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1.   Call to Order.

     Mayor Kelley called the meeting to order at 1:11 p.m.

2.   Roll Call.

     COUNCIL MEMBERS PRESENT: Mayor Gene Kelley; Vice Mayor Bob Delzer;
     Council members Kenneth E. King, Rick Fernau, Anne Staffnik (arrived at
     1:20 p.m., Virginia Evans, and Bill Thomas.


     STAFF MEMBERS PRESENT: Ed Muder, Interim Co-City Manager; Rob
     Emmett, Interim Co-City Manager; Michael J. Brown, City Attorney; Larry
     Ploughe, Budget Manager; Jim Matteson, City Engineer; Joel Weeks,
     Community Services Director; Tad Spader, Controller; and Elizabeth A. Burke,
     City Clerk.

     GUESTS: None.

3.   Consideration of City Manager Selection Process.


4.   Discussion of Budget Priorities, Themes and Goals.

     Councilman King suggested that the Council go through each one of the
     themes/policies provided by staff and heard from the Council.

     Councilman Thomas asked for a two-minute update on the budget for the current
     year before getting into the themes.

     Mr. Ploughe said that after the session he could provide Councilman Thomas
     with the review at the end of the first quarter.             Councilman Thomas
     acknowledged that he already had that. Mr. Ploughe said that since that time
     revenues from sales taxes had increased a little. He said that the stock market
     had been looking pretty good for the past few weeks. He said that he did have a
     feeling that they were beginning to see a little recovery; however, he attended a
     free session in the Valley and the measures presented there were not very
Show Low City Council
Special Meeting – Minutes                    2                           November 22, 2002

       positive. He said that he would stick with what he said the other night—that it
       was encouraging; however, they had to proceed with a conservative approach
       toward revenue projections. He added that spending was, for the most part, in
       line, other than those areas that were seasonal.

       Mayor Kelley said that the City was very blessed, but they had to plan for
       additional losses with shared revenues.

       Discussion began on the first theme:          Maintenance of Infrastructure and

       1)     Include sufficient funds in the budget to maintain the useful and expected
              life of long-term assets.

       Councilman King said that this was a must.

       Mr. Spader arrived at this time.

       Councilman Thomas asked if this included buildings. Mayor Kelley replied that it

       2)     Protect funding of the Rehabilitation and Rejuvenation (R&R) program and
              inflow and infiltration – Sewer Main Mitigation Program (I&I) during the
              ranking of projects for Capital Improvement Program (CIP). These
              programs will not be included in the project ranking effort for the CIP and
              will be automatically funded.

       Mayor Kelley said that it was determined in the past that this needed to be done.
       He said that every year they were under a consent order from the State.

       Councilwoman Staffnik arrived at this time.

       Mayor Kelley said that it was a matter of maintaining infrastructure and alleviating
       defects. He said that if they continued with the recent trend, this would be the
       extent of their major expenditures in the future. He said that in the past, the
       Public Works Department made large purchases on items that had long lives,
       which allowed them to get ahead of the curve.

       Councilman Fernau asked if this was something that could reduce future bonding
       of projects. Mayor Kelley said that was what the City had done on large projects.
       He said that they did bond for some projects, such as the Central Avenue

       As Councilwoman Staffnik was now present, the Council returned to Item 3.
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Special Meeting – Minutes                    3                            November 22, 2002

3.     Consideration of City Manager Selection Process.

       Councilman Fernau said that they didn’t want to rush into this. He said that he
       was of the opinion that if it could continue as it was for the next six months to one
       year, and during that time they established the goals, they could then initiate
       something, as long as both of the individuals were willing to continue.

       Vice Mayor Delzer said that he downloaded a workbook as to the requirements
       desired for a city manager. He said that they could comb through the workbook,
       which consisted of 28 pages, and pick out those things that they thought went
       along with the City.

       Councilman King said that he gave this topic a #2 ranking, not because he
       believed they needed to do a search, but because the issue needed to be
       addressed. He said the Council needed to address it. He said that he believed
       they had staff sufficient right now to take care of the issues needed right now and
       he believed staff was willing to go out and gain whatever knowledge was needed.
       He said that they would need to hire individuals to take care of the departments
       these co-managers now oversaw.

       Vice Mayor Delzer said that if anyone in staff was interested in applying for the
       job, they could get their resume in, as well. He said that was the only way to be
       fair about it.

       Councilman King said that he wasn’t willing to go through resumes looking for a
       city manager; they needed to have a professional overseeing it. Mayor Kelley
       asked Councilman King if he was saying that they needed to hire a consultant
       firm to do resume reviews to provide the Council with a short list. Councilman
       King said that they needed to do that if they didn’t choose someone already on

       Councilman Fernau said that before any of that happened, the job description
       needed to be developed and that would take months to formulate.

       Councilwoman Staffnik said that a headhunter brought up Patrick Sherman, so
       that didn’t give them any guarantees.

