FLAGSTAFF CITY COUNCIL BUDGET RETREAT
FLAGSTAFF CITY COUNCIL CHAMBERS
211 WEST ASPEN
FLAGSTAFF, ARIZONA
THURSDAY, FEBRUARY 16, 2017
8:00 A.M.
FLAGSTAFF CITY COUNCIL CHAMBERS
211 WEST ASPEN
FLAGSTAFF, ARIZONA
THURSDAY, FEBRUARY 16, 2017
8:00 A.M.
MINUTES
1.
Call to Order
Mayor Evans called the Budget Retreat to order at 8:03 a.m.
NOTICE OF OPTION TO RECESS INTO EXECUTIVE SESSION
Pursuant to A.R.S. §38-431.02, notice is hereby given to the members of the City Council and to the general public that, at this work session, the City Council may vote to go into executive session, which will not be open to the public, for legal advice and discussion with the City’s attorneys for legal advice on any item listed on the following agenda, pursuant to A.R.S. §38-431.03(A)(3).
2.
Pledge of Allegiance
The audience and City Council recited the Pledge of Allegiance.
3.
Roll Call
| NOTE: One or more Councilmembers may be in attendance telephonically or by other technological means. |
| PRESENT: MAYOR EVANS VICE MAYOR WHELAN COUNCILMEMBER BAROTZ COUNCILMEMBER MCCARTHY (arrived at 8:35 a.m.) COUNCILMEMBER ODEGAARD COUNCILMEMBER OVERTON COUNCILMEMBER PUTZOVA (arrived at 8:08 A.M.) |
ABSENT: NONE |
Others present: City Manager Josh Copley and City Attorney Sterling Solomon
4.
Public Participation
Public Participation enables the public to address the council about items that are not on the prepared agenda. Public Participation appears on the agenda twice, at the beginning and at the end of the work session. You may speak at one or the other, but not both. Anyone wishing to comment at the meeting is asked to fill out a speaker card and submit it to the recording clerk. When the item comes up on the agenda, your name will be called. You may address the Council up to three times throughout the meeting, including comments made during Public Participation. Please limit your remarks to three minutes per item to allow everyone to have an opportunity to speak. At the discretion of the Chair, ten or more persons present at the meeting and wishing to speak may appoint a representative who may have no more than fifteen minutes to speak.
None
Public Participation enables the public to address the council about items that are not on the prepared agenda. Public Participation appears on the agenda twice, at the beginning and at the end of the work session. You may speak at one or the other, but not both. Anyone wishing to comment at the meeting is asked to fill out a speaker card and submit it to the recording clerk. When the item comes up on the agenda, your name will be called. You may address the Council up to three times throughout the meeting, including comments made during Public Participation. Please limit your remarks to three minutes per item to allow everyone to have an opportunity to speak. At the discretion of the Chair, ten or more persons present at the meeting and wishing to speak may appoint a representative who may have no more than fifteen minutes to speak.
None
5.
City Council FY 2018 Budget Retreat - February 16, 2017
Mr. Copley began the introduction of the meeting, asking each Councilmember to share their objectives for the Retreat.
INTRO AND RETREAT OBJECTIVES
Councilmember Barotz said that she would like to weave into the conversation the e-mail regarding the total revenues they get from the state so they understand that in the context of all the other decisions they are making.
Mayor Evans said that she would like to have a conversation about the property tax levy, what it is and what it is not.
Vice Mayor Whelan said that they should be mindful of their goals and as they speak about items to keep in mind their growth and how quickly that is happening. Also, the current large stress and pressure that the community is feeling.
Councilmember Barotz said that she has some comments about issues that came up the other night with the state funding and the organizations that care for those who cannot care for themselves. She would like to see more engagement in the legislative issues that concern the City and possibly add that to the Legislative agenda.
