Others present: City Manager Josh Copley and City Attorney Sterling Solomon.

Mr. Copley said that in furtherance of the Code, he as City Manager convened a committee of the chairmen of commissions, to bring forward a recommendation to the Council regarding Council salaries. He said that the committee members were presented with comparisons from other communities in Arizona and elsewhere. He said that they were provided information on applying the CPI over the course of years and the committee decided to give them one-half of that amount.

Councilmember Barotz said that it was important to also note that the committee also talked about the travel budget and per diem for Mayor and Councilmembers. Mr. Copley said that there was some discussion about the impact of pressure on travel, especially with the Mayor position.

Mr. Copley said that the committee's recommendation was to go from $36,000 to $38,500 a year and Council from $24,000 to $25,500 a year.

He said that another issue was whether only those coming on the Council in 2018 received the increase, or if they deferred the effective date to 2020 so that all members were receiving the same amount. He said that Legal did research this issue and their opinion was that having different amounts would not be illegal.

Councilmember Putzova asked when they first started getting salaries; she would like to see a trend line. Mr. Copley said that he did not currently have that information, but could provide it for the second read.

Councilmember Putzova said that she was very much interested in having a discussion about the policy behind the salaries. She was not ready to entertain the first read. She asked what the salaries were supposed to do in the community and if it was a stipend. She said that she has a lot of thoughts and concerns, and does not like the lack of policy discussion.

Mr. Copley said that there is not an abundance of policy; the City Code talks about the analysis and the committee. He said that he did talk with them about the work that the Mayor and Council put into the job, explaining that for every hour sitting at a meeting, there is equally an hour or more in prep work. He said that the committee was aware of that and considered it.

Mr. Copley said that the recommendation is merely a recommendation; the final decision is that of Council.

Councilmember Putzova said that she thought it was a very sensitive area of discussion. She could understand how the public listening to the discussion could come to the conclusion that they are making the decision based on their individual situation. To avoid that misperception she suggested that they postpone the discussion until later in the spring until it is clear who is running or not running.

Mr. Copley said that while the policy is less robust, it is clear on one point--the decision needs to be made in the year before the electioni year. Waiting until next spring is not what is contained in the City Code. Mr. Solomon said that while the Code has timelines, they can clean that up in the future. Right now there is no provision to postpone this.

Councilmember Overton said that he is not concerned about who might pull packets. For him and others, these are not designed to be income producing or a person's main income. It is seen as a sense of service, with the Council-Manager form of government. There is no question that everyone has a difference of opinion. He does not have a strong opinion that would justify why it would be a high or low salary. He believes it is good where it is.

Mr. Copley said that those comments were reflected in those of the committee as well. Some were on one side and the others were on the other side. The proposed 50% was a compromise. He said that the committee took this work very seriously. They put in their time and effort, but it is up to the Council as to how they want to consider their recommendation.

Councilmember Odegaard said that he was surprised with those making the motions. He is ready to move forward, but he would feel more comfortable if the salary could happen at the same time, in 2020. Mr. Solomon said that could be amended if it was the majority's will.

Councilmember McCarthy said that the salary should be high enough that if a person wanted to live on it or have a part time job. If it is really low it excludes people that do not have a source of income. He is a retired engineer; it does not matter if it is $2,000 or $20,000, but he asked if it was fair that others cannot afford to live without an income would be excluded. He said that he was willing to move forward and take the recommendation of the committee. He was also fine with it becoming effective in 2020.

Councilmember Putzova said that she has a different perspective. It is not just a matter of whether they can piece together a living; it is also a matter of independence. Historically, most of those on Council have been retired or own their own businesses. This level of salary excludes people that work full time. That is one reason they do not have someone that is employed and working for Wal-Mart or FUSD. The level of salary is not just about making a living, but being an independent actor on behalf of those that voted for them.

Vice Mayor Whelan said that Councilmember Putzova brought up some wonderful points. They do not know what the community wants from the Council. Clearly they are an engaged council. They need to discuss this further and base it on policy. She is hearing that there is no policy.

Mayor Evans said that it is awkward talking about a salary of a future council. She said that she has been on the Council since 2008. The individuals that have the ability to run for Council either work for themselves or are retired, or they are going to take a vow of poverty.

When she was canvassing she met a group of people and she was encouraging them to run for office. She said that every single one of them were young and said that they could not afford to do it. There is a sense that this is a part-time job. She said that she did not think they were ready. Maybe they need to sit down and engage the community and put together something that would be meaningful.

Mr. Copley said that they have been at this discussion for half an hour and all of the things they are discussing were subjects of conversation for the committee. They talked about the absence of policy; they did not know if that was a mistake or intentional. The community, through the authority invested in it, works through the committee every four years, and speaks to the Council and community about what to do. If they want to have a conversation about something different, they can do that.

Councilmember Odegaard asked if they needed to vote on the travel and per diem. Mr. Copley said that the subject of the travel and expense budget came up because he asked the committee to provide some input on it. Some Councilmembers have depleted their accounts. The amounts were a matter of discussion for the committee and they made their recommendation. These are not considered part of the salary; his recommendation was to increase those next July.