       Councilwoman Evans said that she disagreed with Councilman Fernau; they
       didn’t need months to decide on the goals and what they were looking for.

       Councilwoman Staffnik said that she thought the Council needed to go outside
       for a search and establish some minimum criteria they wanted. She said that the
       issues in the Police Department, at the pool, in Parks and Recreation, etc.
       needed to be addressed. She said they needed one person. She said that she
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Special Meeting – Minutes                   4                           November 22, 2002

       agreed with not micromanaging and she would prefer to have one individual that
       they could go to that would handle all of these situations. She said that staff was
       pulled in many different directions and they needed one person to take control of
       the situation and address the needs of the City Council. She said that she didn’t
       feel the current situation was acceptable. She said that if they stayed in house,
       there were going to be ―Patrick Shermanisms‖ and ―Larry Langeisms.‖ She said
       that staff needed to oversee operations with which the City contracted and the
       only way to do that was with one person. She said that in no management book
       would they find a city run by two individuals.

       Councilman King said, in defense of Messrs. Sherman and Lange, that they were
       what the City needed for the time. He said that Mr. Sherman destroyed his
       career himself, but he believed that Mr. Lange was forced to leave.

       Councilman Thomas said that he would like to start the search in one or two
       publications. He said he would stay until midnight to look through resumes. He
       thought in the next month or two the Council members could come up with what
       they wanted in a city manager. He said he wanted the Council to do it on its

       Vice Mayor Delzer said that the book he was speaking of came from ICMA
       (International City Managers Association). He said that they could advertise 100
       words for $300 and would be paying thousands for a headhunter.

       Councilman Fernau said that they would be limiting the number of qualified
       people—people needed to know what was expected of them when they applied.
       He said that he thought things were going well right now. He said that there were
       bigger fish to fry and he didn’t think they needed to jump into it right away.

       Councilwoman Evans said that the League of Cities and Towns had its listings
       posted on what was expected. Mayor Kelley said that in a short time frame they
       could have what they needed or wanted in a manager.

       Mayor Kelley made a few observations. He said that when the Council decided
       to go with the team leadership approach, with Joel Weeks and Chief John Corder
       as backup, he literally left that meeting wondering what they had done. He said
       that they had come away much better than he ever expected. He said that this
       afternoon he was hearing some considerable diversification on the rate at which
       the Council wanted to tackle this problem.

       Mayor Kelley said that when he rated it #1 in terms of priority, he believed they
       needed to settle this and have the City headed by one person. He said that he
       had heard no one say that they needed to do something in a different form in the
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Special Meeting – Minutes                     5                            November 22, 2002

       Mayor Kelley said that, with no reflection on Mr. Weeks and Chief Corder, they
       had not been needed for the key role, as previously expected. He said that in the
       interim, he was advocating that they continue with Messrs. Emmett and Muder
       and place Mr. Weeks and Chief Corder in far lesser modes and/or no modes in
       the city manager role.

       Mayor Kelley said that from there, they would need to hear from Messrs. Emmett
       and Muder on whether their individual departments were really suffering. He said
       that if they would need more help, the Council should make that available. He
       said that the Council should have a time of evaluation regarding financial
       compensation for the two men. He said that it had been too good for the City
       and maybe not even fair to them. He observed that they had saved the City
       hundreds of thousands in salaries.

       Mayor Kelley asked if the majority of the Council felt they needed to do
       something different on an interim basis. He said that he would like to see them
       debate this topic and share ideas, and be open-minded enough so they could get
       a direction from the majority of the Council, not a 4 to 3 vote. He said that the
       rules were clear, they could go forward with a 4 to 3 vote, but he hoped that was
       not how they went forward.

       Councilman Thomas said that he talked with Chief Corder about his assistance
       to the managers, and even he (Chief Corder) believed it should be eliminated.
       He said that Chief Corder needed to be at the Police Department 100% of the
       time and Mr. Weeks needed to be dealing with his departments.

       Councilwoman Evans asked Mayor Kelley if a 5 to 2 vote would satisfy him.
       Mayor Kelley said that he wasn’t trying to infer that any four or three had jelled.
       He said that once they had debated the issue enough, they should be able to
       come together and realize that on major issues, they had everything in common
       and the only diversity they had was their background. He said that if they had a
       scenario where four members didn’t want to move forward quickly and the other
       three did, he believed that the three in the minority needed to get in
       synchronization with the majority for the good of the community. He said that it
       was not a healthy situation to try and hire a city manager with a 4 to 3 vote.

       Councilman Thomas said that he didn’t take it that way. He said that as the
       issues became more important, one would see more splits.

       Councilman Fernau said that his understanding was that the Mayor would like to
       see it as a 7 to 0 vote, but if not, those not in favor needed to be in full support of
       the individual.