Management Services Director Rick Tadder then continued the presentation:
REVENUE OUTLOOK
CITY SALES TAX - GENERAL FUND
STATE SHARED SALES
STATE SHARED INCOME TAX
FRANCHISE TAXES
BUILDING PERMITS
BBB SALES TAX
HIGHWAY USER REVENUES
REVENUES AND FIXED COSTS
REVENUE UPDATE SUMMARY - GENERAL FUND
EXPENDITURE UPDATE - FIXED COST SUMMARY - GENERAL FUND
REVENUE AND EXPENDITURE UPDATE - OTHER CONSIDERATIONS
PERSONNEL COSTS IN 1X
REVIEW REVENUE OPPORTUNITIES - COUNCIL DIRECTION
REVENUE OPPORTUNITIES - PROPERTY TAX LEVY
Discussion was held on the need to define the terminology in discussing the tax levy and using the actual percentage rate rather than the percentage increase. Council discussed the need to use wording that is easy for the public to understand when discussing the tax levy and tax rate. It was noted that the final determination by Council with regard to the property tax will take place at the April Budget Retreat.
REVENUE OPPORTUNITIES - SALES TAX
Discussion was held on a potential sales tax on water that has not been taxed before. This is one item, similar to groceries, that the City can charge tax on but selects not to. It was noted that this was separate from the water/wastewater funds which are operated as enterprise funds. This tax is a general sales tax that would go into the General Fund and could offset increased costs and inflation. Consensus of Council was to not increase the sales tax. Some members stated that if it did move forward it would be best to have it go toward a specific project.
SALES TAX INFORMATION
TOTAL TAX BY TYPE BASE RATE
CURRENT SALES TAX RATES FOR CITIES IN NORTHERN ARIZONA
REVENUE OPPORTUNITIES - USER FEES AND OTHER FEES
RIO DE FLAG - COUNCIL DIRECTION
RIO DE FLAG FUNDING
UTILITY RELOCATION CONTRIBUTION
STORMWATER FUND
Interested was voiced by the Council to research stormwater fees paid by Northern Arizona University.
GENERAL OBLIGATION BOND
Discussion was held on the possibility of including a question on the 2018 ballot regarding a general obligation bond for the Rio de Flag project. Many Councilmembers agreed with researching this further. It was emphasized that information pamphlets need to be clear about what the impact to a family would be with such an approval. It was noted that the Council needs to continue working with Washington D.C. to have the project funded, but this would assist with needed funding. When they go to D.C. they need to go with a plan. Consensus of Council was to keep this option in the toolbox for further consideration.
SALES TAX
A majority on Council was in favor of keeping this option in the toolbox.
ADDITIONAL CONSIDERATIONS
USER FEE DISCUSSION
USER FEES 2017
COUNCIL DIRECTION
KEY CONCEPTS TO DISTINGUISH
WHAT IS THE TIMETABLE FROM THIS TIME FORWARD?
OVERVIEW
DIRECTOR AND SECTION HEAD PRESENTATIONS
INTRO AND RETREAT OBJECTIVES
Councilmember Barotz said that she would like to weave into the conversation the e-mail regarding the total revenues they get from the state so they understand that in the context of all the other decisions they are making.
Mayor Evans said that she would like to have a conversation about the property tax levy, what it is and what it is not.
Vice Mayor Whelan said that they should be mindful of their goals and as they speak about items to keep in mind their growth and how quickly that is happening. Also, the current large stress and pressure that the community is feeling.
Councilmember Barotz said that she has some comments about issues that came up the other night with the state funding and the organizations that care for those who cannot care for themselves. She would like to see more engagement in the legislative issues that concern the City and possibly add that to the Legislative agenda.
