HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 11/18/2003 * PLEASE NOTE: Since the Glendale City Council does not take formal action at
the Workshops, Workshop minutes are not approved by the City Council.
MINUTES
CITY OF GLENDALE
CITY COUNCIL WORKSHOP
November 18, 2003
1:30 p.m.
PRESENT: Mayor Elaine M. Scruggs, Vice Mayor Thomas R. Eggleston, and
Councilmembers Joyce V. Clark, Steven E. Frate, David M. Goulet,
H. Phillip Lieberman, and Manuel D. Martinez
ALSO PRESENT: Ed Beasley, City Manager; Pam Kavanaugh, Assistant City
Manager; Rick Flaaen, City Attorney; and Pamela Hanna, City
Clerk
Mayor Scruggs announced that today's workshop would have to conclude by
4:10 p.m. The City Council has to begin Executive Session by 4:30 p.m. Any agenda
item not completed would be rescheduled.
1. FY03-04 FIRST QUARTER REPORT: GENERAL FUND RECAP
CITY STAFF PRESENTING THIS ITEM: Ms. Sherry Schurhammer, Budget Director
OTHER PRESENTERS: Mr. Marshall Vest, Director of Economic and Business
Research, University of Arizona
Purpose
This is a request for the City Council to review the Fiscal Year (FY) 2003-04 first quarter
report on General Fund expenditures and revenues.
Council Policies Or Goals Addressed
The FY03-04 first quarter report on the General Fund is consistent with the Council's
goal of ensuring the city's financial stability through timely reviews of actual
expenditures and revenues.
Background
In response to requests from Council, staff committed to providing quarterly reports on
the General Fund. City Council was informed at the July 15, 2003 workshop that the
FY03-04 first quarter report would be brought forward in mid-November 2003, with
subsequent quarterly reports for scheduled mid-February 2004 and mid-May 2004.
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As part of this report, Marshall Vest will present information about the Arizona economy,
as well as the state of Arizona's budget challenges and the implications they have for
municipal budgeting. Mr. Vest is the director of Economic and Business Research at
the University of Arizona. He also is the revenue consultant for the Joint Legislative
Budget Committee.
The FY03-04 first quarter budget and actuals for the General Fund operating and
capital expenditures are as follows:
1St Qtr Budget 1st Qtr Actuals
(in 000s) (in 000s)
GF Operating Expenses $26,749 $25,328
GF Capital Expenses $ 624 $ 45
Total GF Expenses $27,373 $25,373
As the preceding list shows, the FY03-04 first quarter actual general fund expenditures
were $2 million less than budget. These savings were the result of measures begun
last fiscal year such as delayed hiring for vacant positions, deferred payments for
equipment replacement funds, reduced service levels in several areas, and reduced
spending on capital projects. In addition, spending at the beginning of a new fiscal year
tends to occur more slowly, and picks up as the year progresses.
The FY03-04 first quarter budget and actuals for general fund revenues are as follows:
1st Qtr Budget 1st Qtr Actuals
(in 000s) (in 000s)
One-time GF Revenue $ 750 $ 1,000
Ongoing GF Revenue $ 32,750 $33,800
Total GF Revenue $ 33,500 $34,800
As the preceding list shows, one-time general fund revenue for the first quarter of FY03-
04 equals $1 million. This revenue source is the result of parcel sales at the Northern
Crossing development.
The primary sources of on-going revenue for the city's general fund are city sales taxes
and state-shared revenue. State-shared revenue is comprised of state income taxes,
state sales taxes, and vehicle in-lieu taxes. These on-going sources of revenue make
up 67% of all general fund budgeted revenue for the first quarter ($22.3 million out of
$33.5 million) and 69% of all general fund revenue actuals for the first quarter ($24
million out of $34.8 million)
For FY02-03, city sales taxes and state-shared revenues made up 67% of all general
fund budgeted revenue ($92.1 million out of $136.6 million), and 63% of all general
fund revenue actuals ($92.7 million out of $147.5 million).
