Others present: City Manager Barbara Goodrich and City Attorney Sterling Solomon.

Moved by Councilmember Eva Putzova, seconded by Councilmember Charlie Odegaard  moved to approve Consent Agenda items 6-A and 6-B.

Vote: 6 - 0 - Unanimously

  Capital Project Manager Eli Reissner briefly reviewed the project.

Moved by Councilmember Scott Overton, seconded by Councilmember Charlie Odegaard  to approve the Construction Contract with Eagle Mountain Construction Co. in the amount of $933,300.00, which includes a $70,000.00 Contract Allowance and a Contract Timeframe of 120 calendar days; approve Change Order Authority to the City Manager in the amount of $86,330.00 (10% of the Contract Price, less the Contract Allowance); and uthorize the City Manager to execute the necessary documents.

Vote: 6 - 0 - Unanimously

Human Resources Director Shannon Anderson said that they have done some changes to the fingerprint ordinance, most of which were minor. She said that after they adopt the final ordinance it will be reviewed by the FBI, which could take one to three months, and she suggested they do not start practicing the changes until approval is received.
 
Councilmember Overton said that when going through the categories, he wondered by Fire was not a population that is fingerprinted. Ms. Anderson said that it may be because they are usually responding in a group, but the City is free to add anyone they would like. Council agreed that they would like to include the Fire personnel.

Moved by Councilmember Scott Overton, seconded by Councilmember Jim McCarthy  to read Ordinance No. 2018-19 by title only for the final time.

Councilmember Putzova asked what the implications for employability of people with criminal records would be, and if it would make it harder for them to be employed. Ms. Anderson said that they are currently looking to see how long it has been and in relation to the job they are actually doing. They also look for trends. It usually only comes as part of the hiring decision if iit will have an impact on them being able to do a specific job.
 
Councilmember Putzliva asked if the changes would broaden the number of people or it would make them have a harder time to be employed. Ms. Anderson said that she has not seen it increase or decrease. She said that most of the changes are administrative in nature.

Vote: 6 - 0 - Unanimously

Moved by Councilmember Jim McCarthy, seconded by Councilmember Scott Overton  to adopt Ordinance No. 2018-19.

Vote: 6 - 0 - Unanimously

 Brian Hunsinger with the Water Services Division briefly reviewed the item.

Moved by Councilmember Charlie Odegaard, seconded by Councilmember Eva Putzova  to approve a service agreement with Empire CAT for an initial three month rental of two 800KW generators and one 350KW generator for $57,400.75 plus applicable tax, through the National Joint Powers Alliance (NJPA) Contract #120617-CAT.

Councilmember McCarthy said that in reading the packet, it did not explain why they were doing temporary instead of going with permanent. Mr. Hunsinger explained that the lead time for purchasing is 18-20 weeks so they are looking for a short term solution while they also look at long term purchases.
 
Vice Mayor Whelan asked if the generators were mobile. Mr. Hunsinger replied that they were, and they were required to be according to the agreement with the Forest Service.
 
Vice Mayor Whelan said that she appreciated staff being proactive in this and moving forward. Mr. Hunsinger said that the other element to this is as they have proposed funding in the FY19 to look at the permanent solutions going forward.

Vote: 6 - 0 - Unanimously

 Others present: City Manager Barbara Goodrich and City Attorney Sterling Solomon.

 John Viktora, Flagstaff, said that he was there to support the FWPP. He said that there is nothing cheap about thinning the firest, especially on the steep slopes.
 
Interim City Manager Kevin Treadway presented Interim Police Chief Dan Musselman and Corporal David Sauer an award to the Flagstaff Police Department for their assistance with the Run for the Wall. He said that it is an organization founded by Vietnam Veterans and starts on the west coast and rides across the country to Washington DC to the Veterans Memorial Wall. The Flagstaff Police Department was recognized for their motor unit assist through the City and the Council came down and thanked the Chief and Corporal.
 

Current Planning Manager Tiffany Antol came forward to review the proposed amendment. Mayor Evans opened the Public Hearing. Ms. Antol said that during a recent work session the Council had been given two options to address an appeal of a Conditional Use Permit and what is being presented was the direction given by Council.
 