Management Services Director Rick Tadder then continued the presentation:
REVENUE OUTLOOK
CITY SALES TAX - GENERAL FUND
STATE SHARED SALES
STATE SHARED INCOME TAX
FRANCHISE TAXES
BUILDING PERMITS
BBB SALES TAX
HIGHWAY USER REVENUES
REVENUES AND FIXED COSTS
REVENUE UPDATE SUMMARY - GENERAL FUND
EXPENDITURE UPDATE - FIXED COST SUMMARY - GENERAL FUND
REVENUE AND EXPENDITURE UPDATE - OTHER CONSIDERATIONS
PERSONNEL COSTS IN 1X
REVIEW REVENUE OPPORTUNITIES - COUNCIL DIRECTION
REVENUE OPPORTUNITIES - PROPERTY TAX LEVY
Discussion was held on the need to define the terminology in discussing the tax levy and using the actual percentage rate rather than the percentage increase. Council discussed the need to use wording that is easy for the public to understand when discussing the tax levy and tax rate. It was noted that the final determination by Council with regard to the property tax will take place at the April Budget Retreat.
REVENUE OPPORTUNITIES - SALES TAX
Discussion was held on a potential sales tax on water that has not been taxed before. This is one item, similar to groceries, that the City can charge tax on but selects not to. It was noted that this was separate from the water/wastewater funds which are operated as enterprise funds. This tax is a general sales tax that would go into the General Fund and could offset increased costs and inflation. Consensus of Council was to not increase the sales tax. Some members stated that if it did move forward it would be best to have it go toward a specific project.
SALES TAX INFORMATION
TOTAL TAX BY TYPE BASE RATE
CURRENT SALES TAX RATES FOR CITIES IN NORTHERN ARIZONA
REVENUE OPPORTUNITIES - USER FEES AND OTHER FEES
RIO DE FLAG - COUNCIL DIRECTION
RIO DE FLAG FUNDING
UTILITY RELOCATION CONTRIBUTION
STORMWATER FUND
Interested was voiced by the Council to research stormwater fees paid by Northern Arizona University.
GENERAL OBLIGATION BOND
Discussion was held on the possibility of including a question on the 2018 ballot regarding a general obligation bond for the Rio de Flag project. Many Councilmembers agreed with researching this further. It was emphasized that information pamphlets need to be clear about what the impact to a family would be with such an approval. It was noted that the Council needs to continue working with Washington D.C. to have the project funded, but this would assist with needed funding. When they go to D.C. they need to go with a plan. Consensus of Council was to keep this option in the toolbox for further consideration.
SALES TAX
A majority on Council was in favor of keeping this option in the toolbox.
ADDITIONAL CONSIDERATIONS
USER FEE DISCUSSION
USER FEES 2017
COUNCIL DIRECTION
KEY CONCEPTS TO DISTINGUISH
WHAT IS THE TIMETABLE FROM THIS TIME FORWARD?
OVERVIEW
DIRECTOR AND SECTION HEAD PRESENTATIONS
Planning Director Dan Folke continued the presentation:
PLANNING & DEVELOPMENT SERVICES SECTION USER FEE DISCUSSION
PLANNING & DEVELOPMENT SERVICES FEES
USER FEE RECOMMENDATIONS
A break was held between 11:00 a.m. and 1:30 p.m. at which time the Mayor reconvened the Budget Retreat.
USER FEE RECOMMENDATIONS
Discussion was held regarding the User Fees in Community Development. It was noted that legally such fees may not be waived, but they may be reimbursed through various programs, such as if the Council wished to focus on affordable housing. That reimbursement would come from a housing fund to offset the expenses.
Mr. Folke noted that currently there are nine applications for which they do not collect a fee.
Mr. Tadder noted that the current policy of past Council was to have a recovery rate of 71%; however, they are currently collecting at 37%. By going to a recommended 53% they would actually be increasing revenues. Discussion was held on why they were not meeting the 71% policy. It was noted that if they stayed with the 71%, it will need to be framed that they are implementing what a former council put into place. The messaging will be important.
After further discussion, majority of Council recommended moving forward with staff's recommendation of 53%.
City Engineer Rick Barrett then continued the presentation:
ENGINEERING
Development
Transportation
Inspection/Testing
CIP
Mr. Barrett noted that payroll constitutes 95% of the budget he covers. Currently Engineering is on a 50% policy recovery, based on prior direction, except when they were asked to eliminate the Materials Testing Lab and go with private sector providers, that went to 100%.