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The FY03-04 first quarter budget and actuals for city sales tax receipts are as follows:
1st Qtr Budget 1st Qtr Actuals
(in 000s) (in 000s)
City sales tax revenue $ 11,050 $ 12,600
The city sales tax receipts include the additional revenue generated as a result of the
telecommunications rate adjustment that became effective March 1, 2003. An
additional $834,000 in revenue was generated in the first quarter of FY03-04 as a result
of this rate adjustment, exceeding the expected first quarter revenue of $750,000.
The city sales tax receipts also include the additional revenue generated as a result of
the elimination of the rental housing exemption that became effective September 1,
2003. An additional $32,000 was generated in September, for the first quarter of FY03-
04, as a result of this change.
New retail development also boosted city sales tax receipts by $792,000 for the first
quarter of FY03-04, exceeding the expected first quarter revenue of $663,000.
The FY02-03 budget and actuals for state-shared revenue are as follows:
1st Qtr Budget 1st Qtr Actuals
(in OOOs) (in 000s)
State income tax revenue $ 4,900 $ 4,900
State sales tax revenue $ 4,300 $ 4,300
Vehicle in-lieu revenue $ 2,000 $ 2,200
Total state-shared revenue $ 11,200 $ 11,400
Some issues to keep in mind for the upcoming budget development process for FY04-
05 are listed below.
• Restoration of replacement fund contributions,
• Restoration of base reductions,
• Continuation of the building of GF fund balance,
• Stability of state-shared revenues,
• Salaries and benefits,
• Additional operations and maintenance expenses as a result of new capital
improvement program projects,
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• Additional debt service costs covered through the General Fund operating
budget,
• Restoration of street maintenance funding,
• Restoration of pay as you go capital funding,
• Continuation of COPs grant funding,
• And increases in electric rates resulting in higher electricity bills for city
facilities and operations.
Previous Council/Staff Actions
The FY02-03 year-end report was presented to City Council on September 16, 2003.
Community Benefit
The community benefits from periodic reports to City Council on the General Fund's
revenues and expenditures because it is a means to evaluate the city's financial
stability.
Direction/Policy Guidance
This is a status report only. No Council action is required.
Ms. Schurhammer reviewed General Fund revenue for the first quarter, noting City
Sales Tax actuals came in $1 .5 million greater than expected.
She said state income tax and state sales tax revenue came in as expected and state
motor vehicle in-lieu tax continues to exceed expectations. While state-shared revenue
actuals are meeting budget this FY, it should be remembered that total state income tax
revenue this FY will be $3.6M less than FY02-03's actuals. In FY02-03, the city
received state income tax revenue totaling $23.3 million; in the current fiscal year, the
city expects to receive $19.7 million from state income tax revenue. The decline in
revenue from this source is attributable to the fact that the state income tax revenue the
city receives this year reflects the weak economy of 2001. She explained the state
distribution formula also declined from 15% in FY01-02 to 14.8% in FY02-03 and FY03-
04. She noted, however, that the state plans to return the distribution formula to 15%
in 2004/05.
She said property tax revenue looks as though it is below budget because the revenue
is not collected evenly over the fiscal year. Historically, the largest share of property tax
revenue comes in during the second and fourth quarters.
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With regard to Court fees, Ms. Schurhammer explained the revenue budget included
$220,000 in additional revenue expected through enhanced collection efforts. Like
property tax revenue, court fees are not collected evenly over the course of a year. In
addition, the push to enhance collection efforts in June probably contributed to slightly
lower collections in July and August.
She stated the All Other category actually exceeded the budget by $500,000.
Ms. Schurhammer summarized the revenue discussion by saying that 69% of General
Fund revenue actuals received for the first quarter were derived from two sources, city
sales tax and state shared revenue. She also noted that $1 million of the actuals is a
result of one time revenue, specifically, the sale of parcels at the Northern Crossing
development. Overall, GF revenues are $1 million above what was expected for the
first quarter.
