Loading...
HomeMy WebLinkAbout2014 10.07 City Council Regular Agenda City of Apache Junction, Arizona Meeting location: City Council Chambers 1U Z at City Hall Agenda 300 E.Superstition Blvd \gilONr Apache Junction,AZ City Council Meeting 85119 apachejunctionaz.gov Ph:(480)982-8002 Tuesday,October 7,2014 7:00 PM City Council Chambers This document may not reflect the most current legislation adopted by the City of Apache Junction and is for convenience and informational use only. For further information on the official version of council meeting minutes please contact the Apache Junction City Clerk's office at (480) 982-8002. B. INVOCATION AND PLEDGE OF ALLEGIANCE C. ROLL CALL D. CONSENT AGENDA The council may, at this time, take single action on any or all items listed as consent agenda items. These may include, but are not limited to, acceptance of agenda, acceptance of minutes, appointments, acceptance of resignations and adoption of certain resolutions and other items which do not require a public hearing. The consent agenda is a timesaving device of which the mayor and city council is to receive documentation on these items from the city manager for their review prior to the meeting. Any member of the council may remove any item from the consent agenda for discussion and cause a separate vote on the matter later in the agenda. 1. 14-469 Acceptance of agenda. Consideration and action. Sponsors: Kathy Connelly 2. 14-470 Approval of minutes of regular meeting of September 16, 2014. Consideration and action. Sponsors: Kathy Connelly Attachments: ccmin 091614 September 16,2014 minutes E. AWARDS, PRESENTATIONS AND PROCLAMATIONS Awards,presentations from other organizations,proclamations issued by the mayor, and acknowledgement of distinguished guests and visitors, and staff presentation of receipt of grant or donated funds are permitted at this time. 3. 14-423 Presentation of 25 Year Service Award to Lisa Eminhizer of the Apache Junction Police Department. Presentation. Sponsors: Thomas Kelly City of Apache Junction,Arizona Page 1 Printed on 611512026 City Council Meeting Agenda October 7,2014 4. 14-483 Proclamation designating October 2014 as Domestic Violence Awareness Month. Elizabeth Ditlevson-Garman from the Community Alliance Against Family Abuse (CAAFA)will receive the proclamation and make a presentation. Presentation and discussion. Sponsors: Thomas Kelly Attachments: Proclamation Domestic Violence Month 2014 F. ANNOUNCEMENT OF CURRENT EVENTS The mayor or any member of council may at this time present a brief summary of current events. However, no discussion shall take place on such items except for clarifying comments related to substance, time and location. G. CITY MANAGER'S REPORT The city manager, members of city staff or those individuals designated by the manager may present information pertinent to items under consideration or information related to the operation of the city. There shall however be no discussion at this time except for clarification inquiries. 5. 14-424 City manager's report. Presentation. Sponsors. Bryant Powell H. PUBLIC HEARINGS Public hearings required by applicable law shall be conducted by the council and any person shall be given the opportunity to speak.All remarks shall be addressed to the council as a whole and not to any member thereof. Such remarks shall be limited to five(5)minutes unless additional time is granted by the mayor. This time limitation shall not apply to applicants and their agents appearing before the council. 6. 14-471 Application for a special event liquor license for Superstition Mountain Rotary Club on October 25, 2014 at 1590 E. Lost Dutchman Blvd., Apache Junction. The next step in the procedure is for the city council to hold a public hearing on the application and make a recommendation for approval or denial to be forwarded to the Arizona Department of Liquor Licenses and Control. Consideration and action. Sponsors: Kathy Connelly Attachments: 2014 superstition mountain rotary club cc 2014 Superstition Mountain Rotary sp event application 2014 superstition rotary special event october.applicant letter 2014 Superstition Mountain rotary event.dept 2014 superstition mountain rotary special event building recomr 2014 superstition mountain rotary event fd recommendation 2014 Superstition mountain rotary special event planning recorr 2014 superstition mountain rotary special event pd recommend; City of Apache Junction,Arizona Page 2 Printed on 611512026 City Council Meeting Agenda October 7,2014 7. 14-486 Consideration of the proposed development agreement with Blount Rental Equipment for reimbursement of actual cost of public infrastructure improvements not to exceed $51,200.00. Staff respectfully requests council approval of this item. Consideration and action. Sponsors: E'Lan Vallender Attachments: Final -Blount Rental Equipment DA Memorandum-09-24 Blount Development Agreement 8. 14-476 Presentation, discussion and council direction to staff on the .2% sales tax dedicated to fund roadway maintenance and repairs. Consideration and action. Sponsors. Bryant Powell Attachments: ORDINANCE NO Sales Tax Increase Sept 2014 I. OLD BUSINESS The council shall consider any business that has been previously considered and which is still unfinished to include those items previously postponed or tabled. No member of the public shall be permitted to speak on these items unless invited to do so by the mayor after first submitting a written request-to-speak form with the city clerk. J. NEW BUSINESS The council shall consider any business not yet considered. No member of the public shall be permitted to speak on these items unless invited to do so by the mayor after first submitting a written request-to-speak form with the city clerk. 9. 14-473 Annual appointments and reappointments for the Board of Adjustment, Library Board of Trustees, Parks and Recreation Commission and Planning and Zoning Commission. Council interviewed the new applicants and reappointees at the work session of October 6, 2014. Council may choose to fill any or none of the vacancies from the pool of applicants. Consideration and action. Sponsors. Kathy Connelly Attachments: 2014 b&c appointments 1ST session.nb K. COUNCIL DIRECTION TO STAFF This item allows the mayor and city council to direct staff on specifically listed matters. L. SELECTION OF MEETING DATES, TIMES, LOCATIONS, AND PURPOSES 10. 14-430 Executive Session at 5:45 P.M. and Work Session at 7:00 P.M. for Monday, October 20, 2014. Sponsors: Bryant Powell City of Apache Junction,Arizona Page 3 Printed on 611512026 City Council Meeting Agenda October 7,2014 11. 14-431 Executive Session at 5:45 P.M. for Tuesday, October 21, 2014. Other meetings if necessary. Sponsors: Bryant Powell M. CALL TO PUBLIC At this time the public has the privilege to address the council with requests, communications, comments or suggestions relating to city business that are not listed on the agenda.All speakers must have already submitted a written "Request to Speak"form to the city clerk no later than the conclusion of the city manager's report portion of the agenda. If there is a group speaking on the same item, they should select a spokesperson.All such remarks shall be addressed to the council as a whole and not to any member thereof. The mayor is authorized to ask a speaker to stop speaking and leave the podium or to adjourn the meeting if anyone becomes disorderly, uncivil, makes personal attacks or continues to speak about items that are not within the jurisdiction of the city after being warned such issues are beyond the jurisdiction of the city to act. The council may not answer questions of the speaker, discuss the matter with one another, but may, at the conclusion: 1)respond to criticism by a speaker;2)ask the city manager to review a matter;3)ask the city manager to place the matter on a future agenda. Each speaker must approach the podium, speak into the microphone,provide their name and address. There is a three (3)minute time limit per speaker. N. ADJOURNMENT Copies of this agenda and additional information on any of the items listed above may be obtained from the City Clerk's office located at 300 E Superstition Blvd,Apache Junction,AZ 85119, Monday through Thursday from 7:00a-6:00p, excluding holidays. If any person with a disability needs any type of accommodation,please notify Human Resources at(480) 474-2617 or(480) 983-0095(TDD)at least 72 hours prior to the scheduled time. City of Apache Junction,Arizona Page 4 Printed on 611512026 ►�P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard � 0 Agenda Item Cover Sheet Apache Junction,AZ _ 85119 Agenda Item No. 1. '+'Piz File ID: 14-469 Sponsor: Kathy Connelly Agenda Date: 10/7/2014 Index: In Control: City Council Meeting Acceptance of agenda. Consideration and action. City of Apache Junction,Arizona Page 1 Printed on 611512026 ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard � 0 Agenda Item Cover Sheet Apache Junction,AZ _ 85119 Agenda Item No.2. '+'Piz File ID: 14-470 Sponsor: Kathy Connelly Agenda Date: 10/7/2014 Index: In Control: City Council Meeting Approval of minutes of regular meeting of September 16, 2014. Consideration and action. City of Apache Junction,Arizona Page 1 Printed on 611512026 CITY COUNCIL REGULAR MEETING SEPTEMBER 16, 2014 The regular meeting of the City Council of the City of Apache Junction, Arizona, was held on September 16, 2014, at the Apache Junction City Council Chambers pursuant to the notice required by law. CALL TO ORDER Vice Mayor Barker called the meeting to order at 7 : 00 p.m. INVOCATION Councilmember Wilson gave the Invocation. PLEDGE OF ALLEGIANCE Councilmember Waldron led the Pledge of Allegiance. ROLL CALL Councilmembers Present: Mayor Insalaco (telephonically) Vice Mayor Barker Councilmember Evans Councilmember Rizzi Councilmember Serdy Councilmember Waldron Councilmember Wilson Staff Present: Assistant City Manager Bryant Powell City Attorney Joel Stern Public Safety Director Tom Kelly Others Present: Deputy City Clerk Jan Mason Principal Economic Development Specialist Janine Solley Economic Development Specialist E' Lan Vallender Public Information and Marketing Communications Specialist REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 1 OF 29 Constance Halonen-Wilson Vice Mayor Barker commented since Mayor Insalaco is on the phone, she requested everyone to make an effort to speak into their microphones so that he can hear everything. ACCEPTANCE OF CONSENT AGENDA ) Councilmember Evans MOVED THAT THE CONSENT AGENDA BE ACCEPTED; AND THAT APPROVAL BE GIVEN FOR THE CONTRACTS BETWEEN THE GOVERNOR' S OFFICE OF HIGHWAY SAFETY AND THE CITY OF APACHE JUNCTION FOR REIMBURSEMENT OF PERSONNEL SERVICES AND PROCUREMENT OF EQUIPMENT UNDER CONTRACT #GOHS 2015-164-004 IN THE AMOUNT OF $2, 000 FOR EQUIPMENT, CONTRACT #GOHS 2015-164-007 IN THE AMOUNT OF $47, 000 FOR THE PURCHASE OF A FULLY-EQUPPED MARKED DUI ALCOHOL ENFORCEMENT POLICE PACKAGE SUV, CONTRACT #2015-HV-001 IN THE AMOUNT OF $10, 000 FOR PERSONNEL SERVICES AND RELATED EXPENSES AND CONTRACT #2015-PT-002 IN THE AMOUNT OF $10, 985 FOR PERSONNEL SERVICES AND RELATED EXPENSES AND EQUIPMENT FOR A TOTAL AMOUNT OF $69, 985; AND THAT AUTHORIZATION BE GIVEN TO THE PUBLIC SAFETY DIRECTOR AND THE CITY MANAGER TO SIGN THE CONTRACTS PENDING APPROVAL AS TO FINAL FORM BY THE CITY ATTORNEY; AND THAT APPROVAL BE GIVEN FOR THE SECOND AMENDMENT TO THE EASEMENT AGREEMENT BETWEEN VERIZON WIRELESS AND THE CITY OF APACHE JUNCTION FOR LOCATION OF COMMUNICATION EQUIPMENT ON CITY PROPERTY, EXTENSION OF THE AGREEMENT FOR FOUR ADDITIONAL TERMS OF FIVE YEARS EACH, INCREASING THE ANNUAL RENT THREE PERCENT ANNUALLY WITH THE CURRENT ANNUAL RENT BEING $9, 240, A ONE TIME PAYMENT OF $20, 000, NEW ADDRESSES FOR NOTICES BEING SENT TO PARTIES OF THE AGREEMENT, REAFFIRMATION OF TERMS OF THE ORIGINAL AGREEMENT, AND CLARIFICATION THAT ALL ADDITIONS, VARIATIONS AND MODIFICATIONS TO THE AGREEMENT BE IN WRITING; AND THAT AUTHORIZATION BE GIVEN TO THE CITY MANAGER TO SIGN THE AGREEMENT PENDING APPROVAL AS TO FINAL FORM BY THE CITY ATTORNEY; AND THAT THE AWARD OF BID FOR PR14-03, LANDSCAPE MAINTENANCE FOR RENAISSANCE POINT, ARROYO VERDE, PHELPS DRIVE PHASE I AND PHASE II, IRONWOOD COVE, ROYAL PALM ROAD, IRONWOOD DRIVE AND US 60 EXIT, GOLDFIELD ROAD AND US 60 EXITE, TOMAHAWK ROAD AND US 60 EXIT, IDAHO ROAD AND US 60 EXIT, PLAZA DRIVE, OLD WEST HIGHWAY REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 2 OF 29 MEDIAN AND NORTH APACHE TRAIL, BE AWARDED TO SOMERSET LANDSCAPE MAINTENANCE, INC. , IN THE AMOUNT OF $96, 826 WITH AN ADDITIONAL 10% IN THE AMOUNT OF $9, 682 . 60 FOR CONTINGENCY FOR A TOTAL AMOUNT NOT TO EXCEED $106, 508 . 60 FOR A PERIOD OF ONE YEAR WITH THE OPTION TO RENEW WITH THREE ADDITIONAL ONE-YEAR PERIODS . Councilmember Waldron SECONDED THE MOTION. VOTE: Unanimous . The motion carried. AWARDS, PRESENTATIONS AND PROCLAMATIONS Vice Mayor Barker read a proclamation designating September 17 through September 23 as Constitution Week. She then presented the proclamation to Regent Carol Pearson, Chairman of the Constitution Week Committee Karen Barks and Carol Shepherd. ANNOUNCEMENT OF CURRENT EVENTS Councilmember Waldron commented Vice Mayor Barker, Councilmember Wilson and he attended an emergency services exercise on Friday afternoon where the police department, fire district and Pinal County collaborated on a storm scenario. It was a good exercise. Vice Mayor Barker commented the exercise called for 80 miles per hour winds . Her house would have blown away. Councilmember Wilson commented a week ago D & H Auto Repair and Towing contacted Paws and Claws Care Center to pay it forward. Their donation paid for the adoption of five dogs . He thanked them personally for doing this . CITY MANAGER' S REPORT Assistant City Manager Bryant Powell commented on September being National Preparedness Month, public works being called out on September 8 for numerous flooded intersection calls, and public works cleaning up the drainage areas to prepare for REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 3 OF 29 tropical depression Odile . He then showed a video on the emergency preparedness services exercise. PUBLIC HEARINGS DRAFT ORDINANCE FOR AN ADDITIONAL . 2% SALES TAX DEDICATED TO FUND ROADWAY MAINTENANCE AND REPAIRS ) ) Assistant City Manager Bryant Powell briefed the council on the item. City Attorney Joel Stern briefed the council on the draft ordinance language and its possible effect on bonding in the future. Assistant City Manager Bryant Powell asked if he was talking about the language of the conditions . The language they have before them states ten years no matter what. City Attorney Joel Stern stated that is correct. He continued with his briefing. Councilmember Serdy asked if they can ask questions at will or if they have to wait. Vice Mayor Barker commented this is a public hearing. She suggested they let the public address them first and then they can discuss this . The consensus of the council was to go ahead with the public hearing. Vice Mayor Barker opened the public hearing on the item. Mr. William Rollins, 574 W. Greasewood, Apache Junction, addressed the council . He stated he has lived here for 28 years and the previous . 2o to get the buildings they are now sitting in is greatly appreciated. He does not see anything wrong with sales tax because it is the most fair tax this city could have. It affects everyone. The streets are used by everybody that comes into town. He is REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 4 OF 29 totally against the property tax as it means the public can drive on a street that he has no say so over. If they are looking for fair representation of tax money, there is nothing more fair than sales tax. Mr. Clark Smithson, 1700 S . Weaver, Apache Junction, addressed the council . He stated no one likes taxes but they do like the services they provide. These are services that are desperately needed. He does not want to see it put off any longer than necessary. He commends the council for considering a minimal sales tax increase . They discussed a bond issue 3-4 years ago to bring the streets up to par and then the number was $10 million. Fourteen million does not surprise him at all; in fact he is surprised it is not higher. As the Highway User Revenue Funds are not here they need something to do it. He likes the idea of a sunset clause. He personally does not feel the property tax would hurt him but he feels it will hurt the businesses . He would be opposed to a property tax. He suggested considering going out for a bond to be funded by the sales tax so that more could be done considerably sooner. He liked the idea of lowering the sales tax when the Highway User Revenue Funds come in. Mr. Carlos Rivera, 2096 E. 37th Avenue, Apache Junction, addressed the council . He stated he is for the sales tax increase to improve the streets . The property tax could hurt businesses but when he goes down the Trail, it is rough. We need to improve the road and get the people to come back into Apache Junction. Mr. R.E. Eck, Jr. , 2106 W. Roundup, Apache Junction, addressed the council . He stated it is the choice between two evils and the sales tax would be more fair than the property tax. In talking with people, they do not realize how much tax we pay, including utility taxes and rental taxes on buildings . He commented there is an exercise tax where the city charges people to exercise. With the capital facilities plan the tax went from 8 . 7 to 8 . 9 and the city raised $6 million to $7 million. It was a great investment for the buildings that was kept going for the police department. He is not saying he does not agree with the tax but he wants everyone to know where we are at. He is concerned about the small businesses . A 9 . 1% tax sounds extremely high to him. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 5 OF 29 Mr. Randy Blount, who does not reside in the city but is relocating a business here, addressed the council . The raise in the sales tax made him think about how it might affect his business . There is perception that it would, but when thinking about his own business spending, he rarely considers the amount of sales tax. He does transactions in Buckeye and Goodyear and never looks at the sales tax. He does not feel it is a threat to him. If he provides a good service they will transact with him. Most of the spending is done where they are at. Most of the people on the way to the lake will stop here. He questioned if the increase was enough to combat the problem. A bond would be helpful but he suggested they consider a . 4% increase to resolve the issue quicker. There is a perception with Apache Junction and some of that is road conditions . Scottsdale spends a lot of money on roads and median improvements . It really changed the perception of Scottsdale. It is the right move but he is concerned that it is enough and will they be able to improve the image of the city. Improving the overall image will bring a lot of potential customers to the city. Ms . Tess Nesser, 1511 S . Cactus, Apache Junction, addressed the council . She stated if her math is correct, it would be two cents on a ten dollar purchase or twenty cents on a hundred dollar purchase. It would be $2 on a $1, 000 purchase, $20 on a $10, 000, and if buying a house for $100, 000 it would only be $200 . She asked who could complain about getting that in exchange for roads . She agreed with the last gentleman in that is . 2% enough. She wants to get the roads fixed. Mr. Steven Keel, 3274 S . Bowman, recently from South Texas, addressed the council . He asked what the original . 2% tax was put in place for. Vice Mayor Barker commented it was for where he is right now. Mr. Steven Keel stated it was to pay for this building. He asked if it was for more than one year' s revenue or several years . He asked what year it was . REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 6 OF 29 City Attorney Joel Stern stated he would have to interrupt this as this is for public comment only. The council can answer the questions afterwards . Vice Mayor Barker commented they can answer his questions afterwards . Mr. Steven Keel asked the assistant city manager for his name. Assistant City Manager Bryant Powell stated he would give him his card later. Mr. Steven Keel asked if he could have just his name . Assistant City Manager Bryant Powell told him his name . Vice Mayor Barker commented they would be happy to answer the questions after the public hearing portion of the meeting. Mr. Steven Keel stated he had two more questions . In Texas any through street going through the city is owned by the state . He asked if it is the same way in Arizona. All the highways leading to the lake should be owned by the state. Vice Mayor Barker commented they would be happy to answer those questions after the public hearing. She is writing them down. Mr. Steven Keel stated they are on the same subject. Vice Mayor Barker commented they are but the rules of a public hearing are that we cannot answer him while he is talking. She is writing his questions down so that the council as a whole can address them as soon as he is seated. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 7 OF 29 Mr. Steven Keel asked if the $18 million needed for paving is for all the streets in the city or just the Trail . He asked if she could answer that question or not. City Attorney Joel Stern asked if he was being timed. Vice Mayor Barker stated he was not being timed. City Attorney Joel Stern stated the law is they can answer the questions after he sits down. The law does not allow them to answer right now. Mr. Steven Keel asked again about the $18 million. City Attorney Joel Stern stated he is answering his question. He added he can ask questions and they will take notes . Mr. Steven Keel asked if they could answer the question if all the streets in the city have to be paved at the same time. Vice Mayor Barker commented she would explain it one more time. The council cannot answer his questions at this point. They can after he sits down. She has written both of those questions down. She asked if he had other questions . Mr. Steven Keel stated he had other questions that they do not have to answer. Vice Mayor Barker commented she would let him ask two more questions . After the meeting Mr. Powell would be delighted to speak with him and answer any questions he has . Mr. Steven Keel stated they do not have to answer them. He asked if they want to have ideas on how to come up with $18, 000 . He can come up with ideas for REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 8 OF 29 that. He asked if anyone wants to hear his suggestions, and, if so, to raise their hands . City Attorney Joel Stern stated he believed they are beyond the scope of open meeting law. Vice Mayor Barker commented they are beyond the open meeting law at this point and asked him to please be seated. Mr. Steven Keel asked if he could have one question. Vice Mayor Barker refused. Mr. Steven Keel stated she said he could have two more questions . Vice Mayor Barker commented he overstepped it . Mr. Steven Keel asked for one more. City Attorney Joel Stern requested a break. Vice Mayor Barker called for a two minute break. Vice Mayor Barker reconvened the meeting and called for anyone else who would like to address the council . Mr. Peter Heck, 1390 N. San Marcos, Apache Junction, addressed the council . He stated he understands from the slide presentation that the revenue would be in the neighborhood of $1 million. That is significantly less than what is needed for the time frame for the work that needs to be done. He is hoping there will be some additional discussion on how to go about generating more revenue, whether REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 9 OF 29 through a bond issue or something else. He recognizes the sales tax revenue will be inadequate to cover the costs . Mr. Mark LeResche, 2910 W. Apache Trail, addressed the council . He stated he is a small business owner in town. He was part of the retreat in April where he sat on the sidelines being a listener. In April the entire council was miles apart on this issue . Now they are a team. Vice Mayor Barker closed the public hearing with no one else wishing to speak. She reopened the item to council discussion. She commented she believes Steve, being new to the community, did have some questions that perhaps those new to the community would wonder about, such as what was the original . 2o designated for. It was an excellent question. She sees no problem with that type of thing. They got a little off the rails with the amount but that and the state roads were good questions . Apache Trail is not a state road. It is important to know. She is sure there are those who have been in Arizona a long time who drove from Florence to Mesa on Apache Trail and presumed it was all state highway. They may not realize it is a city-maintained road. Councilmember Waldron commented the rental tax is actually gone now. He asked if we no longer collect rental tax. He believes the state took that away. City Attorney Joel Stern stated they are in a discussion part of the council meeting and they cannot get someone to answer. Councilmember Waldron commented he suggested they do a trigger on the Highway User Revenue Funds . There are some inherent problems with that. They could cease the sweep one session and start it all over again the next session or a couple of sessions later. In thinking it through, it is probably not a good trigger point. He knows there will still be some Highway User Revenue Funds coming in and hopefully they will stop the sweeps so that the city gets more of that money. His concern is they would continue the sweeps if the city were to trigger the sunset on REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 10 OF 29 the sales tax with the Highway User Revenue Funds . It is a suggestion he would like to withdraw. Vice Mayor Barker commented the Highway User Revenue Funds, as they were in 2006 and 2007, may not be enough if it is completely reinstated five years from now. In dollars, five years from now, it may not be anywhere near what the city would need at that point. Councilmember Serdy asked why gasoline is off limits to the city and only the state can tax gasoline . He asked why they could not do their own little gasoline tax here. City Attorney Joel Stern stated they are preempted by the state in the statutes . It is reserved for the state. It is different in some states, other states can. California has a whopping state tax coming. He does not believe California allows cities to tax either. It might be a carryover from the federal government. It is in the statutes that they cannot put a tax on gasoline. Councilmember Wilson commented the sunset on the Highway User Revenue Funds will be a discussion for the council at that time to discuss and bring about. This is about deciding to bring it back to the council at that time. They can make a determination to continue it or have it sunset at that time. He had two interesting conversations . One was today with a business owner here in Apache Junction. She owns her own business, owns the facilities and land, and owns her own home and resides in Apache Junction. She does not feel a property tax would be fair to her as it would impact her business as well as her personal home. She feels she would be paying twice as much as others would. She is for the . 