He also discussed staffing levels compared to when he started with the Town 17 years ago. The Chief indicated his willingness to respond to questions from the Council. Mayor Schlum thanked Chief LaGreca for his presentation. Ms. Ghetti stated that the Law Enforcement budget increased by 5% ($3,049,572) and that is primarily due to the Town's contract with the Maricopa County Sheriff's Office (MCSO). She noted that they contract for 3.8 beats and a school Resource Officer and added that any increases, since it is a full cost recovery contract with Maricopa County, are passed on to the Town. She further stated that the budget also includes funds for the Town's contract with Maricopa County for animal control and prisoner fees. She pointed out that the new item in the budget is the amount for the Posse. She indicated her willingness to respond to questions from the Council. Mayor Schlum commented on the fact that the Forum was very well attended and citizens were provided excellent information on the services they receive. Discussion ensued relative to the number of law enforcement personnel assigned to the Town. Councilmember Elkie discussed the Posse and issues/concerns that were expressed regarding the condition of their vehicles. He said that the Posse provides a valuable service and one of the things that was discussed during the budget meetings was perhaps making sure that any funds that are allocated be used strictly for vehicle maintenance to ensure that they are out on the road. Councilmember Leger stated that he knows the Council is not making any decisions this evening but he certainly would be on board with the suggestion outlined by Councilmember Elkie. He added that if z:\council packets\2012\r5-3-12\120410m.docx Page 11 of 18 vehicle maintenance can enhance the Posse's patrol activities then this would be an excellent direction in which to move. He pointed out that Ms. Ghetti had advised that $15,000 was included in the budget under Administration. Ms. Ghetti informed the Council that if this is approved, it will stay with Law Enforcement but staff will set up a new program for it (right now the amount is just in there as a place holder -- it would be under Law Enforcement - Posse Program). She also confirmed that there is no change as far as the school Resource Officer; the Town is still funding that position. Ms. Ghetti further stated that the Streets Fund (HURF) is a separate fund that can only be used for streets and Mr. Mood will address the Council relative to this budget. Mr. Mood stated that the Streets Fund is used to fund the day-to-day operations of the Street Division's operations (potholes, open space maintenance of right-of-ways and medians, street signs, signals, etc.). He reported that the budget shows an 11% increase (from $1.1 million last year to $1.4 million) and said that the $1.4 is based on the original estimate provided by the State. He noted that the League came back last week and stated that the amount could really be $1.1 so they do not know the exact amount of HURF funds the Town will receive and that information will not be available until the State's budget is adopted. He pointed out that the $1.4 million represents a $142,000 increase and $110,000 of that is in a contingency line item so if the funding goes away that contingency line item will go away as well. He added that the State has been sweeping HURF funds and in Fiscal Year 2010-11 the LTAF funds were taken away and that amounted to $115,000 that the Town lost. He further stated that they are "taking away a piece of the pot" for DPS as well. He noted that the HURF is based on the gasoline tax so the more gas that is sold, the more money that goes "into the pot" and then is distributed based on population (so as the population gets smaller, so does the Town's share of that money). Mr. Mood informed the Council that right now the big issue is Pavement Maintenance and from 2000 to today the General Fund or CIP has been putting in about $1.2 million (early 2000) for street maintenance and depending on the zone and the size of that zone and costs, that has consistently gotten lower and lower. Last year they did Zone 5 for about $350,000 and this year they cannot do Zone 6. Staff has included $100,000 in the streets budget just for potholes, pavement patching, sidewalk and curb repairs, striping, etc. He added that they do have $100,000 programmed in the CIP every year to help out so they have approximately $200,000 and if they continue to lose HURF monies that will go lower and lower. He stated that he, the Town Manager, Ms. Ghetti, the Town Engineer and the Streets Superintendent have been meeting in an effort to come up with different ideas, including possibly going out for a road bond that would help them get some of the worse pavement back up to speed but there is still the issue of on - going maintenance and a sustainable fund. Mr. Mood noted that the Streets Superintendent went to Zone 1 in the northeast part of To wn and drove around. If they had the money to do proper maintenance he identified roughly 70 areas that would have to be cut out and replaced before they could do a slurry seal on top of it because it is failing pavement (that alone is over $300,000 to do). He indicated his willingness to respond to questions from the Council. Mayor Schlum thanked Mr. Mood for his presentation. In response to a question from the Mayor, Mr. Mood confirmed that Zone 1 is comprised of mostly residential areas. Discussion ensued relative to Councilmember Elkie's comment that Mr. Mood previously stated that it would cost approximately $2 to $2.5 million annually