Ms. Schurhammer reviewed some of the items in the All Other category, stating the first
quarter budget totaled $5.8 million while the actuals totaled $6.3 million. The City
collected more revenue than expected because of the sale of parcels at the Northern
Crossing development and the continuing vigor of the construction industry.
Specifically, she explained the city expected to receive $750,000 from the sale of the
North Crossing parcels, but ultimately received $1 million; this is a one-time source of
revenue. In addition, development permits and fees revenue continues to outpace
expectations as a result of issuing almost 11% percent more permits in the first quarter
of this fiscal year than in the same time period last year.
The revenue budget for parks and recreation fees included an additional $65,000 per
year, or $16,000 per quarter, expected as a result of the new fee structure that became
effective June 1, 2003. The first quarter actuals came in $5,000 less than expected.
She explained that parks and recreation revenue is not collected evenly over the year,
with the largest share coming in during the spring and early summer.
The increase seen in actuals for library fines and fees is due to the adjustment to the
fines and fees structure that became effective August 1, 2003.
The revenue source called chargebacks represents revenue from enterprise funds for
services provided by General Fund operations, in compliance with the city's financial
policies. The city's financial policies state that enterprise funds should be charged for
services provided by other departments.
Councilmember Lieberman asked if the sale of the Wal-Mart parcel at Northern
Crossings was included in last year's budget. Mr. Lynch explained the $2,569,012.50
collected as a result of selling the Wal-Mart parcel was received before July 1, 2003,
and therefore, it was reflected in last year's revenue numbers. He said the $1 million
collected from the sale of other parcels and pads is reflected in the revenue actuals for
the first quarter of the current fiscal year.
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Councilmember Lieberman asked if the city considers the rebate amount Wal-Mart is
allowed to keep as revenue. Mr. Lynch said it will be counted as revenue once the city
receives a check. He explained monies left in the construction account will come back
to the city, noting they anticipate receiving $581 ,000 within the next week or two.
Councilmember Lieberman asked if any of the $1 million will be used as collateral for
building the remaining portion of the development. Mr. Lynch responded "no," and
explained the development agreement anticipated a series of construction loans. He
assured Councilmember Lieberman that none of the money received to date from the
sale of parcels and pads will be used as collateral funding.
Councilmember Martinez asked if Lowe's has purchased its parcel. Mr. Lynch stated
the Lowe's contract is contingent upon development at Los Arcos. While steps have
been taken to remove that contingency, staff has not yet received any word of it having
been removed.
Ms. Schurhammer compared city sales tax collections for the first three months of last
year's first quarter and this year's first quarter. The increase in collections in this fiscal
year-23.5% higher, or $2.4 million more than the first quarter of FY02-03—reflects a
trend the City began to see in the fourth quarter of last fiscal year. The collection
figures include revenues from the telecomm rate adjustment, removal of the rental
housing tax exemption and new retail development. While the City has seen
impressive improvement in this revenue source compared to last year, Ms.
Schurhammer cautioned that there is no guarantee this level of improvement will
continue each month given the volatility of sales tax revenue.
Ms. Schurhammer stated that new retail development was estimated to bring in
$663,000 in additional revenue per quarter for the current fiscal year. The city actually
collected $792,000 from new retail development during the first quarter. All new retail
development expected to be brought on board this fiscal year opened either early or on
time, except for the Village at Arrowhead, which opened two months late, and Northern
Crossings, which is expected to open in March 2004.
The amount of city sales tax revenue attributable to the telecom rate adjustment was
estimated to be $750,000 per quarter. She noted, however, collections actually totaled
$834,000 for the first quarter.
The elimination of the rental housing tax exemption became effective on September 1,
2003 and has resulted in $32,000 in additional revenue.
Ms. Schurhammer stated there are many components to the 03-04 budget plan with
regard to expenditures. She identified three major expenditure savings expected in the
current year's budget:
1) $6.3 million in base reductions,
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2) $1.1 million in salary savings, and
3) $3.2 million in replacement fund deferrals.
Items 1 and 3 are guaranteed savings for FY03-04 because the FY03-04 General Fund
base budgets were reduced by a total of $9.5 million as a result of the base reductions
and deferral of replacement fund contributions.