       Vice Mayor Delzer said that they needed to get teamwork back—working
       together. He said that he had been running against a wall for the last ten years.
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Special Meeting – Minutes                   6                            November 22, 2002

       Councilwoman Staffnik said that she just read an article off of the League of
       Cities and Towns page which tied into what Vice Mayor Delzer and Councilman
       Fernau were referring to—once a decision was made, they needed to be
       supportive of each other.

       Mayor Kelley said that it was a problem when one Council member started
       questioning another’s caring about what was right for Show Low. He suggested
       that they interview the four city managers on fine-tuning what was required for
       the position. Councilwoman Evans said that she was not in support of
       Mr. Weeks and Chief Corder.

       Mr. Brown said that he was concerned with the direction of the discussion
       because Mr. Weeks and Chief Corder had never worked for the Council; they
       worked under the city managers. He said that the Council had expressed
       concerns and opinions and the city managers had heard them; it was now their
       responsibility to address that situation in the manner they saw fit. He said that if
       it was not in the manner the Council agreed with, they needed to bring it up with
       Messrs. Muder and Emmett.

       Councilwoman Staffnik said that one of the reasons she thought there were four
       city managers was that the compensation was equal. Mr. Brown clarified that it
       was not equal.

       Mr. Muder said that he and Mr. Emmett had already offered to continue serving
       in the interim. He said that they had saved the City over $250,000 in the current
       process. He said that if they were going to have the legacy of continuing the
       ―Patrick Shermanisms‖ and ―Larry Langeisms,‖ they should get rid of them right

       Councilwoman Evans said that she thought the Council appointed Mr. Weeks
       and Chief Corder. Mr. Brown said that they went through Messrs. Emmett and
       Muder. Mayor Kelley said that the more he thought about it, he agreed with
       Mr. Brown. He said that he was comfortable with having the city managers
       address the deputies, but he thought that the Council needed to address a
       compensation adjustment for the interim co-city managers.

       Councilwoman Staffnik said that from the citizens she had talked with, there was
       a perception that if they didn’t allow an open application process, they would be
       continuing past practices.

       Councilman Fernau said that the way he took Councilwoman Staffnik’s comment
       was that if they didn’t open up the selection process, it would be considered as
       continuing the ―Patrick Shermanisms‖ and ―Larry Langeisms.‖
Show Low City Council
Special Meeting – Minutes                   7                           November 22, 2002

       Councilman King asked if they could talk about what was wrong with the City.
       He said that there must be specifics in everyone’s minds of why they wanted to
       look outside for managers. Councilman Thomas said that all they were
       discussing was the selection process. He said that they should look at what was
       out there. He said that they were not questioning anyone’s abilities—they just
       wanted to look.

       Mayor Kelley said that when they appointed the two city managers, they did
       something that he thought was just right for the City at that time. He said that
       anyone wanting examples of things that he knew was different, and better, he
       would welcome their calls. He said that was not to say they didn’t have a feeling
       in the citizenry, but he wanted to try and correct it.


       Councilman King said that to him it was two motions. He said that they needed
       to discuss whether they wanted to search, and if they did, then they continued
       with what they were doing or change it. Mr. Muder clarified that about one month
       ago, the Council approved the extension of the contract with Messrs. Muder and
       Emmett. He said that the only motion they would need to make was if they
       wanted to dissolve that action.


       King said that his thinking was, ―If it isn’t broken, why fix it?‖ He said that the
       people he talked with liked the way things were going with staff, but they didn’t
       like what was going on with the Council.

       Vice Mayor Delzer said that he wanted to hear from the interim co-city managers.
       Mr. Emmett said that he didn’t have a problem. He said that he entered into this
       agreement as an interim manager. He said that his heart had always been in
       promoting and making Show Low the best place for people to live. He said that
       this had been a passion of his, and he had let other opportunities slide by
       because of it. He said that the Council had every right to go out and search.

       Mr. Emmett said that if the Council wanted to move forward, he strongly thought
       that they should look into and research going through a headhunter. He said that
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Special Meeting – Minutes                   8                           November 22, 2002

       they (the Council members) didn’t know what they had ahead of them and if they
       were worrying about the ―Shermanisms,‖ they were headed on that track. He
       said that they didn’t have the background to understand the complexities of city
       management while trying to find a proper candidate. He said that they should try
       to consider that as they developed their job description.

       Mr. Muder said that he thought things were going well. He said that he and
       Mr. Emmett were serving as interim management because of their love of the

       Chief Corder said that nothing was utopia. He believed they (the management
       team) were going in a good direction, and they had done a good job for the
       employees, the citizens and the Council. He also reminded everyone that the
       four members of the management team, as well as the Mayor, went through a
       natural disaster in the community—no small challenge—and they made it
       through that experience very well. He said that he thought that action spoke
       louder than anyone’s words.

