Public Meetings - Payson, Arizona

The Town of Payson Common Council met in a work study session on May 6, 2025, from approximately 3:00 p.m. to 7:43 p.m. to discuss renewal of annual nonprofit agreements and a comprehensive overview of the draft FY26 budget. No formal action was taken, as work studies are intended for discussion only. The meeting focused on balancing ongoing revenues and expenditures, with particular emphasis on personnel costs (74% of the general fund), capital improvement priorities, and the financial sustainability of community events and services. Consent Calendar - No consent calendar items were presented; all agreements were discussed individually. Public Comments & Testimony - No public comment was taken, as per the stated purpose of the work study. Discussion Items Renewal of Annual Agreements - Blattner Brush Pit (Resolution 3446): Kevin McCully (Fuels Manager) and Frank Aspelagh (President, Mogollon Valley Pit Program) presented. The agreement includes a 10% increase from $7,000 to $7,700. Last season the pit collected over 4.6 million pounds of biofuel, with 56% of drops from Payson residents. Funds support equipment maintenance, fuel, and road base to cover ash. The pit operates on Forest Service land and cannot charge fees, relying on donations. Council members expressed support, with Council Member Bell stating it is a “necessity.” The $7,000 is already in the FY26 budget; the additional $700 increase will be included with council consensus. - Humane Society of Central Arizona (Resolution 3445): Police Commander Joshua Haines reported that animal incidents doubled in the last year. The Humane Society requested a $10,000 increase (from $95,200 to $105,200). Mark Van Earn (Vice Chair) noted a $36,000 operating loss for the quarter ending March 2025. The Humane Society is a no-kill shelter, provides animal control services for Payson and Star Valley, and covers approximately 10% of its budget from the town. Council acknowledged the importance of the partnership and agreed to include the requested amount in the budget. - Senior Center (Resolution 3442): Janice Chesser (Director of Development) and Steve Richardson (Parks and Recreation Director) presented. The Senior Center requested $135,000 (same as prior year), covering 17% of its operating budget. Services include 5,925 congregate meals (up 2.36%), 18,424 home-delivered meals (down 14.52%, seen as positive for social interaction), and 3,849 transportation rides (up 8.8%). The center also provides medical equipment loans. Council expressed support and included the amount in the budget. - Consolidated Court Agreement (Resolution 3444): Tracie Bailey (Town Clerk) noted a decrease of $8,126 annually, with a new monthly fee of $13,910. Council agreed to keep the agreement in the budget. FY26 Draft Budget Presentation and Discussion - Overview: Acting Town Manager Sheila DeSchaaf and Finance Director Dana Ohanesian presented the draft budget. The general fund projects $35.9 million in revenues and $35.5 million in expenditures, with an available fund balance of about $5.8 million after reserves. Personnel costs account for 74% of general fund expenditures. Police and Fire together represent 56–57% of the general fund budget. Highway User Revenue Fund (HURF) has a projected uncommitted balance of $470,000, with about $5.7 million in total revenues. - Revenues: Revenue growth has flattened. The one-percent sales tax increase approved previously did not generate the anticipated surplus due to increased costs. Council discussed TPT (transaction privilege tax) audits and contractors on the “honor system.” Tourism-related taxes (bed tax) are separate. Council Member Bell challenged the council to examine consultants, attorney fees, and temporary staffing costs. - Expenditures: Departments were advised not to exceed FY25 budgets; most are at or below prior year levels. The largest expenditure increases are in personnel costs. Community Development’s increase is due to the Beeline Bus project (partially funded by HURF). Council expressed caution about “co-mingling” of funds (general, HURF, water), but staff confirmed no violations. - Personnel Requests: Human Resources Director Lynne O’Donnell reviewed new personnel requests: water utility billing clerk, airport admin from part-time to full-time, library page to clerk, visitor center variable hours, fire community risk reduction specialist reclassification, police analyst, police volunteer coordinator, and two patrol sergeants plus a lieutenant. Staff recommended “no” for most general-fund positions due to lack of ongoing revenue surplus; water-funded and bed-tax-funded positions were recommended as “yes.” - Capital Improvement Projects: The draft includes about $600,000 in recommended “yes” projects (e.g., conference room technology, security cameras, Beeline bus replacement with 15% town share). Over $14 million in “maybe” projects were identified, including the aquatic center (Phase Two), event center upgrades, evidence facility, and Green Valley Parkway. Council debated the pool project, with several members noting lack of cost certainty and the need for external financing. - Ice Rink Discussion: Parks and Recreation Director Steve Richardson reviewed the 2024 ice rink: 1,372 skaters, $49,660 