Ms. Schurhammer compared the first quarter budget and actual expenditures for the
first quarter. She said the city actually under spent in the expenditure categories of
salaries and benefits, non-personnel, and pay-as-you-go capital. She explained
spending is cyclical, especially in the non-personnel and capital areas. At the start of a
fiscal year, spending typically occurs slowly in the non-personnel and pay-as-you-go
capital categories, but pick up as the year progresses. Therefore, the $2 million saved
in the first quarter will not automatically double for the second quarter, or triple by the
third quarter.
Ms. Schurhammer confirmed for Mayor Scruggs that the city realized $1.1 million in
salary and benefits savings during the first quarter, thus achieving the annual goal for
salary savings by the end of the first quarter.
Ms. Schurhammer stated the beginning General Fund Balance totaled $31.6 million.
Revenue of $34.8 million flowed into the General Fund during the first quarter while
funds flowed out of the General Fund for transfers to other operations of ($2.9 million)
and expenditures ($25.3 million in expenses). After deducting for $2.2 million in
designated funds (for the final payment on the Hickman property) the General Fund's
fund balance at the end of the first quarter was $35.9 million.
Councilmember Lieberman asked if funds the city borrowed with regard to the Hickman
and Manistee projects are shown as revenue. Ms. Schurhammer explained that those
lease proceed revenues showed up in FY 2002/03 budget.
Ms. Schurhammer identified issues to be kept in mind when developing the budget for
FY 2004/05. Based on the replacement contributions that should have been included in
the FY03-04 budget, the General Fund could see an increase in expenses totaling at
least $3.2 million. In addition, no payments were made to the replacement funds for
seven months of last fiscal year. She stated the Information Technology and Field
Operations Departments are reassessing the fee structures for both replacement funds
to see if annual contributions made by departments can be adjusted.
In terms of the base budget reductions, departments are working through their business
plan to evaluate whether any of the base reductions should be restored. The
restoration of base budget reductions will be presented to City Council for consideration
through the supplemental request process.
Another item to keep in mind for the FY04-05 budget is the General Fund fund balance.
She explained the city's financial policies state that the General Fund should include a
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contingency appropriation (versus fund balance) that is equal to at least 10% of
General Fund budgeted revenues. The current year's contingency appropriation
represents only 6% of General Fund budgeted revenues.
In response to Vice Mayor Eggleston's question, Ms. Schurhammer explained the
contingency appropriation for the current fiscal year totaled $8 million, or 6% of the
revenue budget for the current fiscal year. She stated the revenue budget for this fiscal
year totals $133.7 million. She pointed out that the contingency appropriation should
have been $13.4 million.
Another item to keep in mind is the stability of a major source of General Fund revenue,
state-shared revenues. While state shared revenues have been stable for several
years, the $3.6 million loss in state income tax revenue from last fiscal year to this fiscal
year points to the potential volatility of state shared revenue. She noted the city will not
receive any revenue estimates from the state until June 2004.
Court revenue was identified as another issue to keep in mind even though the state
had repealed the bill requiring payments to the state out of additional court revenues
collected at the municipal level. The repeal becomes effective at the end of FY03-04,
so payments must continue for the current fiscal year.
Additional budget funds for operations and maintenance functions will be needed in
FY04-05 as new capital improvement projects are brought on line. She said a draft CIP
will be presented to City Council on December 16, at which time they will further discuss
new O&M expenses.
The Field Operations Department will bring forward a study on street maintenance
issues at the Council's December 2 meeting in response to Council's concerns, which
were expressed last spring, about the declining amount of funds available for street
maintenance activities.
The pay-as-you-go budget for this fiscal year is $2.7 million, down from $11.5 million in
FY02-03. Several on-going projects, including Neighborhood Grants, Building
Maintenance Reserve, Right-of-way Beautification, and Curb, Gutter and Sidewalk
improvements, are funded at significantly lower levels in FY03-04.