       Mr. Weeks said that he had been amazed by the process, and the leadership
       provided by Messrs. Muder and Emmett. He said that it had been a great
       opportunity for him to work with everyone and he had seen things change for the
       very best, in his opinion.

       Vice Mayor Delzer said that they had seen the problem that resulted from using a
       headhunter the last time. He said they had a TV interview with the consultant
       and he thought they were more enlightened regarding knowing what Show Low
       needed than someone else.

       Mayor Kelley said they were going to have to choose one way or the other.
       Councilman Fernau said that he needed to excuse himself, but he wanted to
       impress that as far as economic development, they really needed to consider
       that. He said that they couldn’t be thinking ―here and now,‖ they needed to be
       looking to the future.

       Mayor Kelley asked, before Councilman Fernau left, if the Council members were
       ready to say what direction they wanted to go, i.e., hire a professional service or
       do it themselves. Councilman Fernau said that he agreed with Vice Mayor
       Delzer that the League had a wealth of information. He said that before he
       committed to a headhunter, he would like to hear from them.

       Councilman Thomas thought they (the Council) should start receiving
       applications; they could have Human Resources do that. Mayor Kelley said that
       if they did this themselves, it was his understanding that staff should not be
       involved at all in the process.
Show Low City Council
Special Meeting – Minutes                   9                             November 22, 2002

       Councilwoman Evans said that she would rather go with the League first. Vice
       Mayor Delzer said that he consulted with the League representatives when they
       were last up here and they were the ones that suggested ICMA to him.

       Mr. Emmett suggested that the Council members contact Lloyd Harrell and use
       him as their advisor. He said that as far as a headhunter, it was a selection
       process. He said the Council members would pick the people they felt the most
       comfortable with; they didn’t have to pick the first group that came along.

       Mr. Brown asked if there was going to be a leader taking the initiative to draft up
       something. Vice Mayor Delzer offered to take the lead. Mayor Kelley suggested
       that everyone pull together information they wanted out there, and they would
       have to meet again to agree on that. Vice Mayor Delzer said that he would have
       copies of the 28-page booklet made for all of the Council. Mayor Kelley said that
       at the December 3 Council meeting, they could schedule another time to meet on
       the issue.

       Mr. Emmett suggested that the Council take the time to review everything and
       look to Mr. Harrell for additional guidance.

       Discussion on this issue ended at 2:36 p.m.

4.     Discussion of Budget Priorities, Themes and Goals.

       Discussion then returned to budget priorities, themes and goals.

       Mayor Kelley said that R&R (Rehabilitation and Rejuvenation) and I&I (Inflow and
       Infiltration) had been in the City’s CIP (Capital Improvements Plan) as priority
       items. He asked if the Council wanted to leave them there or break them out as
       individual items. Everyone agreed that they needed to be kept separate.

       3)     Prior to construction, a life cycle or value engineering analysis for all
              proposed building and facilities should be completed to reduce
              maintenance costs.

       Councilman King asked if this referred to City-constructed facilities or community-
       wide. Mayor Kelley said it referred to City-owned and operated facilities.
       Councilman King said he agreed with that.

       4)     Based on public input and expectation, satisfactory levels of service
              should be defined for the maintenance of all infrastructure and buildings.

       Councilman Thomas said he agreed 100% with all four items.
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Special Meeting – Minutes                  10                          November 22, 2002

       Vice Mayor Delzer asked the City Engineer to provide a report whenever there
       was building going on. Mr. Matteson said any engineer who accepted money to
       do his job should do that as part of the design process, although he wasn’t
       saying it was always done. Vice Mayor Delzer asked if a report was written for
       every job and whether the Council members were given a copy of it.
       Mr. Matteson said that was what the Council paid the staff to do. He used the
       Old Linden Road project as an example. He said as it was being designed, the
       designers used standard AASHTO requirements. He said, however, as work on
       the project began, staff had assumed the City would have to make a significant
       expenditure to move a large 12-inch water line. He said the Public Works staff
       came up with a method to move the existing line itself and saved the City
       $15,000. He said he himself looked at it and then talked with Mr. Emmett about it
       and, within two days, the change was made.             He said this was what
       professionals did.

       Vice Mayor Delzer said he was looking at the liability base, which was the only
       reason for getting off the agenda.

       Discussion began on the second theme: Financial Planning and Management –
       Ensure the City’s Long-Term Financial Ability to Deliver Quality Services.

       1)     Develop a schedule for the reduction of general fund subsidy of all
              enterprise funds with priority on water and sewer operational and recurring

       Councilwoman Evans said the City subsidized the library and pool, and she
       wanted to figure out how to reduce those subsidies. Mr. Emmett said that last
       year these General Fund subsidies were reducing revenues. He felt it was
       important to look at the fees charged to see if they needed to be adjusted. He
       said this spring staff would be bringing some of the water and sewer information
       back to the Council for consideration. He said the pool and the airport were
       additional issues.