 She said that the proposed change requires amending only the Title 10 Zoning Code. It would allow any councilmember to request a review of a planning commission decision on a CUP w/in 10 days of approval. Notification would be provided to Council immediately following the Planning and Zoning Commission approval. At next Council meeting, if a quorum agrees, the CUP would be set for a de novo hearing
 
Councilmember McCarthy said that this was not what they asked for, but it was better. He thanked the staff and Planning and Zoning Commission for taking their ideas and improving on them.
 
Vice Mayor Whelan echoed Councilmember McCarthy, pointing out that the way the Commission worked with the Council was superb and she would like to see that with every commission.
 
Mayor Evans closed the Public Hearing.

Moved by Councilmember Jim McCarthy, seconded by Vice Mayor Jamie Whelan  to read Ordinance No. 2018-21 for the first time by title only.

Vote: 6 - 0 - Unanimously

 Dispatch Supervisor Katie Brandis said that this was approving a five-year IGA  between the Pinewood Fire District and the City. She said that the City contracts with four other fire agencies and if approved they would be billed based on the number of calls, or approximately $26,000 a year.
 
Vice Mayor Whelan asked if they did not feel this would present any undue pressure on staff. Ms. Brandis replied that the City already takes the calls for Munds Park because they dispatch; this just cuts out the middle man.

Moved by Councilmember Charlie Odegaard, seconded by Vice Mayor Jamie Whelan  to read Resolution No. 2018-29 by title only.

Vote: 6 - 0 - Unanimously

A RESOLUTION OF THE FLAGSTAFF CITY COUNCIL APPROVING THE INTERGOVERNMENTAL AGREEMENT FOR DISPATCH SERVICES BETWEEN THE PINEWOOD FIRE DISTRICT AND THE CITY OF FLAGSTAFF

Moved by Councilmember Charlie Odegaard, seconded by Vice Mayor Jamie Whelan  to adopt Resolution No. 2018-29.

Vote: 6 - 0 - Unanimously

Finance Director Brandi Suda gave a PowerPoint presentation which addressed the following:
 
TENTATIVE BUDGET ADOPTION
Sets maximum appropriation
Sets in motion legal requirements for final adoption
06/19
    PUBLIC Hearing for truth in taxation, budget and tax levy
    Final budget adoption
    1st read of property tax ord
07/03
    Second read and adoption of our property tax ord
 
CITY’S PROPOSED $279,965,072     $22.1 million decrease
GF – 27% of budget
Special Revenue Funds – 28%
Debt Service  3%
Capital Project Funds 12%
Enterprise Funds 30%
 
HIGHLIGHTS
Focus on Council Goals and Objectives
Market based pay – min 2% increase
Moved several one-time funded positions ongoing
Public Safety Pension Funding
Benefit Increases
 
INVESTMENTS BY COUNCIL GOAL
 
CHANGES SINCE APRIL RETREAT
Appropriations Increased by $80.5 million
 
Council Adds  $899,000
          Housing Relocation Support $100,000
          Teacher Training Sustainability $10,000  

Councilmember Overton said that they are adopting a $280 million budget, but the proposed budget in April was nearer $200 million. Ms. Suda said that this also includes $79 million for the capital program.

          Public Restrooms
          Paid M/P Leave 4 weeks $40,000
          Impact fee study $150,000
          IT $100,000
          3% merit for sworn policy   $345,000   offset with pension 30 year amortize changes
          Willow bend $10,000
          Boys and girls  $25,000
          Airport dump station $175,000
          Airport security upgrades $79,000
          Sister Cities $10,000
 
CAPITAL CARRYOVERS - $69.6 million
          Transportation Projects, USGS Building, Courthouse, Water Services Project and Fleet Purchases
OPERATIONAL CARRYOVERS $6.3 million
          Various studies, software and contracts
GRANT CARRYOVERS $2.8 million
          CDBG/Home, FMPO and New Airline Services
LIBRARY RESERVES CARRYOVER $900,000
 
TENTATIVE BUDGET BOOKS
          City Website
          Clerk’s Office
          Downtown Library
          East Flagstaff Community Library
 
QUESTIONS

Councilmember McCarthy asked if there was any way to help fund another planner in the Planning Department. He said that there are a lot of things that the Council wants to do that are taking longer because of the lack of staff.
 