Ms. Schurhammer explained that there is some uncertainty concerning future funding of
the COPS grants. Staff anticipates receiving more concrete news about the future of
COPS grants in 2004.
She stated electricity is also a concern given that APS and SRP have submitted
requests for rate increases. APS is looking at an average increase of 9%-10% across
all classes of customers, with some customer classes expecting an increase of more
than 20%-30%. SRP also is looking at rate adjustments that primarily impact only the
city's water and sewer services.
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In response to Mayor Scruggs' question, Ms. Schurhammer stated staff will come back
to Council in January to further discuss salaries. Ms. Schurhammer also said staff will
return to Council in the spring to further discuss the benefits issue.
Ms. Schurhammer reviewed a graph depicting the known $2 million increase in General
Fund debt service payments in FY04-05, $1.6 million of the $2 million is a result of the
Northern Crossing lease debt service. She explained the city has collected a total of
$3.6 million from the sale of parcels at Northern Crossings, which is $2 million more
than needed to cover the $1.6 million due next fiscal year. She said the remaining $2
million could be applied to pay down the debt service, if Council wished to do so, but a
decision is not required now. Staff will return to this issue as part of the FY04-05
budget.
Mayor Scruggs asked if the $2.6 million in revenue collected in FY02-03 from the sale
of parcels at Northern Crossings was used to balance the $18 million deficit in FY
2002/03. Mr. Lynch explained the proceeds of the lease went into the General Fund
fund balance as did the $2.6 million from the sale of parcels.
Mayor Scruggs asked if using the $2 million to pay down the debt service would be in
conflict with their intention to build the General Fund Balance to 10%. Mr. Lynch
responded no.
Councilmember Lieberman asked if the FY 2004/05 General Fund lease debt service
figures include payments on the arena. Ms. Schurhammer responded no. Mr. Lynch
stated the General Fund did not sell the bonds for the arena, explaining that the arena's
funding source was Municipal Property Corporation obligations, which will be repaid
with excise taxes. Excise tax revenue includes sources like state-shared revenue and
city sales taxes.
Councilmember Lieberman expressed his opinion the arena lease payments should still
be taken into consideration when discussing the FY 2004/05 budget. Mr. Lynch
assured Councilmember Lieberman the lease payments are taken into consideration as
part of the city's overall debt management plan, stating, however, they are not
considered part of the General Fund.
Ms. Schurhammer reviewed staff's next steps, stating that presentations on street
maintenance, the Utilities needs assessment, the CIP and organizational goals will be
made to Council in December 2003. She said staff will return to Council to further
discuss salaries in January and the second quarter report on the General Fund will be
presented to Council in February. The operating budgets will be presented to Council
in March. She stated the draft CIP plan will be presented to the Planning and Zoning
Commission in March and the recommended CIP plan will be brought to Council in
April.
Ms. Schurhammer concluded her presentation and then introduced Marshall Vest to
City Council. She stated that Mr. Vest is the director of Economic and Business
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Research at the University of Arizona. He also is the revenue consultant for the Joint
Legislative Budget Committee.
Marshall Vest stated both the national and state economies have entered the
expansion phase of this business cycle, noting the recession ended in November 2001.
He said recovery is proceeding slowly, pointing out, however, third quarter real GDP
growth of 7.2% was the best in nearly 20 years. He stated the recession was actually
mild and the economy is doing better than most people realize.
Employment data has been mixed, with some industries, including health services,
educational services, federal government and leisure/hospitality, growing while others,
such as manufacturing, mining, and information sectors, continuing to decline. He said,
in the aggregate, Arizona is adding jobs, expressing his opinion that a significant
improvement in the labor market lies ahead.
Mayor Scruggs asked in what types of manufacturing can the state expect to see
increases. Mr. Vest responded that while a significant portion of manufacturing and
other industries have started outsourcing to other countries, he believes the magnitude
of outsourcing has been overstated. The important underlying trend in manufacturing is
in productivity gains, explaining that productivity gains offset job growth.