2o as she feels it would not be impacting her business . It would increase her drive to encourage people to come into the community to spend their money. The second was a conversation he had the other day from a concerned citizen who stated if the council passes this, she would drive over to Mesa and spend her money there instead of in Apache Junction. He also heard this from other people. He got into a conversation with this person concerning that and brought up the price of gasoline. He asked how many miles she would drive and she answered ten miles for REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 11 OF 29 the round trip. He asked her what kind of mileage she gets and was told she drives a truck averaging 15 to 18 miles per gallon. He told her she would spend $3 . 27 for that gallon of gasoline and possibly spend more to save one cent on a five dollar bill . He is very torn with the idea. He is not a person who enjoys paying sales tax as well but he does see the benefit in this one. He is still looking to the people of the community, especially the business community, on what they feel impacts them and how it should be resolved. The city needs to do something and needs to do something soon. Mayor Insalaco commented they have been told by staff that the Trail will not last much more than a year-and-a-half. If it is not fixed now, there will not be a road for the people to come to the businesses on. Every day the road gets torn up worse and worse. He asked how about the people that drive that road going to the local businesses if the city loses one, two or ten customers to go out of town because they want to be vindictive and not spend their money in town. If one wants to talk about businesses suffering, look at what will happen if the road gets so bad that people will not want to go to those businesses . It is a catch 22 . He asked what they should do. He thinks their obligation is to get the road fixed. When Peter Heck commented on it being $1 million, he may not have realized it is $1 million a year or $10 million for the life of the bond. He does not know if Mr. Heck understood that or if he misunderstood him. If the city goes to a property tax, people will have to understand the city just cannot have an election, it would have to wait until November 2016 before we can do anything, with another year after that of waiting to get the money. The road will not even be around. He asked what would happen if the people of Apache Junction turned that vote down. They are back to square one, in fact, below square one . He is all for it, and the people he has talked to do not have a problem with the . 20 . Councilmember Evans commented she truly believes they have to do this and do it right now for all of our immediate needs . As the mayor just said, to do a property tax we would be a year-and-a-half to two years out before we could receive any funds whatsoever. Her concern is with the sunset clause. If they do just this for just the roads, she asked what they would do when this sunsets . This is REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 12 OF 29 like a patch to get them going right now. Even to rely on the Highway User Revenue Funds, if they all go back to driving Corvettes and Chevelles and the really nice, big, fun cars, they will be spending that gas money to get the Highway User Revenue Funds back in. But they are not. Our cars are becoming so energy efficient, we are using less and less gasoline . The Highway User Revenue Funds have to decrease, even if they set it back to the same level we were receiving, the funds will still be less . When the council originally had their retreat and talked about a property tax, she believes she has the numbers right, a $125, 000 house for one year' s property tax would be approximately two cups of coffee at Starbuck' s a year. They were talking about an extremely low amount. They recently attended the League of Cities and Towns Conference and she sat in on a financing infrastructure seminar to learn new ways different communities and different states have come up with, having the same problem with the gas tax and the roads deteriorating, and as a council they have to investigate these other avenues besides just the . 20 . They need to do that right now as this is not going to fix our problem. It will be an ongoing problem. They need to really look at how they can solve it. For example, one city created a transportation tax district where they pay an additional tax on their license plates . Whenever the plates are renewed, it is a new tax district on there . That is a direct effect on the roads . The person lives there, owns a vehicle and it will be funded that way. There are new mechanisms out there they have to investigate further. Flagstaff has just gone through a huge study to figure out how they can obtain $64 million. This is okay for now, and we have the immediate now, but to fix the Trail, they have 22 safety issues on their list now. Mayor Insalaco requested Councilmember Evans talk into her microphone. Councilmember Evans commented they have 22 safety issues for the roads that total $4, 765, 000 . To fix the Trail and the safety issues this would be the most immediate way for them to raise the funds for it. Councilmember Serdy commented sometimes we have more questions than answers . He will probably bring up more questions . He knows they are not here to debate REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 13 OF 29 the commenters, be he is curious how they would think a property tax will hurt business and not sales tax. They will both hurt. By lost business, it will possibly hurt them more than the property tax. A lot of them will choose to go other places . We all get input from different types of people . He is trying to put it out there that he is against this so that may be why businesses have sought him out. He is hearing from businesses, especially along the Trail, that they are against it. They got a survey from staff and he tried to interpret it. He put a plus if they were for it, incomplete if they did not say and a lot of them were just managers who do not live in our community and stated they would report it and would have a job regardless, and he put a negative sign if they were against it. He came up with 18 for, 13 against and 33 incomplete. Some of them are vehemently against it. They will be punishing the people that follow the Shop Local program. To use a phrase from one of his most unpopular politicians about everyone paying their fair share, people that do not shop here will not pay anything for this road. The ones that get on the freeway and go to Signal Butte or Power Road will not pay at all . If they do a little bit of a property tax that these voters vote for, then everyone will be paying for all the roads that everyone uses . He is throwing that out as a question, not a solution. They are leaving self-governance to the people. As for sunsetting, he is not hearing anything about mandatory sunsetting. It is about they should sunset it. He thinks they are dealing with a rolled over sunset right now on one of them. He thinks if they are going to do this there has to be wording in there that it is mandatory non-renewable sunset. No one is saying that. Or, if it is, they would have to do a whole new tax. Even a supermajority would not do it. He wants to hear something about mandatory sunsetting. Like Councilmember Evans stated, Bryant just talked about the other priorities . If they are going to dedicate this only to the Trail, it is a temporary fix. A perpetual property tax to do nothing but roads that we cannot rob to start doing public safety and everything else is how it should be worded. If the people want to do it then they will vote for it. Those are all of his points for now. Councilmember Rizzi commented one of her concerns is, like Councilmember Serdy said and a few of them have mentioned, that this sales tax is not going to be enough to fix all of our needs . She asked what comes next if REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 14 OF 29 they do not have an alternative solution. She asked if they raise it again or keep it and then keep it going. She asked when it would end. As a small business owner she is not for it. She talked to a lot of small business owners that are very upset about it. They feel like this being put on them and that the property owners are not sharing the burden. As a property owner we have a vested interest in our community and part of that interest is to take care of our roads . We have a responsibility. She feels like this is putting it just on the businesses . Another concern she has is they are estimating it will bring in $1 million per year, but we do not know that. If people do not shop here, more and more people look to other places to shop, then what. They already know it will not be enough. If people shop somewhere else, then what. She asked what the city would do then. There is no easy fix. There are no easy answers . None of us want to have a property tax, none of us want to have the . 20 . It may look like a quick, easy fix but she does not feel that. She feels they need to come up with other solutions and she does not feel they are doing the business community justice . Mayor Insalaco commented there is one thing they have to realize. It is not only the residents, the homeowners that will be paying taxes, the businesses that own their own property, who own the business, there will be a property tax put on them. If they have a landlord that property tax will be put on the landlord. He asked what the landlord is going to do. The landlord is going to raise their rent or lease payments . As far as other solutions, they have two solutions to collect money like almost every other city. Sales tax or property tax. When he hears that they are going to run businesses out of the city, they will be running businesses out if they put a property tax on the business people . Instead of having everybody coming through town paying the tax, it would be the business people paying the tax. Either the business people or the people who own the property where business is located. Vice Mayor Barker commented it seems to her what they have here is a fundamental difference in philosophies . Some of them up here apparently adhere to notion that what is good for business is good for the community. She feels the opposite . She feels that what is good for the REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 15 OF 29 community is good for business . It is their job to build and maintain infrastructure and create a quality of life that will bring people into this community. Those people will become the customers that keep the businesses here and make them thrive. We all know that businesses do not locate in a vacuum. They do not go out and locate twenty miles from a community because they will not have a customer. It is a very poor business plan. What they do is wait until there are people and then they locate because that is where their customers are. We have looked at the possibility of getting chain restaurants here. They have all told the city they need "x" number of rooftops before they will consider locating in this community. What is obvious to her is they need to repair this infrastructure and she agrees it is a short term solution for a long term plan. She agrees with that entirely and she thinks this council is definitely going to have to work very hard to come up with other solutions that will take this city years of building and creating infrastructure. Either tax that is put on will be paid by the whole community. Sales tax will be paid by everyone. We all know that. Property tax will be paid by everyone . If a business owner has an increase in property tax that becomes part of his overhead. She is a business owner; she knows what happens with that. They will either take it out of their employees' pockets by cutting hours or by cutting an employee, or they add a little, maybe . 20 to their product . It seems to her that sales tax is a more honest tax. People know it is there . There it is . Like Mr. Blount stated, she rarely looks at the sales tax. She is not at all sure what kind of sales tax the cities around Apache Junction have . If, as Mr. Wilson stated, somebody is willing to pay $3 . 27 to drive into Mesa to save less than fifty cents, they are doing it already. They have been doing it all along because they did not like the original . 20 . She does agree they need to come up with something else to go along with this . For right now, Mr. Serdy, this is not just for the Trail . The ordinance that Joel wrote says streets . It does not designate the Trail period, it says streets . Mayor Insalaco commented the Trail is supposed to be done first. Vice Mayor Barker commented that is what they talked about. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 16 OF 29 Assistant City Manager Bryant Powell stated that is correct. Once they get the revenue stream in place he can go talk to the financial advisor about different methods, including the Greater Arizona Development Authority which is similar to general allegation bonds . It is how they paid for this facility. They paid it off on time with a very, very low interest rate. The cost of money is as low as it has ever been. He will come back at another time with staff and give them the options if they were to move forward in this manner and how to bring in $9 million up front. Vice Mayor Barker commented Mr. Serdy came up with an interesting idea a couple of weeks ago about lowering our sales tax and putting in a property tax that was dedicated to roads . She was thinking about that for awhile . The more she thought about it, she thought it was pretty counterproductive because the vast majority of our general fund is funded by sales tax revenues, which would cut services, would cut programs and the quality of life that we are trying to create would suffer. We would have really great roads but no one would want to live here because there would not be a library, multi-gen center, et cetera. She wanted to comment on that. She gave it a lot of thought. Councilmember Serdy commented he was referring to one of the surveys the city had done about how a lot of the people, if they were going to pay a tax, would want it focused on the Trail first. That was an earlier survey. He thinks they have since moved on from that. Councilmember Evans commented at the beginning of the item the city attorney stated he had a concern about the way this was written if we had to go after a bonding issue. She asked if that is correct as it kind of got a little muddy for a few minutes . She asked what he would suggest to change the way that sunset was written so it would not conflict down the road if they have to go for a bond. City Attorney Joel Stern stated he is not sure it conflicts . He thinks it may cause a bond attorney, and remember, Mr. Powell is correct, we have a large bond capacity. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 17 OF 29 Assistant City Manager Bryant Powell stated the city effectively has zero debt. The assessed valuation is tremendous capacity. This is only $10 million; we have hundreds of millions ability. Councilmember Evans commented it is the sunset provision that causes the problem. City Attorney Joel Stern stated if it is passed. Vice Mayor Barker asked if it is because it is conditional . City Attorney Joel Stern stated it is not really conditional . It is saying it will sunset, however, if one or both of these things happen, the council could have a meeting to talk about the sunset. They do not have to have that in here but last time they directed him to put that in there for public disclosure to let the public know. They do not even need that in there. They could still do that without having that in there . If a Highway User Revenue Fund increase happened and if a property tax passed, they do not have to wait until the sunset date . Say it happened in year eight that the voters approved a property tax. Right after that happened the council could have a hearing on sunsetting or terminating the . 20 . They can do that. They do not have to have it in the ordinance. He was directed to do it last time and that is the only reason it is in there. He would recommend they take out B completely and say it is going to sunset in 10 years . But they could still bring it back before that. Councilmember Serdy asked how they could make it a guaranteed sunset and not just another vote of council . City Attorney Joel Stern stated it sunsets if they leave in A, however, under municipal law the council could still come in and make it less than that date . Vice Mayor Barker commented the council can also recreate it. A mandatory sunset does not REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 18 OF 29 necessarily mean it actually sunsets . This particular one would sunset but it does not stop a future council from reinstating it or something different or extending it. City Attorney Joel Stern stated that is correct. Mayor Insalaco commented ten years from now a whole new council can reinstate it. He questioned putting the clause in until the time comes . It is supposed to sunset in ten years . If they cut it off right there and a future council is in the same predicament we are in right now or worse, it takes away their leverage . He is actually predicting to a future council they cannot do anything. He asked if he was correct. City Attorney Joel Stern stated he is on Washington time so he did not understand what he was saying. He requested the mayor to repeat what he said. Mayor Insalaco commented if they make it mandatory to sunset, in ten years they would have a whole new council and they get into the same shape the current council is now, it would tie their hands down by not letting them take over and say they need to continue it or sunset it. City Attorney Joel Stern stated even though he says to sunset it, a council can still come in and say it is too long, they did not like what happened on January 1, 2015 . Now it is January 1, 2018 and they wish to get rid of the tax. Mayor Insalaco commented that is correct. To put that in there is almost not necessary. City Attorney Joel Stern stated this gives the public notice that it can go on until January 1, 2025, unless it is sunsetted or terminated earlier by a council action. Assistant City Manager Bryant Powell asked if it takes a proactive action by the council . He recalled the council did do a proactive approach in 2009 . REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 19 OF 29 City Attorney Joel Stern stated it could be extended for that. He does not know where this discussion is going tonight, but he thinks the January 1 date is going to be quick. What has to happen is they say go ahead and draft this, they want to have full consideration and vote on "x" date, once they know that date they have to publish something in the paper that says this is going to be considered and it has to be 60 days before that date . He wanted them to know that. They are pushing the time a bit. Mayor Insalaco commented he thinks they fooled around with it long enough. Personally, he thinks they should go ahead with this but he is only one vote . Assistant City Manager Bryant Powell stated tonight was a public hearing and discussion on a staff perspective as based on tonight, get that direction to fine tune the language and come back at the first meeting in October if they are in alignment. They will then bring that for a vote. He thinks they have plenty of time for the 60 days . For purposes of communication with the public, a January 1 date would be the start date so that the business owners know and can work with Kathy' s staff on coordination of the net new change. It is a natural time of year for a new thing. It could be February 1 or whenever council wants . City Attorney Joel Stern asked if he meant direction when he stated for it to come up for a vote. Assistant City Manager Bryant Powell stated that is correct. Vice Mayor Barker commented they still have a direction on the ordinance to give . Assistant City Manager Bryant Powell stated a direction on the ordinance to take place on October 7 any maybe the vote on October 21 . City Attorney Joel Stern stated the problem is they have to do the 60 day notice before they have the vote . REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 20 OF 29 Assistant City Manager Bryant Powell asked what the law says about starting the 60 day notice . He thinks they could start that today. City Attorney Joel Stern asked if he knows the date they are going to pass it. Vice Mayor Barker asked if it has to be a date certain. City Attorney Joel Stern stated he would ask the city clerk or the deputy city clerk what would be done mechanically for posting. Deputy City Clerk Jan Mason stated she could get a notice done tomorrow and get it posted but it would not be published until the following week. If they need to have 60 days after the publishing date then that is what they are looking at. City Attorney Joel Stern stated that is when the clock starts by statute. They have to know what date they want to act on the ordinance, which would be a Tuesday night, and they pick the date . From that point, it has to go out at least 30 days, except this has an emergency clause so there is no 30 day period. It takes effect after they vote on it. By the way, this is not a referable act because it is a tax matter. There is case law on that in case someone decides they want to refer this to the voters . Assistant City Manager Bryant Powell stated he is saying they will have meetings on October 6, October 7, October 20 and October 21 . City Attorney Joel Stern stated he would propose there be another public hearing on this since there is more discussion and then they direct who is to create the ordinance, with an ordinance number because we do not have an ordinance number attached, and they also pick a date next time, whatever date it is, for the date they vote. Vice Mayor Barker commented the public hearing should be on October 7 . REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 21 OF 29 City Attorney Joel Stern stated the next public hearing would be October 7 . That is the next date for a public hearing. Councilmember Serdy commented they are also not limited to meeting every two weeks . Vice Mayor Barker stated they are not. They can have a special meeting. City Attorney Joel Stern stated they can. Assistant City Manager Bryant Powell stated this is the second public hearing but they have had many public discussions . His thought was tonight would be the night to give direction to staff on moving forward. Mayor Insalaco commented that is what he thought they were going to do, too. Vice Mayor Barker commented they do not have that direction. Assistant City Manager Bryant Powell stated he thought tonight was directional . Vice Mayor Barker commented that is not what is in their packet. We have a discussion item only. There is no direction to staff here. Any direction to staff would have to be on October 7 . Deputy City Clerk Jan Mason stated if they want the notice to be gotten ready so that it can be published next week, they are looking at 60 days or December for a vote. Vice Mayor Barker agreed. City Attorney Joel Stern stated they may want to think about it over the next two-and-a- half weeks to come up with those dates . It might push it, possibly, into February for an effective date . REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 22 OF 29 Mayor Insalaco asked if they cannot go ahead and do it, as they said, on the next meeting date . Vice Mayor Barker asked if he meant give direction to staff. Mayor Insalaco commented to give direction to staff. City Attorney Joel Stern stated they could after a public hearing. Mayor Insalaco asked if it would be on the same night. City Attorney Joel Stern stated they could do both on the same night. Deputy City Clerk Jan Mason stated she believes once they have the 60 day notice posted they can do whatever they want within those 60 days, as long as they do their vote in December. They just cannot do their vote until the 60 days are up. City Attorney Joel Stern stated that is correct. Deputy City Clerk Jan Mason stated they could do the vote in December to have it ready for January. Councilmember Waldron stated they would have direction on October 7 . City Attorney Joel Stern stated it would be a public hearing and direction. The consensus of the council was to have the direction to staff and public hearing on October 7 . REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 23 OF 29 Vice Mayor Barker closed the discussion with no further comments and moved on to the next item. OLD BUSINESS None . NEW BUSINESS PROPOSED RESOLUTION NO. 14-36, ADOPTING A NOTICE OF INTENT TO ENTER INTO A RETAIL DEVELOPMENT TAX INCENTIVE AGREEMENT WITH BLOUNT RENTAL EQUIPMENT, LLC ) Economic Development Specialist E' Lan Vallender briefed the council on the item. He thanked the city attorney for his assistance and introduced Sarah Murley of Applied Economics to present her findings on whether the agreement meets state requirements . Ms . Sarah Murley, Applied Economics, briefed the council on her findings . Her conclusion was the agreement does meet the requirements of the statute for sales tax incentives . City Attorney Joel Stern stated Ms . Murley did an excellent job summing this up. He thanked E' Lan for pursuing this . It took a while to get here but we got here . He did an excellent job with the developer and also in facilitating it with the city manager. The resolution does not say the agreement is in place tonight. Under the law the council has to pass this resolution that has two exhibits . The first exhibit is a notice to the public that tells the public the city intends to enter into this retail development tax incentive agreement. This is a change in the law back in 2007 . Before this did not have to be done . It has to be at least 14 days before the city actually passes the development agreement. Exhibit B is the actual draft development agreement. The intent is to pass this tonight, the notice is now good, and they go out 14 days but our next meeting is well beyond that to October 7, making it 21 or 22 days beyond. He thanked E' Lan again and Sarah for coming out. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 24 OF 29 Vice Mayor Barker called for a motion. Councilmember Waldron MOVED THAT RESOLUTION NO. 14-36, A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, PINAL COUNTY, ARIZONA, ADOPTING A NOTICE OF INTENT TO ENTER INTO A RETAIL DEVELOPMENT TAX INCENTIVE AGREEMENT WITH BLOUNT RENTAL EQUIPMENT, LLC, BE APPROVED. Councilmember Evans SECONDED THE MOTION. VOTE: Unanimous . The motion carried. APPOINTMENTS OR REAPPOINTMENTS TO FILL VACANCIES ON THE SEWER DISTRICT BOARD ) Vice Mayor Barker commented they interviewed the applicants last night. She called for any discussion. There being no discussion, she called for a motion. Councilmember Rizzi MOVED TO NOMINATE JEFF STRUBLE TO THE SEWER BOARD. Vice Mayor Barker asked if she would like to reappoint him for a term certain. Councilmember Rizzi MOVED TO REAPPOINT JEFF STRUBLE TO THE SEWER BOARD FOR A TERM TO EXPIRE JULY 7, 2020 . Councilmember Wilson SECONDED THE MOTION. VOTE: Unanimous . The motion carried. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 25 OF 29 Councilmember Evans MOVED THAT KATHLEEN WALDRON BE REAPPOINTED TO THE SUPERSTITION MOUNTAINS COMMUNITY FACILITIES DISTRICT NO. 1 BOARD OF DIRECTORS FOR A TERM TO EXPIRE JULY 7, 2020 . Councilmember Rizzi SECONDED THE MOTION. VOTE: 6-0 (Councilmember Waldron declared a conflict on the item. ) The motion carried. Vice Mayor Barker commented she appreciated Mr. Buzzin applying for this position. She thinks where the council is at this point is because of the massive changes, et cetera, which are occurring at the sewer district. It would appear the council felt the folks who had been involved in that would be better able to handle these changes as they continue . She certainly hoped this would not dissuade him from applying again. DIRECTION TO STAFF ANNUAL BOARD AND COMMISSION APPOINTMENTS AND REAPPOINTMENTS ) ) Deputy City Clerk Jan Mason briefed the council on the item. Councilmember Evans MOVED THAT THE FOLLOWING DIRECTION BE GIVEN TO STAFF REGARDING ANNUAL BOARD AND COMMISSION APPOINTMENTS AND REAPPOINTMENTS : THAT STAFF SEND LETTERS INVITING ALL APPLICANTS AND THOSE WISHING TO BE REAPPOINTED TO ATTEND INTERVIEWS FOR THE POSITIONS : THAT THE BOARD OF ADJUSTMENT, LIBRARY BOARD, PARKS AND RECREATION COMMISSION AND PLANNING AND ZONING COMMISSION APPLICANTS BE INTERVIEWED AT THE WORK SESSION OF OCTOBER 6, 2014 WITH APPOINTMENTS BEING MADE AT THE REGULAR MEETING OF OCTOBER 7, 2014; AND THAT THE CONSTRUCTION CODE BOARD OF APPEALS, HEALTH AND HUMAN SERVICES COMMISSION, INDUSTRIAL DEVELOPMENT AUTHORITY, MUNICIPAL PROPERTY CORPORATION BOARD AND PUBLIC SAFETY PERSONNEL RETIREMENT BOARD APPLICANTS BE INTERVIEWED AT THE WORK SESSION REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 26 OF 29 OF OCTOBER 20, 2014 WITH APPOINTMENTS BEING MADE AT THE REGULAR MEETING OF OCTOBER 21, 2014 . Councilmember Rizzi SECONDED THE MOTION. VOTE: Unanimous . The motion carried. SELECTION OF MEETING DATES, TIMES, LOCATIONS, AND PURPOSES Councilmember Waldron MOVED THAT AN EXECUTIVE SESSION AT 5 : 45 P.M. AND A WORK SESSION AT 7 : 00 P.M. BE HELD ON MONDAY, OCTOBER 6, 2014, IN THE CITY COUNCIL CONFERENCE ROOM AND CITY COUNCIL CHAMBERS RESPECTIVELY; AND THAT AN EXECUTIVE SESSION AT 5 : 45 P.M. BE HELD ON TUESDAY, OCTOBER 7, 2014, IN THE CITY COUNCIL CHAMBERS . Councilmember Evans SECONDED THE MOTION. VOTE: Unanimous . The motion carried. CALL TO THE PUBLIC: None . ADJOURNMENT ) Mayor Insalaco adjourned the meeting at 8 : 40 p.m. Consent Agenda Items are as follows : l . Acceptance of Agenda. 2 . Approval of Minutes of Regular Meeting of September 2, 2014 . REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 27 OF 29 3 . Consideration of approval of contracts between the Apache Junction Police Department and the Governor' s Office of Highway Safety for reimbursement of personnel services and procurement of equipment . The contracts are as follows : Contract #GOHS 2015-164-004 - $2, 000 for equipment; Contract #GOHS 2015-164-007 - $47, 000 for the purchase of a fully equipped marked DUI Alcohol Enforcement Police Package SUV; Contract #2015-HV-001 - $10, 000 for personnel services and related expenses; and Contract #2015-PT-002 - $10, 985 for personnel services and related expenses and equipment . The total of these four contracts is $69, 985 . 4 . Consideration of the second amendment to the easement agreement between Verizon Wireless and the City of Apache Junction for location of communication equipment on city property. 5 Consideration of an annual maintenance agreement with Somerset Landscaping for PR-14-03 Landscape Maintenance for Renaissance Point, Arroyo Verde, Phelps Drive Phase I, Phelps Drive Phase II, Ironwood Cove, Royal Palm Road, Ironwood Drive and US Highway 60 Exit, Goldfield Road and US Highway 60 Exit, Tomahawk Road and US Highway 60 Exit, Idaho Road and US Highway 60 Exit, Plaza Drive, Old West Highway Median and North Apache Trail for a price of $96, 826 with an additional 10o contingency of $9, 682 . 60 resulting in a total price of $106, 508 . 60 for a period of one year with the option to renew for three additional one-year periods . ACCEPTED THIS 7TH DAY OF OCTOBER, 2014, BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA. SIGNED AND ATTESTED TO THIS 7TH DAY OF OCTOBER, 2014 . JOHN S . INSALACO Mayor REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 28 OF 29 ATTEST: KATHLEEN CONNELLY City Clerk CITY COUNCIL MINUTES CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the regular meeting of the City Council of the City of Apache Junction, Arizona, held on the 16th day of September, 2014 . I further certify that the meeting was duly called and held and that a quorum was present. Dated this 30th day of September, 2014 . KATHLEEN CONNELLY City Clerk REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 29 OF 29 CITY COUNCIL REGULAR MEETING SEPTEMBER. 16, 2014 The regular meeting of the City Council of the City of Apache Junction, Arizona, was held on September 16, 2014, at the Apache Junction City Council Chambers pursuant to the notice required by law. CALL TO ORDER Vice Mayor Barker called the meeting to order at 7 : 00 p.m. INVOCATION Councilmember Wilson gave the Invocation. PLEDGE OF ALLEGIANCE Councilmember Waldron led the Pledge of Allegiance. ROLL CALIF Councilmembers Present : Mayor insalaco (telephonically) Vice Mayor Barker Councilmember Evans Councilmember Rizzi Councilmember Serdy Councilmember Waldron Councilmember Wilson Staff Present : Assistant City Manager Bryant Powell- City Attorney Joel Stern Public Safety Director Tom Kelly Others Present : Deputy City Clerk Jan Mason Principal Economic Development Specialist Janine Solley Economic Development Specialist E' Lan Vallender Public Information and Marketing Communications Specialist REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 10, 2014 PAGE 1 OF 29 Constance Halonen-Wilson Vice Mayor Barker commented since Mayor Insaiaco is on the phone, she requested everyone to make an effort to speak into their microphones so that he can hear everything. _ACCEPTANCE OF _CONSENT AGENDA _) Councilmember Evans MOVED THAT THE CONSENT AGENDA BE ACCEPTED; AND THAT APPROVAL BE GIVEN FOR THE CONTRACTS BETWEEN THE GOVERNOR' S OFFICE OF HIGHWAY SAFETY AND THE CITY OF APACHE JUNCTION FOR REIMBURSEMENT OF' PERSONNEL SERVICES AND PROCUREMENT OF EQUIPMENT UNDER CONTRACT #GOHS 20i5-164-004 IN THE AMOUNT OF $2, 000 FOR EQUIPMENT, CONTRACT #GOHS 2015-164-00, IN THE AMOUNT OF $47, 000 FOR THE PURCHASE OF A FULLY-EQUPPED MARKED DUI ALCOHOL ENFORCEMENT POLICE PACKAGE SUV, CONTRACT #2015-HV-001 IN THE AMOUNT OF $1.0, 000 FOR PERSONNEL SERVICES AND RELATED EXPENSES ANI? CONTRACT #2015-PT-002 IN THE AMOUNT OF $10, 985 FOR PERSONNEL SERVICES AND RELATED EXPENSES AND EQUIPMENT FOR A TOTAL AMOUNT OF )69, 985; AND THAT AUTHORIZATION BE GIVEN TO THE PUBLIC SAFETY DIRECTOR AND THE CITY MANAGER TO SIGN THE CONTRACTS PENDING APPROVAL AS TO FINAL FORM BY THE CITY ATTORNEY; AND THAT APPROVAL BE GIVEN FOR THE SECOND AMENDMENT TO THE EASEMENT AGREEMENT BETWEEN VERIZON WIRELESS AND THE CITY OF APACHE JUNCTION FOR VOCATION OF COMMUNICATION EQUIPMENT ON CITY PROPERTY, EXTENSION OF THE AGREEMENT FOR FOUR ADDITIONAL TERMS OF FIVE YEARS EACH, INCREASING THE ANNUAL RENT THREE PERCENT ANNUALLY WITH THE CURRENT ANNUAL RENT BEING $9, 240, A ONE TIME PAYMENT OF $20, 000, NEW ADDRESSES FOR NOTICES BEING SENT TO PARTIES OF THE AGREEMENT, REAFFIRMATION OF TERMS OF THE ORIGINAL AGREEMENT, AND CLARIFICATION THAT ALL ADDITIONS, VARIATIONS AND MODIFICATIONS TO THE AGREEMENT BE IN WRITING; AND THAT AUTHORIZATION BE GIVEN TO THE CITY MANAGER. TO SIGN THE AGREEMENT `ENDING APPROVAL AS TO FINAL FORM BY THE CITY ATTORNEY; AND THAT THE AWARD OF RID FOR PR14-03, LANDSCAPE MAINTENANCE FOR RENAISSANCE POINT, ARROYO VERDE, PHELPS DRIVE PHASE i AND PHASE II, IRONWOOD COVE, ROYAL PALM ROAD IRONWOOD DRIVE AND US 60 EXIT, GOLDFIELD ROAD AND US 60 EXITE, TOMAHAWK ROAD AND US 60 EXIT, IDAHO RCAD AND US 60 EXIT, PLAZ?: DRIVE, OLD WEST HIGHWAY REGULAR MEETING OF THE CITY COU.]CIL SEPTEMBER 16, 2014 PAGE 2 OF 29 MEDIAN AND NORTH APACHE TRAIL, BE AWARDED TO SOMERSET LANDSCAPE MAINTENANCE, INC. , IN THE AMO'JNT OF $96, 826 WITH AN ADDITIONAL 10% IN THE AMOUNT OF $9, 682 . 60 FOR CONTINGENCY FOR A TOTAL AMOUNT NOT TO EXCEED $106, 508 . 60 FOR A PERIOD OF ONE YEAR WITH THE OPTION TO RENEW WITH THREE ADDITIONAL ONE-YEAR PERIODS. Councilmember Waldron SECONDED THE MOTION. VOTE: Unanimous . The motion carried. P_WARDS, PRESENTATIONS AND PROCLAMATIONS Vice Mayor_ Barker read a proclamation designating September 17 through September 23 as Constitution Week. She then presented the proclamation to Regent Carol Pearson., Chairman of the Constitution Week Committee Karen Barks and Carol Shepherd. ANNOUNCEMENT OF CURRENT EVENTS Councilmember Waldron commented Vice Mayor Barker, Councilmember Wilson and he attended an emergency services exercise on Friday afternoon where the police department, fire district and Pinal County collaborated on a storm scenario. It was a good exercise. Vice Mayor Barker commented the exercise called for 80 miles per hour winds . Her house would have blown away. Councilmember Wilson commented a week ago D & H Auto Repair and Towing contacted Paws and Claws Care Center to pay it forward. Their donation paid for the adoption of five dogs. He thanked them personally for doing this. CITY MANAGER' S REPORT Assistant City Manager Bryant Powell commented on September being National Preparedness Month, public works being called cut on September 6 for numerous flooded intersection calls, and public works cleaning up the drainage areas to prepare for REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 3 OF 29 tropical depression Odile. He then showed a video on the emergency preparedness services exercise. PUBLIC HEARINGS DRAFT ORDINANCE FOR AN ADDITIONAL . 2% SALES TAX DEDICATED TO FUND ROADWAY MAINTENANCE AND REPAIRS ) ) Assistant City Manager Bryant Powell briefed the council on the item. City Attorney Joel Stern briefed the council on the draft ordinance language and its possible effect on bonding in the future. Assistant City Manager Bryant Powell asked if he was talking about the language of the conditions. The language they have before them states ten years no matter what , City Attorney Joel Stern stated that is correct. He continued with his briefing. Councilmember Serdy asked if they can ask questions .at wall or if they have to wait. Vice Mayor Barker commented this is a public nearing. She suggested they let the public address them first and then they can discuss this . The consensus of the council was to go ahead with the public hearing. Vice Mayor Barker opened the public healing on the item. Mr. William Rollins, 574 W. Greasewood, Apache Junction, addressed the council. He stated he has lived here for 28 years and the previous . 2% to qet the buildings they are now sitting in is greatly appreciated. He does not see anything wrong with sales tax because it is the most fair tax this city could have. It affects everyone . The streets are used by everybody that comes into town. He is REGULAR. MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 4 OF 29 totally against the property tax as it means the public can drive on a street that he has no say so over. If they are looking for fair representation of tax money, there is nothing more fair than sales tax. Mr. Clark Smithson, 1700 S . Weaver, Apache Junction, addressed the council . He stated no one likes taxes but they do like the services they provide. These are services that are desperately needed. He does not wart to see it put off any longer than necessary. He commends the council for considering a minimal sales tax increase. They discussed a bond issue 3-4 years ago to bring the streets up to par and then the number was $10 million. Fourteen million does not surprise him at all; in fact he is surprised it is not higher. As the Highway User Revenue Funds are not here they need something to do it. He likes the idea of a sunset clause. He personally does not feel the property tax would hurt him but he feels it will hurt the businesses. He would be opposed to a property tax. He suggested considering going out for a bond to be funded by the sales tax so that more could be done considerably sooner. He liked the idea of lowering the sales tax when the Hl.ghway User Revenue Funds come in. Mr. Carlos Rivera, 2096 E. 37th Avenue, Apache Junction, addressed the council. He stated he is for the sales tax increase to improve the streets . The property tax could hurt businesses but when he goes down the Trail, it is rough. We need to improve the road and get the people to come back into Apache Junction. Mr. R.E. Eck, Jr. , 2106 W. Roundup, Apache Junction, addressed the council . He stated it is the choice between two evils and the sales tax would be more fair than the property tax. In talking with people, they do not realize how much tax we pay, including utility taxes and rental taxes on buildings . He commented there is an exercise tax where the city charges people to exercise. With the capital facilities plan the tax went from 8 . 7 to 8 . 9 and the city raised $6 million to $7 million. It was a great investment for the buildings that was kept going for the police department . He is not saying he does not agree with the tax but he wants everyone to know where we are at . He is concerned about the small businesses. A 9 . 1% tax sounds extremely high to him. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER. 16, 2014 PAGE v OF 29 Mr. Randy Blount, who does not reside in the city but is relocating a business here, addressed the council . The raise in the sales tax made him think about how it might affect his business . There is perception that it would, but when thinkina about his own business spending, he rarely considers the amount of sales tax. He does transactions in Buckeye and Goodyear and never looks at the sales tax. He does not feel it is a threat to him. If he provides a good service they will transact with him. Most of the spending is done where they are at. Most of the people on the way to the lake will stop here. He questioned if the increase was enough to combat the problem. A bond would be helpful but he suggested they consider a . 4% increase to resolve the issue quicker. There is a perception with Apache Junction and some of that is road conditions . Scottsdale spends a lot of money on roads and median improvements . It really changed the perception of Scottsdale. It is the right move but he is concerned that it is enough and will they be able to improve the image of the city. Improving the overall image will bring a lot of potential customers to the city. Ms . Tess Nesser, 1511 S. Cactus, Apache Junction, addressed the council . She stated if her math is correct, it would be two cents on a ten dollar purchase or twenty cents on a hundred dollar purchase. It would be $2 on a $1, 000 purchase, $20 on a $10, 000, and if buying a house for $100, 000 it would only be $200 . She asked who could complain about getting that in exchange for roads . She agreed with the last gentleman in that is . 2o enough. She wants to get the roads fixed. Mr. . Steven Keel, 3274 S. Bowman, recently from South Texas, addressed the council . He asked what the original . 2% tax was put in place for. Vice Mayor Barker commented it was for where he is right now. Mr. Steven Keel stated it was to pay for this building . He asked if it was for more than one year' s revenue or several years . He asked what year it was. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 6 OF 29 City Attorney Joel Stern stated he would have to interrupt this as this is for public comment only. The council can answer the questions afterwards. Vice Mayor Barker commented they can answer his questions afterwards . Mr. Steven Keel asked the assistant city manager for his name. Assistant City Manager Bryant Powell stated he would give him his card later. Mr. Steven Keel asked if he could have just his name . Assistant City Manager Bryant Powell told him his name . Vice Mayor Barker commented they would be happy to answer the questions after the public hearing portion of the meeting. Mr. Steven Keel stated he had two more questions . In Texas any through street going through the city is owned by the state. He asked if it is the same way in Arizona. .All the highways leading to the lake should be owned by the state. Vice Mayor Barker commented the, would be happy to answer those questions after the public hearing. She is writing them down . Mr. Steven Keel stated they are on the same subject . Vice Mayor Barker commented they are but the rules of a public hearing are that we cannot answer him while he is talking. She is writing his questions down so that the council as a whole can address them as soon as he :is seated. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER ln, 2014 PAGE 7 OF 29 Mr. Steven Keel asked if the $18 million needed for paving is for all the streets in the city or just the Trail. He asked if she could answer that question or. not . City Attorney Joel Stern asked if he was being timed. Vice Mayor Barker stated he was not being timed. City Attorney Joel Stern statea the lava is they can answer the questions after he sits down. The law does not allow them to answer right now. Mr. Steven Keel asked again about the $18 million. City Attorney Joel Stern stated he is answering his question. He added he can ask questions and they will take notes. Mr. Steven Keel asked if they could answer the question it all the streets in the city have to be paved at the same time . Vice Mayor Barker commented she would explain it one more time. The council cannot answe.= his questions at this point. They can after he sits down. She has written both of those questions down. She asked if he had other questions . Mr. Steven Keel stated he had other questions that they do not have to answer. Vice Mayor Barker commented she would let :nim ask two more questions . After the meeting Mr . Powell would be delighted to speak with him and answer any questions he has. Mr. Steven Keel stated they do not have to answer them. He asked if they want to have ideas on how to come up with $18, 000 . He can come up with ideas for REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2)014 PAGE 8 OF 29 that. He asked if anyone wants to near his suggestions, and, if so, to raise their hands. City Attorney Joel Stern stated he believed they are beyond the scope of open meeting law. Vice Mayor Barker commented they are beyond the open meeting law at this point and asked him to please be seated. Mr. Steven Keel asked if he could have one question. Vice Mayor Barker refused. Mr. Stever: Keel statea she saia he could have two more questions . Vice Mayor Barker commented he overstepped it . Mr. Steven Keel asked for one more. City Attorney Joel Stern requested a break. Vice Mayor Barker called for a two minute break. Vice Mayor Barker reconvened the meeting and called for anyone else who would like to address the council. Mr. . Peter Heck, 1390 N. San Marcos, Apache Junction, addressed the council . He stated he understands from the slide presentation that the revenue would be in the neighborhood of $1 million. That is significantly less than what is needed .for the time frame for the work that needs to be done. He is hoping there- will be some additional discussion on how to go about generating more revenue, whether REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 9 OF 29 through a bond issue or something else. he recognizes the sales tax revenue will be inadequate to cover the costs . Mr. Mark LeResche, 2910 W. Apache Trail, addressed the council . He stated he is a small business owner in town. He was part of the retreat in April where he sat on the sidelines being a listener. In April the entire council was miles apart on this issue. Now they are a team. Vice Mayor Barker closed the public hearing with no one else wishing to speak. She reopened the item to council discussion. She commented she believes Steve, being new to the community, did have some questions that perhaps those new to the community would wonder about, such as what was the original . 2o designated for. It was an excellent question. She sees no problem with that type of thing. They aot a little off the rails with the amount but that and the state roads were good questions. Apache Trail is not a state road. It is important to know. She is sure there are those who have been in Arizona a long time who drove from Florence to Mesa on Apache Trail and presumed it was all state highway. They may riot realize it is a city-maintained road. Counciimember Waldron commented the rental tax is actually gone now. He asked if we no longer collect rental tax. He believes the state took that away. City Attorney Joel Stern stated they are in a discussion pare of the council meeting and they cannot get someone to answer. Councilmember Waldron commented he suggested they do a trigger on the Highway User Revenue Funds . There are some inherent problems with that. They could cease the sweep one session and start it all over again the next session or a couple of sessions later. In thinking it through, it is probably not a good trigger point. He 'snows there will still be some Highway User Revenue Funds coming in and hopefully they will stop the sweeps so that the city gets more of that money. His concern is they would continue the sweeps if the city were to trigger the sunset on REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER16, 2014 PAGE 10 OF 29 the sales tax with the Highway User Revenue Funds . It is a suggestion he would like to withdraw. Vice Mayor Barker commented the Highway User Revenue Funds, as they were in 2006 and 2007, may not be enough if it is completely reinstated five years from now. In dollars, five years from now, it may not be anywhere near what the city would need at that point. Councilmember Serdy asked why gasoline is off limits to the cite and only the state can tax gasoline. He asked why they could riot do their own little gasoline tax here. City Attorney Joel Stern stated they are preempted by the state in the statutes . It. is reserved for cne state. It is different in some states, other states can. California has a whopping state tax coming. He does not believe California allows cities to tax either. It might be a carryover from the federal government . It is in the statutes that they cannot put a tax on gasoline. Councilmember Wilson commented the sunset on the Highway User Revenue Funds will be a discussion for the council at that time to discuss and bring about. This is about deciding to bring it back to the council at that time . They can make a determination to continue it or have it sunset at that time. He had two interesting conversations. One was today with a business owner here in Apache Junction. She owns her own business, owns the facilities and land, and owns her own home and resides in Apache Junction. She does riot feel a property tax would be fair to her as it would impact her business as well as her personal home. She feels she would be paying twice as much as others would. She is for the . 2% as she feels it would not be impacting tier business . It would increase her drive to encourage people to come into the community to spend their money. The second was a conversation he had the other day from a concerned citizen who stated if the council passes this, she would drive over to Mesa and spend her money there instead of in Apache Junction. He also heard this from other people , He got into a conversation with this person concerning that and brought up the price of gasoline. He asked how many miles she would drive and she answered ten miles for REGULAR MEETING OF THE CITY COU1`ICIT SEPTEMBER 16, 2014 PAGE 1.1 OF 29 the round trip. He asked her what kind of mileage she gets and was told she drives a truck averaging 15 to 18 miles per gallon. He told her she would spend $3 . 