He said that his staff recommendation is to go to 100% cost recovery for most of the work done in Engineering. He said that once a project gets to Site Plan Approval and they move forward to construction plan review and the engineering reviews, they should be at 100%.
Mr. Barrett said that he has identified some new services for which they currently do not charge a free.
ENGINEERING SECTION RECOVERY
He said that their overall actual cost recovery at this time is 36%, while the current policy is 50%. His recommendation is 100%.
Mr. Copley said that they receive a lot of complaints about customer service, but they are actually running on the lean side. They have been trying to recruit a traffic engineer, but they could not get adequate applicants with the amount the City is willing to pay.
Discussion was held on a third and subsequent TIA (Traffic Impact Analysis). Mr. Barrett said that they have found over and over that at the end of twp reviews they are not ready to approve a TIA. The bottom line is they do not believe they have really uncovered, or properly identified, the impacts of these developments. Mr. Copley said that they are not proposing a new service, but rather a fee for a current service.
ENGINEERING SECTION RECOVERY
Discussion was held on the reasoning for having Planning at 53% recovery and engineering at 100%. Mr. Barrett said that the Planning Fees are on the front-end of the project, concept through site plan approval. Once they get to construction and permitting issues must be addressed more closely.
Staff was told that a question they are going to get is why they are increasing the fees if they are subsidizing at over 60% right now, and they need to be prepared to address that issue with the building community.
Community Development Director Mark Landsiedel said that Engineering is very lean. During the construction bubble they had 95 people in Planning; today they are at 60 with 2/3 staffing.
Mr. Landsiedel said that when they get to Engineering, it feels more black and white; however, Mr. Barrett's section looks at variances on virtually every project. They do not just say "no," they try to work with them. That takes time to provide that level of service.
DIRECTION
Consensus of Council was to move forward as recommended by staff.
Mr. Barrett noted that they do have a TIA discussion on the working calendar to discuss that issue further.
Fire Chief Mark Gaillard then continued the presentation:
FIRE DEPARTMENT
Development Permits (Construction)
Operational Permits
Special Event Permits
Wildfire Management
OPPORTUNITIES - POLICY DISCUSSION
Risk vs. Frequency
One-time Fee vs. Repeat Fee
City Sponsored Event vs. Non-City Sponsored Event
Development (Cost Recovery)
Operational (Cost Recovery)
NEW CONSTRUCTION - COMPARISON
STAFF RECOMMENDED CHANGES
Expansion of Fee System of 15-80 Permits
Development Permits - 5-54 - 100% cost recovery
Operational Permits - from 6-24 based on risk and new/expanded permits - 40% cost recovery
Special Event - from 1-5 based on increased demand and scope/size of event - 100% cost
recovery
SUMMARY
FY15
Current Actual - 24%
Current Policy - 28%
Recommendation - 73%
PUBLIC OUTREACH
Chamber of Commerce
NABA
Local Fire Protection Contractors
Local Special Event Vendors
COUNCIL DIRECTION
Move forward with staff's recommendations.
Parks and Recreation Director Rebecca Sayers continued the presentation:
RECREATION SERVICES
Current Policy on Direct Costs Recovery
50% youth enrichment events and activities
100% adult enrichment/special programs
BASED ON DIRECT COSTS
Aquaplex - 70% cost recovery
RECOMMENDATION
Staff's recommendation is to keep the current fee schedule.
MINIMUM WAGE
$10 - $75,000 increase
$12.25 - $260,000 increase
To maintain the existing revenue, it means their cost recovery will go down further.
OUTREACH EFFORTS
Parks and Recreation Commission
Affected User Groups
Discussion was held on publicizing the services more and working through the schools.
A break was taken from 3:06 p.m. to 3:22 p.m.
