I pledge your allegiance to the flag of the United States of America.

One nation, under God, indivisible with liberty and justice for all.

Thank you.

Marcel, if we could have roll call, please.

Councilmember Condi.

Here.

Councilmember Garcia.

Here.

Councilmember Solario.

Here.

Councilmember Weiss here.

Vice Mayor Nielsen.

Here.

Mayor Paneda.

Here.

And Councilmember White will be appearing electronically online.

But she's not on the call at the moment.

We're having technical difficulties, but I'll note her arrival in the minutes and I'll announce it.

Thank you.

Thank you, Marcella.

At this time we have uh unscheduled public appearances.

We have two blue cards.

Are there any others, Marcella, besides these two?

Marcella?

Thank you, Mayor.

We have only received the two requests to speak.

Okay, thank you.

Uh first up, we have Maria Alvarado.

And Mayor, this P the speakers will come to this podium here.

Okay, got it.

Thank you.

Good evening.

Can everyone hear me?

My name is Maria Alvarado.

I'm a resident of Avondale, and I was going to say about some really neat things that happened on Friday night, but I won't just limit it to saying that we were invaded by grasshoppers.

It was made it very hard to talk to people, but they were all over the place, and I know you can't do anything about the grasshopper invasion.

I also wanted to say that as far as uh council members, uh I do believe that uh training and attending national conferences are very critical for fair ethical and proper representation.

So I do believe that any time someone is elected to an official position that I think that any training that is available to the council uh members is always it always pays off.

Not only information, but you do a lot of networking.

And you also represent the city of Avondale, and uh we believe that that is money well invested.

So I would be against any kind of cut from training and from attending workshops and networking with council members from across the nation.

Thank you.

Thank you.

Next up we have Teresa DeSante Okay.

Then at this time, we'll move on to item three consent agenda.

Are there any uh council members who wish to have an item removed for or removed or for discussion or separate uh consideration?

Seeing none, can I get a motion?

Okay, we got a council we got councilmember Solario with a motion.

Okay, we got Vice Mayor Nielsen with a second.

Can we please vote?

And I'll do a voice vote.

Councilmember Condi, aye.

Councilmember Garcia, aye, Councilmember Solario?

Aye, Councilmember Weiss, aye.

Vice Mayor Nielsen, aye, Mayor Paneda.

Aye.

And uh are we have we have Councilmember White yet?

No, she's still trying to get on the call.

Okay.

Thank you.

So moving on to item number four, Ron.

Thank you, Mr.

Mayor.

Council.

Up first, we're gonna have a presentation and discussion on general obligation bonds.

I'll let Renee introduce our guest, our finance and budget director.

Good evening, Mayor, Vice Mayor, and Council.

Tonight um, we're here to discuss our general obligation bond.

Um we have with us Mr.

Paul Bence, his senior vice president of high ground strategies.

He's with us to present the results of the city's November 2025 obligation bond election.

And so at this time, um I will be turning it over to Paul.

And Mayor and Council, before we move on to Paul, I just want to test um Councilmember White's audio.

Councilmember White, can you hear me okay?

Yes, can you hear me?

Yes, thank you so much.

I appreciate your patience.

Thank you.

Uh good evening, Mayor, Vice Mayor, members of the council.

My name is Paul Bence.

I'm the senior vice president of strategy at High Ground Public Affairs.

We did help with the uh bond effort last year in 2025.

I'm here to just give a little quick recap about that before turning it back over to Renee.

Uh a couple things to note.

Number one, uh the turnout for the election in the 2025 cycle was about 16.7% of your registered voters.

That represents about 7,772 folks that showed up and participated in the election.

Uh what is interesting is that over 7,000 people voted, but actually on both of the Avondale questions, there was an undervote, which means that there's folks that showed up to vote for other items that didn't actually make it to that portion of the ballot.

So I'll I'll talk about that just in a minute.