27 for that gallon of gasoline and possibly spend more to save one cent on a five dollar bill . He is very torn with the idea. He is not a person who enjoys paying sales tax as well but he does see the benefit in this one. He is still looking to the people of the community, especially the business community, on what they feel impacts them and how it should be resolved. The city needs to do something and needs to do something soon. Mayer Insalaco commented they have been told by staff that the Trail will not last much more than a year-and-a-half. If it is not fixed now, there will not be a road for the people to come to the businesses on. Every day the road gets torn up worse and worse . He asked how about the people that drive that road going to the local businesses if the city loses one, two or ten customers to go out of town because they want to be vindictive and not spend their money in town. If one wants to talk about businesses suffering, look at what will happen if the road gets so bad that people will not wart to go to those businesses. It is a catch 22 . He asked what they should do. He thinks their obligation is to get the road fixed. When Peter Heck commented on it being $1 million, he may not have realized it is $1 million a year or $10 million for the life of the bond. He does not know if Mr. Heck understood that or if he misunderstood him. If the city goes to a property tax, people will have to understand the city just cannot have an election, it would have to wait until November 2016 before we can do anything, with another year after that of waiting to get the money. The road will not even be around. He asked what would 'happen if the people of Apache Junction turned that vote down. They are back to square one, in fact, below square one. He is all for it, and the people he has talked to do not have a problem with the .20 . Councilmember Evans commented she truly believes they have to do this and do it right now for all of cur immediate needs . As the mayor just said, to do a property tax we would be a year-and-a-•half to two years out before we could receive any funds whatsoever. Her concern is with the sunset clause. Ii they do lust this for just the roads, she asked what they would do when this sunsets. This is REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 12 OF 29 like a patch to get them going right now. Even to rely on the Highway User_ Revenue Funds, if they all go back to driving Corvettes and Chevelles and the really nice, big, fun cars, they will be spending that gas money to get the Highway User Revenue Funds back in. But they are not. Our cars are becoming so energy efficient, we are using less and less gasoline. The Highway User Revenue Funds have to decrease, even if they set it back to the same level we were receiving, the funds will still be less. When the council originally had their retreat and talked about a property tax, she believes she has the numbers right, a $125, 000 house for one year' s property tax would be approximately two cups of coffee at Starbuck' s a year. They were talking about an extremely low amount . They recently attended the League of Cities and Towns Conference and she sat in on a financing infrastructure seminar to learn new ways different communities and different states have come up with, having the same problem with the gas tax and the roads deteriorating, and as a council they have to investigate these other avenues besides just the . 20 . They need to do that right now as this is not going to fix our problem. It will be an ongoing problem. They need to really look at how they can solve it. For example, one city created a transportation tax district where they pay an additional tax on their license plates . Whenever the plates are renewed, it is a new tax district on there. That is a direct effect on the roads . The person lives there, owns a vehicle and it will be funded that way. There are new mechanisms out there they have to investigate further. Flagstaff has just gone through a huge study to figure out how they can obtain ;64 million. This is okay for now, and we have the immediate now, but to fix the Trail, they have 22 safety issues on their list now. Mayor Insalaco requested. Councilmember Evans talk into her microphone. Councilmember Evans commented they have 22 safety issues for the roads that. total $4 , 765, 000 . To fix the Trail and the safety issues this would be the most immediate way for them to raise the funds for it. Councilmember Ser.dy commented sometimes we have more questions than answers. He will probably bring up more questions. He knows they are not here to debate REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 13 OF 29 the commenters, be he is curious how they would think a property tax will hurt business and not sales tax. They will. both hurt. By lost business, it will possibly hurt them more than the property tax. A lot of them will choose to go other places. We all get input from different types of people . He is trying to put it out there that he is against this so that may be why businesses have sought him out . He is hearing from businesses, especially along the Trail, that they are against it . They got a survey from staff and he tried to interpret it. He put a plus if they were for it, incomplete if they did not say and a lot of them were just managers who do not live in our community and stated they would report it and would have a job regardless, and he put a negative sign if they were against it . He came up with 18 for, 13 against and 33 incomplete. Some of then are vehemently against _t . They will be punishing the people that follow the Shop Local program. To use a phrase from one of his most unpopular politicians about everyone paying their fair share, people that do not shop here will not pay anything for this road. The ones that get on the freeway and go to Signal Butte or Power Road will not pay at all . If they do a little bit of a property tax that these voters vote for, then everyone will be paying for all the roads that everyone uses. He is throwing that out as a question, not a solution. They are leaving self-governance to the people. As for sunsetting, he is not hearing anything about mandatory sunsetting. It is about they should sunset it. He thinks they are dealing with a rolled over sunset right now on one of them. He thinks if they are going to do this there has to be wording in there that it is mandatory non-renewable sunset. No one is saying that. Or, if it is, they would have to do a whole new tax. Even a supermajority would not do it. He wants to hear something about mandatory sunsetting. Like Councilmember Evans stated, Bryant just talked about the other priorities. If they are going to dedicate this only to the Trail, it is a temporary fix. A perpetual property tax to do nothing but roads that we cannct rob to start doing public safety and everyzhing else is how it should be worded. If the people want to do it thee: they will vote for it . Those are all of his points .for now. Councilmember Rizzi commented one of her concerns is, like Councilmember Serdy said and a few of them have mentioned, that this sa',.es tax_ is not going to be enough to fix all of our needs. She asked what comes next if REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 14 OF 29 they do not have an alternative solution. She asked if they raise it again or keep it and then keep it going. She asked when it would end. As a small business owner she is not for it. She talked to a lot of small business owners that are very upset about it. They feel like this being put on them and that the property owners are not sharing the burden. As a property owner we have a vested interest in our community and part of that interest is to take care of our roads . We have a responsibility. She feels like this is putting it just on the businesses . Another concern she has is they are estimating it will bring in $1 million per year, but we do not know that . If people do not shop here, more and more people look to other places to shop, then what . They already know it will not be enough. If people shop somewhere else, then what. She asked what the city would do then. There is no easy fix. There are no easy answers . None of us want to have a property tax, none of us want to have the . 20 . It may look like a quick, easy fix but she does not feel that. She feels they need to come up with other solutions and she does not feel they are doing the business community justice. Mayor Insalaco commented there is one thing they have to realize . It is not only the residents, the homeowners that will be paying taxes, the businesses that own their own property, who own the business, there will be a property tax put on them. If they have a landlord that property tax will be put on the landlord. He asked what the landlord is going to do. The landlord is going to raise their rent or lease payments . As far as other solution's, they have two solutions to collect money like almost every other city. Sales tax or property tax. When he hears that they are going to run businesses out of the city, they will be running businesses out if they put a property tax on the business people . Instead of having everybody coring through town paying the tax, it would be the business people paying the tax. Either the business people or the people who own the property where business is located. Vice Mayor Barker commented it seems to her what they have here is a fundamental difference in philosophies . Some of them up here apparently adhere to notion that what is good for business is good for the community. She feels the opposite. She feels that what is good for the REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 1.5 OF 29 community is good for business. It is their job to build and maintain infrastructure and create a quality of life that will bring people into this community. Those people will become the customers that keep the businesses here and make them thrive. We all know that businesses do not locate in a vacuum. They do not go out and locate twenty miles from a community because they will not have a customer. It is a very poor business plan. What they do is wait until there are people and then they locate because that is where their customers are. We have looked at the possibility of getting chain restaurants here. They have all told the city they need "x" number of rooftops before they will consider locating in this community. What is obvious to her is they need to repair this infrastructure and she agrees it is a short term solution for a long term plan. She agrees with that entirely and she thinks this council is definitely going to have to work very hard tc come up with other solutions that will take this city years of building and creating infrastructure. Either tax that is put on will be paid by the whole community. Sales tax will be paid by everyone. We all know that. Property tax_ will be paid by everyone. If a business owner has an increase in property tax that beccmes part of his overhead. She is a business owner; she knows what happens with that. They will either take it out of their employees' pockets by cutting hours or by cutting an employee, or they add a little, maybe . 2% to their product . It seems to her hat sales tax is a more honest tax. People know it is there. There it is. Like Mr. Blount stated, she rarely looks at the sales tax. She is not at all sure what kind of sales tax the cities around Apache Junction have . If, as Mr. Wilson stated, somebody is willing to pay $3.27 to drive into Mesa to save less than fifty cents, they are doing it already. They have been doing it all along because they did riot like the original .20 . She does agree they need to come up with something else to go 'along with this. For right now, Mr. Serdy, this is not just for. the Trail . The ordinance that Joel wrote says streets. It does not designate the Trail period, it says streets. Mayor Insalaco commented the Trail is supposed to be done first. Vice Mayor Barker commented that is what they talked about . REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER. 16, 2014 PAGE 16 OF 29 Assistant City Manager Bryant Powell stated that is correct.. Once they get the revenue .stream in place ,he can go talk to the financial advisor about different methods, including the Greater Arizona Development Authority which is similar to general allegation bonds. It is how they paid for this facility. They paid it off on time with a very, very low interest rate. The cost of money is as low as it has ever been. He will come back at another time with staff and give them the options if they were to moue forward in this manner and how to bring in $9 million up front . V'_ce Mayor Barker commented Mr. Serdy came up with an interestinq idea a couple of weeks ago about lowering cur sales tax and putting in a property tax that. was dedicated to roads . She was thinking about that for awhile . The more she thought about it, she thought it was pretty counterproductive because the vast majority of our general fund is funded by sales tax revenues, which would cut services, would cut programs and the quality of life that we are trying to create would suffer. We would have rally great roads but no one would want to live here because there would not be a Library, multi-gen center, et cetera. She wanted to comment on that . She gave it a lot of thought . Counci_lmember Serdy commented he was referring to one of the surveys the city had done about how a lot of the people, if they were going to pay a tax, would want it focused on the Trail first. That was an earlier survey. He thinks they have since moved on from that . Councilmember Evans commented at the beginning of the item the cittf attorney stated he had a concern about the way this was written if we had to go after a bonding issue. She asked if that is correcr. as it kind of got a little muddy for a few -minutes. She asked what he would suggest to change the way that sunset was written so it would not conflict down the road if they Have to gc for a bond. City Attorney Joel Stern stated he is not sure it conflicts. He thinks it may cause a bond attorney, and remember, Mr. Powell is correct, we have a large bond capacity. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 1-7 OF 29 Assistant City Manager Bryant Powell stated the city effectively has zero debt. The assessed valuation is tremendous capacity. This is only S10 million; we have hundreds of millions ability. Councilmember Evans commented it is the sunset provision that causes the problem. City Attorney Joel Stern stated if it is passed. Vice Mayor Barker asked If it is because it is conditional. City Attorney Joel Stern stated it is not really conditional . It is saying it will sunset, however, if one or both of these things happen, the council could have a meeting to tali about the sunset. They do not have to have that in here but last time they directed him to put that in there for public disclosure to let the public know. They do not even need that in there. They could still do that without having that in there. If a Highway User Revenue Fund increase happened and if a property tax passed, they do not have to wait until the sunset date. Say it happened in year eight that the voters approved a property tax. Right after that happened the council could have a hearing on sunsetting or terminating the . 2% . They can do that . They do not have to have it in the ordinance. He was directed to do it last time and that is the only reason it is in there. He would recommend they take out B completely and say it is going to sunset in 10 years. But they could still bring it back before that. Councilmember Serdy asked how they could make it a guaranteed sunset and not just another vote of council . City Attorney Joel Stern stated it sunsets if they leave in A, however, under municipal law the council could still come in and make it less than that date. Vice Mayor Barker commented the council can also recreate it. A mandatory sunset does not REGULAR MEETING OF THE CiTY COUNCIL SEPTEMBER 16, 2014 PAGE 18 OF 29 necessarily mean it actually sunsets . This particular one would sunset but it does not stop a future council from reinstating it or something different or extending it . City Attorney Joel Stern stated that is correct . Mayor Insalaco commented ten years from now a whole new council can reinstate it. He questioned putting the clause in until the time comes. It is supposed to sunset in ten years. If they cut it off right there and a future council is in the same predicament we are in right now or worse, it takes away their leverage. He is actually predicting to a future council they cannot do anything. He asked if he was correct. City Attorney Joel Stern stated he is on Washington time so he did not understand what he was saying. He requested the mayor to repeat what he said. Mayor Insalaco commented if they make it mandatory to sunset, in ten years they would have a whole new council and they get into the same shape the current council is now, it would tie their hands down by not letting them take over and say they need to continue it or sunset it. City Attorney Joel Stern stated even though he says to sunset it, a council can still come in and say it is too long, they did not like what happened on January 1, 2015 . Now it is January 1, 2018 and they wish to get rid of the tax. Mayor Insalaco commented that is correct . To put that in there is almost not necessary. City Attorney Joel Stern stated this gives the public notice that it can go on until January 1, 2025, unless it is sunsetted or terminated earlier by a council action. Assistant City Manager Bryant Powell asked if it takes a proactive action by the council. He recalled the council did do a proactive approach in 2009. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 19 OF 29 City Attorney Joel Stern stated it could be extended for that. He does not know where this discussion is going tonight, but he thinks the January i date is going to be quick. What has to happen is they say go ahead and draft this, they want to have full consideration and vote on "x" date, once they know that date they have to publish something in the paper that says this is going to be considered and it has to be 60 days before that date. He wanted them to know that. They are pushing the time a bit . Mayor Insalaco commented he thinks thev fooled around with it long enough. Personally, he thinks they should go ahead with this but he is only one vote. Assistant City Manager Bryant Powell stated tonight was a public hearing and discussion on a staff perspective as based on tonight, aet that direction to fine tune the language and come back at the first meeting in October if they are in alignment . They will then bring that for a vote. He thinks they have plenty of time for the 60 days . For purposes of communication with the public, a January 1 date would be the start date so that the business owners know and can, work with Kathy' s staff on coordination of the net new change. It is a natural. time of year for a new thing. It could be February 1 or whenever council ,&ants . City Attorney Joel Stern -asked if he meant direction when he stated for it tc come up for a -rote. Assistant City Manager Bryant Powell stated that is correct. Vice Mayor Barker commented they still have a direction on the ordinance to give. Assistant City Manager Bryant Powell statea a direction on the ordinance to take place on October ? any maybe the vote on October 21 . City Attorney Joel Stern stated the problem is they have to do the 60 day notice before they have the vote. REGULAR MEETING OF 1'HE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 20 OF 29 Assistant City Manager Bryant Powell asked what the law says about starting the 60 day notice. He thinks they could start that today. City Attorney Joel Stern asked if he knows the date they are going to pass it. Vice Mayor Barker asked if it has to be a date certain. City Attorney Joel Stern stated he would ask the city clerk or the deputy city clerk what would be done mechanically for posting. Deputy City Clerk Jan Mason stated she could get a notice done tomorrow and get it posted but it would not be published until the following week. If they need to have 60 days after the publishing date then that is what they are looking at. City Attorney Joel Stern stated that is when the clock starts by statute. They have to know what date they want to act on the ordinance, which would be a Tuesday night, and they pick the date. From that point, it has to go out at least 30 days, except this has an emergency clause so there is no 30 day period. It takes effect after they vote on it . By the way, this is not a referable act because it is a tax matter. There is case law on that in case someone decides they want to refer this to the votFrs. Assistant City Manager Bryant Powell stated he is saying they will have meetings on October 6, October 7, October 20 and October 21 . City Attorney Joel Stern stated he would propose there be another public hearing on this since there is more discussion and then they direct who is to create the ordinance, with an ordinance number because we do not have an ordinance number attached, and they also pick a date next time, whatever date it is, for the date they vote. Vice Mayor Barker commented the public hearing should be on October 7 . REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 21 OF 29 City Attorney Joel Stern stated the next public hearing would be October 7 . That is the next date for a public hearing. Councilmember Serdy commented they are also not limited to meeting every two weeks . Vice Mayor Barker stated they are not . They can have a special meeting. City Attorney Jcel Stern statect they can. Assistant City Manager Bryant Powell stated this is the second public hearing but they have !-ad many public discussions . His thought was tonight would be the night to give direction to staff on moving forward. Mayor Insalaco commented that is what he thought they were going to do, too . Vice Mayor Barker commented they do not have that direction. Assistant City Manager Bryant Powell stated he thought tonight was direr-'Cional. Vice Mayor Barker commented that is riot what is in their packet. We have a discussion item only. There is no direction to staff here. Any direction to s-caff would have to be on October i . Deputy City Clerk Jan Mason stated if they want the notice to be gotten ready so that it can be -published next week, they are looking at 60 days or December for a vcte. Vice Mayor Barker agreed. City Attorney Joel Stern stated they may want to think about it over the next two--and-a- half weeks to come up with those dates. It might push it, possibly, into February for an effective date . REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 22 OF 29 Mayor Insalaco asked if they cannot go ahead and do it, as they said, on the next meeting date. Vice Mayor Barker asked if he meant give direction to staff. Mayor Insalaco commented to give direction to staff. City Attorney Joel Stern stated they could after a public hearing. Mnlor Insalaco asked if it would be on the same night. City Attorney Joel Stern stated they could do both cn the same night. Deputy City Clerk Jan Mason stated she believes once they have the 60 day notice posted they can do whatever they want within those 60 days, as long as they do their vote in December. They just cannot do their vote until the 60 days are up. City Attorney Joel Stern stated that is correct . Deputy City Clerk Jan Mason stated they could do the vote in December to have it ready for January. Councilmember Waldron stated they would have direction on- October 7 . C=_ty Attorney Joel Stern stated it would be a public hearing and direction. The consensus of the council was to have the direction to staff and public hearing on October 7 . REGULAR MEETING OE' THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 23 OF 29 Vice Mayor Barker closed the discussion with no further comments and moved on to the next item. OLD BUSINESS None. NEW BUSINESS PROPOSED RESOLUTION NO. 14-36, ADOPTING A NOTICE OF INTENT TO ENTER INTO A RETAIL DEVELOPMENT TAX INCENTIVE AGREEMENT WITH BLOUNT RENTAL EQUIPMENT, LLC ) Economic Development Specialist E' Lan Val,lender briefed the council on the item. He thanked the city attorney for his assistance and introduced Sarah Murley of Applied Economics to present her findings on whether the agreement meets state requirements . Ms . Sarah Murley, Applied Economics, briefed the council on her findings. Her conclusion was the agreement does meet the requirements of the statute for sales tax incentives . City Attorney Joel Stern stated Ms . Murley did an excellent job summing this up. He thanked E' Lan for pursuing this . It took a while to get here but we got here. He did. an excellent job with the developer and also in facilitating it with the city manager. The resolution does not say the agreement is in place tonight . Under the law the council has to pass this resolution that has two exhibits . The first exhibit is a notice to the public that tells the public the city intends to enter into this retail development tax incentive agreement . This is a change in the law back in 2007 . Before this did not have to be done. It has to be at least 14 days before the city actually passes the development agreement . Exhibit B is the actual draft development agreement . The intent is to pass this tonight, the notice is now good, and they go out 14 days but our next meeting is well beyond that to October. 7, making it 21 or 22 days beyond. He thanked E' Lan again and Sarah for coming out. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 24 OF 29 Vice Mayor Barker called for a motion. Councilmember Waldron MOVED THAT RESOLUTION NO. 14-36, A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF' THE CITY OF APACHE JUNCTION, FINAL COUNTY, ARIZONA, ADOPTING A NOTICE OF INTENT TO ENTER INTO A RETAIL DEVELOPMENT TAX INCENTIVE AGREEMENT WITH BLOUNT RENTAL EQUIPMENT, LLC, BE APPROVED. Councilmember Evans SECONDED THE MOTION. VOTE: Unanimous . The motion carried, APPOINTMENTS OR REAPPOINTMENTS TO FILL VACANCIES ON THE SEWER DISTRICT BOARD_ Vice Mayor Barker commented they interviewed the applicants last night . She called for any discussion. There being nc discussion, she called for a motion. Councilmember Rizzi MOVED TO NOMINATE JEFF STRUBLE TO THE SEWER BOARD. Vice Mayor Barker asked if she would like to reappoint him for a term certain. Councilmember Rizzi MOVED TO REAPPOINT JEFF STRUBLE TO THE SEWER BOARD FOR A TERM TO EXPIRE JULY 7, 2020 . Councilmember Wilson SECONDED THE MOTION . VOTE: Unanimous . The motion carried. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 25 OF 29 Councilmember Evans MOVED THAT KATHLEEN WALDRON BE REAPPOINTED TO THE SUPERSTITION MOUNTAINS COMMUNITY FACILITIES DISTRICT NO. 1 BOARD OF DIRECTORS FOR A TERM TO EXPIRE DULY 7, 2020 . Councilmember Rizzi SECONDED THE MOTION. VOTE: 6-0 (Councilmember Waldron declared a conflict on the item. ) The motion carried. Vice Mayor Barker commented she appreciated Mr. Buzzin applying for this position. She thinks wnere the council is at this ocint is because of t_ne massive changes, et cetera, which are occurring at the sewer district. It would appear the council felt the folks who had been involved in that would be better able to handle these changes as they continue. She certainly hoped this would not dissuade him from applying again. DIRECTION TO STAFF ANNUAL BOARD AND COMMISSION APPOINTMENTS AND REAPPOINTMENTS ) ) Deputy City Clerk Jan Mason briefed the council on the item. Councilmember Evans MOVED THAT THE FOLLOWING DIRECTION BE GIVEN TO STAFF REGARDING ANNUAL BOARD AND COMMISSION APPOINTMENTS AND REAPPOINTMENTS : THAT STAFF' SEND LETTERS INVITING ALL APPLICANTS AND THOSE WISHING TO BE REAPPOINTED TO ATTEND INTERVIEWS FOR THE POSITIONS: THAT THE BOARD OF' ADJUSTMENT, LIBRARY BOARD, PARKS AND RECREATION COMMISSION AND PLANNING AND ZONING COMMISSION APPLICANTS BE INTERVIEWED AT THE WORK SESSION OF OCTOBER 6, 2014 WITH APPOINTMENTS BEING MADE AT THE REGULAR MEETING OF OCTOBER 7, 2014; AND THAT THE CONSTRUCTION CODE BOARD OF APPEALS, HEALTH AND HUMAN SERVICES COMMISSION, INDUSTRIAL DEVELOPMENT AUTHORITY, MUNICIPAL PROPERTY CORPORATION BOARD AND PUBLIC SAFETY PERSONNEL RETIREMENT BOARD APPLICANTS BE INTERVIEWED AT THE WORK SESSION REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 26 OF 29 OF OCTOBER 20, 2014 WITH APPOINTMENTS BEING MADE AT THE REGULAR MEETING OF OCTOBER 21, 2014 . Councilmember Rizzi SECONDED THE. MOTION. VOTE: Unanimous . The motion carried. SELECTION OF MEETING DATES, TIMES, LOCATIONS, AND PURPOSES Councilmember Waldron MOVED THAT AN EXECUTIVE SESSION AT 5: 45 P.M. AND A WORK SESSION AT 7 : 00 F.M. BE HELD ON MONDAY, OCTOBER 6, 2014, IN THE CITY COUNCIL CONFERENCE ROOM AND CITY COUNCIL CHAMBERS RESPECTIVELY; AND THAT AN EXECUTIVE SESSION AT 5 : 45 P.M. BE HELD ON TUESDAY, OCTOBER 7, 2014, IN THE CITY COUNCIL CHAMBERS . Councilmember Evans SECONDED THE MOTION. VOTE: Unanimous . The motion carried. CALL TO THE PUBLIC: None. ADJOURNMENT _ ) Mayor Insalaco adjourned the meeting at 8 : 40 p.m. Consent Agenda Items are as follows: 1. Acceptance of Agenda . 2 . Approval of Minutes of Regular Meeting of September 2, 2014 . REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 27 OF 29 3. Consideration of approval of contracts between the Apache Junction Police Department and the Governor' s Office of Highway Safety for reimbursement of personnel services and procurement of equipment . The contracts are as follows: Contract #GOHS 2015-164-004 - $2, 000 for equipment; Contract #GOHS 2015-164-007 - $47, 000 for the purchase of a fully equipped marked DUI Alcohol Enforcement Police Package SUV; Contract #2015-HV-001 - $10, 000 for personnel services and related expenses; and Contract #2015-PT-002 - $10, 985 for personnel services and related expenses and equipment . The total of these four contracts is $69, 985. 4 . Consideration of the second amendment to the easement agreement between Verizon Wireless and the City of Apache Junction for location of communication equipment on city property. 5. Consideration of an annual maintenance agreement with Somerset Landscaping for PR-14-03 Landscape Maintenance for Renaissance Point, Arroyo Verde, Phelps Drive Phase I, Phelps Drive Phase !I, Ironwood Cove, Royal Palm Road, Ironwood Drive and US Highway 60 Exit, Goldfield Road and US Highway 60 Exit, Tomahawk Road and US Highway 60 Exit, Idaho Road and US Highway 60 Exit, Plaza Drive, Old West Highway Median and North Apache Trail for a price of $96, 826 with an additional 10o contingency of $9, 682 . 60 resulting in a total price of $106, 508 . 60 for a period of one year with the option tc renew for three additional_ one-year periods. ACCEPTED THIS 7TH DAY OF OCTOBER, 2014, BY THE MAYOR AND CITY ,COUNCIL* OF THE CITY OF APACHE 7UNCTION, ARIZONA. SIGNED AND ATTESTED TO THIS 7TH DAY OF OCTOBER, 2014 . 7 / JCHN S. INSALACO Mayor REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 28 OF 29 ATTEST: I f KATHLEEN CONNELLY City Clerk CITY COUNCIL MINUTES CERTIFICATION T herebv certify that the t-cregoing minutes are a true and correct copy of the minutes of the regular meeting of the City Council of the Cit-y of Apache Junction, Arizona, held on the 1-6th day of September, 2014 . I further certify that the meeting was duly called and hela and that a quorum was present . Dated this 30th. day of September, 2014 . KATHTEFN CONNELLY Cit-y Clerk REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 16, 2014 PAGE 29 OF 29 ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard z Agenda Item Cover Sheet Apache Junction,AZ 85119 Agenda Item No. 3. �Pii File ID: 14-423 Sponsor: Thomas Kelly Agenda Date: 10/7/2014 Index: In Control: City Council Meeting Presentation of 25 Year Service Award to Lisa Eminhizer of the Apache Junction Police Department. Presentation. City of Apache Junction,Arizona Page 1 Printed on 611512026 ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard z Agenda Item Cover Sheet Apache Junction,AZ 85119 Agenda Item No.4. �Pii File ID: 14-483 Sponsor: Thomas Kelly Agenda Date: 10/7/2014 Index: In Control: City Council Meeting Proclamation designating October 2014 as Domestic Violence Awareness Month. Elizabeth Ditlevson-Garman from the Community Alliance Against Family Abuse (CAAFA)will receive the proclamation and make a presentation. Presentation and discussion. City of Apache Junction,Arizona Page 1 Printed on 611512026 vrortamatton DOMESTIC VIOLENCE AWARENESS MONTH OCTOBER 2014 Whereas, during their lifetime, an estimated 1 in 3 women will experience domestic violence; and Whereas, Arizona experienced 125 domestic violence related deaths in 2013; and Whereas, domestic violence in any community may exist as a hidden, silent, and often unrecognized reality that is often not reported to authorities; and Whereas, there is a need to challenge the assumptions made about domestic violence, become proactive in preventing domestic violence and hold offenders accountable; and Whereas, the City of Apache Junction, the Apache Junction Police Department, the Community Alliance Against Family Abuse (CAAFA) and other agencies, organizations and state coalitions across Arizona and the nation are committed to preventing domestic violence by promoting prevention awareness campaigns, educating the community and advocating for victim's rights. NOW, THEREFORE, I,John Insalaco, Mayor of the City of Apache Junction, Arizona, do hereby proclaim October 2014 as DOMESTIC VIOLENCE AWARENESS MONTH in Apache Junction and urge all citizens to work together to prevent domestic violence Signed and attested to this day of 92014. JOHN INSALACO Mayor ATTEST: KATHLEEN CONNELLY City Clerk ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard = Agenda Item Cover Sheet Apache Junction,AZ _ 85119 Agenda Item No. 5. Piz File ID: 14-424 Sponsor: Bryant Powell Agenda Date: 10/7/2014 Index: In Control: City Council Meeting City manager's report. Presentation. City of Apache Junction,Arizona Page 1 Printed on 611512026 ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard � 0 Agenda Item Cover Sheet Apache Junction,AZ _ 85119 Agenda Item No.6. '+'Piz File ID: 14-471 Sponsor: Kathy Connelly Agenda Date: 10/7/2014 Index: In Control: City Council Meeting Application for a special event liquor license for Superstition Mountain Rotary Club on October 25, 2014 at 1590 E. Lost Dutchman Blvd., Apache Junction. The next step in the procedure is for the city council to hold a public hearing on the application and make a recommendation for approval or denial to be forwarded to the Arizona Department of Liquor Licenses and Control. Consideration and action. City of Apache Junction,Arizona Page 1 Printed on 611512026 SEPTEMBER 11, 2014 MEMORANDUM TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS THROUGH: KATHY CONNELLY, CITY CLERK THROUGH: JAN MASON, DEPUTY CITY CLERK FROM: SUZANNE HENINGER, SENIOR CLERK SUBJECT: AGENDA ITEM FOR OCTOBER 7, 2014: APPLICATION FOR A SPECIAL EVENT LIQUOR LICENSE FOR SUPERSTITION MOUNTAIN ROTARY CLUB An application for a special event liquor license has been submitted by Mr. Michael Bernard Cowan of Superstition Mountain Rotary Club for a special event on October 25, 2014 at 1590 E. Lost Dutchman Blvd., Apache Junction, Arizona. Correspondence has been received from the planning division, building division, police department and fire district, a copy of which is attached. The next step in the procedure is for the city council to hold a public hearing on the application and make a recommendation for approval or denial to be forwarded to the Arizona Department of Liquor Licenses and Control. Arizona Department of Liquor Licenses and Control 800 W Washington 5th Floor Phoenix AZ 85007-2934 www.azliquor.gov (602) 542-5141 APPLICATION FOR SPECIAL EVENT LICENSE Fee= $25.00 per day for 1-10 days (consecutive) A service fee of$25.00 will be charged for all dishonored checks (A.R.S. §44-6852) IMPORTANT INFORMATION:This document must be fully completed or it will be returned. The Department of Liquor licenses and Control must receive this application ten (10) business days prior to the event.If the special event will be held at a location without a permanent liquor license or if the event will be on any portion of a location that is not covered by the existing liquor license, this application must be approved by the local government before submission to the Department of Liquor Licenses and Control(see Section 14 SECTION 1 Name of Organization: 5 ype.r-5T'i 41,a^ YA+NE 90]A RY yf SECTION 2 Non-Profit/IRS Tax Exempt Number: SECTION 3 The organization is a: (check one box only) []Charitable (501.C) ❑Fraternal (must have regular membership and have been in existence for over five (5) years) ❑Religious UCivic (Rotary,College Scholarship) []Political Party,Ballot Measure or Campaign Committee SECTION 4 Will this event be held on a currently licensed premise and within the already approved premises? ❑Yes [No Name of Business License Number Phone(include Area Code) SECTION 5 How is this special event going to conduct all dispensing, serving, and selling of spirituous liquors? Please read R-19-318 for explanation (look in special event planning guide) and check one of the following boxes. ❑Place license in non-use ❑Dispense and serve all spirituous liquors under retailer's license ODispense and serve all spirituous liquors under special event ❑Split premise between special event and retail location (If not using retail license,submit a letter of agreement from the agent/owner of the licensed premise to suspend the license during the event. If the special event is only using a portion of premise,agent/owner will need to suspend that portion of the premise.) SECTION 6 What is the purpose of this events? GOn-site consumption ❑Off-site (auction) ❑Both SECTION 7 Location of the Event: A-��,�he Vh� GH 40j e G nriugs -- Address of Location:_ �SY/D � last /Jy+ w•4 N r'31 va d-e 3�NG 4�, Az pt",/ i Street City County/State Tip S-a t SECTIONS Will this be stacked with a wine festival/craft distiller festival? ❑Yes Mo SECTION 9 Applicant must be a member of the qualifying organization and authorized by an Officer,Director or Chairperson of the Organization named in Section 1. (Authorizing signature is required in Section 13.) I.Applicant: ()`AjC.K fM 1 C,�u t l f�c ievw rt +> 50 VA Last First Middle Date of Birth 2.Applicant's mailing address: 179 4 H is PC-CoKu C t Lo /ld t G m ych !¢Z k-S--//6- Street City State zip 3.Applicant's home/cell phone: (L kd) 4 K ct-3 k 15- Applicant's business phone: ( ) 4.Applicant's email address: 0?/5 c e w c H 1 6P vNrN.cam 8/5/14 Page 1 of 4 Individuals requiring ADA accommodations call(602)542-9027. SECTION 10 1.Has the applicant been convicted of a felony, or had a liquor license revoked within the last five (5)years? ❑Yes ONO (if yes,attach explanation.) 2.How many special event licenses have been issued to this location this year? (The number cannot exceed 12 events per year;exceptions under A.R.S.§4-203.02(D).) 3. Is the organization using the services of a promoter or other person to manage the event? ❑Yes ❑No (If yes,attach a copy of the agreement.) 4.List all people and organizations who will receive the proceeds. Account for 100% of the proceeds. The organization applying must receive 25% of the gross revenues of the special event liquor sales. Attach an additional page if necessary. )0, t Sr/0 h Name Syvee-e- -"tluo bl egy K Qo�K / (Iv4 1��16 Percentage %f Address -6 k5-1/7 Street city State Zip Name A Percentage 5-e Address AV box I �a IV Ar, alr jr'�"c 74�4 If Z 9-3-/7 k Street city State Zip 5. Please read A.R.S.§4-203.02 Special event license:rules and R 19-1-205 Requirements for a Special Event License. Note:ALL ALCOHOLIC BEVERAGE SALES MUST BE FOR CONSUMPTION AT THE EVENT SITE ONLY. "NO ALCOHOLIC BEVERAGES SHALL LEAVE SPECIAL EVENT UNLESS THEY ARE IN AUCTION SEALED CONTAINERS OR THE SPECIAL EVENT LICENSE IS STACKED WITH WINE/CRAFT DISTILLERY FESTIVAL LICENSE" 6.What type of security and control measures will you take to prevent violations of liquor laws at this event? (List type and number of police/security personnel and type of fencing or control barriers,if applicable.) y 01 cal/ Number of Police _16 Number of Security Personnel )fencing ®Barriers Explanation: ;� rl►e 1n ktck 14 K 6,(n s v"c) n�� a CA)R� oaf c4 G 7�6/1 oG�t [nc�, lzenl /lYl�✓Pr�c.�� 44'jf,k,mr will 4-c 9efii1-i'me o fn ye"# far <r�t wf� n,`e?LH/ T/J e,h.� 1—;l! 4CL'&"n I jja„�/,.,�( SECTION 11 Date(s) and Hours of Event. May not exceed 10 consecutive days. See A.R.S. §4-244(15) and (17) for legal hours of service. Date Day of Week Event Start License End / Time AM/PM Time AM/PM DAY 1: D�- Dol y AA4 v DAY 2: DAY 3: DAY 4: DAY 5: DAY 6: DAY 7: DAY 8: DAY 9: DAY 10: 8/5/14 Page 2 of 4 Individuals requiring ADA accommodations call(602)542-9027. SECTION 13 This section is to be completed only by an Officer, Director or Chairperson of the organization named in Section 1. r I, "ilia rO /V6 H declare that I am an OFFICER, DIRECTOR, or CHAIRPERSON (Print full name) appointing the applicant listed i tion 9,to apply on behalf of the foregoing organization for a Special Event s Liquor e X /err<Ksory 9 � 1 so 1 1gnotu Title/Position Date tecu# TI.e fc going instrument was acknpwI&dqed before me this " cR , !!C-ARI' i Day � rj % , MI f un y Ye r,�;, 101�,Gr�,�iso:on ErpWO St to County of - My Commission Expires on: AV Date Signature of Notary Public SECTION�k4-11 14 This section is to be completed only by the applicant named in Section 9. eGwLt'W? declare that I am the APPLICANT filing this application as (Print full name) listed in Se n 9. 1 have read t application and the contents and all statements are true, correct and comp T natu Title/Position Dot Phone# he fo going instrument was acknowledged before me this - Day Final Count/ ITIS, to County of « i;i c:��a,o. 9c 20;6 r .�'dn!' ry My Commission Expires on: Date Signature of Notary Public The local governing body may require additional applications to be completed and submitted.Please check with local government as to how far in advance they require these applications to be submitted. Additional licensing fees may also be required before approval may be granted. For more information, please contact your local jurisdiction:http://www.azliquor.aov/assets/documents/homepaae does/spec event links adf. SECTION 15 Local Governing Body Approval Section 1, recommend ❑APPROVAL ❑ DISAPPROVAL (government official) (Title) on behalf of (City,Town,County) Signature Date Phone FOR DEPARTMENT OF LIQUOR LICENSES AND CONTROL USE ONLY ❑APPROVAL ❑ DISAPPROVAL BY: DATE: 8/5/14 Page 4 of 4 Individuals requiring ADA accommodations call(602)542-9027. �cv ti jr✓. .•_,r'' -sue• :�'�`��',.�� . � f '. r� IL • '";LOP 7'� EF \��.. •7r .► y Ali ,YV �� _ .. \ •Z . � •� Si7V1Srn � •.� , - 4 Dco h f p �l� O cn pop GATE Iw h s � T ro TOMAHAWK RD. September 4, 2014 Superstition Mountain Rotary Club #1246 Attn: Michael Bernard Cowan 17844 E. Pacana Court Gold Canyon, AZ 85118 Dear Mr. Cowan: Please be advised that your application for a Special Event Liquor License for the Superstition Mountain Rotary Club for October 25, 2014 at 1590 E. Lost Dutchman Blvd., Apache Junction, AZ has been scheduled for a public hearing. The Apache Junction City Council will hold a public hearing on October 7, 2014, at 7:00 p.m. in the City Council Chambers, 300 E. Superstition Blvd., Apache Junction, at which time a recommendation for approval or disapproval will be made to be forwarded to the Arizona Department of Liquor Licenses and Control. Your attendance is requested should council have any questions on this application. If you have any questions concerning this matter, please contact my office at (480) 982-8002. Sincerely, Kathleen Connelly City Clerk SEPTEMBER 4, 2014 MEMORANDUM TO: DEPARTMENT OF PUBLIC SAFETY PLANNING DIVISION APACHE JUNCTION FIRE DISTRICT BUILDING DIVISION THROUGH: KATHLEEN CONNELLY, CITY CLERK JANET R. MASON, DEPUTY CITY CLERK FROM: SUZANNE HENINGER, SENIOR CLERK SUBJECT: APPLICATION FOR A SPECIAL EVENT LIQUOR LICENSE FOR SUPERSTITION MOUNTAIN ROTARY CLUB #1246 Mr. Michael Bernard Cowan has submitted an application for a Special Event Liquor License for October 25, 2014 at 1590 E. Lost Dutchman Blvd., Apache Junction, AZ. Please conduct the necessary inspections and submit your recommendation be email by Tuesday, September 17, in order for this item to be placed on the agenda for the City Council meeting of October 7, 2014. Janet Mason From: Suzanne Heninger Sent: Monday, September 08, 2014 3:40 PM To: Janet Mason Subject: FW: Message from KMBT_C652DS From: Dennis Dixon Sent: Monday, September 08, 2014 6:50 AM To:Suzanne Heninger Subject: RE: Message from KMBT_C652DS No objections From: Suzanne Heninger Sent: Thursday, September 04, 2014 4:53 PM To: Jeff Robinson; Rudy Esquivias; Dennis Dixon; 'john.suniga@ajfire.org' Subject: FW: Message from KMBT_C652DS Please see attached memo and special event liquor license application for Superstition Mountain Rotary Club. 1 Superstition Fire & Medical District 565 North Idaho Road, Apache Junction, AZ 85119 Phone (480) 982-4440, Fax(480) 982-0183 www.ajfire.org MEMORANDUM TO: Jan Mason, Deputy City Clerk City of Apache Junction 300 E. Idaho Road Apache Jct.,AZ. 85119 FROM: John Suniga,Deputy Fire Marshal - DATE: September 8,2014 SUBJECT: Application for Special Event Liquor License for 1590 E.Lost Dutchman The Superstition Fire/Medical District has reviewed the application as noted above regarding the facilities at 1590 E. Lost Dutchman Boulevard for an event to be held on October 25, 2014. We have recently completed an annual fire and life safety inspection with no major violations found. We therefore would recommend approval of this application. Thank you for your notification on this matter. If you have any further questions regarding this inspection, please feel free to contact my office at (480) 982- 1299. Thank You. ATTN: Application Janet Mason From: Suzanne Heninger Sent: Tuesday, September 09, 2014 2:26 PM To: Janet Mason Subject: FW: Message from KMBT-C652DS - Sup Mtn Rotary Rodeo Grounds Event From: Rudy Esquivias Sent:Tuesday, September 09, 2014 2:14 PM To: Suzanne Heninger;Jeff Robinson; Dennis Dixon; 'john.suniga@ajfire.org' Subject: RE: Message from KMBT_C6S2DS-Sup Mtn Rotary Rodeo Grounds Event Suzanne: The Planning Division has no concerns with or objections to this request. Similar events have been held successfully in the past. C&CI Uivlac.6 Senior Planner/Zoning Administrator City of Apache Junction 300 E. Superstition Blvd. Apache Junction, AZ 85119 480-474-2645 resquivias@ajcity.net SERVICE OVER AND ABOVE THE REST (Development Services Department office hours: Monday through Thursday from 7:OOam to 6:OOpm, closed Fridays and Holidays. ) From. Suzanne Heninger Sent: Thursday, September 04, 2014 4:53 PM To: Jeff Robinson; Rudy Esquivias; Dennis Dixon; 'john.suniga@ajfire.org' Subject: FW: Message from KMBT_C652DS Please see attached memo and special event liquor license application for Superstition Mountain Rotary Club. 1 Janet Mason From: Suzanne Heninger Sent: Tuesday, September 09, 2014 2:54 PM To: Janet Mason Subject: FW: Message from KMBT_C652DS From:Jeff Robinson Sent:Tuesday, September 09, 2014 2:40 PM To: Suzanne Heninger Cc:Troy Mullender Subject: RE: Message from KMBT C652DS Suzanne, The police department has no objections to this request. Similar events have been held successfully in the past. From: Suzanne Heninger Sent: Thursday, September 04, 2014 4:53 PM To: Jeff Robinson; Rudy Esquivias; Dennis Dixon; 'john.suniga@ajfire.org' Subject: FW: Message from KMBT_C652DS Please see attached memo and special event liquor license application for Superstition Mountain Rotary Club. 1 ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard � 0 Agenda Item Cover Sheet Apache Junction,AZ 85119 Agenda Item No. 7. '+'Piz File ID: 14-486 Sponsor: E'Lan Vallender Agenda Date: 10/7/2014 Index: In Control: City Council Meeting Consideration of the proposed development agreement with Blount Rental Equipment for reimbursement of actual cost of public infrastructure improvements not to exceed $51,200.00. Staff respectfully requests council approval of this item. Consideration and action. City of Apache Junction,Arizona Page 1 Printed on 611512026 4 DATE: September 24, 2014 MEMORANDUM TO: Mayor and City Council MEMORANDUM THROUGH: Bryant Powell, Assistant City Manager Janine Solley, Principal Economic Development Specialist MEMORANDUM FROM: Elan Vallender, Economic Development Specialist SUBJECT: Development Agreement with Blount Contracting On September 16, 2014 City Council voted unanimously to adopt Resolution No. 1436 a notice of intent to enter into a development agreement with Blount Rental Equipment LLC. At that time staff presented to City Council the deal points of the development agreement and Sarah Murley, Principal of Applied Economics LLC, presented her findings that the development agreement met all state statute requirements. Staff respectfully requests council approval on this item. When recorded return to: Richard Joel Stern, Esq. Apache Junction City Attorney 300 East Superstition Blvd. Apache Junction, AZ 85119 RETAIL DEVELOPMENT TAX INCENTIVE AGREEMENT WITH BLOUNT RENTAL EQUIPMENT, LLC. AND CITY OF APACHE JUNCTION THIS RETAIL DEVELOPMENT TAX INCENTIVE AGREEMENT (the "Agreement") is made as of the day of 2014, by and between CITY OF APACHE JUNCTION, ARIZONA, an Arizona municipal corporation (the "City"); and BLOUNT RENTAL EQUIPMENT, LLC, an Arizona private corporation ("Developer"). City and Developer are sometimes referred to herein collectively as the "Parties," or individually as a "Party." RECITALS A. Developer owns three (3) acres of unimproved real property, located at 1353 S. Vista Rd, Apache Junction, Arizona, 85119 (the "Property"), the legal description and map of which are attached hereto as Exhibit A. Developer intends to develop the Property as a heavy equipment rental and civil construction firm consisting of buildings and improvements of approximately three thousand five hundred square feet (3,500 ft2) on the Property (the "Project"). B. It is anticipated that completion of the Project as planned will improve and/or enhance the economic welfare of City's residents and businesses and generate anticipated tax revenues for City as verified for the City in an independent study compiled by Applied Economics, a copy of which is on file with the City's Principal Economic Development Specialist and incorporated herein by this reference. C. Developer has submitted, or will submit, a development review application package for the Property (which includes, but is not limited to, applications for approval of standard grading and drainage, traffic, elevations, landscaping, signage, etc.) for review and approval (or disapproval) by City in accordance with City's customary and ordinary zoning, plan and development review processes. The proposed (but not approved) Site Plan for the Property is attached hereto as Exhibit B. D. It is anticipated that development of the Project pursuant to this Agreement will generate municipal benefits, tangible and intangible, which benefits outweigh, or are not disproportionate to, the costs associated with the economic incentives provided for in this Agreement. E. The Parties understand and acknowledge that this Agreement is a "Development Agreement" within the meaning of, and entered into pursuant, A.R.S. § 9-500.05, and that the terms of this Agreement shall constitute covenants running with the Property as more fully described in this Agreement. F. The Parties also understand and acknowledge that this Agreement is authorized by and entered into accordance with the terms of A.R.S. § 9- 500.11. The actions taken by City pursuant to this Agreement are for "economic development" purposes as that term is used in A.R.S. § 9-500.11; they will assist in the creation and retention of jobs; and in other ways will improve and enhance the economic welfare of the residents of City. On September 16t", 2014, City adopted a 14-day notice of intent to enter into this Agreement as required by A.R.S. § 9-500.11(K) and made the findings required by A.R.S. § 9-500.11(D), such findings having been verified by an independent third party (Applied Economics) before City entered into this Agreement. The findings are, by this reference, incorporated into this Agreement as though set forth in their entirety herein. AGREEMENT NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual promises contained in this Agreement, the Parties agree as follows: 1. DEFINITIONS. In this Agreement, unless a different meaning clearly appears from the context: (a) "Agreement" means this Agreement, as amended and restated or supplemented in writing from time to time, and includes all exhibits hereto. References to sections or exhibits are to this Agreement unless otherwise qualified. The Recitals set forth in Paragraphs "A" through "F" inclusive are incorporated herein by reference and form a part of this Agreement. (b) "Applicable Laws" means all federal, state, county and local laws (statutory and common law) and the ordinances, rules, regulations, permit requirements, and other requirements and official policies and practices of City which apply to the development of the Property as such may be modified from time to time. (c) "AZDOR" means Arizona Department of Revenue, the tax collector on all sales taxes. 