Deputy City Manager Shane Dille then continued the presentation:
OBJECTIVES
ECONOMIC DEVELOPMENT
AFFORDABLE HOUSING
SOCIAL JUSTICE
TRANSPORTATION AND OTHER PUBLIC INFRASTRUCTURE
BUILDING AND ZONING/REGIONAL PLAN
CLIMATE CHANGE
WATER CONSERVATION
ENVIRONMENT AND NATURAL RESOURCES
He then reviewed the Administrative Goals
COMMUNITY OUTREACH
SOCIAL MEDIA
TOWN & GOWN
CODE COMPLIANCE
Council agreed with the objectives presented.
PLANNING & DEVELOPMENT SERVICES SECTION USER FEE DISCUSSION
PLANNING & DEVELOPMENT SERVICES FEES
USER FEE RECOMMENDATIONS
A break was held between 11:00 a.m. and 1:30 p.m. at which time the Mayor reconvened the Budget Retreat.
USER FEE RECOMMENDATIONS
Discussion was held regarding the User Fees in Community Development. It was noted that legally such fees may not be waived, but they may be reimbursed through various programs, such as if the Council wished to focus on affordable housing. That reimbursement would come from a housing fund to offset the expenses.
Mr. Folke noted that currently there are nine applications for which they do not collect a fee.
Mr. Tadder noted that the current policy of past Council was to have a recovery rate of 71%; however, they are currently collecting at 37%. By going to a recommended 53% they would actually be increasing revenues. Discussion was held on why they were not meeting the 71% policy. It was noted that if they stayed with the 71%, it will need to be framed that they are implementing what a former council put into place. The messaging will be important.
After further discussion, majority of Council recommended moving forward with staff's recommendation of 53%.
City Engineer Rick Barrett then continued the presentation:
ENGINEERING
Development
Transportation
Inspection/Testing
CIP
Mr. Barrett noted that payroll constitutes 95% of the budget he covers. Currently Engineering is on a 50% policy recovery, based on prior direction, except when they were asked to eliminate the Materials Testing Lab and go with private sector providers, that went to 100%.
He said that his staff recommendation is to go to 100% cost recovery for most of the work done in Engineering. He said that once a project gets to Site Plan Approval and they move forward to construction plan review and the engineering reviews, they should be at 100%.
Mr. Barrett said that he has identified some new services for which they currently do not charge a free.
ENGINEERING SECTION RECOVERY
He said that their overall actual cost recovery at this time is 36%, while the current policy is 50%. His recommendation is 100%.
Mr. Copley said that they receive a lot of complaints about customer service, but they are actually running on the lean side. They have been trying to recruit a traffic engineer, but they could not get adequate applicants with the amount the City is willing to pay.
Discussion was held on a third and subsequent TIA (Traffic Impact Analysis). Mr. Barrett said that they have found over and over that at the end of twp reviews they are not ready to approve a TIA. The bottom line is they do not believe they have really uncovered, or properly identified, the impacts of these developments. Mr. Copley said that they are not proposing a new service, but rather a fee for a current service.
ENGINEERING SECTION RECOVERY
Discussion was held on the reasoning for having Planning at 53% recovery and engineering at 100%. Mr. Barrett said that the Planning Fees are on the front-end of the project, concept through site plan approval. Once they get to construction and permitting issues must be addressed more closely.
Staff was told that a question they are going to get is why they are increasing the fees if they are subsidizing at over 60% right now, and they need to be prepared to address that issue with the building community.
Community Development Director Mark Landsiedel said that Engineering is very lean. During the construction bubble they had 95 people in Planning; today they are at 60 with 2/3 staffing.
Mr. Landsiedel said that when they get to Engineering, it feels more black and white; however, Mr. Barrett's section looks at variances on virtually every project. They do not just say "no," they try to work with them. That takes time to provide that level of service.
DIRECTION
Consensus of Council was to move forward as recommended by staff.
Mr. Barrett noted that they do have a TIA discussion on the working calendar to discuss that issue further.
