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HomeMy WebLinkAbout2007-07-09 City Council Special MinutesCITY COUNCIL SPECIAL MEETING JULY 9, 2007 The special meeting of the City Council of the City of Apache Junction, Arizona, was held on July 9, 2007, at the Apache Junction City Council Chambers pursuant to the notice required by law. CALL TO ORDER Mayor Insalaco called the meeting to order at 5:00 p.m. ROLL CALL Councilmembers Present:Mayor Insalaco Vice Mayor Eck Councilmember Barker Councilmember Dietz Councilmember Serdy Councilmember Severs Councilmember Wilson Staff Present: Others Present: City Manager George Hoffman Assistant City Manager Bryant Powell City Clerk Kathleen Connelly City Attorney Joel Stern Library Director Pam Loui Finance Director Keith Lewis Public Works Director Doug Dobson Development Svcs. Director Brad Steinke Business Advocate Janine Hanna-Solley Economic Dev. Dir. Steve Filipowicz Captain Tom Kelly 150 city employees SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 1 OF 30 DISCUSSION ON FINAL BUDGET FOR FISCAL YEAR 2007-2008 )City Manager George Hoffman briefed the council on the item.He read a letter from city employees that he wished to have incorporated into the minutes.The letter is as follows: "July 9, 2007, Honorable Mayor and Councilmembers, the classification and Compensation Team appreciates your allowing us to provide you with information and a recommendation on compensation and we hope to continue to do so in the future. City employees would like to formally thank you for your generosity in giving us a general increase, the market adjustment and step on classification date. The Classification and Compensation Team worked hard to provide a recommendation that would ensure external competitiveness as well as internal equity.As a team, we discussed compression across the entire organization and felt that it should be addressed for all.Both the team and city employees are disappointed that only three position titles within the organization will have the compression issue addressed. In closing, we would like to again thank you for your consideration and trust in us as city employees. Sincerely," He added that there were additional pages of employee signatures attached, and that it was the same as what had been distributed at the council seats earlier this day.He then stated the city attorney had some position changes that were not previously listed and would address the council on those. City Attorney Joel Stern stated the assistant city attorney is still listed; they had talked about taking that off and creating a legal assistant I and a legal assistant II.He would also like to delete the half-time secretarial position.It would save the city $58,000. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 2 OF 30 Councilmember Barker asked what page he was on. City Attorney Joel Stern stated he is on page 23 of the green sheets. Councilmember Dietz commented he recalled discussing that but they had decided to leave it as is right now until they decided which way they were going to go. They wanted it left in the budget.It does not mean they would have to do .that. City Attorney Joel Stern stated the dollar amount would not have to change.The budget has already been approved at that dollar amount.He is only asking that the titles be changed. Councilmember Dietz commented he understands that. Vice Mayor Eck asked if they could increase the budget once the tentative budget has been approved. City Manager George Hoffman stated they could not for the city.For other districts that is not necessarily the case. Vice Mayor Eck asked when it was approved. City Clerk Kathleen Connelly stated it was approved on June 25, 2007.She believes it is within the fund. City Manager George Hoffman asked if she was specifically speaking about the city attorney's office.Any changes to his office were contemplated in that. Vice Mayor Eck commented he was not; he was speaking because of this room.He would like to SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 3 OF 30 see about making some changes, but that would be an increase in budget.He asked how they would do that. City Manager George Hoffman asked the finance director if they could take money from one allocation or capital fund and use it for operating expenditures or eliminate a contingency budget and put it into the departmental budgets, or allocate for certain contingency expense. Finance Director Keith Lewis stated they could do it in contingency. City Manager George Hoffman asked if they could spend their capital money if they wanted to. Finance Director Keith Lewis stated that is not budgeted in that respect.The money would still be there although it is not being used for capital.They could not transfer that money to increase the budget.It would have to be the contingency fund that is set up in nondepartmental. City Manager George Hoffman asked how much is in the contingency fund. Finance Director Keith Lewis stated there is $800,000 in contingency. City Manager George Hoffman stated they have $400,000 allocated for growth issues. Finance Director Keith Lewis stated that is correct. Vice Mayor Eck commented that would leave $400,000. Finance Director Keith Lewis stated there is $817,000 in contingency.It is on page 25, line item 58.The $17,000 is there for a project for Councilmember Dietz; it has been left there for it to be used at a later date if he decides to do that project.They would have to vote on SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 4 OF 30 transferring the $800,000 to wherever.The $400,000 in growth opportunities could be voted on and put in another area.It would have to come from the council because growth opportunities, although it is listed separately, is part of the contingency fund. Vice Mayor Eck commented he has a primary concern about the organization.He sees this turnout and to him they need to do something to try to fix