2 (d) "Commencement of Construction" means both: (i) the obtaining of a building, excavation, grading or similar permit by Developer for the construction of the Minimum Improvements and the Public Infrastructure Improvements; and (ii) the actual commencement of physical construction operations on the Property (or in right-of-way adjacent thereto) and the diligent pursuit of such construction in a manner necessary to achieve Completion of Construction within the time provided in this Agreement. (e) "Completion of Construction" means the date on which: (i) as to the Minimum Improvements, one or more temporary or final certificates of occupancy (or comparable instruments) have been issued by the City for the Minimum Improvements, and that such Minimum Improvements are open for business to the public; and (ii) for the Public Infrastructure Improvements, acceptance by the City Council or appropriate administrative staff member of the City of the completed Public Infrastructure Improvements for maintenance in accordance with the policies, standards and specifications contained in applicable City ordinances, which acceptance shall not be unreasonably withheld, conditioned or delayed. Unless otherwise expressly stated, "Completion of Construction" of the Minimum Improvements means Completion of Construction of both the Minimum Improvements and the Public Infrastructure Improvements. (f) "Economic Incentive Period" means as defined in Section 8.3(b)(iii). (g) "Minimum Improvements" means not less than three thousand five hundred square feet (3,500 ft2) of gross building area constructed on the Property as a heavy equipment rental and civil construction firm. (h) "Public Infrastructure Improvements" means those facilities required by the City to be constructed in conjunction with the construction of the Minimum Improvements and are further described in Section 5 of this Agreement. (i) "Public Improvement Costs" means costs, expenses, fees and charges actually incurred and paid by or on behalf of City or Developer to contractors, architects, engineers, surveyors, governmental agencies and other Third Parties for materials, labor, design, engineering, surveying, site excavation and preparation, governmental permits, payment and performance bonds, and other costs reasonably necessary for the construction, installation, or provision of the Public Infrastructure Improvements. "Public Improvement Costs" expressly excludes any "contingencies" and any fees, costs, salaries, or other amounts described as or allocable to Developer's or City's "overhead" or "administrative" costs or "profit," and shall not include interest on any sum or any financing charge or cost of any kind. 3 Q) "Sales Taxes" and "Sales Tax Revenues" mean, for the purposes of this Agreement, that portion of City's transaction privilege taxes which are imposed on all taxable activities as determined by the Apache Junction Tax and Licensing Supervisor and construction activities only (as further described in and contemplated by Section 8.1 of this Agreement) under the Tax Code of City of Apache Junction, as the same may change from time-to- time, applicable to general sales and construction revenues and similar activities occurring at the Property ("Taxable Activities"); provided that, for the purposes of this Agreement, the rates of such Sales Taxes used for calculating any Sales Tax Rebate shall never be more than the Sales Tax rates imposed and in effect as of the date of recordation of this Agreement, notwithstanding any increases in City's transaction privilege tax rate, changes in the unallocated portion of City's transaction privilege taxes, or for any other reason whatsoever; and provided, further, that in no event does the term "Sales Taxes" include present or future dedicated or special taxes allocated to a specific purpose only (e.g., mountain preserve acquisition, transportation, recreation debt, sewer debt, or special public safety expenditures). (k) "Third Parties" means individuals or entities other than the Parties or any person or entity related to, affiliated, or associated in any way with a Party, other than as an independent contractor. 2. PARTIES AND PURPOSE OF THIS AGREEMENT. 2.1 Parties to the Agreement. The Parties to this Agreement are City and Developer. (a) City. City is a municipal corporation and a political subdivision of the State of Arizona, duly organized and validly existing under the laws of the State of Arizona, exercising its governmental functions and powers. (b) Developer. Developer is Blount Rental Equipment, LLC, an Arizona private corporation, together with its successors in interest and assigns. 3. SCOPE AND REGULATION OF DEVELOPMENT. 3.1 Development Plans. Development of the Property shall be consistent with the Property's zoning and the City-approved site plan and shall be governed by the provisions, requirements and restrictions contained in this Agreement and by Applicable Laws (as defined herein). 3.1.1 Submissions by Developer. Developer shall submit complete applications with respect to all aspects of its development of the Property, including all information required by City to review and process Developer's applications. Developer's submissions shall include all information, 4 specifications and drawings reasonably requested by City and/or required by Applicable Laws. 3.2 Development Regulation. 3.3 City Development Fees. Developer shall pay all then-current City impact, development, and resource fees or exactions, currently in effect or as may be adopted in the future (referred to individually as a "City Development Fee" or collectively as "City Development Fees") as and when such City Development Fees are assessed, due or otherwise required to be paid by City. 4. PROPERTY IMPROVEMENTS. 4.1 Minimum Improvements and Full-Time Employee Staffing. Subject to the terms and conditions of this Agreement, the Minimum Improvements shall be developed on the Property as a heavy equipment rental and civil construction firm facility of approximately three thousand five hundred square feet (3,500 ft2) with a minimum staff of approximately two (2) full-time employees ("Full-Time Employee Staffing"). The Parties agree that Developer shall have no obligation to develop any more of the Property than the Minimum Improvements. 4.2 Completion of Construction. Developer agrees that Completion of Construction shall occur, subject to Enforced Delay (under 12.6 below), on or before December 31, 2015. 4.3 Conditions to Reimbursement. Completion of Construction of the Minimum Improvements and the Public Infrastructure Improvements by Developer as described in this Agreement and Developer's initial and continued compliance with the Full Time Employee Staffing requirement throughout the Terms of this Agreement are not contractual obligations of Developer, but rather are conditions to the obligations of City to provide the Economic Incentives to Developer provided in this Agreement. 5. PUBLIC INFRASTRUCTURE IMPROVEMENTS. Pursuant to A.R.S. § 34-201(L), as a condition of development of the Property imposed by City and as authorized by A.R.S. § 9-463.01, Developer at its sole cost shall design, construct or cause to be constructed and dedicate to the City the Public Infrastructure Improvements, subject to the terms and conditions of this Agreement. 5.1 Construction and Phasing. The Public Infrastructure Improvements shall consist of construction of a twenty four foot (24') minimum pavement improvement along the east side of Vista Rd. alignment south of 121" Ave. for a distance of six hundred twenty (620') linear feet, pavement turnouts providing access to subject site, and drainage channel improvements along the west side of Vista Road and those additional improvements as described on 5 Exhibit "C" to this Agreement. In the absence of a City-approved construction schedule, Developer shall cause the Public Infrastructure Improvements to be constructed in conjunction with Developer's construction of the Minimum Improvements. 5.2 Design, Bidding, Construction and Dedication. The Public Infrastructure Improvements shall be designed, bid, constructed and dedicated in accordance with Applicable Laws, including without limitation all City procurement and public bidding procedures as determined to be applicable by the City Attorney in his sole judgment. 5.3 City Review and Approval of Plans. Developer recognizes that its development and construction of the Minimum Improvements and Public Infrastructure Improvements pursuant to this Agreement are subject to City's normal plan submittal, review and approval processes and fees, and day-to-day inspection services. 5.4 Payment of Public Improvement Costs. Developer shall pay all Public Improvement Costs as the same become due, subject to the reimbursement provisions of Section 8 of this Agreement. 5.5 Dedication, Acceptance and Maintenance of Public Infrastructure Improvements; Limited Indemnity. When the Public Infrastructure Improvements or a discrete portion thereof, as determined by City, are completed (e.g., all of the paving for a particular street within any designated section or phase of the Property), then upon written request of City or Developer, Developer shall dedicate and City shall accept such Public Infrastructure Improvements in accordance with Applicable Laws and upon such reasonable and customary conditions as City may impose, including without limitation a two (2) year workmanship and materials contractor's warranty. Upon acceptance by City, the Public Infrastructure Improvements shall become public facilities and property of City, and City shall be solely responsible for all subsequent maintenance, replacement or repairs. With respect to any claims arising prior to acceptance of the Public Infrastructure Improvements by City, Developer shall bear all risk of, and shall indemnify, defend, pay and hold harmless City and its officials, employees and City Councilmembers, for, from and against any claim arising from any injury (personal, economic or other) or property damage to any person, entity or utility, arising from the condition, loss, damage to or failure of any of the Public Infrastructure Improvements, except to the extent caused by the grossly negligent or willful acts or omissions of City or its officials, employees and City Councilmembers. 6. ADDITIONAL MUNICIPAL BENEFITS. In addition to the construction of the Public Infrastructure Improvements and the direct, pecuniary, indirect and intangible benefits City will realize as a consequence of the development of the Property as contemplated by this Agreement, Developer agrees to perform, 6 supply or comply with the Additional Municipal Benefits set forth in this Section, the covenants, terms and provisions of which shall survive the expiration or termination of the Term of this Agreement. City agrees and acknowledges that these Additional Municipal Benefits are of value to City and are in addition to those matters that can be compelled or exacted by City and confer economic and non-economic benefits upon City in excess of the economic and non- economic benefits conferred by Developer's construction of the Public Infrastructure Improvements. 6.1 Use of Property Name by City. Developer shall permit City to use the name of the Property and/or Project in City communications, including radio, television, internet and print advertisements, utility bill inserts and City publications, provided, however, that City shall submit to Developer drafts of any such City communication for Developer's review and approval, which shall not be unreasonably withheld. 6.2 Character, Theme, Design and Architectural Features. Developer shall cause the Property and Project to incorporate the character, theme, design and architectural features and improvements reasonably requested by City and consistent with the approved site plan, zoning and City's General Plan. 6.3 Access. In addition to access required by Applicable Laws, Developer shall permit access to the Property by City, its officials, personnel and designees, at reasonable times, subject to reasonable safety requirements as Developer may impose from time to time, to assure compliance with all Applicable Laws and with the terms of this Agreement. 6.4 Public Access. In addition to access required by Applicable Laws, Developer will grant to City recorded emergency vehicle access and use easements over and through the main entrance to the Property and other private roadways as may exist from time to time within the Property. 7. DEVELOPER ASSISTANCE. Developer, by notice to City, may request to have City implement an expedited review and/or inspection process; and if City consents, Developer (or City in its discretion) shall engage at Developer's cost such private independent consultants and advisors as are approved by and necessary to assist City in the review and/or inspection process; provided, that such consultants and advisors shall take instruction from, be controlled by, and be responsible to City rather than Developer and provided further, that to the extent City elects to use its own personnel and overtime and similar charges are incurred by City, Developer shall be responsible for incremental overtime costs incurred above City's ordinary operational expenses for such personnel, as determined by City. 7 8. PAYMENTS TO DEVELOPER. 8.1 Reimbursement Amount. City agrees to pay to Developer in accordance with the reimbursement provisions of this Agreement the sum of all Public Infrastructure Improvement costs evidenced by invoices or receipts or other evidence reasonably acceptable to City, but in no event more than fifty one thousand two hundred dollars ($51,200), but only to the extent that Sales Tax Revenues are available for such reimbursement as further set forth in Section 8 of this Agreement (the "Reimbursement Amount"). Developer understands and agrees that City shall not reimburse for Developer interest relating to the Public Infrastructure Improvement costs or any other sum arising from or relating to the fact that the reimbursements to Developer will be paid over time. The reimbursements payable under the Agreement shall be equal to and shall not exceed the actual Public Infrastructure Improvement Costs incurred, subject to the Reimbursement Amount limitation and all other limitations set forth in the Agreement. The reimbursements to be provided by the City are sometimes referred to herein as the "Economic Incentive." 8.2 Allocation and Deposit of Revenues. (a) Allocated Revenues. Subject to the limitations set forth in this Agreement, fifty percent (50%) of Sales Tax Revenues as defined in Section 1 of this Agreement shall be deposited by City in a segregated bookkeeping account (the "Special Account") for the purpose of measuring the payment required hereunder (the "Allocated Revenues"). The first entry into the Special Account shall be made within forty-five (45) calendar days following the end of the first calendar quarter following the date on which Sales Tax Revenues are collected (and verified and received by City from AZDOR) from any development or construction activity on, from or related to the Property, or the date that any sales or similar Project-related taxable activity occurs on or at the Property, and shall thereafter be made within forty-five (45) calendar days of the end of every subsequent quarter, until the Reimbursement Amount has been paid to Developer, or after an eight-year (8) payment period (measured from Completion of Construction) has occurred, whichever occurs first. City recognizes that Sales Taxes shall, in any event, be collected by AZDOR, sent to the City and deposited in the Special Account (i) from and after the commencement of any construction activity with respect to construction sales and use taxes, and (ii) from and after Grand Opening with respect to all Sales Taxes. Developer acknowledges, however, that no payment shall be due or made by City unless and until Completion of Construction has occurred. (b) Limited Obligations. The City's obligation to make the reimbursement payments described in this Agreement is limited to payment from Allocated Revenues received from the taxable activities described in Section 1 of this Agreement. Under no circumstances shall any obligation hereunder represent or constitute a general obligation of or pledge of the full faith and credit of the City, the State of Arizona or of any political subdivision 8 thereof, nor require the levy of, or be payable from the proceeds of any ad valorem taxes. The obligation of City to reimburse or pay any amount pursuant to this Agreement shall not constitute an indebtedness of the City, the State of Arizona or any political subdivision thereof within the meaning of any Constitutional or statutory debt limitation or restriction or otherwise. The City and Developer agree and acknowledge that all obligations to make reimbursement payments pursuant to this Agreement are subordinate and subject to the lien and pledge of excise taxes pledged as security for the payment of all obligations of the City. Nothing in this Agreement shall be construed as a pledge of any City funds, assets or revenues nor shall Developer have any claim to or interest in the Special Account. 8.3 Payment Procedures. (a) Conditions Precedent to Reimbursement. Notwithstanding the accumulation of funds in the Special Account and the allocation of revenues under this Agreement, no payment shall be made to Developer as a debit against the Special Account until the Completion of Construction (of the Minimum Improvements and the Public Infrastructure Improvements); provided, however, that prior to Completion of Construction of the Minimum Improvements and the Public Infrastructure Improvements, Sales Tax Revenues shall be recorded in the Special Account for subsequent disbursement to Developer. Further, City shall have no obligation to make any payment to Developer from the Special Account until Developer shall have delivered to City evidence satisfactory to City in its sole discretion to support the claim by Developer for reimbursement for such Public Infrastructure Improvement Costs. (b) Quarterly Reimbursement Payments. (i) Subject to the provisions of Section 8.3(a), above reimbursement payments shall be made to Developer no less frequently than quarterly. The first quarterly reimbursement payment (which shall include all accumulated Allocated Revenues recorded in the Special Account) shall be made by City to Developer within, forty-five (45) calendar days following the last day of the calendar quarter in which Completion of Construction occurs, or such additional time the City deems appropriate to confirm payment of sales taxes were made to AZDOR from Developer and were received from AZDOR to the City. (ii) Reimbursement payments will continue to be made forty-five (45) calendar days after the last day of every quarter thereafter in which Sales Tax Revenues are collected from the Property until the Reimbursement Amount has been paid in full, or until eight (8) years from Completion of Construction, whichever first occurs. Any accrued but not yet disbursed Reimbursement Payments existing upon expiration of the Term of this Agreement shall be paid to Developer notwithstanding the fact that such 9 disbursement occurs after the expiration of the Term. 8.4 Determination of Amount of Allocated Revenues Received by City. City's Director of Finance (or his or her designee) shall determine, from sales tax returns and other appropriate financial records of City and AZDOR, the amount of Sales Tax Revenues and Allocated Revenues for each quarter (or partial quarter if appropriate). If Developer reasonably disputes such determination, Developer may request a review of such determination by the City Manager (or his designee), subject to any applicable laws relating to the confidentiality of taxpayer information or waiver authority thereof. 8.5 Computation of Sales Tax Revenues. Within forty-five (45) calendar days following the end of each City fiscal year, or such additional time the City deems appropriate to confirm payment of sales taxes were made to AZDOR from Developer and were received from AZDOR to the City. City will deliver to Developer a statistical report of all Sales Tax Revenues (classified, if appropriate, to prevent the disclosure of confidential information) received from the Property and/or the Project. Such report shall specifically identify any offsets, credits, exclusions or other deductions from the gross sales tax revenues generated by or attributable to the Property and/or Project which have been utilized by City in computing the Sales Tax Revenues for purposes of this Agreement. 8.6 City's Prepayment Right. City shall have the right to prepay the Reimbursement Amount, in whole or in part at any time, without premium or penalty. 8.7 Repayment to City. Without limiting City's rights arising under Section 14.9(b) of this Agreement, in the event that subsequent to the Effective Date: (i) any State of Arizona legislation is enacted that retroactively amends, modifies or otherwise rescinds or limits the effect of A.R.S. § 42-6010 (or any successor statute) with respect to Reimbursements made or paid to Developer in accordance with this Agreement, or would result in reduced state- shared revenue to City or any other financial loss or penalty to City as a result of or otherwise with respect to Reimbursements made or paid to Developer in accordance with this Agreement, and such legislation (following a challenge initiated and maintained by the City) is upheld by a court of competent jurisdiction, with such ruling being affirmed in whole or part by the Arizona Court of Appeals; or (ii) any order or other final decision (each, an "Order") is entered by a court of competent jurisdiction that declares, imposes or otherwise orders or determines that the Reimbursements to Developer in accordance with this Agreement in any way violate A.R.S. § 42-6010 (or any successor statute) or any other State of Arizona legislation presently existing or enacted hereafter, and 10 that a financial loss or penalty thereupon is imposed upon the City pursuant to A.R.S. § 42-6010 (or any successor statute) or any other or any other State of Arizona legislation presently existing or enacted hereafter with respect to such Reimbursements, and the Order thereafter is affirmed in whole or part by the Arizona Court of Appeals or Arizona Supreme Court, then Developer, immediately upon demand from City, shall repay City all amounts charged against or assessed to the City as a financial loss or penalty, and any further obligations of the City to make Reimbursements pursuant to this Agreement that would constitute acts giving rise to penalties imposed pursuant to A.R.S. § 42- 6010 (or any successor statute) with respect to such Reimbursements, shall be deemed withdrawn in their entirety, and Developer shall have no further rights with respect to such Reimbursements; provided, however, that City and Developer thereupon shall meet and negotiate in good faith in an effort to replace the invalidated provision or provisions with other economic incentives from City that may be available to Developer in lieu of the Reimbursements. 9. INDEMNITY; RISK OF LOSS. 9.1 Indemnity by Developer. Developer shall pay, defend, indemnify and hold harmless City and its City Council members, officers and employees from and against all claims, demands, fines, penalties, costs, expenses, damages, losses, obligations, judgments, liabilities, and suits (including attorneys fees, expert fees and court costs) which arise from or relate in any way to any act or omission of Developer, or its employees, contractors, subcontractors, agents or representatives in implementing the terms of this Agreement. The provisions of this Section 9.1, however, shall not apply to loss or damage or claims therefore which are attributable to the grossly negligent or intentional acts or omissions of City, its agents or employees. The foregoing indemnity obligations of Developer shall survive the expiration or termination of this Agreement for a period equal to the applicable statute of limitations period. 9.2 Risk of Loss. Developer assumes the risk of any and all loss, damage or claims to any portion of the Public Infrastructure Improvements unless and until title to the Public Infrastructure Improvements is transferred to City. At the time title to the Public Infrastructure Improvements is transferred to City by dedication deed, plat recordation, or otherwise, Developer will, to the extent allowed by law, assign to City all unexpired warranties relating to the design, construction and/or composition of such Public Infrastructure Improvements. Further, acceptance of the Public Infrastructure Improvements shall be conditioned on City's receipt of a two (2) year warranty of workmanship, materials and equipment, in form and content reasonably acceptable to City; provided, however, that such warranty or warranties may be provided by Developer's contractor or contractors directly to City and are not required from Developer, and that any such warranties shall extend from the date of completion of any Public Infrastructure Improvement, any component thereof, or the work of any specific trade or contractor, as applicable. 