Councilmember McCarthy said that he was sensing that the increases should be more so there is a wider cross-section of the community that could serve. He suggested that they move to have first read and when it comes back next time they could make changes. If they do nothing they have to wait another four years.

Vice Mayor Whelan said that she heard that it is time to have a deeper discussion about it. They need to move forward, but they also need to host the discussion with getting what the community wants. She believes they need the increases, but need to have a much broader discussion.

Councilmember Putzova asked what the rules were to change the code in terms of changing the process. Mr. Solomon said that one thing that came up was that the elections used to be held in Spring and as a result this had to be done the year before. However, the election is now in the fall. He said that with the way the Code is written, he believed they could put this into January, but if they get past there they would run into an issue.

Moved by Councilmember Eva Putzova, seconded by Councilmember Scott Overton to take no action.

Vote: 5 - 2

NAY:

Councilmember Charlie Odegaard
Vice Mayor Jamie Whelan

At this time, the Council and audience were joined by students from the Haven Montessori School who sang a few Christmas carols.

Management Services Director Rick Tadder began a PowerPoint presentation which addressed:

FULL COST OF SERVICE
CURRENT ENGINEERING USER FEES
DECISION MAKING FLOW CHART
CURRENT ENGINEERING USER FEES - COUNCIL DIRECTION
PROCESS FOR REDUCING FEES

Mr. Tadder said that the new fees took effect on August 1, 2017, and since that time they have received around $40,000. He added that the fees went into affect after a 60-day public notice and public hearing was held before Council.

ENGINEERING OUTREACH

City Engineer Rick Barrett then continued the presentation:

HISTORY OF USER FEES
     Pre-Application Meeting
     Concept Site Plan Review
     Actual Site Plan Review
          Approved by IDS

He said that the first part (above) is the Entitlement Phase. The second phase is the Construction Phase. Previously the Council had agreed to 50% recovery in the Entitlement Phase and different for the Construction Phase. He said that when they move into the Construction Phase, many of the questions have been answered and they see very detailed construction plans.

TRAFFIC IMPACT ANALYSIS (TIA)
SOILS REPORT REVIEW
PUBLIC IMPROVEMENTS PLAN REVIEW
INSPECTIONS
MATERIALS TESTING
INSPECTIONS (ASSOCIATED WITH FRANCHISE UTILITY WORK)
PARKING LOT MAINTENANCE PERMIT

The following individuals addressed the Council:

•Rick Lopez
•Carolyn Oberholtzer, Vintage Partners
•Ryan Rhoton, owner of Capstone

•It is easy to make decisions based on staff's presentations
•They had a consultant prepare the study
•There is a piece missing to the study--the real world application
•The end user is not the developer--it is the purchaser, the police officer, teacher, etc.
•The developer has the vision and takes the risks, and is going to pass on all of these fees to the end user
•Asking Council to support the reduction of the fees
•They do a lot of building in Flagstaff
•They rushed for Crestview before the 8/1/2017 date
•When they develop in Ponderosa Trails, it used to cost between $18,000 and $22,000; today it is around $45,000 to $55,000

Further discussion was held on when various steps occur in the process. Mr. Barrett then reviewed the spreadsheet.

Mayor Evans said that the homes were not affordable before when the City was subsidizing the fees. They have asked the question several times of, "who sets the price of a house?" and have been told "the market." They were at a meeting last week with ECoNA who talked about the Workforce Housing Study. People want to buy a house but cannot afford it. The excuse is because of the fees. She said that if they subsidized all of the fees, that would mean the taxpayers would have to pay for it, and they could still not guarantee that the houses being produced would be affordable.

Mayor Evans asked Mr. Rhoton how they could be sure that a reduction in engineering fees would be passed on to the buyer, if it is driven by the market. Mr. Rhoton said that competition is the answer. He said that he was not asking for a subsidy; he was asking that they look closer at the 8% as he believes the consultant screwed up.

Councilmember Odegaard said that he recently saw a chart at a real estate luncheon showing how they used to have pretty healthy housing happening, and now they do not. He asked Mr. Rhoton if he felt that was because of the fees. Mr. Rhoton said that the engineering fees is a small portion. Just the inspection fee and materials testing comes to about $2,500 per lot.

After further discussion, a majority of Council requested that this item be brought back to a future meeting for further discussion.

Councilmember Putzova requested that staff attach a copy of the draft resolution to her F.A.I.R. item.

Mr. Copley noted that the discussion opposing the lifting of the moratorium on uranium mining is being worked on by partners. They are hoping to get this on the agenda in December; they will walk it on if possible, otherwise it will come back on January 2, 2018.