Fire Chief Mark Gaillard then continued the presentation:
FIRE DEPARTMENT
Development Permits (Construction)
Operational Permits
Special Event Permits
Wildfire Management
OPPORTUNITIES - POLICY DISCUSSION
Risk vs. Frequency
One-time Fee vs. Repeat Fee
City Sponsored Event vs. Non-City Sponsored Event
Development (Cost Recovery)
Operational (Cost Recovery)
NEW CONSTRUCTION - COMPARISON
STAFF RECOMMENDED CHANGES
Expansion of Fee System of 15-80 Permits
Development Permits - 5-54 - 100% cost recovery
Operational Permits - from 6-24 based on risk and new/expanded permits - 40% cost recovery
Special Event - from 1-5 based on increased demand and scope/size of event - 100% cost
recovery
SUMMARY
FY15
Current Actual - 24%
Current Policy - 28%
Recommendation - 73%
PUBLIC OUTREACH
Chamber of Commerce
NABA
Local Fire Protection Contractors
Local Special Event Vendors
COUNCIL DIRECTION
Move forward with staff's recommendations.
Parks and Recreation Director Rebecca Sayers continued the presentation:
RECREATION SERVICES
Current Policy on Direct Costs Recovery
50% youth enrichment events and activities
100% adult enrichment/special programs
BASED ON DIRECT COSTS
Aquaplex - 70% cost recovery
RECOMMENDATION
Staff's recommendation is to keep the current fee schedule.
MINIMUM WAGE
$10 - $75,000 increase
$12.25 - $260,000 increase
To maintain the existing revenue, it means their cost recovery will go down further.
OUTREACH EFFORTS
Parks and Recreation Commission
Affected User Groups
Discussion was held on publicizing the services more and working through the schools.
A break was taken from 3:06 p.m. to 3:22 p.m.
Deputy City Manager Shane Dille then continued the presentation:
OBJECTIVES
ECONOMIC DEVELOPMENT
AFFORDABLE HOUSING
SOCIAL JUSTICE
TRANSPORTATION AND OTHER PUBLIC INFRASTRUCTURE
BUILDING AND ZONING/REGIONAL PLAN
CLIMATE CHANGE
WATER CONSERVATION
ENVIRONMENT AND NATURAL RESOURCES
He then reviewed the Administrative Goals
COMMUNITY OUTREACH
SOCIAL MEDIA
TOWN & GOWN
CODE COMPLIANCE
Council agreed with the objectives presented.
6.
Informational Items To/From Mayor, Council, and City Manager.
Councilmember Odegaard said that the Council's travel expense budget is split seven ways equally, but he does not think it is fair that the Mayor's funding is the same as Council's. He would like a F.A.I.R. item on this issue.
Councilmember Barotz said that they used to have the State delegation come and meet with the Council to review the Council's legislative agenda. Mr. Copley said that he would put that on the agenda.
Councilmember McCarthy said that he felt it would be appropriate, as well, to meet with the Board of Regents.
Vice Mayor Whelan asked if there was any way to speak with the Chamber of Commerce Board. Mr. Copley said that as a Council they would have to schedule a special meeting, but any individual Council member, or two, could do that on their own.
Vice Mayor Evans said that there is a bill going through the House, SB14532, regarding immigration enforcement and repeal of SB1070 ,and she would like additional information on that and a resolution of support.
Councilmember Barotz said that they used to have the State delegation come and meet with the Council to review the Council's legislative agenda. Mr. Copley said that he would put that on the agenda.
Councilmember McCarthy said that he felt it would be appropriate, as well, to meet with the Board of Regents.
Vice Mayor Whelan asked if there was any way to speak with the Chamber of Commerce Board. Mr. Copley said that as a Council they would have to schedule a special meeting, but any individual Council member, or two, could do that on their own.
Vice Mayor Evans said that there is a bill going through the House, SB14532, regarding immigration enforcement and repeal of SB1070 ,and she would like additional information on that and a resolution of support.
7.
Adjournment
The Budget Retreat of February 16, 2017, adjourned at 4:54 p.m.
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MAYOR |
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ATTEST:
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_________________________________ CITY CLERK |