       Mayor Kelley asked what were included in the enterprise funds. Mr. Emmett said
       water, sewer, airport and aquatics.

       Mayor Kelley asked what the differences were. Mr. Ploughe said it was more of
       an accounting issue. He said the General Funds covered the City’s departments
       and how they operated. He said an enterprise fund was where the expectation
       was to charge a fee and generate revenue.

       Mayor Kelley said if the City raised fees at the pool to cover expenses, it would
       lose the numbers using it. Mr. Ploughe said they were looking to reduce costs,
       maintain service levels and increase revenues.
Show Low City Council
Special Meeting – Minutes                  11                          November 22, 2002

       Councilman King thought it needed to continue.

       2)     Utilize conservative assumptions for the development and extrapolation of
              revenue projections.

       Mr. Emmett said it meant using the lower end of sales tax revenue projections.

       Councilwoman Evans returned to the previous item and asked who developed
       the schedules. Mr. Emmett said staff would bring forward suggestions, but the
       Council was the only entity that could change fees.

       Mr. Ploughe said he went to a budget meeting on Wednesday and learned that
       the State was through interfering with State-shared revenues. Mr. Emmett said it
       had gone from 15% down to 14.8% so the City would see a reduction.
       Mr. Spader noted that State-shared revenues made up a small portion of the
       City’s budget. Vice Mayor Delzer said that was why he gave information on
       grants to Mr. Spader.

       3)     Continue with the implementation of development/impact fees.

       Mayor Kelley issued a tremendous caution regarding impact fees. He said he
       sincerely hoped the City wouldn’t cross the line. Mr. Emmett said if staff had a
       recommendation, it was along the lines to maintain the present structure and
       continue to reconsider impact fees. Mr. Muder said other fees were scheduled to
       be implemented next October. He said if a business wanted to come in and one
       parcel had impact fees and the other didn’t, it would take the one that didn’t.

       Councilwoman Evans said if a business came in she thought the City would enter
       into a development agreement. Mr. Muder said the real estate helpers came in
       and it required additional steps they might not want to take.

       Mr. Muder said that water and sewer fees applied to commercial zones. He said
       staff’s position was to leave them as they were, but the police impact fee
       dramatically increased business fees. He said it would have cost Wal-Mart
       $40,000 to $50,000, which could have been enough to move it to another site.

       Mayor Kelley said to deal with it, the City had to make a deposit out of the
       General Fund if it made a development agreement with them.

       Councilman King agreed taking staff’s recommendation to revisit this. Mr. Muder
       said the Development Fee Committee would be looking at it. He said the Council
       might want to reword it to say, ―Maintain development/impact fees and reconsider
       the implementation of the police department fee.‖
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Special Meeting – Minutes                   12                          November 22, 2002

       Vice Mayor Delzer said regarding the monies from the impact fees, he suggested
       putting them into a fund to consolidate them and collect interest on it.
       Mr. Emmett said that water and sewer fees had been programmed for use in the
       Show Low Creek Trunk Line and also using it for the City’s water resource
       master plan (the City was currently interviewing consultants for it) and wells. He
       said funds were also programmed through the CIP for a treatment plant.

       Mayor Kelley called for a short break at 3:09 p.m. The meeting was reconvened
       at 3:18 p.m.

       Everyone agreed leaving item no. 3 as it was worded.

       4)     Reinvest the annual interest from the emergency fund of one million
              dollars back into the fund to maintain an inflation hedge.

       Everyone agreed with item no. 4.

       5)     Increase the contingency fund to approximately one and one-half percent
              of operating expenditures to cover unforeseen events that occur during
              the fiscal year.

       Mr. Spader said that Mr. Emmett had already frozen capital but there was other
       small capital that could be frozen. He said there were other areas that could be
       used to reduce spending, but if it went on too long, it would hurt operations.

       Mr. Ploughe said staff’s approach to accountability was not to wait, but look at it
       on a month-to-month basis.

       Mr. Emmett said that modified zero-based budgeting was the other component to
       make sure that the City did not exceed budget. He said staff was looking at ways
       to contract these programs.

       Councilwoman Evans asked if staff went to the Council saying that they needed
       to sell a bunch of trucks, for example, or whether it was up to the Council to
       make that decision. Mr. Emmett said that typically staff would put together
       recommendations, and some things they did automatically. He said it was more
       to hold off on capital purchases.

       Councilman King asked if staff felt that 1-1/2% was sufficient. Mr. Emmett said
       staff found, when doing research last year, that it floated from 1.5% to 3%. He
       said Phoenix carried the 3% of operating costs as a contingency fund. He said
       the item should read, ―Maintain the contingency fund to 1.5%.‖ Mr. Muder said in
       2002 the City didn’t have 1.5%. Mr. Emmett said the City spent around $300,000
       for the airplane and another $200,000 was sitting there. He said in the 2002
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Special Meeting – Minutes                   13                           November 22, 2002

       budget, staff carried over that money and that had gone to the library. He said
       this was how the City paid as it went.