Councilmember Lieberman asked how imbalance in trade with South Korea, China and
Japan effects the economy. Mr. Vest said the money invested in other countries
ultimately gets circulated back to the United States.
Mr. Vest stated the Phoenix area accounts for two-thirds of the state's population and
employment and sets the pace for the rest of the state. He said, statewide, he expects
90,000 new jobs and 160,000 new residents next year.
With regard to personal income, Mr. Vest reported wages and incomes are improving
and companies are once again paying bonuses. He explained gains in income, along
with mortgage refinancing and federal tax cuts, will support consumer spending.
Restaurant and bar sales will rebound as business and leisure travel improves.
Mayor Scruggs expressed her opinion that economic growth often contributes to the
state's problems, especially given the fact that the state's population is increasing faster
than employment opportunities. Mr. Vest agreed an increasing population creates an
increasing demand for public services.
Mr. Vest displayed graphs taken from the October 21, 2003 Arizona Joint Legislative
Budget Committee forecast briefing. He said the state's adopted budget included
revenue growth of 3.7% for the current fiscal year, whereas year-to-date revenues are
up 7.3%. However, the increased revenue is expected to be offset by the end of the
year by the federal reduction in income tax withholdings.
He then reviewed unavoidable spending increases that the state must face
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immediately, explaining that the expenditures are either set in statute, mandated by the
voters, ordered by the courts, or deferred from prior fiscal years. He said the
unavoidable expenses represent a growth of $909 million on a base budget of $6
billion. He noted cost items over which the Legislature has some control, such as
employee benefit costs, employee pay raises, and university funding, are not included
in the $909 million number.
Mr. Vest explained that since FY 93 through the end of the decade the state has cut
one-third of its tax base, which equates to $1.8 billion each year that is no longer
collected. In FY 04, a $480 million gap was closed with one-time borrowing and
deferring expenses into the following year. FY 2005's shortfall is expected to be $860
million. This grim situation is expected to continue into the future.
Mr. Vest cautioned that the state's economic problems will not be solved by the growing
economy in Arizona. Even as the state's economy continues to grow, the state's tax
system is inadequate to fund the needs of the system. While it would make sense to
ask taxpayers to give back some of the prior tax cuts, a super majority in the Legislature
would be required to raise taxes. He said, consequently, there will be increasing
pressure on the 40 percent unprotected portion of the General Fund. He stated that
state-shared revenue is not protected, and thus subject to possible cuts when the state
tries to balance its budget.
Mr. Vest concluded his presentation, stating that while the economic trends are positive,
the city would be wise to brace for cuts in state-shared revenues. He said the state will
likely ask municipalities to provide services the state can no longer finance. He
expressed his opinion that competition among cities will increase and infrastructure and
"quality of life" will be at least as important as the level of taxation.
Mr. Vest said the key to budgeting in future years will be to ensure an adequate
contingency fund [i.e., General Fund fund balance]. He stated his opinion that the
state would not have a deficit today had it maintained an adequate contingency fund
[i.e., General Fund fund balance] in the 1990s. While the city's contingency fund [i.e.,
General Fund fund balance] has worked for the city in the past, he recommends the
General Fund fund balance be increased.
Councilmember Frate asked what impact another terrorist event on the scale of
September 11, 2001 would have if one were to occur. Mr. Vest explained the
September 11 attack was a tremendous shock to both the American psyche and the
American economy. He said by the time decision makers were ready to move forward
again, accounting and corporate scandals were brought to light and the country went to
war. He reported a survey of business leader confidence conducted in June 2003
found a significant jump in the confidence of Arizona decision makers regarding capital
spending, sales and hiring intentions. Given the time that has passed since the
September 2001 attacks, another attack of the same scale would shock the economy
and send into another downward cycle, although the downward cycle would probably
not be as bad as the first one.
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Councilmember Martinez asked if his forecast factored in that some of the jobs that will
be added will be lower paying and not include benefits. Mr. Vest stated a large portion
of the workforce is considered contingent and is not eligible for benefits. He explained
their models incorporate all jobs, whether full time or part time, and their associated
incomes.
