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ITEM 9.a. TOWN OF FOUNTAIN HILLS STAFF REPORT Meeting Date: 6/16/2026 Meeting Type: Town Council Regular Meeting Submitting Department: Administration / Administrative Services Prepared by: David Trimble, Deputy Town Manager/Administrative Services Director Staff Contact Information: Phone: 480-816-5125 Email: dtrimble@fountainhillsaz.gov Request to Town Council Regular Meeting (Agenda Language) CONSIDERATION AND POSSIBLE ACTION: Regarding the Town Council's direct- report employment contract amendments and/or updated agreements, as applicable, for the Town Manager, Town Attorney, Town Prosecutor, and Presiding Judge/Town Magistrate, and authorizing the Mayor, Town Manager, Town Attorney, and Town Clerk to take all actions necessary to carry out the intent of the approvals. Staff Summary (background) Background The Town Council has four direct reports: the Town Manager, Town Attorney, Town Prosecutor, and Presiding Judge/Town Magistrate. These positions are unique because they report directly to the Town Council rather than through the Town's regular employee supervisory structure. The purpose of this item is to update and align the contracts for the Council's direct reports so that the Town Council can standardize the performance evaluation process and place that process on a fiscal year cadence. The Town's fiscal year begins July 1, and the Council has expressed a desire to conduct annual evaluations before the beginning of each new fiscal year. Aligning the contracts at this time will allow Council to review performance, consider any contract issues, and make compensation or other contract decisions in advance of the new fiscal year. Over the past several months, the Town Council has met face-to-face with each of the four direct reports. During those meetings, Council reviewed performance and discussed any potential contract changes with each direct report. The proposed action does not make all four relationships the same. Each position has a different legal and operational structure. The Town Manager and Presiding Judge/Town Magistrate are Town employees serving under employment agreements. The Town Attorney and Town Prosecutor are independent contractors serving under professional services agreements. Prior Council Action The Town Council appoints and oversees the Town Council's direct reports. The structure of each relationship differs based on the position. The Town Attorney has traditionally been provided through an outside law firm rather than as a Town employee. This structure has been in place for decades. The current Town Attorney services are provided through the LaSota Law Firm, with Jen Wright serving as Town Attorney. The current agreement began July 1, 2025. This is a contractor relationship, and Town Attorney services are provided through a set monthly contract amount. The Town Attorney also tracks time associated with Town services. The Town Prosecutor has also traditionally been provided through an outside contractor arrangement. This structure has been in place for decades. The Town Prosecutor remains a contractor and is not a Town employee. The Town Manager is a full-time Town employee appointed by the Town Council. Rachael Goodwin began employment with the Town in 2014, was appointed Interim Town Manager on April 3, 2023, and was appointed permanent Town Manager by the Town Council on October 3, 2023. The Presiding Judge/Town Magistrate, Robert Melton, has served the Town since 2014. He is a Town employee serving under contract and has traditionally served in a part-time capacity. The Presiding Judge's current agreement became effective July 1, 2024, and runs through June 30, 2028. This is consistent with Town Code Section 5-2-1, which provides for an initial two-year term followed by subsequent four-year terms. Current Action The proposed action updates the direct report contracts and related compensation provisions as follows: Town Attorney The Town Attorney will remain a contractor through the LaSota Law Firm, with Jen Wright continuing to serve as Town Attorney. The contractor structure is not changing. The proposed change would increase the Town Attorney's set monthly contract amount from $18,000 to $20,000, increasing the annual amount from $216,000 to $240,000 for the next fiscal year. For context, the existing agreement includes annual review language referencing CPI-related adjustments. Applying a 3.3% CPI factor to the current $18,000 monthly amount would result in a CPI-adjusted reference amount of approximately $18,594 per month, or $223,128 annually. The proposed $20,000 monthly amount is approximately 7.6% above that CPI-adjusted reference amount. The Town Attorney will continue to track time associated with Town services. Town Prosecutor The Town Prosecutor will remain a contractor. The contractor structure and compensation methodology are not changing. The proposed action would approve an Amended and Restated Town Prosecutor Agreement. The restated agreement continues the existing contractor relationship and incorporates updated status reporting and coordination provisions into a single updated agreement. The updated agreement would enhance status reporting by including prior-period and prior- year context. The agreement would also require regular coordination with the Town Attorney. These changes are intended to improve communication and context for Council and staff while preserving the Town Prosecutor's reporting structure and independent prosecutorial discretion. The Town Prosecutor's annual fee will increase from approximately $144,766 to $150,267. This increase was already provided for in the existing agreement and is not a newly negotiated term. Under the existing agreement, the Town Prosecutor receives the same across-the-board increase provided to Town employees. Therefore, the compensation adjustment would occur under the current agreement even without the proposed Amended and Restated Agreement. Town Manager The Town Manager will remain a full-time Town employee appointed by and reporting directly to the Town Council. The proposed change would increase the Town Manager's annual salary to $238,074. For context, the Town Manager's current annual salary is approximately $206,268. Applying a 3.3% CPI factor to that amount would result in a CPI-adjusted reference salary of approximately $213,075. The proposed salary is approximately $25,000 above that CPI- adjusted