11 9.3 Insurance. During the period of any construction involving the Public Infrastructure Improvements , and with respect to any construction activities relating to the Public Infrastructure Improvements, Developer will obtain and provide City with proof of payment of premiums and certificates of insurance showing that Developer is carrying, or causing its contractor(s) to carry, builder's risk insurance, comprehensive general liability and worker's compensation insurance policies in amounts and coverages set forth on Exhibit "D." Such policies of insurance shall be placed with financially sound and reputable insurers, require the insurer to give at least thirty (30) calendar days' advance written notice of cancellation to City, and will name City as an additional insured on all such policies. 10. CITY REPRESENTATIONS. City represents and warrants to Developer that: 10.1 The City's execution and approval of this Agreement have been made in compliance with the procedural requirements of the Apache Junction City Code. 10.2 The City will execute and acknowledge when appropriate all documents and instruments and take all actions necessary to implement and evidence this Agreement. 10.3 As of the date of this Agreement, the City knows of no litigation, proceeding, initiative, referendum, or investigation contesting the powers of the City or its officials with respect to this Agreement, that has not been disclosed in writing to Blount. 10.4 The execution, delivery and performance of this Agreement by the City is not prohibited by, and does not conflict with, any other agreements, instruments or judgments or decrees to which the City is a party or is otherwise subject. 10.5 The City has been assisted by counsel of its own choosing in connection with the preparation and execution of this Agreement. 11. DEVELOPER REPRESENTATIONS. Developer represents and warrants to City that: 11.1 Developer has the full right, power and authorization to enter into and perform this Agreement and of the obligations and undertakings of Developer under this Agreement, and the execution, delivery and performance of this Agreement by Developer has been duly authorized and agreed to in compliance with the organizational documents of Developer. 11.2 All consents and approvals necessary to the execution, delivery and performance of this Agreement have been obtained, and no further 12 action needs to be taken in connection with such execution, delivery and performance. 11.3 Developer will execute and acknowledge when appropriate all documents and instruments and take all actions necessary to implement, evidence and enforce this Agreement. 11.4 As of the date of this Agreement, Developer knows of no litigation, proceeding or investigation pending or threatened against or affecting Developer, which could have a material adverse affect on Developer's performance under this Agreement that has not been disclosed in writing to City. 11.5 This Agreement (and each undertaking of Developer contained herein) constitutes a valid, binding and enforceable obligation of Developer, enforceable according to its terms, except to the extent limited by bankruptcy, insolvency and other laws of general application affecting creditors' rights and by equitable principles, whether considered at law or in equity. Developer will defend the validity and enforceability of this Agreement in the event of any proceeding or litigation arising from its terms that names Developer as a party or which challenges the authority of Developer or City to enter into or perform any of its obligations hereunder and will cooperate with City in connection with any other action by a Third Party in which City is a party and the benefits of this Agreement to City are challenged and Developer shall indemnify and hold harmless City against all costs, expenses and attorneys' fees incurred in connection with any such action. 11.6 The execution, delivery and performance of this Agreement by Developer is not prohibited by, and does not conflict with, any other agreements, instruments,judgments or decrees to which Developer is a party or to which Developer is otherwise subject. 11.7 Developer has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement other than normal costs of conducting business and costs of professional services such as the services of architects, engineers and attorneys. 11.8 Developer has been assisted by counsel of its own choosing in connection with the preparation and execution of this Agreement. 12. EVENTS OF NON-PERFORMANCE; REMEDIES. 12.1 Events of Non-Performance by Developer. "Non- Performance" or an "Event of Non-Performance" by Developer under this Agreement shall mean one or more of the following: 13 (a) Any representation or warranty made in this Agreement by Developer was materially inaccurate when made or shall prove to be materially inaccurate during the Term; (b) Developer fails to comply with the dates established in this Agreement for the Commencement of Construction or the Completion of Construction, for any reason other than an Enforced Delay; (c) Foreclosure (or deed in lieu of foreclosure) upon any mechanic's, materialmen's or other lien on the Property prior to Completion of Construction or upon any improvements on the Property, but such lien shall not constitute an Event of Non-Performance if Developer deposits in escrow sufficient funds to discharge the lien or otherwise bonds over such liens in a customary fashion; (d) Developer transfers or attempts to transfer or assign this Agreement in violation of Section 14.2; or (e) Developer fails to observe or perform any other material covenant, obligation or agreement required of it under this Agreement. 12.2 Events of Non-Performance by City. Non-Performance or an Event of Non-Performance by City under this Agreement shall mean one or more of the following: (a) Any representation or warranty made in this Agreement by City was materially inaccurate when made or shall prove to be materially inaccurate during the Term; (b) City fails to make the reimbursement payments to Developer as provided in this Agreement; or (c) City fails to observe or perform any other material covenant, obligation or agreement required of it under this Agreement. 12.3 Grace Periods; Notice and Cure. Upon the occurrence of an Event of Non-Performance by any Party, such Party shall, upon written notice from the other Party, proceed immediately to cure or remedy such Non- Performance and, in any event, such Non-Performance shall be cured within ninety (90) calendar days (or twenty (20) calendar days in the event of a monetary Non-Performance) after receipt of such notice. 12.4 Remedies for Non-Performance. Whenever any Event of Non- Performance occurs and is not cured by the non-performing Party in accordance with Section 12.3 of this Agreement, the other Party may take any of one or more of the following actions: 14 (a) Remedies of City. City's exclusive remedies for an Event of Non-Performance by Developer shall consist of, and shall be limited to the following: (i) If an Event of Non-Performance by Developer occurs prior to Completion of Construction and with respect to Developer's failure to construct or develop the Minimum Improvements and/or the Public Infrastructure Improvements in accordance with the terms of this Agreement, City may suspend any of its obligations under this Agreement, other than the recording of the Sales Taxes in the Special Account pursuant to Section 8.2(a), during the period of the Non-Performance. (ii) If the Event of Non-Performance under Section 12.4(a)(i) is not cured within the period provided in Section 12.3 after written notice by City to Developer of such Non-Performance, City may terminate this Agreement by written notice thereof to Developer, in which event the Special Account also shall terminate and all reimbursement payments paid to Developer shall be returned to City free of any claim or interest of Developer. (iii) At any time, City may seek special action or other similar relief (whether characterized as mandamus, injunction or otherwise), requiring Developer to undertake and to fully and timely address a public safety concern or to enjoin any construction or activity undertaken by Developer that is not in accordance with the terms of this Agreement. (iv) If an Event of Non-Performance occurs after Completion of Construction, City shall have all rights and remedies available at law, in equity or under this Agreement, subject to any express limitations set forth in this Agreement. (b) Remedies of Developer. Developer's exclusive remedies for an Event of Non-Performance by City shall consist of and shall be limited to the following: (i) Recovery of damages for unpaid amounts due in accordance with the reimbursement provisions of this Agreement. Such damages shall consist solely of Developer's actual damages as of the time of entry of judgment (meaning only the right to receive reimbursement payments of Allocated Revenues to be applied to the Reimbursement Amount in accordance with and limited by this Agreement). Developer waives any right to seek consequential, punitive, multiple, exemplary or any other damages from City. (ii) If an Event of Non-Performance by City occurs at any time, whether prior to or after Completion of Construction, Developer may seek special action or other similar relief (whether characterized as mandamus, injunction or otherwise), requiring City to undertake and to fully 15 and timely perform its obligations under this Agreement, including, but not limited to, the collection, deposit, allocation, and disbursement of reimbursement payments to Developer in accordance with the terms of this Agreement. 12.5 Delays. Except as otherwise expressly provided in this Agreement, any delay by any Party in asserting any right or remedy under this Agreement shall not operate as a waiver of any such rights or limit such rights in any way; and any waiver in fact made by a Party with respect to any Non- Performance by the other Party shall not be considered as a waiver of rights with respect to any other Non-Performance by the performing Party or with respect to the particular Non-Performance except to the extent specifically waived in writing. 12.6 Enforced Delay in Performance for Causes Beyond Control of Party. Neither City nor Developer, as the case may be, shall be considered not to have performed its obligations under this Agreement in the event of enforced delay (an "Enforced Delay") due to causes beyond its control and without its fault or negligence or failure to comply with Applicable Laws, including, but not restricted to, acts of God, fires, floods, epidemics, pandemics, quarantine, restrictions, embargoes, labor disputes, and unusually severe weather or the delays of subcontractors or materialmen due to such causes, acts of a public enemy, war, terrorism or act of terror (including but not limited to bio-terrorism or eco-terrorism), nuclear radiation, blockade, insurrection, riot, labor strike or interruption, extortion, sabotage, or similar occurrence or any exercise of the power of eminent domain any governmental body on behalf of any public entity, or a declaration of moratorium or similar hiatus directly affecting the Property (whether permanent or temporary) by any public entity. In no event will Enforced Delay include any delay resulting from general economic or market conditions, unavailability for any reason of particular tenants or purchasers of portions of the Property, labor shortages, unavailability of financing, or the unavailability for any reason of particular contractors, subcontractors, vendors, investors or lenders desired by Developer in connection with the Property. Developer agrees that Developer alone will bear all risks of delay which are not Enforced Delay. In the event of the occurrence of any such Enforced Delay, the time or times for performance of the obligations of the Party claiming delay shall be extended for a period of the Enforced Delay; provided, however, that the Party seeking the benefit of the provisions of this Section shall, within thirty (30) calendar days after such Party knows or should know of any such Enforced Delay, first notify the other Party of the specific delay in writing and claim the right to an extension for the period of the Enforced Delay; and provided further that in no event shall a period of Enforced Delay exceed ninety (90) days. 12.6 Rights and Remedies Cumulative. The rights and remedies of the Parties are cumulative, and the exercise by either Party of any one or more of such rights shall not preclude the exercise by it, at the same or different 16 times, of any other right or remedy for any other Non-Performance by the other Party. 13. COOPERATION AND ALTERNATIVE DISPUTE RESOLUTION. 13.1 Representatives. To further the cooperation of the Parties in implementing this Agreement, City and Developer each shall designate and appoint a representative to act as a liaison between City and its various departments and Developer. The initial representative for City shall be City Manager (the "City Representative") and the initial representative for Developer shall be its Project Manager, as identified by Developer from time to time (the "Developer Representative"). City's and Developer's Representatives shall be available at all reasonable times to discuss and review the performance of the Parties to this Agreement and the development of the Property. 14. MISCELLANEOUS PROVISIONS. 14.1 Governing Law; Choice of Forum. This Agreement shall be deemed to be made under, shall be construed in accordance with, and shall be governed by the internal, substantive laws of the State of Arizona (without reference to conflict of law principles). Any action brought to interpret, enforce or construe any provision of this Agreement shall be commenced and maintained in the Superior Court of the State of Arizona in and for the County of Pinal (or, as may be appropriate, in the Justice Courts of Pinal County, Arizona, or in the United States District Court for the District of Arizona, if, but only if, the Superior Court lacks or declines jurisdiction over such action). The Parties irrevocably consent to jurisdiction and venue in such courts for such purposes and agree not to seek transfer or removal of any action commenced in accordance with the terms of this Section 14.1. 14.2 Restrictions on Assignment and Transfer. 14.2.1 Definitions. For purposes of Section 14.2 of this Agreement, the following terms shall have the meanings ascribed to them below: (a) "Control" means the power to control the management and policies of a person, as a result of stock or membership interest ownership, operating agreement provisions, management agreement or otherwise; (b) "Transfer" means a transfer or assignment, directly or indirectly, through transfer of a manager or member interest in a limited liability company or otherwise, of all or part of the rights or obligations of any Party under this Agreement; 17 (c) "Transfer Notice" means a prior written notice to be delivered to City not fewer than fifteen (15) calendar days in advance of certain Transfers, describing the rights, obligations and/or interests to be transferred or assigned and providing the name and address of the transferee. 14.2.2 Restriction on Transfers. Except as provided in this Section 14.2, prior to Completion of Construction, no Transfer by Developer shall occur without the prior written consent of City, which consent may be given or withheld in City's sole and unfettered discretion. The restrictions set forth in Section 14.2 of this Agreement shall terminate automatically, and without further notice or action, upon Completion of Construction. No voluntary or involuntary successor in interest to Developer shall acquire any rights or powers under this Agreement, except as expressly set forth herein. 14.2.3 Exclusions/Permitted Transfers. The restriction on Transfer set forth in Section 14.2.2 of this Agreement shall not apply to the following: (a) any Transfer, where after completion of the Transfer, Control of Developer and ownership of not less than fifty-one percent (51%) of the total ownership interests in Developer remains in the person and entities constituting Developer on the date of this Agreement; (b) a pledge, collateral assignment, encumbrance or similar financing or refinancing transaction (including, without limitation, assignment of any right to receive any payment or reimbursement from City under this Agreement) to any Lender which provides acquisition, construction, permanent, working capital, tenant improvement or other financing to Developer for all or any part of the Property; and (c) a Transfer to a successor in interest to Developer with respect to all or part of the Property and the Project, if Developer remains responsible for the performance of its obligations under this Agreement (i.e., if the Transfer does not result in a novation). 14.2.4 Notice of Transfer. Developer shall provide a Transfer Notice to City with respect to: (a) any sale or assignment of any interest in Developer which results in ownership of less than fifty-one percent (51%) of the total ownership interests in Developer being held by the persons and entities constituting Developer on the date of this Agreement; (b) any Transfer referred to in Section 14.2.3(c) or (d) of this Agreement. 18 14.2.5 Transfers by City. City's rights and obligations under this Agreement shall be non-assignable and non-transferable, without the prior express written consent of Developer, which consent may be given or withheld in Developer's reasonable discretion. 14.3 Notice of Intent/Development Agreement Approval. Both Parties agree and understand this Agreement is subject to approval by the Mayor and City Council. To effectuate proper approval, the Mayor and City Council must approve a Notice of Intent to enter into this Agreement at least fourteen (14) days before this Agreement is considered. The Mayor and City Council must then approve the Agreement by a two-thirds majority vote. 14.4 Limited Severability. City and Developer each believes that the execution, delivery and performance of this Agreement are in compliance with all Applicable Laws. However, in the unlikely event that any provision of this Agreement is declared void or unenforceable (or is construed as requiring City to do any act in violation of any Applicable Laws) such provision shall be deemed severed from this Agreement and this Agreement shall otherwise remain in full force and effect; provided that, if the City Attorney determines that such action is legally permissible, this Agreement shall retroactively be deemed reformed to the extent reasonably possible in such a manner so that the reformed agreement (and any related agreements effective as of the same date) provide essentially the same rights and benefits (economic and otherwise) to the Parties as if such severance and reformation were not required; provided, however, in no event shall such reformation require any general fund expenditure or incurrence of indebtedness by City. The Parties further agree, in such circumstances, to do all acts and to execute all amendments, instruments and consents necessary to accomplish and to give effect to the purposes of this Agreement, as reformed. 14.5 Construction. The terms and provisions of this Agreement represent the results of negotiations between the Parties, each of which has been or has had the opportunity to be represented by counsel of its own choosing, and none of which has acted under any duress or compulsion, whether legal, economic or otherwise. Consequently, the terms and provisions of this Agreement shall be interpreted and construed in accordance with their usual and customary meanings, and the Parties each hereby waive the application of any rule of law which would otherwise be applicable in connection with the interpretation and construction of this Agreement that ambiguous or conflicting terms or provisions contained in this Agreement shall be interpreted or construed against the Party who prepared or whose attorney prepared the executed Agreement or any earlier draft of the same. 14.6 Notices. (a) Addresses. Except as otherwise required by law, any notice required or permitted under this Agreement shall be in writing and shall be given by personal delivery, or by deposit in the United States mail, certified 19 or registered, return receipt requested, postage prepaid, addressed to the Parties at their respective addresses set forth below, or at such other address as a Party may designate in writing pursuant to the terms of this Section, or by telecopy or telefacsimile machine, or by any nationally recognized express or overnight delivery service (e.g. Federal Express or UPS), delivery charges prepaid: If to City: City of Apache Junction Attn: City Manager 300 E. Superstition Blvd. Apache Junction, Arizona 85119-2899 Telephone: (480) 474-5066 Facsimile: (480) 474-5110 With a required copy to: City of Apache Junction Attn: City Attorney 300 E. Superstition Blvd. Apache Junction, Arizona 85119-2899 Telephone: (480) 474-5105 Facsimile: (480) 982-5883 If to Developer: Blount Rental Equipment, LLC Attn: Randy Blount 820 North 1111h Street Mesa, Arizona 85207 Telephone: (480) 985-2112 Facsimile: (480) 985-7727 (b) Effective Date of Notices. Any notice sent by United States Postal Service certified or registered mail shall be deemed to be effective the earlier of the actual delivery, or three (3) business days after deposit in a post office operated by the United States Postal Service. Any notice sent by a recognized national overnight delivery service shall be deemed effective one (1) business day after deposit with such service. Any notice personally delivered or delivered through a same-day delivery/courier service shall be deemed effective upon its receipt (or refusal to accept receipt) by the addressee. Any notice sent by telecopy or telefacsimile machine shall be deemed effective only upon confirmation of the successful transmission by the sender's telecopy or telefacsimile machine, followed by deposit of a "hard copy" for next business- day delivery by a recognized national overnight delivery service. (c) Payments. Payments shall be made and delivered in the same manner as Notices and shall be deemed made at the same time that a notice would be deemed given. 14.7 Time of Essence. Time is of the essence of this Agreement and each provision hereof. 20 14.8 Section Headings. The Section headings contained in this Agreement are for convenience in reference only and are not intended to define or limit the scope of any provision of this Agreement. 14.9 Attorneys' Fees and Costs; Indemnity. (a) In the event of commencement of a legal action in an appropriate forum by a Party to enforce any covenant or any of such Party's rights or remedies under this Agreement, including any action for declaratory or equitable relief, the prevailing Party in any such action shall be entitled to recovery of its reasonable attorneys' fees and court costs and expenses, including, but not limited to, its costs of expert witnesses, transportation, lodging and meal costs of the Parties and witnesses, costs of transcript preparation and other reasonable and necessary direct and incidental expenses associated with such dispute. (b) Developer shall indemnify, defend, pay and hold City harmless for, from and against any and all claims made or asserted against City in connection with City's entering into this Agreement, including but not limited to claims alleging the illegality, unconstitutionality or unenforceability or any or all of the terms or provisions of this Agreement. City may, in its sole discretion, select its own counsel to defend any matters subject to this indemnity. Further, in the event that any provisions of Article 8 of this Agreement is determined to be illegal, unconstitutional or unenforceable, then the obligations of City hereunder shall terminate, and neither Developer nor the other Owners shall have any rights under this Agreement, including but not limited to the right to receive payment of Reimbursable Sales Taxes. In addition, in the event that City is determined to have made any payment of Reimbursable Sales Taxes that requires a forfeiture, penalty or payment of any amounts from City (or its general fund) to the State of Arizona or any other governmental agency, then in that event Developer (in addition to any other indemnity obligations, but subject to the rights and obligations of the parties described in Section 8.7) shall immediately upon written demand from City, reimburse City for all such amounts so that the net effect to City of such illegality, unconstitutionality or unenforceability is zero. (c) Any obligation of indemnity by Developer of City that has been reduced to judgment or is otherwise liquidated in amount may be offset by City against any amount of Reimbursement then or to be owing to Empire. 14.10 Waiver. Without limiting the provisions of Section 12.5 of this Agreement, the Parties agree that neither the failure nor the delay of any Party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver of such right, remedy, power or privilege, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with 21 respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the Party asserted to have granted such waiver. 14.11 Third Party Beneficiaries. No person or entity shall be a third party beneficiary of this Agreement, except for permitted transferees, assignees, or lenders under Section 14.2 to the extent that they assume or succeed to the rights and/or obligations of Developer under this Agreement, and except that the indemnified parties referred to in the indemnification provisions of Sections 9.1 (or elsewhere in this Agreement) shall be third party beneficiaries of such indemnification provisions. 14.12 Exhibits. Without limiting the provisions of Section 1 of this Agreement, the Parties agree that all references to this Agreement include all Exhibits designated in and attached to this Agreement, such Exhibits being incorporated into and made an integral part of this Agreement for all purposes. 14.13Integration. Except as expressly provided herein, this Agreement constitutes the entire agreement between the Parties with respect to the subject matters hereof and supersedes any prior agreement, understanding, negotiation or representation regarding the subject matters covered by this Agreement. 