revenue, $142,500 total cost (excluding staff). Options for 2025 range from $184,000 (existing vendor) to $241,000 (higher-quality vendor). Council discussed sponsorships, volunteer staffing, and potential cuts to other events (e.g., NIRA College Rodeo cost $35,000) to offset costs. No decision made. - Beeline Bus: Julie Leonard and Doni Wilbanks presented. Total FY24 cost was $362,801, with ADOT reimbursement $241,758, and contributions from Gila County ($73,000) and Star Valley ($10,000), leaving a net town cost of $38,043. A new bus would cost the town $24,693 (15% of total). Ridership increased 120% since the town took over in 2023. Council discussed youth access and route efficiency. - Council Priorities & Concerns: Members debated whether to commit available fund balance to capital projects. Council Member Haws advocated for event center upgrades, evidence facility, and Green Valley Parkway, noting the pool likely requires bond financing. Council Member Ferris emphasized revenue-generating projects. Council Member Tubbs supported evidence locker, drainage improvements (Bentley Street), event center, and restrooms at Rumsey Park. Council Member Nossek suggested using the “rainy day fund” to offset costs. Council Member Bell called for a thorough review of personnel costs and consultants, but several members cautioned against cuts that would harm morale or public safety. Key Outcomes - Consensus on agreements: Council directed staff to include the Brush Pit ($7,700), Humane Society ($105,200), Senior Center ($135,000), and consolidated court (decrease to $13,910/month) in the tentative budget. - Budget direction: Council agreed to continue refining the draft budget at a work session on June 3, 2025, with potential reductions or reprioritizations. No formal action was taken on the draft budget. - Personnel and staffing: Council consensus to hold off on general personnel hiring decisions until a new Town Manager is hired, except for critical positions such as a town engineer. The Town Manager search is ongoing. - Capital improvements: No final decisions were made. Council requested additional information on the pool (May 14 meeting), airport hangar presentation, and appraisal of town-owned properties. The pool was noted as possibly requiring a GO bond election in 2026. - Events: Council expressed interest in increasing sponsorships for the ice rink and other community events. No events were cut or confirmed at this meeting. - Next steps: The tentative budget will be presented for adoption of the expenditure limitation at the May 28 council meeting. Further discussion on reductions and staffing will occur after the new Town Manager is hired.

The Payson Planning and Zoning Commission met on May 5, 2025, at 3:00 p.m. in the Town Hall Council Chambers. Chairman Doug Martin presided, with six commissioners present and one absent. The meeting covered approval of minutes, a single scheduled discussion on a preliminary plat extension, a future agenda request regarding water review processes, and staff information updates. Consent Calendar - Approval of Minutes (April 7, 2025): Motion by Commissioner (unidentified) and second; unanimous approval by voice vote. Public Comments & Testimony - No public comments were made or scheduled. Discussion Items - S22-004 – Second and Final Extension of Preliminary Plat for Ponderosa Pines - Staff report presented by Zoning Administrator Nicole Adams. The applicant requested a second and final six-month extension of the preliminary plat approval for Ponderosa Pines, a 20-lot subdivision located at 609 S. Ponderosa Street (tax parcel 304-02-022, zoned R3 MH). The original preliminary plat was approved by the commission on November 6, 2023. The Unified Development Code allows preliminary plat approval to be valid for 12 months, with up to two six-month extensions. The applicant is still working through final drainage issues. Chairman Martin asked if the process would restart if the extension is not met; Adams confirmed it would expire and require a new application, though it would likely be quicker. The commission voted to approve the extension. - Future Agenda Request – Water Review Process - Commissioner (identified in transcript as water-focused) expressed concern about how water availability is reviewed for projects, asking whether it falls under town or ADEQ purview. The commissioner requested education on the process for the board. Staff (Nicole Adams) offered to provide information and a training video, and the item was placed as a future discussion item (not voted on). Key Outcomes - Motion to Approve S22-004 Extension: Motion by Commissioner (unidentified) to approve the second and final six-month extension of the preliminary plat for Ponderosa Pines, described as a 20-lot subdivision to accommodate 20 residential duplex units. Seconded and passed unanimously by voice vote (6-0). - Information Items: Staff noted receipt of Juniper Pine Civil and Final Plat, reminded commissioners of the joint Planning and Zoning Commission and Airport Commission meeting on May 12, 2025, at 5:00 p.m. in the same location, and mentioned that the Unified Development Code update is aiming for a July meeting with the commission. - Adjournment: Motion to adjourn, seconded, and passed unanimously.