reference amount, or approximately 11.7% above that reference amount. The adjustment is based on compensation information reviewed by the Town Council indicating that the Town Manager's salary was below the Maricopa County municipal manager peer average, including when population was considered. The proposed agreement would also update the future annual adjustment language so that future adjustments are tied to the Town's employee Annual General Adjustment rather than CPI. This change is intended to align the Town Manager's agreement with the Town's fiscal year budget and evaluation cycle. Presiding Judge/Town Magistrate The Presiding Judge/Town Magistrate will remain a Town employee serving under contract. The current contract began July 1, 2024, and does not expire until June 30, 2028. The Presiding Judge's current annual salary is approximately $100,720. The Presiding Judge's compensation provision is not changing. Under the current agreement, the Presiding Judge receives the greater of a minimum 2.5% increase or, if Town employees receive a higher across-the-board increase, the same increase provided to Town employees. For the upcoming fiscal year, the Presiding Judge's salary would increase to approximately $104,547 under that existing contract provision. The Town Council is currently in negotiations with the Presiding Judge regarding possible contract changes that could include an increase in hours and eligibility for the Town's group health insurance plan. If the Presiding Judge's work schedule is increased so that he satisfies the eligibility requirements for the Town's group health insurance plan, the Town would be required to offer group health benefits and treat him the same as other Town employees who satisfy the plan's eligibility requirements. The parties are also discussing possible offsetting compensation or benefit-related contract changes so that any expansion of eligibility for group health insurance would be cost-neutral or nearly cost-neutral to the Town. If no contract amendment is finalized for the Presiding Judge before this item is posted, the Presiding Judge's current agreement will remain in effect without change. In that case, Council action on this item would apply only to the other direct report agreements presented for approval, and any future change to the Presiding Judge's agreement would be brought back to Council at a later date. Related Ordinance, Policy or Guiding Principle Town Code Section 5-2-1; Town Council authority over Council-appointed positions and direct reports; applicable employment agreements, professional services agreements, and Town personnel and benefits policies. Risk Analysis Approval of the proposed contract updates would align the Council direct report contracts with the Town's fiscal year and support a standardized annual performance evaluation process. This would allow Council to evaluate performance and consider compensation or contract changes before the beginning of each fiscal year. If the contracts are not updated, the Town may continue to have different contract terms, compensation adjustment methods, and evaluation timing among the Council's direct reports. This could make it more difficult to maintain a consistent annual review process and may require additional individual contract actions later in the fiscal year. For the Presiding Judge/Town Magistrate, there is no immediate risk if a proposed amendment is not ready for Council consideration with this item. The current agreement remains in effect through June 30, 2028, and the existing compensation adjustment language will continue to apply unless amended by Council at a later date. If an amendment is finalized, the proposed terms may include offsetting compensation or benefit-related changes intended to make any expanded benefit eligibility cost-neutral or nearly cost-neutral to the Town. Recommendation(s) by Board(s) or Commission(s) N/A Staff Recommendation(s) Staff recommends Council approval of the proposed contract amendments and/or updated agreements for the Town Council's direct reports that are presented with this item. Suggested Motion MOVE TO APPROVE the Town Council's direct-report employment contract amendments and/or updated agreements, as applicable, for the Town Manager, Town Attorney, Town Prosecutor, and Presiding Judge/Town Magistrate, and authorizing the Mayor, Town Manager, Town Attorney, and Town Clerk to take all actions necessary to carry out the intent of the approvals. FISCAL IMPACT Fiscal Impact: The proposed agreements and amendments include increased FY 2026-27 compensation and contract costs. The Town Attorney set monthly contract amount would increase from $18,000 to $20,000 per month, or from $216,000 to $240,000 annually. For context, applying a 3.3% CPI factor to the current $18,000 monthly amount would result in a CPI-adjusted reference amount of approximately $18,594 per month, or $223,128 annually; the proposed $20,000 monthly amount is approximately 7.6% above that CPI-adjusted reference amount. The Town Manager annual salary would increase to $238,074. For context, applying a 3.3% CPI factor to the current annual salary of approximately $206,268 would result in a CPI-adjusted reference salary of approximately $213,075; the proposed salary is approximately $25,000 above that CPI-adjusted reference amount, or approximately 11.7% above that reference amount, plus applicable employer payroll and benefit-related costs. The Town Prosecutor annual fee would increase from approximately $144,766 to $150,267 under the existing agreement formula. The Presiding Judge/Town Magistrate salary would increase from approximately $100,720 to approximately $104,547 under the existing agreement formula. Any contract change that expands Presiding Judge/Town Magistrate eligibility for group health insurance may include offsetting compensation or benefit-related changes intended to be cost- neutral or nearly cost-neutral to the Town. Final fiscal impacts will depend on the agreements and amendments presented for approval. Budget Reference: FY 2026-27 Adopted Budget; General Fund — Administration, Legal, Prosecutor, and Court- related accounts. Funding Source: General Fund ATTACHMENTS 1. Council Direct Report Contract Summary 2. Prosecutor Contract 7-1-2026_signed by Iacovino 3. Town Manager_First Amendment_employment contract_07-01-2026_signed by Goodwin 4. Town_Attorney_First_Amendment_La_Sota_07-01-2026_signed_by_LaSota