this problem.We cannot have this many people upset with the system. It is too much of a morale issue for him.He knows there have been increases in a cost of living adjustment and a step.They do not know what the valuation fund is going to be.Obviously, he has never seen anything like this in 10 years.He ran for council for the people; the people in this organization and the citizens.They need to figure out something.He is open to suggestions. Councilmember Serdy asked if there was a morale issue a few weeks ago. Vice Mayor Eck commented he thinks when they did the compression issue with just one portion of the organization, which is very much a necessity, it probably stems from what is going on tonight since it is not across the board.He does not know what to do, but he hears the topped out people get tired of being topped out.There is no increase there.There is no evaluation happening so they still do not get increases from evaluations.He cannot imagine having an organization this unhappy. Councilmember Severs commented he thinks there is a lot of misunderstanding going around that because they are trying to focus on these 3 positions that we are having a very difficult time filling; that we do not care about the other departments, employees or staff. That is absolutely untrue.It has already been stated by our finance people that there is no way in the world that we can take care of the compression issue across the organization.We just do not have the money.There is no physically possible way for us to do it.He stated he had in front of him a paper he requested today.The issue is that it takes so long to hire SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 5 OF 30 of competition, it evolves into supply and demand.When you have that, the cost increases.We know that all of the city employees are valuable.We know that they help us in daily issues and the certainly help prepare the city for the future. We know that the compensation study will bring these employees to the mid -range plus 3% plus the anniversary raise.All that is pretty nice; it comes to seven plus percent.As a teacher she wishes she could get even half of that, but that is beside the point.She knows that some employees are going to be at the same or very close to that of a new employee in the same position and she does not like that.She knows they do not either.However, other costs like health insurance, etc., have been kept as stable as possible.The fact is, the city simply does not have an unlimited amount of money with which to fund raises.Those are the facts they have to work with and it is their job to consider those and then to consider the 30,000 plus people who contribute to the general fund which pays those raises.It is their job to consider it not just for today, and not just for this year, but long term.How will it impact us as a community long term.It will not be an easy decision.They will not please all the people.That will not happen, but that is their job, and that is what they get paid the big bucks for. Bear with them.They have looked at all this and stressed over all this.When the decision comes through, bear with them and understand that they hear you.They appreciate the letter that they took the time to write to them.She thanked them for that. Councilmember Dietz commented he brought it up during the budget meetings how they could take care of the rest of the organization which he really feels they need to do.However, it came back at a seven -figure cost to do the compression for the entire organization which we do not have.Seven figures on top of the 4.3 for the entire organization.He agreed that public safety is very important and it needs to be brought up to speed.He does not know how they could take a couple of hundred thousand dollars and pick a few other areas to take care of compression.He really feels that on the next budget round that this is something very serious that they have to take care of for the rest of the organization.They need'to take care of the people that are here and have been here for years and years. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 7 OF 30 Councilmember Serdy commented he thinks the veteran police officers were patient for several years while we worked on this. Councilmember Dietz commented so was the rest of the organization on top of that. Councilmember Serdy commented he thinks the tax money is going to be down this year the way WalMart is hurting.He would ask the other city employees to be patient until we can get some other shopping centers going and then be a little more like Mesa and Scottsdale and work on it every year and try to bump it up when we can. Vice Mayor Eck commented that is what he heard in 1996 when he was an employee for the city. Councilmember Serdy stated we do not have those shopping centers yet. Vice Mayor Eck commented he feels it is obvious that we are going to create a line between us and them.It is the worst he has ever experienced in his ten years.That is his concern. Councilmember Barker commented she would like to see this not continue to happen. She would prefer that we not continue to look at specific jobs from this point onward, that we look at the entire organization. If we make this adjustment today, she would like to see them not continue to just adjust for single positions from this point on. Councilmember Severs commented they need to be fair to everybody.It is not just the police department that I feel is more important or anything like that.That is not it at all.Going back to the list, the police network administrator had only 4 applicants.They have 57 applicants on file for a police records clerk.Those are positions that we have applications for and they are easy to fill.They are talking about the people that are out on the street protecting each and every one of us, whether it be while SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 8 OF 30 we are at work, shopping