The Payson Town Council held a regular meeting on April 23, 2025, at 4:03 p.m. in Town Hall Council Chambers. The meeting included public comments, approval of a consent agenda, first readings of two ordinances, discussion on procurement policy and the Beeline Bus Route Improvement Project, and a new business item to award a well-drilling contract. The council later recessed into executive session for legal advice and returned to take further action. Consent Calendar - B.1: Approved minutes of Regular Council Meetings on February 26, March 12, 2025; Work Session on March 4; and Special Meeting on April 17, 2025. - B.2: Approved Resolution No. 3441, an intergovernmental agreement with Houston Mesa Fire District for fire, emergency medical, and administrative services. - The consent agenda passed 7–0. Public Comments & Testimony - Mike Quinn: Urged clear information about public meetings; opposed partisan moderators at city events. - Rebecca Orahood: Advocated for strategic planning, wider streets with sidewalks for safety and fire access; urged council to rely on professional input. - Isaac Blake: Expressed concern about a perceived disconnect between council and administration regarding agenda item placement; called for transparent process and assurance that council members can fulfill their duties. - Council Member Scott Nossek: Responded that staff has been cooperative; requested a future agenda item to explain the process of placing items on the agenda. Vice Mayor Tubbs joined the request. Council Members Ferris and Bell requested inclusion of a legal perspective on Code 30.50 A and B. - Robert Decker (RIMWAT member): Reiterated requests for funding firewise programs, a fire crew, and education; criticized council for ignoring fire chief recommendations and public comments; shared stories about vulnerable residents. - Tom Dunning: Emphasized narrow election margins and urged nonpartisan governance, strict following of town rules, and opposition to backdoor maneuvers. The council also heard testimony on specific agenda items: - F.1 – Rezoning (Mountain View Subdivision): Applicant Michelle Hallenar explained the need for a 5-lot subdivision due to road improvement costs; addressed neighbor concerns about well impacts, stating a hydrologist indicated no impacts if wells are drilled to sufficient depth. - F.2 – Wildfire Structure Hardening Code: Kevin McCully (fuels manager) presented the code requirements; answered council questions about roof materials, gutters, decking, and applicability to existing structures. Discussion Items - G.1 – Procurement Policy Modification (Section 1.1.5): Council Member Ferris proposed removing language that deems budgeted capital projects over $100,000 as pre-approved (Exhibit B). After discussion, council directed staff to not include grant‑contingent projects on Exhibit B and to clearly state that listed items are pre‑approved only with the budget. A motion passed 6–1 (Council Member Nossek opposed). - G.2 – Beeline Bus Route Improvement Project: Staff reported the project (originally approved March 26, 2025) had been revisited after discovery of a two‑year grant extension (through September 2026) and cost allocation questions. Water Director Tanner Henry argued water’s requested work is only $310,130, not the $1.12 million originally apportioned. Council debated value of the six small segments vs. full road repairs. A motion to continue contracts as originally approved with water’s share reduced to $310,130 failed 2–5. The item was tabled for executive session. - F.1 – First Public Hearing on Ordinance 969 (Rezoning): Staff presented the request to rezone 7.66 acres at 1500 E Frontier Street from R1‑175 to R1‑90 for a five‑lot subdivision. The public hearing was opened; no council action required until second hearing on May 14, 2025. - F.2 – First Public Hearing on Ordinance 970 (Wildfire Hardening Code): Kevin McCully reviewed the code applying to new structures and level‑3 remodels, requiring class‑A roofs, non‑combustible gutters, ignition‑resistant walls, etc. No council action taken; second reading scheduled. - H.1 – Sky Park Well Replacement: Water Director Tanner Henry recommended awarding a $150,000 contract to Integrity Drilling Services (lowest of three bids) to drill a new well. Council approved 7–0. - H.2 – Payson Hangar One Complex Management: Tabled to next meeting pending legal advice and presenter availability. - H.3 – Executive Session: Council voted 7–0 to recess into executive session for legal advice on G.2 (Beeline Bus) and H.3 (Hangar One management) under A.R.S. §38‑431.03(A)(3),(4),(7). The meeting reconvened at 8:31 p.m. Key Outcomes - Consent Agenda: Approved 7–0. - Procurement Policy (G.1): Motion passed 6–1 directing staff to exclude grant‑contingent projects from Exhibit B and to clearly show pre‑approval status. - Beeline Bus (G.2): After executive session, a motion carried 7–0 to direct staff to proceed with the previously awarded contracts (from March 26) with water’s funding portion capped at $400,000 and the remaining costs covered by any eligible funding source. - Sky Park Well (H.1): Approved 7–0 to award contract to Integrity Drilling Services for $150,000 from the Water Enterprise Fund. - Executive Session: Authorized 7–0; meeting reconvened with action on G.2. - Next Steps: The second readings for Ordinances 969 and 970 are scheduled for May 14, 2025. The Hangar One item will be revisited at the next regular meeting.