       Councilwoman Staffnik asked if that amount had any relationship to whether the
       City would be eligible for grants or loans. Mr. Emmett said that was exactly what
       this was for, i.e., for the Council to take advantage of grants and also to provide
       for budget overruns. He said there was discussion held the other day about
       community service with the courts and the Council said the City needed to
       continue doing so. He said the City was now looking at $3,000 a month, so staff
       would be pulling out of the contingency fund for that.

       Mr. Ploughe said 1.5% equaled $239,694 this year. Mr. Emmett said that last
       year the City had $500,000 because there were additional funds for the airplane.

       Mayor Kelley asked Councilwoman Staffnik if she was addressing grants not
       being available because of this funding being available. Councilwoman Staffnik
       said that was what she was addressing.

       Vice Mayor Delzer said the Council members didn’t know what the construction
       costs were going to be on paper for the old junior high school buildings. He
       thought there might be things such as asbestos needing to be taken out.
       Mr. Emmett said staff was estimating $50 to $60 a square foot, or somewhere
       around $350,000 to $400,000 easily, and staff had identified enough funding to
       take care of that right now. Mr. Muder said if they went over that amount, this
       fund could assist in that area.

       Mayor Kelley said he would feel better if it was $350,000 rather than $238,000.

       Mr. Muder said the Council could keep in the same percentage and Mr. Emmett
       said it could be increased to 2%. Councilman King suggested shooting for 2%.

       Vice Mayor Delzer asked if the City could pass it on to the next year if there was
       an overage. Mr. Emmett said he was correct.

       6)     Separation of the Water and Sewer Fund into two separate enterprise
              funds to increase accountability.

       Mayor Kelley said there were some administrative costs associated with this
       move, although they weren’t horrendous. Councilman King questioned the cost
       effectiveness of the situation, but if it was the way to go he suggested giving it a

       Mr. Spader added that it wouldn’t reach $1,000 in costs to separate the monies.
Show Low City Council
Special Meeting – Minutes                  14                          November 22, 2002

       Councilwoman Staffnik asked if there was a long-term goal to determine what the
       individual sewer rate was. Mr. Emmett said it could be a very challenging,
       expensive proposition. He said the Council needed to get to the point of figuring
       out those connections that were outside the City’s water system. Mr. Spader
       noted that it would identify the subsidy from water to sewer.

       Mayor Kelley said the cost of metering sewer in past discussions had revolved
       around those using water for landscaping. He said it was fine if one had a family
       of eight, but when one reduced the usage one ended up with a stoppage.

       Councilwoman Staffnik said the opposite could occur, wherein someone was
       dumping 25,000 gallons and they were only paying nominal rates.

       Councilman King said homeowners were not paying for the landscaping they did
       in the summer if they were billed using the average of winter months. Mr. Spader
       said users had a choice. He said in the spring, staff was hoping to address all of
       these issues.

       Mayor Kelley felt that no matter what was done, there was only one solution,
       which was the metering of the sewer and the cost was prohibitive.

       Vice Mayor Delzer said one couldn’t compare household usage of sewer to
       something like a car wash.

       Councilman King asked how a couple could pay $12 for sewer and an individual
       pay $17. Mr. Spader said it depended on what program they were on.
       Mr. Muder said customers were allowed to change the way they were billed
       every year. Mr. Spader added that some programs had minimum requirements.

       Mayor Kelley asked about the use of personnel. He said the more things were
       broken out, the less apt it was for one department to be friendly to another and
       he didn’t want to lose efficiencies. Mr. Emmett said that Public Works employees
       right now were the only ones that were pigeonholed, while others moved back
       and forth.

       Mr. Spader said as far as the Finance Department, staff took care of water and
       sewer, as well as refuse, etc. at the front desk. He said they didn’t know where
       those expenditures were going, adding that they worked as a team.

       Mr. Emmett said that since the City was moving to activity-based accounting,
       there were budget exchanges to cover (also known as budget transfers).

       Discussion moved to the third theme: Public Safety – Ensure a Safe Community
       (Disaster Relief/Preparation and Crime Reduction)
Show Low City Council
Special Meeting – Minutes                  15                          November 22, 2002

       1)     Ensure optimization of public resources in the protection of vital services
              and public safety during adverse situations.

       Councilwoman Staffnik said she worked for the health department and said there
       were discussions about bioterrorism and what cities were doing to protect

       2)     Promote regional cooperation and mutual assistance for all emergency
              conditions such as mass casualty, disaster or criminal events.

       Mr. Emmett said this item was broad-based. He suggested adding the word,
       ―terrorism.‖ He said staff had been doing additional work, such as in the water
       master plan, assessments, etc.

       Mr. Spader said the City also had the fence project going around the airport. He
       said there were other projects in the City.