Mr. Solomon said that it is within the purview of the budget process by the Council. Ms. Goodrich said that the budget they are presenting is balanced. Should there be a decision made to fund another planner, they would have to find some resource where they would take it from. She said that ongoing funding is hard to come by. As an organization they are trying to get away with funding personnel with one-time funds.
 
Vice Mayor Whelan said that she was glad it was brought up. She agrees that there are a lot of changes that will be going on and it might be wise to hold off and see what they need when those changes comes. Ms. Goodrich said that they would be happy to provide further discussion at a future work session.

Moved by Vice Mayor Jamie Whelan, seconded by Councilmember Jim McCarthy to read Resolution No. 2018-30 by title only.

Vote: 6 - 0 - Unanimously

A RESOLUTION OF THE COUNCIL OF THE CITY OF FLAGSTAFF, ARIZONA ADOPTING THE TENTATIVE ESTIMATES OF THE AMOUNTS REQUIRED FOR THE PUBLIC EXPENSE FOR THE CITY OF FLAGSTAFF FOR THE FISCAL YEAR 2018-2019; ADOPTING A TENTATIVE BUDGET; SETTING FORTH THE RECEIPTS AND EXPENDITURES; THE AMOUNT PROPOSED TO BE RAISED BY DIRECT PROPERTY TAXATION; GIVING NOTICE OF THE TIME FOR HEARING TAXPAYERS, FOR ADOPTING OF BUDGET AND FOR FIXING THE TAX LEVIES

Moved by Vice Mayor Jamie Whelan, seconded by Councilmember Jim McCarthy  to adopt Resolution No. 2018-30.

Vote: 6 - 0 - Unanimously

 Councilmember Odegaard said that he believed this was a good budget overall. There was a lot of give and taken and work with the limited dollars. He was very proud of some of the things they were able to accomplish, with the police receiving an increase, more officers, and maternity leave. He ythanked everyone and staff for all of the work involved.

Senior Assistant City Attorney Anja Wendel reviewed the proposed resolution and ordinance, noting that the changes for the businesses would be September 1 and for the TPT on January 1, 2019. She then reviewed a PowerPoint presentation which addressed:
 
KEY CHANGES
          Who will have a business license:
                   Each business LOCATION
                   Exemptions
 
          Proposed Fees:
                   Current annual occupational license fee $20 reduced to $8
                   Current city TPT license fee changes from $46 1X to $36 annual
  
Last time they recommended a $38 annual
 
REASON FOR CHANGES
Obtain complete picture of our business community
Improve statistical analysis for business community

ADOR   TPT administrator  1/1/2017
Remove duplicative licensing
Align business licensing regulations with current statutes and practices
 
Goal is to license every location in the City of Flagstaff
 
COMMUNITY OUTREACH
Work Session with CC
Groups
          Flagstaff Chamber
          Business Advocacy and Public Policy Division
           DBA (Downtown Business Alliance)
          Flagstaff Lodging and Restaurant Association
 
FEE DISCUSSION:  
# of Licenses
          Business Licenses       7,000
          TPT licenses                6,684
 
Staff Recommended Fee Change
 
Business Licenses      $  8
TPT                             $36
 
City has been subsidizing the TPT licensing cost :
 
Bottom of Option 3
 
They are losing $42,000 a year and $190,000 a year - $230K a year that they are losing
 
By increasing the fees as proposed they would recover full costs.
 
Option 1 is staff’s recommendation
 
She said that Council suggested that staff bring back:
 
Option 2 – 50% cost recovery
 
$4
$18
 
Option 3 - Where they are at now.
Blended rate of 23%
If they take that same lended rate and apply

$2
$8
 
In the third one, they are already losing money compared to cost. The third option maintains their current cost recovery.

Vice Mayor Whelan said that she was asking them to help her understand. From a community perspective they used to have a department that would collect the taxes; the entire department did this one job. The collection has not moved to the state, so there is not as much done at a city level. She said that they have moved the people previously doing this work into other functions, so she did not understand why they needed to increase the fee.

Vice Mayor Whelan said that if it was budgeted and they have absorbed it, then she asked why they need a fee increase. Ms. Corder said that they still have staffing costs. She said that the unit is gone, but they still do auditing and training. Ms. Wendel said that the subsidy right now is $230,000 a year. It would have been greater before when they had additional staff.
 