Mayor Scruggs asked if the models take into consideration the increased cost to the
state for providing healthcare, given the trend for private businesses to decrease or
eliminate their benefits packages. Mr. Vest responded no.
Mayor Scruggs asked Mr. Vest if any of the ideas other groups are developing to
address the state's fiscal issues appear to him to have great potential. Mr. Vest said
dozens of proposals have been submitted, many of which make good economic sense.
He questioned, however, the probability of any of the proposals actually being
implemented.
Mr. Vest concluded his presentation by summarizing the conclusions he has drawn.
Specifically, Arizona is a low tax state and has a tax system that asks little of
individuals, but places a heavy burden on businesses. He said the adequacy of the tax
system to fund government services provided to the public needs to be addressed,
expressing his opinion that the tax base should be kept very broad and the tax rates
should be kept low.
2. RESIDENTIAL DESIGN AND DEVELOPMENT EXPECTATIONS
CITY STAFF PRESENTING THIS ITEM: Mr. Tim Ernster, Deputy City Attorney; Mr. Jon
Froke, Planning Director; and Ms. Tracy Stevens, Senior Planner.
Purpose
This is a request for City Council's final review of the draft Residential Design and
Development Expectations and to provide staff with direction before scheduling this
matter for adoption at a regular meeting.
Council Policies Or Goals Addressed
The goal of combining and updating these guidelines is to provide a tool for high quality
development and provide diverse neighborhoods. Also, the goal is to provide a
customer friendly document for Council, Planning Commission, city staff, developers,
homebuilders, and citizens to reference when guiding new and diverse residential
development throughout the city.
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Background
The draft updates and combines the existing 1999 single Family Residential Design and
Development Guidelines and the 1996 Multiple Residence Housing Design Guidelines.
It combines and replaces the existing Single Family Residential Design Guidelines and
the Multiple Residence Housing Design Guidelines. Modifications from the existing
documents include: Definitions, Small Lot Development, House Product Design,
Architectural Design Review, and Amenities/Open Space.
The draft document separates the Design and Development Guidelines into eight parts:
o Part 1: Small Lot Development Lot sizes less than 7,000 S.F.
o Part 2:Medium Lot Development Lot sizes between 7,000 to 12,000 S.F.
o Part 3:Large Lot Development Lot sizes over 12,000 S.F.
o Part 4:Amenities
o Part 5:House Product Design
o Part 6:Architectural Design Review
o Part 7:Multi-Family Development
o Part 8:Appendix
Some of the key objectives expressed throughout the draft document include: a greater
variety of lot sizes to include small lots, detached sidewalks, shorter block lengths, open
space, varied setbacks, improved recreational amenities, larger buffers from collector
streets and intense land uses, and more variety in architectural style and building
materials for house products.
The proposal clarifies the minimum expectations for all new subdivisions regardless of
standard subdivisions, Planned Residential Developments, or Planned Area
Development. Subdivisions with lot sizes greater than 12,000 square feet will be
eligible for certain alternate development standards.
Previous Council/Staff Actions
In June 2003, the Council received a preliminary draft of the expectations.
The proposal was introduced at the Planning Commission workshop on May 8, 2003
meeting. Staff discussed the draft expectations at five additional workshops with the
Planning Commission on June 12, July 10, August 14, September 11, and September
24, 2003 and one Planning Commission meeting on November 6, 2003.
At the November 6, 2003, Planning Commission meeting, the Planning Commission
recommended approval of the draft document to the Council with the attached
amendments.
The Planning Commission recommends a change to the title of the document to
Residential Design and Development Expectations in an effort to be consistent with the
approved Commercial Design Expectations.
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Community Benefit
With the growth of the city there is a need to insist upon greater quality in residential
development citywide. The revised guidelines should set the standards for diverse
residential development.
Public Input
The Planning Department has been advising developers and homebuilders of the
proposed change in the guidelines during pre-application and post-application review
meetings.