to properly maintain the Town's roads and Mr. z:\council packets\2012\r5-3-12\120410m.docx Page 12 of 18 Mood's concurrence and statement that it does not include Saguaro Boulevard; Councilmember Elkie's remark that the road bond would not take into account road maintenance on an annual basis (this would be essentially just to get the roads back up to where they should be) and Mr. Mood's response that any bond that came forward would just be for the mill and overlay and construction of the roads; the fact that contracting out for street sweeping services is not included at this time and Mr. Mood's statement that that is something that staff continues to look into; Councilmember Elkie's comment that he would like the Council to make the roads a priority and the fact that they could go out for a bond but he believes that sends a message out to the community that if the bond is passed the road issue is solved but that is not the case; his recommendation that they have a comprehensive plan if place if they do go out for a road bond to fund the roads on an annual basis because this is "the thousand pound gorilla in the room" and a very serious problem that must be addressed sooner rat her than later. He stressed the importance of coming up with a comprehensive plan that addresses how they are going to fund the roads. Mayor Schlum asked if the $2.5 million would cover operations and maintenance only and Mr. Mood replied that staff looks at it as being a two-prong problem -- they have to take the worst roads and reconstruct them or do a mill and overlay and then they have the on -going operations and maintenance. The $2.5 million figure included both and if they kept the same zone approach that would mean milling and overlaying about 20% in each zone each year. Mayor Schlum noted that they are talking about over a $1 million gap in the Streets Department budget to cover operations and maintenance. Councilmember Hansen asked what it would cost to fix Saguaro Boulevard per mile and Mr. Mood responded that without following the Vision Plan in the downtown area he would estimate $1 million per mile but until they actually get out there to do it they don't know the sub-grade and if they were thinking of doing so much a year he doesn't think that the residents or businesses would want Saguaro under construction four years in a row in different sections. In response to a question from the Mayor, Mr. Mood reported that the 40 -year old roads that need the work done really badly are Saguaro, Palisades and Fountain Hills Boulevard in the downtown area. He noted that when they did the bond proposal last year they talked with the Sanitary District because if Ellman does come on line they are going to need to run new reclaimed water lines from their treatment plant to the advanced water treatment plant down Saguaro. He stated that obviously they don't want to do a new road and then have to tear it up to put in a new line. He said that there are a lot of associated issues with utilities, Southwest Gas, etc. Councilmember Leger expressed the opinion that Councilmember Elkie raised a good point -- they are looking at $1 million in additional revenue and it is planned to spend that money on facilities maintenance so it is road maintenance versus facilities maintenance. He agreed that facilities maintenance is a priority as well but said that it is important to remember that in setting their own goals they talked about maintaining and improving community infrastructure and specifically about reliable funding sources. He agreed that this is something that needs to be focused on this year and they have stated two specific goals -- and they do speak to roads and road maintenance. He said that in previous meetings Council also mentioned (particularly after the road bond failed) going back and doing a post mortem and taking a closer look at that and the scale of the project on Saguaro and pulling that back. He stated the opinion that this would be the first step in addressing this challenge. Mr. Mood reported that just prior to the meeting this evening staff had a long meeting to discuss that issue. He advised that they could do a general survey using Survey Monkey with the e -mails that the z:\council packets\2012\r5-3-12\120410m.docx Page 13 of 18 Town has for people who subscribe to different Town services. He said that this could be done fairly quickly but if they want a statistically valid survey that is going to take a lot longer because they would probably "piggyback" that onto the SPAC's survey. Councilmember Leger commented that the ball is in motion then and it is just a matter of evaluating specifically through the post-mortem what they should look at in terms of re-calibrating the project and Mr. Mood concurred with that statement. Town Manager Ken Buchanan addressed the Council and stated that there are a lot of factors to be considered -- like when do they want to do this. He added that if they want to look at doing this in November there are a lot of items to be looked at -- if the school is going to be looking at it, the fact that it will be national election and do they want to get in mixed in on that ballot or are they going to look at doing it in 2013. He said that staff wants to bring this back before the Council fairly soon and talk about the post-mortem and how they want to approach it and go out to the citizenry as well as the groups and organizations and ask them a bunch of questions and get their feedback on a lot of items that staff heard afterwards and through discussions with the Councilmembers individually as well. He reiterated that they want