or at home.These are almost emergency situations. PUBLIC HEARING:PROPOSED FINAL BUDGET FOR FISCAL YEAR 2007-2008 ) )Mayor Insalaco opened the public hearing on the item. Mr. Steve Kridler, police department, addressed the council.He stated currently the police department is the lowest paid in the valley.That is part of the reason we are not able to attract and retain new officers, specifically laterals.They are not going to come here because the money just is not there.When you have departments such as Scottsdale who are going to be starting officers out making $51,000 a year as opposed to our officers starting in the $40,000 range, it is hard to compete with that. That is part of the problem.Right now, in patrol division, we are close to 50% under what we should be.That is not the whole organization, just patrol.They have a lot of people working overtime and people are starting to get tired now because they have been working so much overtime to compensate for their being undermanned.He does not recall the exact population of the city now but he based his figures at 35,000.They have 3 to 4 officers per shift.That ratio of citizens to officers is about 8,700 citizens to one officer.That is a bad ratio.Most cities throughout the country are at 5,000 or less.Most of them target at about 2,000 citizens per officer.We are way out of curve.As has already been discussed, as far as the time to get an officer it takes to get an officer recruited, academy trained, field trained and off probation, it takes approximately a year to 18 months.That is another one of their issues with getting people there.They have people leave.They have not had the push in the past to get people to replace those positions that are vacated.Hopefully the dollar amount will bring people in and make us competitive with the other organizations throughout the valley. Ms. Jackie Trevino, human resources, addressed the council.She commented that sworn positions below the rank of corporal total 37, with 4 being in the academy and 6 are vacant.There are 10 positions that are SPECIAL MEETING QF THE CITY COUNCIL JULY 9, 2007 PAGE 9 OF 30 not filled and not on the street.There are 27 people there, which means we have 27% vacancies if you include the 4 people in the academy who are not vacancies. Mr. Matt McNulty, 3264 S. Conestoga, Apache Junction, addressed the council.He works in the public information office.He stated when he first heard about this as a rumor he thought about how to argue it.It is hard to argue when he knows a lot of the people in the police department and they are outstanding individuals.They have had a tough couple of years, and having been a citizen of this community for 22 years, he knows it has been tough.It has been tough for him.He hopes the council has not set a dangerous precedent in dealing with this issue with the contingency fund. He hopes they have not set a dangerous precedent dealing with an individual section of a department.He requested they try not to fractionalize a department, not to mention what may or may not happen with the rest of us.He appreciated what the employees are getting.He knows that the next couple of years will be tough before the land down south opens up.Mesa has big plans and it has a lot to do with this and the other issues of encroachment on our area.He asked that they continue to be outstanding individuals and vote what you think is best for the city. Mayor Insalaco commented that Councilmember Barker already mentioned that this will be the first and last time this will probably be done.He cannot speak for councils in the future, but he believes most of them feel that way.We had to bite the bullet and do something when you have residents out there complaining that it takes 2.5 hours to get someone there to take care of a problem.They cannot allow that to happen. Ms. Kathy Maya, community member, addressed the council.She stated she does not think that everybody in the audience is here because of the increase. She thinks a lot of them there are here to show support for a lot of the decisions that have been made, the things that have been put into the tentative budget that was approved a few weeks ago.There is a lot of focus on why they should do this to these 3 positions, but in her eyes, she sees it as something SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 10 OF 30 that will benefit the entire community because the growth that is planned for Apache Junction is massive.They will need another force to provide a community that they can all live in. She wants to live in a community that is safe and that she can have pride in.She does not want graffiti and crime, and wants to be able to drive to her job safely.They need the manpower to do that. Ms. Elaine Jones, 5504 S. Jacaranda, Gold Canyon, addressed the council.She commented that Councilmember Severs mentioned several positions in the police department that are difficult to fill.Public Works has the same problem.They have been trying to fill the position of traffic signal technician for several years.We do not pay enough so they cannot find one.They want more officers out on the streets.She asked if they realize who is responsible for building those streets.The public works people are out on the streets daily.They are in traffic; they are also in danger. She wanted to let them know that she does not think it is fair. Ms. Denise Moulson, city clerk's office, addressed the council.She stated she keeps hearing the word Scottsdale.We do not live in Scottsdale and Scottsdale has a different income bracket.The cost of living is much higher in that city.We live in Apache Junction.She does not drive a brand new car nor have a big, fancy house. What she has is hers and she is very proud of it.She is proud of working for the city and believes in the city council.She believes in the people she works with and that everyone will stand behind everyone and make this all work.She would