Um almost 17% voter turnout represents, as I said, about 7,000 folks.

If you're looking at, say uh the midterm cycle that we're in now, the gubernatorial cycle, which we talk about, we'd be looking at voter turnout somewhere in the 60 to 65 percent range.

So three to four times as many folks.

We would anticipate um you know, somewhere in that uh 28 to about 30,000 or so voters that show up in an in a in a gubernatorial year.

Presidential years are even a little bit higher than that.

We just see the turnout in the 70% range.

Um looking at what 2025 looked like uh on the right column there is what we anticipated turnout to look like for the various age groups.

Uh when it's a off-cycle or 2025 election, uh we expect a much older electorate.

As you can see, we anticipated about 70 percent or so of the voters to be over the age of 50, with about 40 percent over the age of 65.

We were pretty close.

Uh that was what we modeled in our polling.

It was about 28 percent over the age of 50 to 64, and then another 38 percent um over the age of 65.

In addition, we did basically, you know, while your registration is slightly different, your participation is is what we look at and base a lot of our information on.

Participation in this case was about 47 percent Democrat, about 29 percent Republican, about 21% unaffiliated.

That's what PD stands for, party not declared, and then any other party.

So no labels, which is now the Arizona Independent Party, the Green Party, Libertarian, and others made up about 3.9%.

We anticipated about three.

So um it was closer to we had said the the unaffiliated would be a little bit lower based on historic participation, it was a little bit higher than usual.

Uh we also saw that 852 85323 with 85340 was slightly higher.

But one thing to note is that we were pretty close uh anticipating what we modeled our turnout to look like as we went through the election, and we were pretty spot on.

That's why our data was pretty reflective of what we saw actually in the in the turnout result.

Uh in fact, our polling ended up being very close to what the final result looked like.

Uh from the Prop 404 of the parks issue that did pass, uh, what we saw is that it won by about 275 votes with a 400, or sorry, pardon me, a 295 person undervote.

That means 295 people voted for other parts of the ballot, but did not make it to that portion.

Um, I gave you sort of a map here that gives you an idea of the sort of the breakdown here.

And we have a version that has percentages on it that didn't translate in this version, but the what you'll note is in the upper right-hand corner in particular is so green means passage, the darker the green, the more it passed.

And I'm sure you there's handouts that you can uh get the version of this.

And then the red is where light red is where it failed narrowly, and then the dark red is where uh we saw it did not pass.

And the big area that we see here is that's the Devonshire precinct.

And one thing to note is that was actually a hotbed for another issue that was not related to our bonds to 404 and 405.

In fact, that was uh one of the local issues that was in that area, had a heavy no campaign that you might have been aware of.

And what we actually saw is that no campaign for that issue impacted basically every other issue on the ballot.

I've looked through the the data reports for proposition 409, which was the countywide health care issue.

I also looked at 403 and 406, which were the two West Mech uh joint technical education issues that were also on the ballot.

All five, six of those items basically failed in that in that area, not to mention the other uh issues that were locally just to that area.

So the impact of that no campaign uh definitely overall impacted the the results of this, and that's sort of where that deep red concentrated area.

The rest of the city, you can see there was only basically two precincts uh where the issue did not pass.

So that's the good news uh in an off cycle election with lower turnout.

We did see a positive there.

Moving on to proposition 405, uh, you see a similar result with, but in this case, what we actually saw is a 523 person undervote.

That means 523 people got a ballot, voted for something else, and did not vote on this issue.

Proposition 405 failed by 13 votes.

Now, I was told to do the math on this, but it's actually even a little more heartbreaking than that.

Because if seven people had changed their vote from no to yes, it would have passed.

So it's not 13 people.

I know I know we're oh, it's 13, if 13 more people, actually, seven people vote from no from from no to yes, it would have passed.

So it was a very narrow margin.