to move ahead with this very quickly because if they do want to do it in 2012, they are looking at a Call for the Election as early as June. He added that this would be the first discussion wit h the new Council because it would all have to be done with by June 8th. He stressed the importance of meeting with the Council as soon as possible to discuss this and determine which direction the Council would like to proceed in. Councilmember Elkie commented on the franchise agreement that is being discussed with Chaparral Water and said that if approved, Chaparral Water subsequently charges fees to its users. He asked what the expected revenue would be should the franchise agreement pass. Mr. Mood replied that the percentage would have to be negotiated with the water company and it could be anywhere between $300,000 and $500,000. Vice Mayor Dickey asked if the election could be held in the spring of 2013 and Town Attorney Andre w McGuire advised that it could take place on any one of the four allowable consolidated election dates. He said that it would be a special election paid for by the franchisee. The Vice Mayor noted that in November there could be an election to semi -extend the one-cent sales tax too. Mr. Buchanan reiterated that staff wants to bring this before the Council quickly to have more discussion on it and said some Work Study Sessions would be scheduled to talk specifically about these items -- ones that were identified today that require more discussion and direction from the Council. Councilmember Leger said that they are talking about revenue sources and asked if Ellman will have an impact on the Town if that project is off and running and they are looking at construction sales tax revenue, much of which goes into the Town's capital fund. He pointed out that they really haven't had an opportunity to replenish the capital fund and asked if there is an impact there where they could look forward to some capital dollars. Mr. Mood responded definitely -- if the Ellman project does kick off and there was building construction the Town would get the one-time construction sales tax on 50% into the Capital Projects Fund, which then could be used for road projects. z:\council packets\2012\r5-3-12\120410m.docx Page 14 of 18 Discussion ensued relative to the fact this is a timing issue and the Council may want to evaluate that policy in the near future (it was for the 80-20 and they pulled it back to 50-50 to help the General Fund); the fact that now that things appear to be l eveling off they might want to take a look at that; Councilmember Leger's suggestion that when staff looks at the post-mortem they should also look at the Town's capital projects and his opinion that a number of them are somewhat academic and there is mone y to be found there (i.e., the Avenue of the Fountains median project); the fact that that project, which they are all excited about, will cost $1.7 million and Councilmember Leger's question as to whether they need to spend all that money there or can it be scaled back; and Councilmember Legers statement that Councilmember Hansen once mentioned to him when they were having this discussion that if they scaled that project back, perhaps some of the money could be used elsewhere such as resurfacing part of Saguaro, which would reduce the bond. Mayor Schlum stated that it appears that the post-mortem should be conducted as soon as possible and added his opinion that Survey Monkey would be good and they don't have to go into it very far -- just a couple group meetings and inviting citizens to a couple of gatherings and they should get good feedback on what the concerns were. He added that it appears that there was some misinformation out there and also the language in the election item talked about a lot of wo rst cases so the feedback is very important. He said that he would want to include the Tea Party meeting -- place it on their agenda and ask them to provide some feedback. He commented that he is interested in receiving input from wherever people are gathering. He further stated that although he believes Survey Monkey is a good tool, in light of how good the SPAC did in gathering information, he wants to make sure that they go to where all the people are and ask them to be part of the solution by providing their input. Ms. Ghetti referred to a slide that depicted the Capital Projects Fund and advised that staff did not intend to get into the individual projects this evening -- they are going to have a special Work Study Session at the end of this month and deal specifically with the projects. She reported that the total is approximately $11.7 million and only 4.4% of that is actually coming out of the Town's funds and the rest is from other sources or non-Town fund. The Mayor asked over the last several years what the Town has been spending out of their Capital Projects fund and Ms. Ghetti advised that they have been trying to keep it around $2 million and this year, proposed for next year, is to do a big project and take advantage of the economy of scale instead of spreading it out over two years. She added that they would do some road projects and do them now while it is inexpensive. Councilmember Leger asked what Ms. Ghetti anticipates will be the Town's Capital Fund budget at the end of this fiscal year based on what is projected -- does that bring them down to $6 or $8 million? Ms. Ghetti questioned whether Council Leger was asking what the balance of the year they are in right now would be or the end of next year and Councilmember Leger clarified that he is talking about after the proposed expenditures. Ms. Ghetti