14.14 Further Assurances. Each Party agrees to perform such other and further acts and to execute and deliver such additional agreements, documents, affidavits, certifications, acknowledgments and instruments as any other Party may reasonably require to consummate, evidence, confirm or carry out the matters contemplated by this Agreement or confirm the status of: (a) this Agreement as in full force and effect; and (b) the performance of the obligations hereunder at any time during its Term. 14.15 Business Days. If the last day of any time period stated in this Agreement or the date on which any obligation to be performed under this Agreement shall fall on a Saturday, Sunday or legal holiday, then the duration of such time period or the date of performance, as applicable, shall be extended so that it shall end on the next succeeding day which is not a Saturday, Sunday or legal holiday. 14.16 Consents and Approvals. Wherever this Agreement requires or permits the consent or approval of a Party to any act, document, use or other matter, such consent or approval shall be given or denied by such Party in its reasonable discretion, unless this Agreement expressly provides otherwise. 14.17 Covenants Running With Land; Inurement. The covenants, conditions, terms and provisions of this Agreement shall run with the Property and shall be binding upon, and shall inure to the benefit of the Parties and their 22 respective permitted successors and assigns with respect to such Property. Wherever the term "Party" or the name of any particular Party is used in this Agreement such term shall include any such Party's permitted successors and assigns. 14.18 Recordation. Within ten (10) calendar days after this Agreement has been approved by City and executed by the Parties (together with the execution of the Landowners' Consents hereto), City shall cause this Agreement to be recorded in the Official Records of Pinal County, Arizona. 14.19 Amendment. No change or addition is to be made to this Agreement except by written amendment executed by City and Developer. Within ten (10) calendar days after any amendment to this Agreement, such amendment shall be recorded in the Official Records of Pinal County, Arizona. Upon amendment of this Agreement as established herein, references to "Agreement" shall mean the Agreement as amended. 14.20 Good Faith of Parties. Except where any matter is expressly stated to be in the sole discretion of a Party, in performance of this Agreement or in considering any requested extension of time, the Parties agree that each will act in good faith and will not act unreasonably, arbitrarily or capriciously and will not unreasonably withhold, delay or condition any requested approval, acknowledgment or consent. 14.21 Survival. All indemnifications contained in Sections 9.1 of this Agreement (or elsewhere in this Agreement) shall survive the execution and delivery of this Agreement, the closing of any transaction contemplated herein, and the rescission, cancellation, expiration or termination of this Agreement upon the terms and for the period of any applicable statute of limitations. 14.22 Nonliability of City Officials, Etc., and of Employees, Members and Partners, Etc. of Developer. No City Council member, official, representative, agent, attorney or employee of City shall be personally liable to any of the other Parties hereto, or to any successor in interest to any of the other Parties, in the event of any Non-Performance by City or for any amount which may become due to any other Party or its successor, or with respect to any obligation of City under the terms of this Agreement. Notwithstanding anything contained in this Agreement to the contrary, the liability of Developer under this Agreement shall be limited solely to the assets of Developer and shall not extend to or be enforceable against the individual assets of any of the individuals or entities who are members or managers of Developer. 14.23 Conflict of Interest Statute. This Agreement is subject to, and may be terminated by City in accordance with, the provisions of A.R.S. § 38-511. 14.24 Waiver of Claims Pursuant to A.R.S. § 12-1134 et seq. Developer hereby waives and releases City from any and all claims under A.R.S. 23 § 12-1134 et seq. including any right to compensation for reduction to the fair market value of the Property, as a result of City's approval of this Agreement, application of, all related zoning, use, building and development matters arising from, related or appurtenant to or reasonably inferable from this Agreement. The terms of this waiver shall run with the land and shall be binding upon all subsequent landowners and shall survive the expiration or earlier termination of this Agreement. 14.25 Term. Unless otherwise terminated pursuant to the terms of this Agreement, this Agreement shall expire and terminate on the date on which all payment and/or performance obligations of the Parties have been satisfied or fifteen (15) years from the date of this Agreement, whichever is first to occur (the "Term"); provided, however, that all indemnification obligations of the Parties shall survive expiration or termination for the period of any applicable statute of limitations. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above. BLOUNT RENTAL EQUIPMENT, LLC, an Arizona private corporation By: Its: CITY OF APACHE JUNCTION, ARIZONA, an Arizona municipal corporation By: John S. Insalaco Its: Mayor ATTEST: By: Kathy Connelly, City Clerk APPROVED AS TO FORM: By: R. Joel Stern, City Attorney 24 STATE OF ARIZONA ) ) ss. County of ) The foregoing was acknowledged before me this day of , 2014, by and , the Managers of Blount Rental Equipment, LLC, an Arizona private corporation, on behalf of the corporation. Notary Public My Commission Expires: (seal) STATE OF ARIZONA ) ) ss. COUNTY OF ) The foregoing was acknowledged before me this day of , 2014, by John S. Insalaco, the mayor of City of Apache Junction, Arizona, an Arizona municipal corporation, who acknowledged that he signed the foregoing instrument on behalf of City. Notary Public My Commission Expires: (seal) 25 EXHIBIT A MAP AND LEGAL DESCRIPTION OF THE PROPERTY 1353 South Vista Road, Apache Junction, AZ 85119 APN 103-19-023A LEGAL DESCRIPTION (PER ALTA SURVEY) THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 27, TOWNSHIP 1 NORTH, RANGE 8 EAST OF THE GILA AND SALT RIVER MERIDIAN, PINAL COUNTY ARIZONA. E BROADWAY AVE E 9TH AVE 0 Ut o a Ot M Q Y N (/7 E 12TH AVE 0 N 5 LETH AVE SITE ry N W Fs J, O N ~ Cn Cn VICINITY MAP N. T. S. EXHIBIT B PROPOSED SITE PLAN An original copy of Exhibit B is on file with the City's Principal Economic Development Specialist. EXHIBIT C PUBLIC IMPROVEMENTS In addition to any Public Improvements specified in the Agreement and any improvements outlined in submitted and approved plans, the Public Improvements shall also include, but not be limited to, the following: 1. Developer shall provide a minimum twenty four foot (24') pavement improvement along the east side of the Vista Road alignment south of 12th Avenue for a distance of six hundred twenty (620') linear feet per the approved plans. 2. Pavement shall be installed per attached geotechnical analysis prepared by Smith & Annala Engineering Company dated 11/22/2013, and Memorandum No. 2 to the above referenced geotechnical report. 3. Developer shall install two pavement turnouts providing access to the subject site from the Vista Road alignment. Pavement turnouts shall be constructed to the same structural section of the pavement in Vista Road. 4. Developer shall improve the drainage channel along the west side of the Vista Road Federal Patent Easement according to the design on the approved plans. EXHIBIT D CITY OF APACHE JUNCTION INSURANCE REQUIREMENTS A. Property. During the period of any construction involving the Public Improvements, builder's risk insurance on an all-risk, replacement cost basis for the Public Improvements. B. Liability. During the period of any construction involving the Public Improvements, insurance covering the Developer and (as an additional insured) the City against liability imposed by law or assumed in any written contract, and/or arising from personal injury, bodily injury or property damage, with a limit of liability of $5,000,000.00 per occurrence with a $5,000,000.00 products/completed operations limit and a $10,000,000.00 general aggregate limit. Such policy must be primary and written to provide blanket contractual liability, broad form property damage, premises liability and products and completed operations. C. Contractor. During the period of any construction involving the Public Improvements, each of the general or other contractors with which the Developer contracts for any such construction shall be required to carry liability insurance of the type and providing the minimum limits set forth below: i) Worker's Compensation insurance and Employer's Liability with limits of $1,000,000.00 per accident, $1,000,000.00 per disease and $1,000,000.00 policy limit disease. ii) Commercial general liability insurance on a $5,000,000.00 per occurrence basis providing coverage for: Products and Completed Operations Blanket Contractual Liability Personal Injury Liability Broad Form Property Damage X.C.U. iii) Business automobile liability including all owned, non-owned and hired autos with a limit of liability of not less than $1,000,000.00 combined single limit for personal injury, including bodily injury or death, and property damage. D. Architect. In connection with any construction involving the Public Improvements, the Developer's architect shall be required to provide architect's or engineer's professional liability insurance with a limit of $1,000,000.00 per claim. This policy, or other policies, shall cover claims for a period of not less than three (3) years after the completion of construction involving the Parcels and the Public Improvements. E. Engineer. In connection with any construction involving the Public Improvements, the Developer's soils engineer or environmental contractor shall be required to provide engineer's professional liability insurance with a limit of $1,000,000.00 per claim. This policy, or other policies, shall cover claims for a period of not less than three (3) years after the completion of the construction involving the Property and the Public Improvements. 1 F. CPI Adjustments. The minimum coverage limits set forth above shall be adjusted every five (5) years by rounding each limit up to the million dollar amount which is nearest the percentage of change in the Consumer Price Index (the "CPI") determined in accordance with this paragraph. In determining the percentage of change in the CPI for the adjustment of the insurance limits for any year, the CPI for the month October in the preceding year, as shown in the column for "All Items" in the table entitled "All Urban Consumers" under the "United States City Averages" as published by the Bureau of Labor Statistics of the United States Department of Labor, shall be compared with the corresponding index number for the month of October one (1) year earlier. G. Primary Coverage. Developer's insurance coverage shall be primary insurance with respect to the City, its officers, officials, agents, and employees. Any insurance or self-insurance maintained by the City, its officers, officials, agents, and employees shall be in excess of the coverage provided by Developer and shall not contribute to it. H. Indemnities. Coverage provided by the Developer shall not be limited to the liability assumed under the indemnification provisions of the Agreement. I. Waiver of Subrogation. The policies shall contain a waiver of subrogation against the City, its officers, officials, agents, and employees Property. J. Notice of Cancellation: Each insurance policy shall include provisions to the effect that it shall not be suspended, voided, cancelled, reduced in coverage of in limits except after thirty (30) calendar days' prior written notice has been given to the City. Such notice shall be sent directly to City Manager, 300 East Superstition Blvd., Apache Junction, AZ 85119, and shall be sent by certified mail, return receipt requested. K. Acceptability of Insurers: Insurance is to be placed with insurers duly licensed of approved unlicensed companies in the State of Arizona and with an "A.M. Best" rating of not less than A- VII. The City in no way warrants that the above-required minimum insurer rating is sufficient to protect Developer from potential insurer insolvency. L. Verification of Coverage: Developer shall furnish the City with original certificates of insurance (ACCORD form or equivalent approved by the City) as required herein. The certificates for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. Any policy endorsements that restrict of limit coverage shall be clearly noted on the certificate of insurance. All certificates are to be received and approved by the City before the Commencement of Construction. Each insurance policy must be in effect at or prior to the Commencement of Construction and must remain in effect for the duration of the Agreement. Failure to maintain the insurance policies as 2 required by this Agreement or to provide timely evidence of renewal will be considered a material breach of the Agreement. All certificates required by this Agreement shall be sent directly to City of Apache Junction, Attn: City Manager, 300 East Superstition Blvd., Apache Junction, Arizona 85119. The City reserves the right to require complete, certified copies of all insurance policies and endorsements required by this Insurance Exhibit at any time. M. Approval: Any modification or variation from the insurance requirements in Insurance Exhibit must have prior approval from the City Manager's Office whose decision shall be final. Such action will not require formal contract amendment, but may be made by administrative action. N. Miscellaneous. References to Developer herein shall mean Developer and/or its general contractor(s). References herein to the Agreement shall mean the Development Agreement of which this Exhibit is a part. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement. The City in no way warrants that the minimum limits contained herein are sufficient to protect Developer from liabilities that might arise and Developer may purchase such additional insurance as Developer determines necessary. 3 ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard = Agenda Item Cover Sheet Apache Junction,AZ _ 85119 Agenda Item No.8. Piz File ID: 14-476 Sponsor: Bryant Powell Agenda Date: 10/7/2014 Index: In Control: City Council Meeting Presentation, discussion and council direction to staff on the .2% sales tax dedicated to fund roadway maintenance and repairs. Consideration and action. City of Apache Junction,Arizona Page 1 Printed on 611512026 DRAFT 10 - 7 - 14 ORDINANCE NO. AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, RELATING TO THE TRANSACTION PRIVILEGE LICENSE TAX, COMMONLY KNOWN AS THE "SALES TAX"; AMENDING THE TAX CODE OF THE CITY OF APACHE JUNCTION BY INCREASING THE RATE OF TAXATION BY TWO-TENTHS OF ONE PERCENT ( . 2%) FROM THE EXISTING RATE OF TWO AND TWO-TENTHS PERCENT (2 . 2%) TO A TOTAL OF TWO AND FOUR-TENTHS PERCENT (2 . 4%) ; DESIGNATING THE PURPOSE; DESIGNATING AN EFFECTIVE DATE; DESIGNATING A TERMINATION DATE COMMONLY KNOWN AS THE "SUNSET CLAUSE"; PROVIDING FOR EXISTING CONTRACTS; PROVIDING FOR PENALTIES; REPEALING ANY CONFLICTING PROVISIONS; PROVIDING FOR SEVERABILITY; AND PROVIDING FOR NOTICE. WHEREAS, Arizona Revised Statutes § 9-240 (B) (26) conveys upon the Mayor and City Council the power to levy taxes including a transaction privilege license tax, commonly known as the "sales tax"; and WHEREAS, the City of Apache Junction relies heavily on state-shared highway user revenue funds ("HURF") to pay for design, repair, construction, replacement and continuing maintenance for city roads; and WHEREAS, since fiscal year 2006-2007, the state has legislatively reduced HURF dollars to cities and towns; and WHEREAS, the condition of many city roadways are poor and are in need of maintenance, repair, design, construction and in some instances, complete replacement; and WHEREAS, the cost to make the maintenance, repairs, design, construction and replacement are escalating at a rapid rate each year that passes; and WHEREAS, having no city property tax, the City of Apache Junction relies primarily upon sales tax revenues to pay for these costs; and WHEREAS, the Mayor and City Council have determined that an increase of two-tenths of one percent ( . 2%) transaction privilege license tax, commonly known as "sales tax", is ORDINANCE NO. Page 1 of 6 necessary to sustain the quality of the transportation grid system for community residents and visitors and enhance the public health, safety and welfare; and WHEREAS, on October 7, 2014, a majority of the Mayor and City Council directed staff to prepare an ordinance for a .20 increase of the sales tax for council consideration at a public hearing on December 2, 2014, in compliance with State law and the Model City Tax Code; and WHEREAS, at public meetings on September 2, 2014, September 16, 2014, October 7, 2014, and December 2, 2014, the proposed incremental increase was fully discussed; and WHEREAS, prior to notice of the consideration of the proposed incremental increase was placed on the City' s webpage and published in accordance with A.R. S . Titles 9 and 42; and WHEREAS, changes to the transaction privilege tax rate are affected by amending the Tax Code of the City of Apache Junction, and with post-adoption notification to city taxpayers and to the Arizona Department of Revenue . NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AS FOLLOWS : SECTION I IN GENERAL A. The tax rate in each of the following sections of the city tax code is increased from the rate of two and two-tenths percent (2 . 20) to two and four-tenths percent (2 . 40) : Section 8A-405 Advertising Section 8A-410 Amusement, exhibitions, and similar Activities Section 8A-415 Construction contracting: construction contractors Section 8A-416 Construction contracting: speculative builders Section 8A-417 Construction contracting: owner- builders who are not speculative builders Section 8A-420 Feed at wholesale Section 8A-425 Job Printing Section 8A-427 Manufactured buildings Section 8A-430 Timbering and other extractions Section 8A-435 Publishing and periodicals distribution ORDINANCE NO. Page 2 of 6 Section 8A-444 Hotels Section 8A-447 Additional tax upon transient lodging Section 8A-450 Rental, leasing, and licensing for use of tangible personal property Section 8A-455 Restaurants and bars Section 8A-475 Transporting for hire B. The tax rate in the following sections of the city tax code is increased from three and two-tenths percent (3 .2%) to three and four-tenths percent (3 . 4%) : Section 8A-470 Telecommunications services Section 8A-480 Utility services C. Section 8A-460 of the city tax code is amended to read as follows : Section 8A-460 . Retail Sales : measure of tax; burden of proof; exclusions (a) The tax rate shall be at the amount equal to two and four- tenths percent (2 . 4%) of the gross income from the business activity upon every person engaging or continuing in the business of selling personal property at retail . (b) The burden of proving that a sale of tangible personal property is not a taxable retail sale shall be upon the person who made the sale . (c) Exclusions . For the purpose of this Chapter, sales of tangible personal property shall not include : (1) sales of stocks, bonds, options, or other similar materials . (2) sales of lottery tickets or shares pursuant to Article 1, Chapter 5, Title 5, Arizona Revised Statutes . (3) sales of platinum, bullion, or monetized bullion, except minted or manufactured coins transferred or acquired primarily for their numismatic value as prescribed by Regulation. (4) gross income derived from the transfer of tangible personal property which is specifically included as the gross income of a business activity upon which another Section of this Article imposes a tax, shall be considered gross income of that business activity, ORDINANCE NO. Page 3 of 6 and are not includable as gross income subject to the tax imposed by this Section. (5) sales by professional or personal service occupations where such sales are inconsequential elements of the service provided. (d) Notwithstanding the provisions of subsection (a) above, when the gross income from the sale of a single item of tangible personal property exceeds two thousand dollars ($2, 000) , the two and four-tenths (2 . 4%) tax rate shall apply to the first $2, 000 . Above $2, 000, the measure of tax shall be at a rate of one and four-tenths percent (1 . 4%) . (e) When this City and another Arizona city or town with an equivalent excise tax could claim nexus for taxing a retail sale, the city or town where the permanent business location of the seller at which the order was received shall be deemed to have precedence, and for the purpose of this Chapter such city or town has sole and exclusive rights to such tax. (f) The appropriate tax liability for any retail sale where the order is received at a permanent business location of the seller located in this City or in an Arizona city or town that levies an equivalent excise tax shall be at the tax rate of the city or town of such seller' s location. (g) Retail sales of prepaid calling cards or prepaid authorization numbers for telecommunications services, including sales of reauthorization of a prepaid card or authorization number, are subject to tax under this Section. SECTION II DESIGNATING THE PURPOSE For such period of time that the City of Apache Junction, Arizona, levies the tax as described in Section I above, the revenues collected from the incremental increase of two-tenths of one percent ( . 2%) from the existing two and two-tenths percent (2 .2%) rate to the two and four-tenths percent (2 . 4%) rate shall be used for maintenance, repair, design, construction and replacement of public right-of-ways . SECTION III DESIGNATING AN EFFECTIVE DATE ORDINANCE NO. Page 4 of 6 The provisions of this ordinance shall become effective on March 1, 2015 . SECTION IV DESIGNATING A TERMINATION DATE The provisions of this ordinance shall terminate, or commonly understood to "sunset" on March 1, 2025, at which time the increased tax rate as set forth in Section I of this ordinance shall automatically revert back to two and two-tenths percent (2 . 2%) or whatever the effective rate is in place at that time . SECTION V PROVIDING FOR EXISTING CONTRACTS The tax imposed pursuant to this ordinance shall not apply to contracts entered into prior to March 1, 2015 . SECTION VI PROVIDING FOR PENALTIES Any person found guilty of violating any provision of these amendments to the tax code shall be guilty of a class one misdemeanor and shall be prosecuted pursuant to Article 1-8 of the Apache Junction City Code and Section 8A-580 of the Tax Code of the City of Apache Junction. SECTION VII REPEALING ANY CONCLICTING PROVISIONS All ordinances and parts of ordinances in conflict with the provisions of this ordinance or any part of the code adopted herein by reference are hereby repealed. SECTION VIII PROVIDING FOR SEVERABILITY If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions thereof. SECTION IX PROVIDING FOR NOTICE Pursuant to A.R. S . § 42-6053 (E) , staff must provide a fully executed copy of this ordinance to the Arizona Municipal Tax Code Commission and the Department of Revenue within ten days after the passage date of this ordinance. ORDINANCE NO. Page 5 of 6 PASSED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, THIS DAY OF , 2014 . SIGNED AND ATTESTED TO THIS DAY OF , 2014 . JOHN S . INSALACO Mayor ATTEST: KATHLEEN CONNELLY City Clerk APPROVED AS TO FORM: RICHARD JOEL STERN City Attorney ORDINANCE NO. Page 6 of 6 ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard � 0 Agenda Item Cover Sheet Apache Junction,AZ _ 85119 Agenda Item No. 9. '+'Piz File ID: 14-473 Sponsor: Kathy Connelly Agenda Date: 10/7/2014 Index: In Control: City Council Meeting Annual appointments and reappointments for the Board of Adjustment, Library Board of Trustees, Parks and Recreation Commission and Planning and Zoning Commission. Council interviewed the new applicants and reappointees at the work session of October 6, 2014. Council may choose to fill any or none of the vacancies from the pool of applicants. Consideration and action. City of Apache Junction,Arizona Page 1 Printed on 611512026 SEPTEMBER 3, 2014 MEMORANDUM TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS THROUGH: GEORGE R. HOFFMAN, CITY MANAGER THROUGH: KATHLEEN CONNELLY, CITY CLERK FROM: JAN MASON, DEPUTY CITY CLERK SUBJECT: AGENDA ITEM FOR OCTOBER 7, 2014 (BOARD & COMMISSION APPOINTMENTS & REAPPOINTMENTS) The council interviewed new applicants and reappointees for board and commission appointments at the work session of October 6, 2014. Copies of talent bank applications for current board and commission members wishing to be reappointed and new applicants were given to council in an accompanying notebook. Included in the notebook was an updated version of the board and commission list showing current vacancies and term expiration dates. You may choose to fill any or none of these vacancies from the pool of applicants. Please contact me if you have need additional information. ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard = Agenda Item Cover Sheet Apache Junction,AZ _ 85119 Agenda Item No. 10. Piz File ID: 14-430 Sponsor: Bryant Powell Agenda Date: 10/7/2014 Index: In Control: City Council Meeting Executive Session at 5:45 P.M. and Work Session at 7:00 P.M. for Monday, October 20, 2014. City of Apache Junction,Arizona Page 1 Printed on 611512026 ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard = Agenda Item Cover Sheet Apache Junction,AZ _ 85119 Agenda Item No. 11. Piz File ID: 14-431 Sponsor: Bryant Powell Agenda Date: 10/7/2014 Index: In Control: City Council Meeting Executive Session at 5:45 P.M. for Tuesday, October 21, 2014. Other meetings if necessary. City of Apache Junction,Arizona Page 1 Printed on 611512026