Uh the city did an incredible job with the public outreach with the information, and unfortunately, at the end of the day, uh, we saw a net loss in the Devonshire district alone of about um 218 votes.

So that's where the that's where the difference was really made.

It was in that general area uh with that no campaign.

So uh you know, we saw based on what we expected this to be, it was pretty close to what we anticipated with the unanticipated result that there was a pretty healthy no campaign not related to the bonds that swept some other things up, including proposition 405.

And so with that, I'll happily turn it over to Renee.

So, Mayor, Vice Mayor, and Council, there's been some discussion about the possibility of going out for a bond.

So at this point, we'll turn it over to you, Mayor, to cover the things on do we want to go out back out to the voters in a future election?

Um, and if that was the case, uh use does council wish to establish another bond committee.

And if that is also the case, would we just stick to a public safety question or expand questions?

I'll turn it over to you.

Yep, thank you, Paul.

Thank you, Rene.

Uh I'll look for counsel to provide feedback.

Um just quickly uh before everyone else goes.

Um, I would definitely would like to go back out for bond uh based upon uh the research that you did, Paul, the numbers that you provided.

I think it was very watered down.

You stated as to uh what you believe that to be in terms of the other high um or I should say um contentious bonds that were out there uh for lack of a better term.

And so I think we were fighting upstream uh with that.

My opinion, and we'll hear what council has to say is that we do go out as soon as possible.

Uh we'll determine what that looks like in terms of time.

Uh but what and and and and by the way, for public safety, I believe, if we use have the one question we might have, and you're the professional in this, but that we might have a better chance if we go out with the one question.

Um, but I'm not sure how quick we can do it, but I would say we go out sooner than later.

Uh but I'll turn this over to council and seeing that council member white's online.

I'm gonna go to her first.

Hi, thank you so much.

Hopefully, you can hear me okay.

Um I I just want to make sure I clarify.

Thank you for the presentation.

Um he he did say the it passed, it it failed by 13 votes.

Is that correct?

Correct.

So um I'm not sure if we go right back out.

Uh does it behoove us to change the name or change anything about what was offered before?

Um I can only imagine a bond, a new bond committee would cost money.

Um and I do know having another election in an off-cycle year um would cost money.

Um so even having that election last year probably cost us money.

So I guess I really want to know what's the cost of going right back out because we're focusing on the budget, and what's the cost of having another bond committee?

Um, and is there a cost to change anything about how it was offered before?

Mr.

Mayor, can we let Paul uh answer some of those questions if he wants to take a stab really about uh whether the this November is the right way to do it if you recommend going back out for or creating a committee again?

Um and just some thoughts on next steps.

Sure.

Uh it's always a difficult question to to sort of see something get so close and and not succeed.

There's clearly a lot of voter attitudes in support of these types of issues.

Uh every election is a little bit different.

I I never shy away from a citizens committee.

I think having citizen buy-in where you're looking at things is always a positive.

It gives you people who are experts on the topic.

It gives you champions to go out and discuss the issue.

And quite frankly, 2026, there will be other items on the ballot.

We're hearing from the legislature that they could be putting up to seven more items on the ballot.

They've already placed two.

So there's up to seven more from the state legislature that are likely to be on there.

So we will see some additional items to compete with where also it will be in the gubernatorial cycle, which means or more eyeballs.

The good news is that means it will be a younger electorate.

It will be more voters.

It will be, as I said, the three to four times at least as many people voting in the election when in a race like this where every vote counts.

Sometimes that can be the difference there.

But you also you are going to need to do another full public awareness effort to make sure people make it.

We saw with only four or five items on the ballot in most places, we did see some fall off.

So we'd want to make sure that we address that.

But I think doing a citizen's process building champions, having people look at the items is certainly a worthy exercise, whether you decide to do it now or in the future.

I I think public safety is always a need, especially with a growing community like this.

I think we did a lot of efforts to make them aware, but having them understand that that was what was in there for them.