The Payson Town Council held a special meeting on April 23, 2025, at 3:01 PM in the Town Hall Council Chambers. The meeting lasted approximately one hour, with the council recessing into executive session at 3:01 PM and reconvening at 4:01 PM. The sole purpose was to review applications for the Town Manager position and receive legal advice on conducting interviews, followed by a vote on the next steps. Discussion Items - Item A – Executive Session: The council voted unanimously (7-0) to adjourn into executive session pursuant to A.R.S. § 38-431.03(A)(1),(2) and (3) for the initial review of Town Manager applications and to receive legal advice on conducting interviews. - Item B – Approval of Next Steps: After reconvening from executive session, the council voted unanimously (7-0) to direct staff as instructed during the executive session, which included approving selected candidates for the next stage of the review process and authorizing staff to provide a public update on the application process. Key Outcomes - Motion to enter executive session: Approved 7-0 (Mayor Stephen Otto, Vice Mayor Susan "Suzy" Tubbs, Council Members Charlie Bell, Jim Ferris, Brett Flaherty, Dallin Haws, and Scott Nossek all in favor). - Motion to approve next steps: Approved 7-0 (same voting members) to proceed with selected candidates and issue a public status update. - The meeting adjourned at approximately 4:02 PM.

The Payson Town Council held a special meeting on April 17, 2025, at Town Hall Council Chambers, 303 N. Beeline Highway, Payson, Arizona. Mayor Stephen Otto called the meeting to order at approximately 5:01 p.m. The sole public agenda item was consideration and action to adjourn into executive session under A.R.S. 38-431.03(A)(1), (2), and (3) for the Council’s initial review of Town Manager applications and to receive legal advice on conducting interviews. The public session lasted from about 5:01 p.m. until adjournment at approximately 8:17 p.m., after the closed executive session. Call to Order and Roll Call - Mayor Otto called the meeting to order at approximately 5:01 p.m. All council members were present except Council Member Brett Flaherty. - Council members present: Mayor Stephen Otto, Vice Mayor Susan Tubbs, Council Member Charlie Bell, Council Member Jim Ferris, Council Member Dallin Haws, and Council Member Scott Nossek. - Staff present included Town Attorney Christina Estes-Werther, Town Clerk Tracie Bailey, Human Resources Director Lynne ODonnell, and Deputy Town Clerk Megan Miller. Agenda Item and Motion - Vice Mayor Susan Tubbs moved, and Council Member Charlie Bell seconded, the motion to adjourn into executive session pursuant to A.R.S. 38-431.03(A)(1), (2), and (3) for the Council’s initial review of Town Manager applications and to receive legal advice on conducting interviews. - The motion carried 6-0. Voting yes were Mayor Otto and Council Members Tubbs, Bell, Ferris, Haws, and Nossek. Council Member Brett Flaherty was absent for the vote. Executive Session - Mayor Otto recessed to executive session at approximately 5:02 p.m. Council Member Flaherty arrived at 5:04 p.m. and participated in the executive session. - The meeting reconvened from executive session at approximately 8:17 p.m. Council Member Flaherty was present for the executive session but was not in chambers for the reconvened public portion. - As authorized by Arizona law, the executive session was confidential and covered initial review of Town Manager applications and legal advice on conducting interviews. Key Outcomes - The Council approved the motion to enter executive session by a 6-0 vote. - The Council conducted its initial review of Town Manager applications and received legal advice on interviews in closed session. - Mayor Otto adjourned the meeting at approximately 8:17 p.m. No public action was taken on the applications during the open meeting.