Mr. Copley began the PowerPoint presentation, Exhibit A attached hereto and made a part hereof, which addressed:

REVENUES AND EXPENDITURES
BUDGET TEAM DIRECTION
GOALS

The following individuals addressed the Council:

•Al White
•Armando Bericascari

Comments received included:

•The citizens of Flagstaff voted in the higher wages; they should be willing to cover the difference between what the state pays to the providers.
•Providers for those with disabilities are operating in the red; they need help
•Abreva was first of the agencies to move to the Valley
•Would like to see something put on the ballot for ongoing funding
•Appreciate the long-term approach, but as shortsighted as it may be, they just want to survive this year and the next

Discussion was held on what all services are provided. It was noted that most are from Flagstaff; however, Hozhoni also contracts with the tribes.

Councilmember Putzova said that they are putting the blame of this problem on minimum wage, but the state is not adequately funding those services.

Economic Vitality Director Heidi Hansen continued the presentation.

ECONOMIC DEVELOPMENT
     Goals
     Highlights and Accomplishments
     FY2019 Objectives

Comments from Council included:

•Need to address the impacts of economic development
•Should include programming fro trash clean up
•Invest money in expanding the Mexican market year-round
•Work with the DBA to take their show on the road to help other corridors in the City
•Encourage creative thinking about how different divisions can work together on litter problem
•On large parcels such as Red Gap Ranch, begin looking at options for additional revenue such as energy, farming, etc.

Housing Director Sarah Darr continued the presentation:

AFFORDABLE HOUSING
     Goals
     Highlights and Accomplishments
     FY2019 Objectives

Comments regarding new directions included:

•Create a partnership, contract for services and provide relocation assistance services for those being removed from trailer parks
•Continue conversation about an affordable housing bond
•Closely examine recommendations submitted in Housing Roundtable
•Subsidize new infrastructure
•Examine the City's housing stock; is it time for reinvestment? higher density? best use?
•Strengthen the path from rental to ownership

Assistant to the City Manager Caleb Blaschke continued the presentation:

SOCIAL JUSTICE
     Goals
     Highlights and Accomplishments
     FY2019 Objectives

Comments from Council included:

•Would like to see the Strategic Plan come with identified funding
•Promote indigenous events in the community
•Better relationship between the Mexican Consulate Office in Phoenix and City Manager's Office
•Explore idea of sensitivity training to all emergency services and staff
•Provide public restrooms downtown
•Ongoing funding to support programming for people with disabilities
•There is a homeless shelter on the east side of the community, but need to look at social impacts of that population not having somewhere to go during the day
•Improve interaction between law enforcement, fire response, emergency services, build a better relationship so that the City's employees are having a better experience
•Public safety employees oftentimes need to act as social services; perhaps another staff member or additional funding for a specific program

Public Works Director Andy Bertelsen continued the presentation:

TRANSPORTATION
     Goals
     Highlights and Accomplishments
     FY2019 Objectives

Comments from Council included:

•Address issues related to quiet zones and railroad crossings (Mr. Barrett noted that this item is coming before Council at a Work Session on January 9, 2018.)
•Need to continue focus on a new courthouse
•Need to look further at the MRF (Materials Recycling Facility)
•Consider the need to start adding equipment to the fleet
•Get to the 75% recycling rate
•Need better representation at the Legislature to support improvements on Fourth Street
•Continue supporting the addition of infrastructure to open up City lands for development (e.g. J.W. Powell and Lonetree)

At this time, more public comments were received from:

•Alida Preil
•Monica Attridge
•Gus Miller
•Jesse McGril
•Nathan Martinez

Comments received included:

•Consider people with disabilities in this year's budget
•Grew up in Flagstaff with people with disabilities and is raising her child here
•Moved out of town for awhile for better pay, but never found a community as beautifully inclusive as Flagstaff
•When voters passed Prop 414 she didn't think they understood all of the ramifications
•Provided a handout on the finances related to the service providers and the compounding effect
•Asked that Council direct City Manager to work with the providers

A written comment card was also received from Lisa Koronkiewicz asking for additional funding to help the providers for people with disabilities.

Planning Director Dan Folke then continued the presentation:

BUILDING AND ZONING/REGIONAL PLAN
     Objectives
     New Investments
     Highlights and Accomplishments

Comments from Council included:

•They are right in the middle of passing important Code amendments. There were plans to hire a consultant with that; is that still the plan or are they considering handling it in-house? Mr. Folke replied that his team is now looking at some of their major tasks and there will be more support needed.
•They will be sharing that further with Council in January
•Does not want to lose sight of linking the Zoning Code with other codes once it is set.
•There are a lot of building inspectors leaving this year with retirements. They will need to find a way to replace and retain them and believe there will be a budget element at some point. Mr. Folke noted that they do have a success plan in place.

Due to the lateness of the hour, Mr. Copley said that they would probably come back to Council in chunks during future Council meetings.

Brief discussion was held on the upcoming trip to Washington D.C. It was agreed that Mayor Evans and Councilmembers Odegaard and Putzova would be the Council representatives on that trip with Councilmember McCarthy serving as an alternate.

The Budget Retreat of December 12, 2017, adjourned at 6:16 p.m.