I I would have bet that that they'd be darker green in those areas.

It certainly did not translate.

That's some certainly something I would look at as well.

And I think that you oh, sorry, I mean I know that maybe Councilmember White has a follow-up question, but in regards to what you just mentioned, whether it'd be better communication, better campaign between the Devonshire area and even to the southern end where this where a public safety facility would go, that those variables alone may get it over the hump.

But Councilmember White, did you have any follow-up to your question?

Well, it it sounds like um whatever we do is going to be an expense.

And as we're going through a budget conversation right now, and we're in the process of cutting back a lot.

Um yeah, I I do see the benefit, but I I'm just concerned.

Um maybe Marcelo knows the answer.

How much will it cost to run this if it runs not in this election cycle?

I just need to know what will it cost.

Thank you, Mayor Council.

For this past bond election, it was around 80,000 just for the bond questions.

Thank you.

Um I'm not sure where we would get that from.

Um, but if that is a line item that can be put in the budget, um that might be something we need to consider for uh this year.

I think it's cheaper.

Am I correct, Marcella?

If we run it in conjunction with November's election.

It um so the election is significantly um less expensive if you have it on an election that Maricopa County is already holding.

Um we would spend around 30,000 that we're already spending um if we are holding our candidate election.

So it wouldn't be anything additional to add it to the ballot.

Um we would have a cost for the publicity pamphlet because that is a printing and we don't print policy pamphlets for um candidate elections.

So if we were to have a runoff election in November, Maricopa County would not charge us to add a question.

Um but we would do the cost of um policy pamphlets.

And again, if we don't have a runoff election in November, then we would pay the price of holding the election when it wasn't needed.

Thank you.

Thank you.

Ron Uh Marcella, uh, to follow up on Councilmember White's question.

Um she seemed uh open to uh doing the citizen committee again.

Um this is a much tighter turnaround time.

Uh would if we did a citizens committee, would we be able to make the November election?

Thank you, Ron.

That was a question for me.

Um so for if we were to do a November election, um, let me just pull up.

We would have to call the election.

Let's see.

I I would say we could do a citizen account uh uh citizen bond um board, but it would be an incredibly tight time frame.

Um for the last bond we created the we established the committee in a September for not the immediate November but the following November time frame.

So it was a year and a couple of months.

Um we could always establish a committee at our next city council meeting and get it started very quickly, but the recruitment on it alone usually will take a couple months.

So it's anything is doable, but it wouldn't have the depth of meetings as we had the previous um bond committee.

Thank you, Marcella.

Members of council.

Councilmember, yep, thank you.

So the need doesn't go away.

We need it.

I feel like we need it.

Um I don't know if it's completely impossible to do it in November.

Do we have to have a bond committee for it if it's the same bond that's coming forward?

Uh Mr.

Mayor, Councilmember Slawyer, the one concern I have, and this will take direction from council, is advocates.

Um I'm worried about having um advocates to um uh campaign for the um bond, uh which is often the role of the committee, in addition to uh presenting to council their recommendations for what goes on uh the bond question.

Um they also then can go out and educate and campaign, whereas you know uh employees can't.

So that's the one piece I worry about.

But um just because in your information that you shared, you said that um several factors.

I can tell you that there were there was one bond in particular that I was not a fan of that many people were, and I think there was too many bonds on there that by the time you reach the bottom, you're like, I really don't care, honestly, about it.

But um I think I understand what you're talking about with the citizens committee, but I will tell you then our community from the people that I heard, none of those folks were out there advocating for that.

It was associations and other things that were out there advocating for that.

So maybe with better advocacy from the people that were out there and more traction for them to go out there with more clarity, we might do better, especially while it's still fresh in people's mind.

Mr.

Mayor, Councilmember Sorry, I agree the associations are ready.

Um they they said they would uh do whatever needed to be done to get that to get that done.

Um councilmember Conde.

Thank you, Mayor.