The Payson Common Council met in regular session on April 9, 2025, at 4:09 p.m. in the Town Hall Council Chambers. The meeting included public comments, a lengthy debate over the March 26 meeting minutes, a first public hearing on the FY 2025-2026 fee schedule, and an executive session for the Town Manager recruitment process. The meeting adjourned at approximately 7:59 p.m. Consent Calendar - Items B.2, B.3, B.4 were approved unanimously (7-0) without further discussion. These included: - Resolution 3431: Easement abandonment for a portion of two 60-foot easements on Maranatha Drive. - Resolution 3439: Intergovernmental Agreement (IGA) with Gila County for the 2025 Household Hazardous and Electronic Waste Day event. - Resolution 3440: IGA with Gila County for the Summer Work Program for young people. - Item B.1 (minutes from February 4 Work Session, February 12 Regular, and March 26 Regular meetings) was pulled at the request of Council Member Flaherty for discussion. Public Comments & Testimony - Charlie Seraphin urged the Council to prioritize hiring local contractors and professionals instead of outsourcing to the valley, arguing that local experts care more about the town. - Robert Decker, head of the Rim Wildfire Awareness Team (RIMWAT), quoted scripture and pleaded for the Council to work together to fund wildfire preparedness, including hiring a wildfire team under Parks and Recreation to reduce pension costs. He warned that the wildfire threat is high due to dry conditions. - Tom Thompson, President of the Payson Aero Club, disputed claims of structural damage to Hangar 1 doors and requested the opportunity to present a case for more efficient hangar management by the club. - Darlene Delage Younker raised concerns about fees in the proposed FY 2025-2026 schedule, including $120/hour for police chief consultation, $85/hour for inspections, per-fixture electrical fees, and a $12,000 bond for driveway construction. She asked the Council to calculate the total cost to build a $300,000 home. - Inga Chouinard thanked Council members (Otto, Haws, Ferris, Bell, Nossek) for participating in private citizen-organized meet-and-greets, noting such events help residents connect personally with their leaders. Discussion Items - Minutes (B.1) Debate: Council Member Flaherty raised concerns about a March 26 item (H.1 – Beeline Bus contracts with DBA Construction and Engineering Inc.) and claimed a Council member had spread misinformation on media about the vote. He wanted to clarify that the vote was to approve two contracts (construction and project management) and that the Council could have walked away if desired. Council Members Ferris and Bell requested revisiting H.1 on a future agenda to review contracts and funding details (water line costs, enterprise fund, ADEQ permits). Acting Town Manager DeSchaaf and the Town Attorney noted the minutes themselves were accurate; after discussion, the minutes for February 4, February 12, and March 26 were all approved (7-0 on separate motions). The Council also agreed, by a 2-1 vote (Ferris and Bell in favor, Flaherty and Haws opposed), to place H.1 on a future agenda for reconsideration. Staff were directed to provide additional information on funding, change orders, and prior contracts. - Town Manager’s Report (C.1): Acting Town Manager Sheila DeSchaaf highlighted: youth T-ball/coach-pitch registration, Easter Extravaganza on April 19, Wildfire Symposium on April 12, a March 24 structure fire (no injuries), vehicle fire safety reminders, Taylor Pool site assessment, Manzanita road closure for pavement work, airport road preservation, B-Line Bus project update, Granite Dells closure, and the South Green Valley Parkway preliminary environmental assessment (subject to a 30-day public comment period starting April 11). - First Public Hearing – Resolution 3438 (F.1): DeSchaaf presented proposed fee changes for FY 2025-2026 (effective July 1). Changes included jail fees ($69 to $75/day, plus new $75 booking fee), impound fee adjustments per state statute, and correction of Green Valley Park rental fees to previous levels ($100-$200). No action was taken; the resolution will be voted on at the May 14 meeting. Council and a public speaker (Darlene Younker) asked about building permit and electrical fees; staff clarified those were not being changed and are included in overall permit fees. Key Outcomes - Consent Agenda (minus B.1): Approved 7-0. - All Minutes (B.1): Approved 7-0 in three separate motions. - Reconsideration of H.1 (Beeline Bus): Directed to be placed on a future agenda with additional information to be provided by staff. - Executive Session (H.1): Motion to adjourn into executive session under A.R.S. 38-431.03(A)(1),(2),(3) for initial review of Town Manager applications and legal advice on interviews passed 7-0. The Council met in executive session from approximately 5:21 p.m. to 7:58 p.m., after which they reconvened and adjourned the public meeting at 7:59 p.m. - Fee Schedule (F.1): No decision; next step is consideration and adoption on May 14, 2025.