advised that it should be about $6 or $7 million. She indicated her willingness to respond to any questions from the Council and reiterated that the next step will be during the month o f April -- getting out and talking to the public, allow the citizens to review this document and to ask any questions they might have/provide any input. She added that hopefully if the Council has any more questions they will come in and pose those questions directly to staff. She noted that the proposed budget is available on the Town's website as well and when they get together at the end of this month they will have three nights of Work Study Sessions where again clarifications can be obtained and they can finalize what the z:\council packets\2012\r5-3-12\120410m.docx Page 15 of 18 tentative budget is finally going to look like. She noted that adoption of the tentative budget, which is just the maximum amount, is scheduled to take place at the first meeting in May. Mayor Schlum stated that he looked at the Town's website to find the budget and it is right there on the Home Page (www.fh.az.gov) and instructed citizens to just go down the page and in the right hand column click on Town Budget and they will find the last budget presentation and people can put in some comments and provide feedback. He encouraged the citizens to take advantage of this method to provide their thoughts and ask questions. He added that the proposed budget is just below that, all 326 pages. He further stated that the Open House will take place on Wednesday, the 18th from 5:00 p.m. to 7:00 p.m. at Town Hall. The Mayor commented that the first few slides that Ms. Ghetti displayed were really good and thinks they help to explain the funds. He noted that there is no property tax coming into the Town to fund things -- although the citizens of Fountain Hills pay a property tax. He asked Ms. Ghetti what is on there as far as the Town and Ms. Ghetti replied that the figure is about 22 cents per resident and it pays for the voter approved bonds to preserve the open space and the library/museum, which were voter approved bonds. Mayor Schlum noted that there is no revenue coming from property taxes. Councilmember Hansen noted that the budget schedule shows the adoption of the final budget occurring on May 17th and asked if that is what they are really aiming at. Ms. Ghetti responded that they will do whatever the Council desires -- if they want to do that before the new Council gets seated they could. She added that obviously the new Council 's first action would then be to adopt a budget that they really did not participate in -- or they could do it at the first meeting in June. Councilmember Hansen said that she was wondering about the outreach during the Council Work Study Sessions because they are going to have three new people on the Council and stressed the importance of providing them the opportunity to weigh in. She added that the new members could attend the Work Study Sessions and provide their comments but it is different from sitting up on the dais. The Mayor agreed with Councilmember Hansen's comment and said more of an overview is provided at the Work Study Sessions. He stated that he would encourage more public comment at the Work Study Sessions as they move forward on this as well as at the Council meetings. Ms. Ghetti pointed out that it is an issue every other year because there is an election every other year. She added that it would be nice to have a policy in place that said we would adopt it with the new Council or with the seated Council so that staff knows what to do. She stated that some years they hear the Council wants to do it before the new Council is seated and other years after. She explained that there are some deadlines that staff has to meet so that the budget is adopted by the first meeting in June because the second meeting in June is when they adopt the tax levy because the Council does not meet during the month of July. She said that staff is okay either way -- adopting it in May or at the first meeting in June but it would be nice to have a policy in place. Councilmember Hansen clarified that there will be two to three new Councilmembers. Ms. Ghetti said that she would like to take this opportunity to thank Quinel l Hui for all the work that she has done because she really put most of this document together and they tried to get it out early. Ms. Ghetti added that she would really like to acknowledge that hard work. z:\council packets\2012\r5-3-12\120410m.docx Page 16 of 18 Mayor Schlum stated that he is sure it wasn't easy for all the departments to put thei r numbers together as well but the result was an earlier, more comprehensive draft and that is helpful and allows the process to go smoother. He thanked everyone for their hard work in this regard. Councilmember Elkie asked if it has always been the case, as far as the Council voting on the budget, that the new Council votes on a budget that they have not been involved in creating. Mayor Schlum advised that as far back as he can recall that is what has occurred. Councilmember Hansen stated that a long time ago the Special Sessions took place in June and the budget was adopted at the second meeting in July -- there would be an extra meeting held to do the adoption of the final budget. Mayor Schlum said that he believes it has always been the new Council who adopts the budget. Councilmember Elkie commented that stretching it out seems to make sense since the new Councilmembers will be voting on the adoption of the budget and they will have to follow it for a year. He added that their input should be