Ms. Goodrich said that this is similar to any time they have a user fee conversation. They are asking Council where they are comfortable, as far as a recovery level. She said that the second issue, regardless of the ultimate fee, is that they have some kind of renewable action for every business type, to be able to accumulate that information for themselves.
 
Ms. Corder then addressed the fee discussion comparison which shows what other communities are doing. She said that Flagstaff is proposing the lowest business license fee.
 
She said that the state does not do speculative taxes, but the City auditor is. Staff has identified $400,000 coming up so far and there was one for $100,000 that the state did not catch that the auditor did.
 
Councilmember Overton thanked staff for the additional information. He said that the state has a $12 fee for the initial TPT, they process every return, and there is no renewal fee. He asked how they administer a big program with no annual fee. Ms. Wendel said that two years ago the Governor let go of 42 tax auditors because theye did not have the money to support the program.
 
Councilmember Overton said that he still struggles with the local municipality. He said that he still cannot support the increase.
 
Ms. Goodrich asked Mr. Tadder to remind her of what the state charges the City each year. Mr. Tadder said that they charge the City $150,000.
 
Mayor Evans said that she understood what Councilmember Overton was saying, but then the state charges the City for the work being done.
 
Councilmember Odegaard said that totally gets the 100% cost recovery om the license portion. He believes in partnerships and would consider a 50% cost recovery for the TPT portion.
 
Councilmember Putzova said that one way or another the business passes the cost on to their customers. The policy question is whether the people patronizing a business should be responsible for paying that transaction privilege tax, or if it should be all of the taxpayers in the City. She believed that the customers should be responsible for carrying the costs. She was leaning toward Option 1.
 
Vice Mayor Whelan said that she was having difficulty with this for the reason that Councilmembers Overton and Odegaard have spoken about. While she does understand that these things will be passed through, quite a bit has been passed through to the customer lately. While she sees the need of a cost recovery, she thinks she is willing to go with 50% right now for the TPT and 100% for the business license.
 
Councilmember McCarthy and Mayor Evans both agreed with going with the proposal of 50% for TPT and 100% for the business license.

Moved by Councilmember Charlie Odegaard, seconded by Vice Mayor Jamie Whelan  to read Resolution No. 2018-27 by title only.

Vote: 5 - 1

NAY:

Councilmember Scott Overton

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FLAGSTAFF, ARIZONA, DECLARING THAT CERTAIN DOCUMENT KNOWN AS "THE 2018 BUSINESS LICENSE REGULATIONS" AS A PUBLIC RECORD

Moved by Councilmember Charlie Odegaard, seconded by Vice Mayor Jamie Whelan  to read Ordinance No. 2018-22 by title only for the first time.

Vote: 5 - 1

NAY:

Councilmember Scott Overton

Management Services Director Rick Tadder said that tonight’s presentation is to address the proposed ballot language for the transportation-related questions, noting that it took the efforts of several members of staff and NAIPTA, the bond counsel and Alan Maguire to put together the proposed language.
 
Mr. Tadder explained that the first question continues the levy of combining three tax rates into one, starting July 1, 2020, at the existing combined rate of .426%. He said that these questions will be brought back on the June 19, 2018, agenda for final adoption.
 
Councilmember Odegaard said that he thought they had previously talked about using bonding for the larger overpass questions, not this one, and asked if staff felt that some of these projects would also benefit from debt being issued.
 
Mr. Tadder replied that having the ability to issue debt is a benefit to staff in delivering projects. He said that they can only issue to the amount that the tax collects. He said that should there be a need for certain projects, such as west Route 66 or possibly the Lone Tree improvements, it would allow them to move faster. He said that they would only do it within the capacity of the existing sales tax rate. Councilmember Odegaard said that he was fine with that. He said that he is going to have to place a lot of trust in staff.
 
Mr. Tadder noted that it was not just staff’s decision. It is the Council’s decision when staff brings them the capital improvement plan. Staff has to request authorization through the Council to issue debt.
 
Council agreed to the wording of Question No. 1.
 
Councilmember Putzova said that could not overlook the fact that the first ballot language is treated differently. In Question 419, they go out of their way to point out that it is a continuation of the existing tax. They do not stress with this question that it is a new levy. It paints a picture that they are telling the voters what they want them to notice. For transparency, she would appreciate that they treat all three of these the same way.
 