The Payson Planning and Zoning Commission met on April 7, 2025, at 3:00 p.m. in Town Hall Council Chambers. The commission approved minutes from March 3, 2025, and unanimously recommended approval of a zone change request from R1-75 to R1-90 for a portion of property at 1500 East Frontier Street. Staff provided updates on several development projects and upcoming meetings. Consent Calendar - Approval of Minutes (3/3/25): Motion carried 7–0. Public Comments & Testimony - No public comments were offered; the public hearing was opened and closed with no testimony. Discussion Items - P25-001 Zone Change (1500 E Frontier): Nicole Adams presented the staff report for a rezoning from R1-75 to R1-90 on a 2-acre portion of APN 304-01-3121. The purpose is to facilitate the Mountain View subdivision, creating five single-family lots. The property is not within the Green Valley Water District; lots will use wells and septic systems regulated by Gila County and ADEQ. The existing street (Frontier Street) has a double chip seal from a past dirt road elimination program and does not meet current code. Conditions of approval include completing the on-site roadway with a cul-de-sac, constructing 200 feet of off-site improvements on Frontier Street, and complying with R1-90 and R1-18 standards. The commission discussed water/sewer requirements and confirmed that water district connection is optional and costly. The applicant is not currently running utilities. Staff recommended approval with conditions. Key Outcomes - Motion to Recommend Approval: Commissioner Karen Schaier moved, seconded by Jimmy Lee, to recommend approval of P25-001 to the Town Council with staff’s listed conditions. The motion carried 7–0. Information to Commission - Timber Ridge Subdivision (behind Walmart) has issued permits for phase one ground-breaking. - Discount Tire submitted building and civil plans, currently under review. - Ponderosa Pines will submit its second and final preliminary plat extension. - A joint meeting of the Airport and Planning & Zoning Commissions is scheduled for May 12, 2025, at 5:00 p.m. in council chambers. - The town manager’s report (first Monday of the month) includes a development snapshot of commercial projects and permits; commissioners will receive a copy. Note: The transcription included extraneous audio (music and painting tutorial) that is not part of the meeting record. Only meeting content is summarized.

Mayor Stephen Otto called the meeting to order at approximately 3:02 p.m. in the Town Hall Council Chambers, 303 N. Beeline Highway, Payson, Arizona. All council members were present. The work study session was the fourth in a series of budget work sessions, focusing on FY26 revenue projections, compensation and benefits, hard-to-fill vacancies and development services contracts, the Public Safety Personnel Retirement System (PSPRS) funding policy, and the proposed Structure Hardening Code. No public comment was taken per work study format. Consent Calendar - No items. Public Comments & Testimony - No public comment was taken. Discussion Items - FY26 Revenue Projections: Finance Director Dana Ohanesian reviewed FY25 budget, noting $3 million less revenue than projected, with primary sales taxes 20% below projections and unawarded grants inflating prior General Fund projections. FY26 budget moves grants to a different fund to avoid affecting General Fund revenue. Projected FY26 total revenues are $35.1 million, a 12% decrease from the current budget. State shared taxes are expected to increase 1% based on League of Arizona Cities and Towns projections. Sales tax is projected flat at $22 million. Pending state legislation could limit municipal food taxes to 2%, retroactive to January 2025, costing the town an estimated $1.8 to $1.9 million annually. Another bill could reduce state shared tax rates. - Compensation and Benefits: Human Resources Director Lynne ODonnell presented salary trends showing local government salaries rising significantly since 2020 (e.g., 53% increase for civil engineers). She explained the Town's compensation philosophy using the Employment Cost Index (ECI) rather than COLA; the average ECI over five years is 3.12% vs. COLA at 4.14%. Market analysis compares Payson to similar agencies; for hard-to-fill positions like law enforcement, Payson is above market rate. Three health insurance premium distribution options were presented. Option One (town continues to absorb all increases) would save $359,000 vs. FY25 budget; Option Two (town covers employee-only on all high-deductible plans and 70% of dependent premiums) is market-closest but most costly; Option Three (town covers 100% on the $5,000 deductible plan and employee-only on other tiers with small employee increases) is staff's recommendation and more sustainable. Option Three results in a $6/month increase for the lowest-cost employee-only plan. Council reached consensus to direct staff to proceed with Option Three. Discussion included requests for further data on personnel costs as a percentage of operating expenses, retention rates, and PSPRS cost drivers. - Hard-to-Fill Vacancies / Development Services Contracts: ODonnell detailed recruitment challenges for building division and engineering positions. Contributing factors: high demand, shortage of qualified candidates, rural location, and reluctance to relocate. The Town has used Duffy Group executive recruitment; survey of 146 passive candidates for engineer positions showed 41% not willing to relocate. For building division, the Town has used Brown & Associates for plan review and inspections since 2023. Since 2020, Brown has been paid $311,748 total, offset by plan review fee revenue of $252,000. In FY24, using contract services resulted in $86,000 in cost savings due to lower personnel costs. For engineering, Strand Associates is the primary contract firm. Council discussed remote/hybrid work options for engineers; some members supported exploring remote positions, but opposed fully remote roles. Acting Town Manager Sheila DeSchaaf noted that with only 20% of needed staff, the Town must consider all possibilities. Council expressed support for continuing to use contract services to augment hard-to-fill positions, with a goal of eventually filling seats. Council Member Bell objected to using the term "consultants" for contracted engineering services. - PSPRS Funding Policy: Dana Ohanesian reviewed PSPRS history and statutory requirements. The Town pays a minimum of $500,000 annually toward the unfunded liability, with additional $600,000 paid in recent years. The 0.88% sales tax increase (adopted 2017, originally with a 10-year sunset now repealed) partially funds this. FY26 projected PSPRS payment is $5.1 million (required based on actuarial calculation) plus an additional $600,000, totaling $5.7 million. The unfunded liability is approximately $19 million; funded ratio about 60%. Payment is projected to increase 9% over FY25. Options to reduce unfunded liability include: contributing for DROP participants, paying for vacant PSPRS positions, increasing annual lump sum payments, or issuing bonds/loans. Council consensus was that paying down the unfunded liability is a priority. DeSchaaf noted that additional funding already included in the proposed budget will remain, and council would like to consider loans or bonds when rates improve. No formal direction on changing the policy was given; the item will return. - Proposed Structure Hardening Code: Fuels Manager Kevin McCully presented a proposed performance-based code to increase ignition resistance of new structures. The code was developed in coordination with the Building Advisory Board and local builders. Cost estimates suggest hardened materials can be cheaper than conventional ones. The code would apply to new structures and existing structures undergoing level-three alterations (50% or more modification). The goal is to improve insurability of homes and provide a standardized risk assessment for insurers. Council requested a copy of the code (to be uploaded as supplemental documentation) for review before taking further action. Key Outcomes - Direction on Health Benefits: Council directed staff to proceed with Option Three for insurance premium distribution, implementing modest employee increases as recommended for sustainability. Changes take effect July 1, 2025. - Direction on Hard-to-Fill Positions: Council supported continuing the use of contracted services (e.g., Brown & Associates, Strand Associates) to augment staff for hard-to-fill positions, while continuing recruitment. Council indicated openness to exploring remote/hybrid work options for engineering positions, but not fully remote roles. - PSPRS Direction: Council expressed priority on paying down the PSPRS unfunded liability. Staff will include planned additional contributions in the proposed budget and explore potential financing options (loans/bonds) when interest rates are favorable. No formal change to the funding policy was made at this meeting. - Structure Hardening Code: Council requested time to review the proposed code document before further discussion. Staff will make the code available via the agenda supplement. - Future Work Sessions: A follow-up work session on expenditures and operational budgets is scheduled for late April or early May 2025.