heard. Mr. Buchanan informed the Council that he has seen it work both ways and noted that the third Monday in August is the deadline to adopt the budget according to State statutes but added that it is an extreme administrative effort to have to go back a month and a half to July, especially if you retroactive some things so it is a practice and more of an art than it is a science when trying to get a budget adopted before July 1st. He noted that it is always a challenge when there is a change in Council every two years. Councilmember Contino advised that when he and other new Councilmembers came on board they had two weeks to decide on the new budget and it was good to have the opportunity to ask questions. He said that it is helpful to allow new Councilmembers the opportunity to do that. He added that the budget was always adopted at the second meeting in June. Councilmember Leger recalled that when he ran for Council his first term he had a copy of all the budget materials well in advance and asked if the Mayor-Elect receives these materials in advance as well as the candidates who are running. He asked if they are provided opportunities to come in and meet with staff to pose questions and provide input. Ms. Ghetti responded that all the candidates are provided copies of all the documents to review, provide input on and ask questions. She said that their input and questions are encouraged and welcome. Mayor Schlum again thanked Ms. Ghetti and staff of their hard work in putting together the proposed budget. AGENDA ITEM #3 - PRESENTATION AND DISCUSSION RELATED TO THE PROPOSED FEE SCHEDULE FOR THE FISCAL YEAR BEGINNING JULY 1, 2012. Ms. Ghetti addressed the Council relative to this agenda item and said that they should have before them the proposed Comprehensive Fee Schedule and noted that the items highlighted in yellow are the only ones that will change (Copy available on-line and in the office of the Town Clerk). She added that there really are no controversial items included in the proposed schedule and said unless the Council would like her to go over each and every one of them she will not do that. She informed the Council that the new z:\council packets\2012\r5-3-12\120410m.docx Page 17 of 18 fees will not go into effect until July 1st and the list contains the items that staff is proposing. She indicated her willingness to respond to any questions from the Council. She confirmed that the fees are on line and included in the budget document. She noted that the development fees have already changed on January 1st and the Council already adopted them. Vice Mayor Dickey asked if process wise, the Council adopts the fees but they can pretty much make a policy decision any time they want during the year but it makes sense to adopt them when they do the budget -- but that doesn't mean that they are off the table for a year. Ms. Ghetti replied that the Vice Mayor is correct and staff tries to review the fees and present them once a year for efficiency sake but at any time during the year the Council can bring up any fees and make changes. The Vice Mayor stated that obviously the budget is relying on past experiences and what staff anticipates will be collected on the fees as presented. She added that as they go forward and start to talk about bonds and other revenue items they would have to keep in mind that these are also in play. Councilmember Hansen referred to the Senior Activity Center and the memberships going up and asked if this item had gone through the Senior Services Advisory Board. Ms. Ghetti advised that staff met with representatives of the Commission and Director Mayer had met with the entire Commission. Councilmember Elkie requested that Mr. Mood provide some input on the barricade fee schedule. Mr. Mood stated that right now they do not have any fees for failure to barricade or improper barricading on their streets and that is a high liability issue for the Town. He added that staff is going to work with the Town Manager and Town Attorney in an effort to come up with the best way to show that. He said that they anticipated updating the Town Code but this may be a better place for it. He reported that this would be a fee up to $1,000 and advised that staff looked at some of the surrounding cities and towns and they have fees in place anywhere from $250 to $1,500 with the largest fee being charged to those who create a health or safety risk. He said that it gives staff a way to better control the barricading that takes place. Mayor Schlum asked if they are more for events or utility work that is being done and Mr. Mood replied both but mostly utility type work or construction. Mr. Mood added that civil citations can be issued for repeat offenders. Mayor Schlum thanked staff for their input and comments on this agenda item and also expressed appreciation to the Council for the great dialogue and questions that came forward this evening. AGENDA ITEM #4 – ADJOURNMENT. Councilmember Leger MOVED to adjourn the meeting and Vice Mayor Dickey SECONDED the motion. The Work Study Session adjourned at 7:15 p.m. z:\council packets\2012\r5-3-12\120410m.docx Page 18 of 18 TOWN OF FOUNTAIN HILLS By __________________________ Jay T. Schlum, Mayor ATTEST AND PREPARED BY: __________________________ Bev Bender, Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Work Study Session held by the Town Council of Fountain Hills in the Town Hall Council Chambers on the 10th day of April, 2012. I further certify that the meeting was duly called and that a quorum was present. DATED this 3rd day of May, 2012. _____________________________ Bevelyn J. Bender, Town Clerk