Councilmember McCarthy said that he believed that the transit question should be first on the ballot. Brief discussion was held on this issue and Council agreed to leave the order as presented.
 
After further discussion, majority of Council was to leave the wording as presented.
 
NAIPTA Director Jeff Meilbeck addressed the Council with regard to Proposition No. 421, stating that on May 16, their board discussed the 2018 transit message and supported the recommendation of the Citizens Transportation Tax Commission and the proposed language. They did not discuss changing the start date. He would like to propose that it begin in July 1, 2019, for an eleven year period, then all of their taxes would sunset in 2030. Mr. Tadder said that staff had no issue with starting earlier. Council agreed to starting it on July 1, 2019.
 
Brief discussion was held on the prior survey numbers. Ms. Goodrich indicated that staff would distribute a CCR with the survey results to Council.
 
Discussion was held on the idea of having one resolution to call the election with all of the ballot language included, or to have a separate resolution for each question so that Council could vote independently on each question.

Human Resources Director Shannon Anderson said that the proposed wording for the ordinance was based on the citizen committee that made their recommendation. Councilmember Putzova asked Ms. Anderson to remind the Council what the reasoning was for the committee’s recommendation.
 
Ms. Anderson said that staff provided the committee members with salaries from other benchmark communities and they discussed that average based on a CPI versus the market. They were looking for half of the CPI.
 
Discussion was held on the idea that by having the limited salaries, they are excluding a whole spectrum of people that cannot quit their jobs and do this for $24,000 a year.
 
It was noted that the limited salary dictates whether it is a full-time or part-time job. Mayor Evans said that having been Mayor for the last two years she can state it is more than a full-time job.
 
Discussion was held on having more input from the public on what their expectation is for Councilmembers.
 
Councilmember Putzova said that was part of why she could not do both a full-time university job and serving on the Council. She would like them to consider $72,000 a year for Mayor and $50,000 a year for Councilmembers.
 
Councilmember Overton said that they also need to look at the charter. They have a Council/Manager form of government. It is not structured to be a full-time position. He said that it would be a tall order to continue to run the organization and see employees get 1-2% increases and then double the salaries of Mayor and Council. He said that what the committee recommended were reasonable numbers.
 
Councilmember Odegaard thanked both Councilmember Overton and the Mayor for their comments. He said that he took on the job as service to the community. He never thought about the pay and the recommendation from the committee was reasonable. He did, however, believe that the travel allowance and budget numbers are low and he would like to see those increased.
 
Councilmember McCarthy said that he would consider going a little higher with the salaries, but he could not support doubling them.
 
Councilmember Putzova said that what they are saying is that they do not want certain types of people to serve. Mayor Evans said that she was not interested in doubling the salary, but she thinks there does need to be a community conversation. She said that everything stated tonight about the commitment of time is true. Whatever a person’s second job is will take second place.
 
Further discussion was held on sending the issue to the community for a broader discussion on what type of council they want to see in the future. It was also agreed that while that discussion is taking place, the recommended changes should move forward to at least address the fact that the salaries have not been increased for several years. It was also agreed that the travel options needed to be addressed during the budget process.
 
The majority of Council supported Option 1 presented this evening.
 
Ms. Goodrich said that the travel budget is being addressed separately through the budget.

Councilmember Overton said that NAIPTA is involved in their national search for the next director’s position. In mid-June they will receive the first round of applicants. They are on track for interviews in July and August.

Councilmember Odegaard reported that his mother-in-aw had a stroke in Cottonwood a few months ago and was air evac’d to the hospital in Flagstaff. She was not doing good last night, but they did surgery last night and she is a different person this morning. He said that they have a beautiful hospital and staff.
 
Ms. Goodrich reminded the Council and community that the first outbound flight to Dallas/Ft. Worth will be this coming Saturday.
 
Mayor Evans reported that over the past month they have had two babies join the staff at the City: Mr. Blaschke and his wife had a new daughter, Abigail, and Jessica Drum and her husband have a new son, Atlas

 The Regular Meeting of the Flagstaff City Council held June 5, 2018, adjourned at 8:34 p.m.