The work study meeting of the Payson Town Council was called to order at approximately 7:27 pm in the Town Hall Council Chambers. All seven council members were present (Council Member Ferris via Zoom). Staff and consultants provided two presentations: first on commonly used procurement methods for construction projects, and second on the future management of the Airport Hangar One Complex. No formal action could be taken during a work study, but council members discussed the issues and provided staff with direction for next steps. Discussion Items – Procurement Methods - Jeff Kramer, PE, faculty associate at ASU and expert in design/construction procurement, presented the statutory framework under Arizona Revised Statutes Title 34. He explained three categories of self-performance (force account work) with current dollar limits: building facilities (≈$26,262 labor only), horizontal infrastructure (≈$281,000 total cost), utilities/parks/recreation (≈$250,000), and development agreements (≈$187,000). Kramer noted the town may adopt stricter policies than statute but not less strict. - For professional services (architects, engineers, owner’s reps), three methods were outlined: single project (qualifications-based, typically $500,000), on-call (up to $500,000 per task order, max 5‑year contract, qualifications-based, no secondary procurement), and direct select (single project under $500,000, no formal procurement). - For construction services, four delivery methods were discussed: Design-Bid-Build (low bid), Design-Build, Construction Manager at Risk (CMAR), and Job Order Contracting (JOC). Kramer explained the two‑step selection process available for Design-Build and JOC (RFQ then best‑value RFP), and that CMAR price competition is currently limited to large municipalities (population ≥1 million) unless legislative changes occur. - Council members asked about the $1 million per‑job‑order cap under JOC, noting that council can approve a higher amount at the time of the master contract. They also discussed retention withholding (not allowed in JOC) and monthly progress reporting requirements. Discussion Items – Airport Hangar One Complex - Christine Smith, Deputy Town Manager, provided background: the hangars were transferred from Goodyear in 1991, ownership reverted to the town in 2011 after a 20‑year ground lease. The complex currently operates under a month‑to‑month lease with Payson Hangar One, LLC (PHO‑LLC). There is a 20‑year wait list for hangars (19 applicants for T‑hangars, 9 for box hangars). - Dale Mueller, representative of PHO‑LLC, proposed continuing management of the hangars with a 10‑ to 20‑year lease extension. He disputed the condition report’s tone and emphasized that the LLC has insured and maintained the hangars, and that the structure is sound. He argued the $0.19/sq ft member rate includes insurance, taxes, and electricity not included in the town’s $0.35/sq ft rate for newer hangars. - Jim Hunt, Chairman of the Airport Commission, presented a financial comparison: PHO‑LLC currently pays $17,100/year in ground lease, plus insurance, electricity, and property taxes. The commission recommended the town take over management, estimating potential annual revenue of $33,000–$45,000 (if all 10 hangars are rented at $375/month), compared to the current $17,100. He stated the hangars are a town asset and liability, and that a new lease to PHO‑LLC would likely need to be competitively bid under FAA grant assurances. - Dennis Dueker, Airport Operations Supervisor, reviewed the PCI structural inspection report. He clarified that the hangar structure itself is sound, but the bifold doors have significant weld failures, corrosion, and hinge problems. Replacement doors (Horton stack doors) would cost approximately $14,000–$15,000 per door, and the airport has $160,000 in Bipartisan Infrastructure Law funds available starting October 1, 2025 that can be used for hangar rehab. - Jason Musselman, airport consultant, explained FAA grant assurance requirements (19 pages of conditions) and the risks of non‑compliance, including Part 16 complaints, loss of funding, or repayment. He advised that town self‑management is the safest approach from the FAA’s perspective, and that any new third‑party management agreement would need to be competitively procured. - Matt Thomason, Planning Director, confirmed that if the decision is to retain a management group, a competitive solicitation (RFP) would be necessary to comply with grant assurances. - Council members discussed legal implications, liability, revenue potential, and the need to resolve the long‑standing inequity of the wait list bypass. The town attorney suggested scheduling an executive session to review legal options and FAA compliance. Key Outcomes - No binding decisions were made, as this was a work study. - Council directed staff to work with legal counsel and schedule an executive session to discuss: (a) the legal implications of various management options (town takeover, new lease with PHO‑LLC, or competitive procurement), (b) compliance with FAA grant assurances, and (c) liability issues related to the hangar doors. - The meeting was adjourned at approximately 9:33 pm.