like to have a new car; it will come in time, just like the city's growth, the employees, the police department and the raises. Ms. Theryn Hansen, 10143 E. Wood Avenue, Mesa, addressed the council.She stated she has been an employee of almost 23 years.She thanked the members of the council for running to help this city become what it needs to become.But, as an employee who has been topped out for many years, she has watched her take home pay personally go down and down and down.She brings home less money every year.She thinks that the growth will be important for our future. Officers are important, but all the city employees are SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 11 OF 30 important.We will be designing, inspecting, building and supervising the building of the development to the south of us. It is not just one department that will be affected.She thinks they need to look with equity at the whole staff structure, and not just concentrate on certain areas.She believes it needs to be broader based; that the whole picture needs to be looked at. Ms. Taleen Carpenter, 2146 E. 29th Avenue, Apache Junction, addressed the council.She has worked for the city for 8 years and loves working here.It is not Scottsdale and she does not want to live in Scottsdale.If she wanted to live in Scottsdale she would.She likes Apache Junction for its charm and quietness.She likes her neighbors and friends.When thinking about the growth of the city, the entire unit which is the city has to be kept in mind.She understands the need of the police department and the stresses of their job.That is a personal choice when they choose to enter that profession, just like she is a tax person.She chose tax; that is her choice of profession.There are not a lot of places for her to go in the state; because of what she does she is underpaid.She appreciates what the council is doing for the city and she does not want it to be underappreciated.But when we talk about the city, the team, Project SOAR, teamwork, choosing and wanting to be there, when we are not treated the same, we do not feel the same. Corporal Thom Parker, police department, addressed the council.He is a third generation native of this area.He thanked them for their support of all the members of the police department.He also lives in the city.He has watched Mesa, Gilbert and Chandler grow.He has learned from their mistakes.One of the biggest mistakes the Town of Gilbert had was growing too fast.They had to do a growth freeze because public safety could not keep up with everything.When the growth spurt comes, it will be the police department's responsibility to make sure the properties are safe.Copper is in high demand among tweakers and burglars and they get more reports of those thefts every night because they do not have enough officers to protect those businesses and community members.He appreciates their support but asked that they learn from Gilbert.On Thursday News 15 did a news article SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 12 OF 30 on the shortage of officers nationwide.He hoped some of them watched that. Vice Mayor Eck stated it was Friday. Corporal Thom Parker stated it was a great article.They held to an extremely high standard; the chief will not take someone who barely makes standard.He makes sure they get the candidates they need to safeguard the community.He has worked in the schools, on the streets and has done volunteer work.He annually goes to Washington, D.C. to honor the families of fallen police officers.He asked that they to D.C. during that week and listen to the family survivors of fallen officers.They have the nationwide shortage because no one wants to do this job. America is more violent than it used to be.He asked that they take all that into consideration so that they can fill these positions. Mayor Insalaco closed the public hearing with no one else wishing to speak.He reopened the item to council discussion. Vice Mayor Eck commented he really thinks they have to come up with some solution.Their words mean nothing; it is their actions that do.They have to make some effort to take care of the organization as a whole. The police department thing will happen.He asked what is going to happen for the rest of the organization.. 'Councilmember Barker asked him to give them some suggestions. Vice 'Mayor Eck suggested they not take a vote tonight, leave it open and do some research. Councilmember Barker stated she did not believe they could do that.It is state law. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 13 OF 30 Vice Mayor Eck suggested they take the money out of the thing or give them extra holidays or days off if they are topped out.They have to make some effort. Mayor Insalaco asked if taking $200,000 of the $800,000 would do anything sufficient. City Manager George Hoffman asked if he meant employees would employees be appreciative of that amount being spread out over them, he thinks they would, as contrasted with getting zero. Mayor Insalaco asked if it would be enough for them to get where they are not losing money year after year with the raises, insurance and everything else. He asked if that would do anything. City Manager George Hoffman stated there are many niche problems in the organization.If he is concerned about topped out employees, he needs to understand that their action towards officers, corporals and sergeants will, in the near future, exacerbate that problem.He is confident that all the blue shirts out there will say it is not a problem, go ahead and pass it.It is only when you get topped out that you get concerned about being topped out.Public sector organizations tend to have pay ranges which people move through by seniority.At some point they are topped out.It is unlikely a janitor will ever make $100,000 a year.A city manager is unlikely to make $1,000,000 a year.There are simply maximums for every position and people bump up against them. Health insurance costs have gone up around the nation and we have not escaped that.We are blessed with having a retirement program, but the comments that those percentages in contributions for the employees and the organization have gone up are true. Councilmember Severs commented that they are saying the $300,000 is needed to fix the compression issue for these 3 positions.He asked if they could do another department with the $800,000. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 14 OF 30 Assistant City Manager Bryant Powell stated for clarification, they did an analysis on all the rest of the city departments regarding compression.It would be $774,332 to implement acrosS:the:entire organization.It is still a significant chunk of net new dollars to try to deal with the compression issue across the organization.In the 6 years of doing the budget, it is typically what they do each year. This year-we have done $1..2 million plus the $300,000.That is a significant increase to the base when you are talking about a $20 million base in the General Fund.It would be difficult to manage. Councilmember Barker commented she would hate to drain the contingency fund.It is the thing that stands between them and not being able to pay anybody if something happens. City .Manager .George Hoffman stated he is moved that the council woilld'be desirous of doing something across the organization.He reiterated that he is very cautious about the future Bryant just tried to reference it.Salary is the 'gift that keeps on .giving.This year they added to the base and if they try to keep the step for most employees that means :another 4.33 percent next year.He thinks, as Matt McNulty referenced, that window between nowand when the new state land getsgoing will have the city facing the competition that Councilmember Serdy referenced,He believes they will bein for a tough couple of years.This is.a:good year and councilhas been generous with the employees.He certainly would not tell you that they could make meaningful strides on the compression issue next year.They, will'have ,to wait and seeAaow the money comes in. Vice Mayor Eck asked how many employeeswould:only be receiving a cost of living adjustment. They would be topped out employees; otherwise they are compression issues. City Manager George Hoffman stated the topped out employee is someone who is beyond the maximum of their pay range, of which he believes they have two positions. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 15 OF 30 Councilmember Severs asked which departments they would pick for the betterment of the citizens of this community if they did drain the contingency fund and they were able to fix maybe 2 or 3 departments.He added it is not about what.we want, what they want as a council or as employees, it is about what is best for the citizens of our community. Mayor Insalaco stated they have been struggling with this for months. City Manager George Hoffman stated it has been a multi -year struggle.One of our 25 -year plus department directors stated they would be moving to step A of their pay range. Vice Mayor Eck commented that is the way it works if their pay range is going up, as long as they are getting an increase in dollars. City Manager George Hoffman stated for many years they treated the department directors separately and did do as well by them as they did with the rest of the organization -.That is how you can have 27 and 25 year employees at the start of their pay range.We are in an aggressive metropolitan market.The council has put us in against some very aggressive pay competitors, such as Chandler and Gilbert.They are running with some of the highest -powered economies in the state ,with this labor market.It gives him great anxiety trying to keep up with it. Councilmember Severs commented it gives him great pleasure in not being up there. City Manager George Hoffman stated the vice mayor looked at him like go ahead and reach for your hat and pull the rabbit out of your hat.He does not have a rabbit in his hat. Councilmember Barker commented there is no rabbit this year. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 16 OF 30 Vice Mayor Eck commented they used to do something for the topped out employees.They are the ones that are not getting something.The others are going to get something and they might have the compression issue that we cannot address this year, but they could do something for the topped out ones. City Manager George Hoffman stated they could.At some point they need to have a discussion about where they want to be in the market, which market they want to have, and what it means to be topped out.If they do not mean topped out, if it means topped out plus $1,000, then they get the $1,000, but not $1,001.They need to have a discussion on what it means to be topped out.It means drawing a line.They need to have an awareness that someone will always bump up against that line and not be able to go past it, whether it is topped out or topped out plus $1,000.He is not arguing against it; they just need to have a very basic discussion. Councilmember Dietz asked if the 4.3 move. City Manager George Hoffman stated if you have a pay range that is 9 steps, they can move each year through that pay range from the start to the end. Councilmember Dietz commented the 4.3 does not really move the top.It is the cost of living adjustment. City Manager George Hoffman stated the cost of living adjustment will move that whole range and the step moves you within the range.What the vice mayor is talking about is when they are bumped up against the top, they have nowhere to go.The market does not move every position. The market is moving a lot for officers right now; it is not moving so much for others.They could wait for a 2 -year market adjustment and not have anything happen. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 17 OF 30 Councilmember Dietz commented the employees that are topped out will at least get a 3% increase. Assistant City Manager Bryant Powell stated that is correct. Councilmember Serdy commented he wanted them to remember that during the whole election he did not want to run.He got talked into it.When he did run, he ran on being a pro -business and pro -development candidate.Why it ties in, and until they get it in there, is he hopes that in 5 years they will never have this problem.It would be wonderful.He thinks they will see this council voting to allow a lot more growth.If anyone questions their votes and why they are allowing this, it is because we need this income.He wants to help everyone by getting the growth and tax money in there so that they can easily address it like Mesa and the towns that are booming.There is no reason why we cannot be booming like them. Hopefully it steamrolls and in 5-7 years we will never have this problem.Gilbert and Chandler will be saying Apache Junction is booming and look at what they are doing out there and developing.He thinks that is the solution.If it is run like a household business, you would go and get a second job.He is not saying these people should get a second job.We are the breadwinners here and we need to generate money so that we can give it to our family which is out here in the audience.It is up to the council to bring the money in so that they have more money to work with. Councilmember Barker asked the city attorney which positions he wanted changed. City Attorney Joel Stern stated they should delete the secretary which is a .5 position and the assistant city attorney position.They need to add one legal assistant I and one legal assistant II. Councilmember Barker listed the positions that should then be in the city attorney's office. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 18 OF 30 City Attorney Joel Stern stated he thought she missed one legal assistant that is currently there.He will be adding two positions; a legal assistant I and a legal assistant II. Councilmember Barker stated that is to the one that is already there. City Attorney Joel Stern stated that is correct. Vice Mayor Eck commented they do not have the answer this year to please the entire organization.But they can add a one year bonus to our topped out employees. City Manager George Hoffman stated they could. Vice Mayor Eck stated he would like to do that for this year and hopefully by next year they will have a solution, and they can come up with either you are topped out or you are not.They created the step program, which they worked very hard to get after years of not seeing the type of raises they are giving now.They did that for a while to try to get the pay up, and obviously, that is not working. He would propose at least that.He knows there may be compression issues, but if anyone is not going to get something in this budget, it will be the topped out employee.They cannot do what he would choose to do, which is the entire organization. Councilmember Dietz stated they would all choose to do that.They have talked about it extensively. Vice Mayor Eck commented all they needed to do was look forward.They did not and they did not see this.At least he did not. Councilmember Dietz commented they looked at a seven digit figure to do it.That is what killed it. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 19 OF 30 Councilmember Barker asked if the topped out positions are the only positions that will not receive anything. Vice Mayor Eck commented they will receive the cost of living adjustment.They will not get anything else.We can give them the $1,000 bonus; we used to do that.The people that are getting the 7.3, if they make $40,000 a year, they are getting almost $3,000.Usually you are topped out because you are a veteran employee.They could be topped out in 9 years and be a 25 year employee. Councilmember Barker asked if they are the only ones. Vice Mayor Eck stated that is the only solution he has now.If they are going to have a true employee advisory team, then we are going to have to follow the recommendations of that team.He asked why they have a team if, they are not going to follow their recommendations. Councilmember Barker asked if he was suggesting that the advisory team next year be the only advisory team that we use to recommend salary. Vice Mayor Eck commented if they take into consideration the survey.He asked if we do annual surveys. City Manager George Hoffman stated they do them every two years. Vice Mayor Eck commented if they take the survey into consideration for that.He thinks that in order for it to be fair, they have representation across the whole organization. Councilmember Barker stated that it can be just the single group, rather than two.They had two this year that made recommendations to us. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 20 OF 30 Vice Mayor Eck commented that is correct.As there is very little they can add to the budget since they have already approved the tentative, he proposed they give a $1,000 bonus to the topped out employees. City Manager George Hoffman asked if that would be in addition to the 3%. Vice Mayor Eck stated it would.It would be for this year only and then they could strive for some solution for the future. Councilmember Dietz asked how many employees are topped out. There was general discussion as to how many employees are topped out. Assistant City Manager Bryant Powell stated there are two employees that are topped out and exceeding their top step.We do not know how many are topped out with the new range. City Manager George Hoffman asked what the problem is that they are seeking to solve. Vice Mayor Eck commented equality; fairness.That is the real issue. City Manager George Hoffman asked if giving an employee who is topped out a double pay increase makes things equitable. Vice Mayor Eck stated it does not.If they could go back to the tentative budget, they might be able to work