       Councilman King asked if any of these were more expensive than the other or
       whether there was any order of value. Mr. Emmett said no.

       Councilman King said they all appeared to be what the community needed.

       3)     Review and enhance traffic safety programs since motor vehicle accidents
              claim more lives in Show Low than any other offense or incident.

       Mr. Ploughe said what the Council was doing today was setting broad goals and
       themes. He said staff would then take them back to the City departments and
       they would determine associated costs to be brought back to the Council.

       Mr. Emmett said staff could add that as a separate theme, and everyone agreed.

       Discussion moved to the fourth theme: Economic Development – Attract and
       Retain a Prosperous Business Community.

       1)     Reinstitute the revolving fund to assist infrastructure installation in
              commercial and industrial development as incentive for job creation.

       Mr. Muder recommended changing the first word, ―Reinstitute,‖ to ―Increase.‖
       Mayor Kelley asked by how much. Mr. Muder said $100,000. Mr. Emmett
       suggested a percentage, such as 0.75%, which went up to around $100,000.
       Mr. Ploughe said staff could change it to a percentage totaling $100,000.

       Councilwoman Staffnik asked if a cap should be added. Mr. Muder said those
       funds had definitely paid for themselves.
Show Low City Council
Special Meeting – Minutes                  16                           November 22, 2002

       It was decided to add a not-to-exceed amount of $100,000.

       Vice Mayor Delzer said if it weren’t for the revolving fund, the City wouldn’t have
       the industrial area as accessible as it was right now.

       Mr. Emmett said unencumbered funds were carried over.

       2)     Coordinate with Show Low Chamber of Commerce and White Mountain
              Regional Development Corporation to develop business retention and
              development program.

       Councilwoman Evans asked for figures. Mr. Emmett said the City contributed
       about $70,000 to the Chamber, $44,000 to Main Street and $38,000 to White
       Mountain Regional Development Corporation (WMRDC). He said one of the
       areas all the organizations were moving into was increasing tourism activity. He
       said staff had directed the Recreation Department to work more closely with the
       Chamber and the WMRDC to develop activities for the Festival Marketplace.

       Councilwoman Staffnik said she didn’t have a problem with spending but she
       wanted feedback on where the money was being spent. She said she spoke
       with Barbara Bruce, the new executive director of the Chamber and Main Street
       program, and told her what her opinion was of both organizations. She said she
       didn’t think there would be the same problems as in the past. She said she
       wanted to see something in place that allowed for greater accountability for the
       money the City gave to them. Mr. Muder said staff talked to them about that very
       issue. He said that some time in the next few months staff would be bringing a
       contract back and it would explain in detail what these organizations would do.

       Mr. Muder suggested adding the words, ―Main Street,‖ after ―Show Low Chamber
       of Commerce.‖

       Vice Mayor Delzer noted that the Council wanted accountability from them.

       Mr. Emmett suggested adding, ―coordinate and ensure accountability,‖ to the

       Councilman Thomas felt that every time Main Street got a new director, the
       organization headed in a different direction. Mr. Emmett said Vice Mayor Delzer
       was the Council’s liaison with Main Street. He agreed it had been a challenge

       Councilman King asked if the City was still locked into the 1% of sales tax
       revenue contribution to the Chamber. Mr. Emmett said yes, that was where it
       was right now, but he agreed it needed to be reevaluated. Councilwoman Evans
       asked as the Council’s liaison to the Chamber, if they would be looking at that.
       Mayor Kelley said if the Chamber could show that it was supporting businesses
Show Low City Council
Special Meeting – Minutes                  17                           November 22, 2002

       and because of what the Chamber was doing, businesses were doing better,
       then it was a no-brainer. He said if the Chamber went in another direction, he
       questioned why the City should fund it.

       Councilwoman Staffnik asked if there was some sort of written contract with the
       Chamber. Mr. Emmett said yes.

       Mr. Emmett said that WMRDC was a quasi-governmental organization. He said
       there were by-laws that bound the four communities of Snowflake, Taylor,
       Pinetop-Lakeside and Show Low together. He said staff and the WMRDC board
       were in the process of reworking the by-laws.

       Vice Mayor Delzer commended Messrs. Emmett and Muder for seeing that Main
       Street and the Chamber came together under one umbrella.

       Mr. Emmett said that under Economic Development, Mr. Muder wanted to raise
       the issue of a bed tax. He asked the Council members if they wanted to consider
       a bed tax of 2% to supplement economic development. He said the tax could be
       rolled back to start paying for tourism activities and economic development
       programs. He said this idea went along with the goal of revenue generation. He
       said Show Low was the only White Mountain community without a bed tax.

       Councilman Thomas said that what made him nervous was that the money given
       in the past didn’t seem to result in much activity. Mr. Emmett said this would be
       for Council consideration. Mr. Muder said that businesses were not going to
       support it unless it was used for attracting visitors.