The Planning Department held three meetings with the Home Builders Association of
Central Arizona to discuss the updated draft and provided their representative a copy of
the draft guidelines.
The Planning Department has met with the Arizona Multi-Housing Association to
discuss the minor changes made to the Multi-family section of the guidelines and the
incorporation of the document into the Residential Design and Development Guidelines.
Other interested parties notified of the proposed draft and the changes made to the
existing Single Family Residential Design Guidelines and the Multiple Residence
Housing Design Guidelines include: Fulton Homes; Earl, Curley and Lagarde; Beus
Gilbert PLLC; and Gilstrap and Associates.
The draft document has been placed on the city's website and is available at the
Development Services Center.
Budget Impacts & Costs
These guidelines will be used as part of the standard City review process. With the
exception of reproduction of the final document, no additional resources will be required
once they are adopted.
Direction/Policy Guidance
The recommendation was to provide staff direction on the updated Residential Design
and Development Expectations for standard subdivisions, Planned Residential
Developments, Planned Area Developments, and multi-family developments.
Mayor Scruggs expressed concern about the use of traffic calming devices in small lot
developments, stating they can create traffic hazards in even larger developments. Mr.
Froke explained Transportation Engineering would review all subdivision plats to
determine if traffic mitigation is necessary and the devices would only be required when
warranted. Ms. Stevens explained the intent for small lot development is to create
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shorter blocks, therefore, traffic calming measure will not be placed in typical
subdivisions.
Councilmember Martinez asked if the traffic calming devices will be encouraged or
required. Mr. Froke said staff had considerable discussion with the Planning
Commission as to whether the guidelines set forth in the document are requirements or
preferences. He stated staff believes the document has adequate flexibility to allow
them to work through individual technical and design issues.
Councilmember Clark asked if the guidelines included in the document are mandated or
simply suggestions. Ms. Stevens stated their hope is that the expectations will be
adopted by resolution, not ordinance, therefore, they will not be mandated.
Councilmember Clark said she is concerned that the new document provides no
definitive requirements. Mr. Froke explained the city has different tools it uses to
evaluate residential developments, including a General Plan, which regulates density,
and a zoning ordinance that regulates the use of land. He said the expectations
represent another of these tools. He explained, in a situation where a developer
refused to comply with one or more of the expectations, a stipulation could be placed
on the zoning or, if ultimately found to be substandard, a project could be denied.
Councilmember Clark expressed her opinion the document, as presented, has no teeth,
stating the expectations should be defined as standards. Mr. Ernster stated the design
review process has historically been very dynamic. He said, while the document
contains no legal requirements, it provides developers with direction and gives staff the
necessary flexibility to deal with unique developments. Councilmember Clark
suggested defining the guidelines as standards will convey the level of quality the city
expects. She expressed concern that Planners can become too personally associated
with their projects and act as an advocate for the project rather than the city.
Mayor Scruggs agreed certain items set forth in the document should be requirements
rather than expectations. She expressed concern about the same value being given to
all of the expectations, stating some should be given a higher value. Ms. Stevens
pointed out the burden will be put on the developer to justify why any given expectation
cannot or will not be met.
Councilmember Goulet asked what impact will the document have on redevelopment
and infill projects. Ms. Stevens said the General Plan addresses inf ill and
redevelopment projects and the expectations should not present any problems.
Councilmember Goulet asked if the document prohibits entirely different housing
products. Mr. Froke said he does not believe the document will impede that type of
development scenario.
Mr. Froke noted a representative of the Homebuilder's Association commented that
they view the expectations as an ordinance. Mayor Scruggs explained that is why she
is concerned about giving the same value to all of the expectations.
Councilmember Clark said she is also concerned about the chapter on multi-family,
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expressing her opinion it is very loose.
Mayor Scruggs commended the intent of the document to produce a different type of
living environment.
Mayor Scruggs stated it is 4:10 p.m., we must adjourn and proceed to Executive
Session. This agenda item should be brought back to a future workshop for further
discussion.
ADJOURNMENT
The meeting was adjourned at 4:10 p.m.
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