on the real issues.It is the only thing left. He asked what else they could give.He suggested more vacation days. City Manager George Hoffman stated there is a whole range of things they can do.They cannot increase their overall aggregate budget or their overall SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 21 OF 30 contingency budget tonight.If they do not take any other action tonight they have not given up any alternatives that they cannot address the next meeting or the meeting after when they have the data in front of them and the opportunity to reflect upon they what they want to achieve. Councilmember Dietz commented they could do out of the contingency what they plan on doing. City Clerk Kathleen Connelly stated they can do it out of contingency after tonight. Councilmember Barker stated they can move funds around within the budget, they just cannot increase the numerical bottom line. City Manager George Hoffman stated they could develop a strategy. Finance Director Keith Lewis stated the tentative budget has been published by department. That department cannot be increased, such as Finance, City Clerk, City Manager and so on.All those that are individual departments, not like the police department divisions.The police department as a whole cannot be increased.They cannot be moved around other than with contingency funds voted on by the council. Councilmember Barker asked if that would be after the budget process. Finance Director Keith Lewis stated that is correct; after the tentative budget is approved they can no longer add to a department.They can decrease it, but not increase it. City Manager George Hoffman stated they can make a budgetary decision to allocate money for certain purposes, which could be to an employee out of the contingency fund; this is proposed with the $100,000 for the 6 month market study. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 22 OF 30 Councilmember Dietz stated they could add some floating holidays or whatever out of the contingency. Assistant City Manager Bryant Powell commented or a bonus. Councilmember Barker commented though they cannot add money to specific departments, they can subtract money from the contingency fund to be used for specific employees. Finance Director Keith Lewis stated that is correct. Councilmember Barker stated that would not add to their department. Finance Director Keith Lewis stated it would not if the transfer is legally done by the council in open meetings. Assistant City Manager Bryant Powell asked how much it costs to have a one percent general increase. Finance Director Keith Lewis stated it is $125,000, but with the new pay increase he would have to check that. Councilmember Severs asked how many employees they have topped out in the organization. Assistant City Manager Bryant Powell stated they do not know exactly how many. Councilmember Severs asked if they had a rough guess. Councilmember Dietz commented they can go through that and bring it back.It is something SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 23 OF 30 they can bring back at the next meeting when we have the data in front of us. Vice Mayor Eck asked if they needed to include that in tonight's motion. Councilmember Barker stated they do not. Vice Mayor Eck commented they still have time to discuss that issue. City Manager George Hoffman commented they might want an overview of all the pay personnel issues that exist.If having a 27 year employee moving to the start of a pay range is not as important as giving a double pay increase to someone who is topped out, that would be their choice.However, they would be aware of all the different issues and they could make that choice. Vice Mayor Eck asked how much money did that person who went to the A range get compared to the person getting the $1,000 bonus. City Manager George Hoffman stated he did not know. Vice Mayor Eck commented he would say it is probably five to one, if not more. City Manager George Hoffman stated there was a time when we did flat amount increases under that philosophy because a loaf of bread costs the same for any entry level as it does for a director.That is part of the reason we still •]haire 27 year department directors moving to the start of the pay range.You do not keep up with the labor market when you do that kind of thing.That was a decade ago and we still have not recovered from that. Councilmember Serdy commented this is he and Councilmember Wilson's first budget.He asked for an explanation of contingency money; if it is emergency SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 24 OF 30 money, the money that is left over for some instances where we may need that.He asked if they would have to tap into that if there were a disaster, if they have ever had to before, and if they have ever come up short. City Manager George Hoffman stated not that he could recall. Assistant City Manager Bryant Powell stated it is also there in case they do not have revenue that comes in that has been anticipated.If things are worse than what we think, it can be used. Vice Mayor Eck commented it is like a savings account. Councilmember Dietz stated it is a fall back amount, a reserve. Assistant City Manager Bryant Powell stated most local governments have one or two months contingency funds just in case there is -a loss of revenue. Councilmember Serdy asked how much their contingency fund is. Assistant City Manager Bryant Powell stated it is $800,000 of a $20 million budget.It is less than one month. Councilmember Serdy asked if it has been going up or down over the years. Assistant City Manager Bryant Powell stated there were a few years when he started where they were doing a percentage increase but they have kept it stable for awhile. City Attorney Joel Stern asked where the money comes from on the $50,000 deductibles on tort cases. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 25 OF 30 Finance Director Keith Lewis stated it is out of nondepartmental as part of insurance. City Attorney Joel Stern asked how much is in the budget; how many cases can the city absorb. Finance Director Keith Lewis stated they could do 2 cases. City Attorney Joel Stern stated it would then come out of contingency after that. Finance Director Keith Lewis stated that is correct. City Attorney Joel Stern stated the point is that if there is some tort liability, if it is done within the next fiscal year, and $50,000 is the deductible for each case, there is :a possibility they could run into that money.It has not happened in the 10 years that he has been here;.he does not know about before then.He doubted it _because before him it was only a $10,000 deductible. Councilmember Severs commented he is concerned about dipping too tar into the contingency.They.haveihad 15 businesses leave town, close down or go somewhere else in the last 60 days.If that land down south does not start developing in the next 2 or 3 years, and we continue to lose businesses like we are now,he wondered what would happen.He believes the tax revenue will go down and questioned whether they would have enough or if it would be made up by bringing new businesses in. Vice Mayor Eck asked if he was concerned about the $1,000 bonus. Councilmember Severs stated he was not.He is concerned about dipping into the contingency too much if they do not .even have a month's worth of revenue there.It is kind of scary. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 26 OF 30 Vice Mayor Eck commented the contingency is too low.It should be about 2.5% of the annual fund each year.We have never been anywhere near that. Finance Director Keith Lewis agreed. Vice Mayor Eck commented if they could do something more on this budget he certainly would. He apologized .to those in the audience. Mayor Insalaco stated they all apologize.He then closed the discussion and moved on to the next item. CONSIDERATION OF PROPOSED RESOLUTION NO. 07-29, ADOPTION OF FINAL BUDGET FOR FISCAL YEAR 2007- 2008 )Mayor Insalaco called for a Motion. Councilmember Barker MOVED THAT RESOLUTION NO. 07-29, A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, FULLY ADOPTING ESTIMATES OF EXPENDITURES BY THE CITY OF APACHE JUNCTION FOR THE FISCAL YEAR BEGINNING JULY 1, 2007, AND ENDING JUNE 30, 2008; AMENDING THE CITY ATTORNEY'S BUDGET TO DELETE POSITIONS ASSISTANT CITY ATTORNEY AND SECRETARY AND TO ADD LEGAL ASSISTANT I AND II; DECLARING ESTABLISHMENT OF THE BUDGET FOR THE CITY OF APACHE JUNCTION FOR FISCAL YEAR 2007-2008; AND DECLARING AN EMERGENCY, BE APPROVED, WITH THE CHANGES TO THE CLASSIFICATION/COMPENSATION PLAN AS INDICATED IN THE AMENDMENTS ATTACHED TO RESOLUTION NO. 07-30. Vice Mayor Eck SECONDED THE MOTION. Councilmember Dietz commented he did not like her amendment.He thought they agreed to leave it the same and change it later, but he guesses she saw fit to put it in the motion. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 27 OF 30 Councilmember Severs asked if he could have a clarification. City Clerk Kathleen Connelly stated there is a motion and second on the floor and they have already started the vote. VOTE:Unanimous. The motion carried. RESOLUTION NO. 07-30, DECLARING AS A PUBLIC RECORD AND ADOPTING THOSE CERTAIN DOCUMENTS ENTITLED "CLASSIFICATION PLAN FOR FISCAL YEAR 2007-2008" AND "COMPENSATION PLAN FOR FISCAL YEAR 2007-2008 )City Clerk Kathleen Connelly stated this is part B of the budget, adopting the classification and compensation plans. Mayor Insalaco called for a motion. Councilmember Dietz MOVED THAT RESOLUTION NO. 07-30, A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, DECLARING AS A PUBLIC RECORD AND ADOPTING CERTAIN DOCUMENTS FILED WITH THE CITY CLERK ENTITLED "THE CLASSIFICATION PLAN FOR FISCAL YEAR 2007- 2008" AND "THE COMPENSATION PLAN FOR FISCAL YEAR 2007-2008"; AND DECLARING AN EMERGENCY, BE APPROVED WITH THE FOLLOWING CHANGES: RECREATION LEADER III POSITION SHOULD BE LISTED AS SALARY GROUP 24 AND LIBRARY COMPUTER TECHNICAL ASSISTANT SHOULD BE LISTED AS LIBRARY COMPUTER TECHNICIAN ASSISTANT. Councilmember Barker SECONDED THE MOTION. VOTE:Unanimous. The motion carried. SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 28 OF 30 TEMPORARY CITY HOLIDAY ON MONDAY, DECEMBER 24, 2007 )Mayor Insalaco stated this is because Christmas falls on a Tuesday and it would just be an extended leave for everybody.He called fora motion. Councilmember Severs MOVED THAT THE TEMPORARY HOLIDAY ON MONDAY, DECEMBER 24, 2007, BE APPROVED. Councilmember Dietz SECONDED THE MOTION. VOTE:Unanimous. The motion carried. AGREEMENT WITH THE GREATER PHOENIX ECONOMIC COUNCIL FOR FISCAL YEAR 2007-2008 )Mayor Insalaco called for any discussion on the item.There being no discussion, he called for a motion. Councilmember Severs MOVED THAT APPROVAL BE GIVEN FOR THE AGREEMENT BETWEEN THE GREATER PHOENIX ECONOMIC COUNCIL AND THE CITY OF APACHE JUNCTION FOR FISCAL YEAR 2007-2008 FOR A REGIONAL ECONOMIC DEVELOPMENT PROGRAM IN THE AMOUNT OF $20,474.00; AND THAT AUTHORIZATION BE GIVEN FOR THE MAYOR TO SIGN THE AGREEMENT PENDING FINAL APPROVAL AS TO FORM AND CONTENT BY THE CITY ATTORNEY. THE MOTION. VOTE:Unanimous. The motion carried. ADJOURNMENT SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 29 OF 30 Councilmember Barker SECONDED )Mayor Insalaco adjourned the meeting at 6:15 p.m. ACCEPTED THIS 7TH DAY OF AUGUST, 2007, BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA. SIGNED AND ATTESTED TO THIS 7TH DAY OF AUGUST, 2007. ATTEST: KATHLEEN CONNELLY City Clerk J?Ir S. InALACO Mk ryor CITY COUNCIL MINUTES CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the special meeting of the City Council of the City of Apache Junction, Arizona, held on the 9th day of July, 2007.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 17th day of July, 2007. KATHLEEN CONNELLY City Clerk SPECIAL MEETING OF THE CITY COUNCIL JULY 9, 2007 PAGE 30 OF 30