       Everyone decided to explore the opportunity to institute a bed tax.

       Councilwoman Staffnik said that raising a tax was not her idea of raising

       Mr. Muder told the Council some hotel owners came and talked to staff about
       one. He said some had addressed staff about using it for something like a
       Village Arena.

       Councilwoman Evans said she didn’t have a problem with it, adding that the
       customers paid it.

       Councilman King said he was opposed to any additional taxation.

       Mayor Kelley said he would be opposed to an additional tax, unless there were
       businesses willing to bring it forward asking for such a tax and directing where it
       would go.
Show Low City Council
Special Meeting – Minutes                  18                          November 22, 2002

       Councilwoman Evans said if the owners weren’t against it, she didn’t think it
       would hurt.

       Councilman Thomas suggested having the Council’s Chamber liaison handle this

       3)     Continue funding of Old Town Site redevelopment projects to draw and
              keep businesses in the downtown area.

       There was no discussion on the above item.

       Mr. Emmett finished reviewing the main overall themes. He said one thing never
       looked at was social services, such as TAG (Teen Advocacy Group), seniors,
       housing and other suggested areas.

       Discussion moved to goals and the Council’s priority ranking sheets.

       Councilwoman Staffnik said on her ranking sheet for short-term goals, she added
       ―entertainment.‖ She said that came from her kids wanting something to do.

       Councilman King said the City had built City Park, the aquatic center, etc. He
       thought the Council and community needed to work on the attitude of young
       people in getting them something they considered important and letting them
       promote it.

       Mayor Kelley felt there needed to a firefighters’ competition in Show Low, adding
       that firefighters in Phoenix were very supportive of the idea.

       Discussion turned to community and social services.

       Councilwoman Staffnik wanted to add athletic training.

       Vice Mayor Delzer said the Amateur Ham Radio Group was holding a HAMfest
       next June at Blue Ridge High School. He said the event would draw lots of
       people and would help fill up every establishment.

       Mr. Muder referred to enforcing ordinances and clean up in all areas. He said
       this would relate to additional funding in the cleanup process. Mayor Kelley
       asked if this meant maintaining or increasing services. He said he was in favor
       of maintaining services. Mr. Muder said that two years ago there was $40,000 in
       the budget for cleanup and $22,000 in the last two years and it had worked well.

       Councilman King felt strongly that the City needed to enforce ordinances and
       treat everyone the same. He said the City should either change the ordinances
       or enforce them.
Show Low City Council
Special Meeting – Minutes                   19                            November 22, 2002

       Councilwoman Staffnik wanted to add ―review of travel and its benefit to the City‖
       to the list. Mr. Spader said staff changed accounting procedures regarding travel
       expenses a little. He said staff took the credit card statements and broke out
       every item separately. He said one would now see a line from every expense on
       the credit card so that instead of seeing one line item, for example, one now saw
       five items. He said there wasn’t more traveling being done, just the accounting
       procedures had changed for greater clarification.

       Councilwoman Staffnik appreciated the change. She reiterated that she wanted
       to review what the City was spending on travel expenses. Mr. Emmett said that
       last year, every department took a 25% cut in travel.

       Mayor Kelley suggested continuing to take a close look at travel expenses, from
       a department head standpoint.

       Mr. Muder understood that whatever travel was happening was limited to those
       trips that were beneficial to the City.

       Mayor Kelley said when the Council halted moving in a specific direction such as
       stopping all travel until the end of the year, the City lost out. He said he wouldn’t
       support the absolute cessation of all travel, although he would agree with
       reviewing travel requests.

       Mayor Kelley said he didn’t think he was the one that needed to tell Mr. Emmett
       and the Public Works Department which training sessions a particular field
       worker needed to be at. He said, however, that overall most of the Council
       members now felt travel had gotten out of hand. He observed that what
       happened in the Council budget was that no one had to tell the Council members
       anything and it (travel) came to a stop. He encouraged the new Council
       members to take advantage of the first opportunity to go to trainings. He said he
       wanted to have at least one person attend the National League of Cities and
       Towns conference and have one of the city managers attend, too.

       Councilwoman Staffnik said her concern, going back to travel, was that she was
       invited back to the pool. She said, at the time, Aquatics Director Dirk Gardner
       was at a training and she questioned whether he should have been attending
       training or at the pool taking care of business.

       Councilman King said he would be out of town on December 3, the next regularly
       scheduled Council meeting.

5.     Report of Officers.

       Mr. Muder reminded all the Council members to check their boxes periodically.
Show Low City Council
Special Meeting – Minutes             20                       November 22, 2002

6.     Adjournment.

       There being no further business to be brought before the Council, MAYOR
       COUNCIL OF NOVEMBER 22, 2002 AT 4:45 P.M.

ATTEST:                                    APPROVED:

______________________________             ________________________________
Elizabeth A. Burke                         Gene Kelley
City Clerk                                 Mayor


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