Thank you for the presentation.

Um I agree with with Solorio.

Um, you know, I think is something that we definitely want to go out and do because, like she said, nothing's gonna change, there's still the need there.

And I believe in striking when the iron is still hot, so we people are aware of it right now.

And if we could keep that momentum going and get it on the ballot.

Honestly, I think that if we reach out and connect to the HOAs to the folks down in Alamark to let them know that this is for their benefit, it's for the community.

I think that we can gain some traction down there.

Mr.

Mayor, before you go on, I want uh if Paul could answer one more question for council's consideration.

You mentioned it, there's already two state uh questions that are gonna be on the ballot.

One of our problems was the drop-off rate of people, and we were at the end.

Will we be at the end of three or four pages again uh this November?

Uh what's your uh take on the uh future?

That's the million-dollar question.

I mean, uh it's certainly there's a different strategy involved.

Uh we know one thing, for example, is that we know we will be dealing with the short language.

Uh unfortunately, the recorder you provide them with the long form language, the succinct language, and then the short form language.

Our recorder, despite only having a few things on the ballot, chose to go only with the short form language, which was shall the city you know this number of amount of bonds to be paid for back by property secondary property taxes.

We didn't have any of the additional detail that we worked very hard to give them to to sort of educate the public about.

So you know going into it, it is the short form language, so that just makes some of that other effort more important.

But yes, I think ultimately there's two things to think about.

It's probably going to be a two-page ballot again, hopefully not three, but it will be two.

It will be probably um I defer to Marcella, but I would I believe it'd be after the judges once again, just like we saw in the past.

Then the other question is the other areas that were there with some controversy.

Are they going to go out again in in light of their failure?

Because if that's going to happen, not related to you, just understanding nearby what else might be on the ballot, would be really important to know as well.

Thank you, Paul.

Councilmember Garcia.

Thank you for the presentation.

Um it's not a secret.

I'm not a huge on bonds.

And but I do believe that the people should have the opportunity to vote on that because they're the ones that get to choose what we spend our money on.

With the demographic that went out, you said it was 46.7% Democrat, 28.6 Republican.

I think that was a huge factor in public safety itself because of the state of the country at the moment and all of the public, everything all the attacks on police and fire.

But if you do put it in the November, I think the outcome would be totally different because the outcomes during the bigger elections and not the special elections are very just dramatically the opposite.

So I think putting it on there would be uh a better chance for the bond to go through.

And also I don't I agree with um Councilmember Solario.

I don't think we need another committee if they're not advocating for it because if that's their job and they're not doing it, we could they could we already have those people that are supposed to do it, we could use them again, but as the associations, they're the ones that really want this, they should be pushing it if that's you know, if that's their goal.

So that's just I want it to cost less if we're gonna do it, less money is better.

Thanks, Mary Ilson.

I was gonna say maybe from the layman, whatever it might be.

It's the last page, last thing.

They didn't even turn the page over the people that ask me then what's it all about, whether it was a short form or whatever it was.

I don't think there was enough information to say it was fire and public safety down in the southern part of Arizona of Avondale.

So I think if we do that, we need to have some words that people have simple understanding of what it is, rather than trying to uh convolute it with that many big words if it's just a fire and police in Southern Arizona, we need it.

Southern Arizona, we're in Southern Avondale, the and that it's needed for that area and the growth down there, just make it simple.

We don't need to have it all the way.

So we do need it, whether we go out now, whatever I'm in agreement, you know, with the the funding of the L level S now.

I do know that a couple of the school boards will be on this ballot as well as what you're telling us about legislators, so we just need to be strategic in whatever we do, but address the people who are going to be reading it rather than come on to us and say what this is all about.

Thank you.

And Paul, what's the aside from cost, what's the benefit or the drawback of establishing a new committee?

Certainly, if you're going to explore other items uh to look at that, it it creates that buy-in, that public process that you you've vetted it and had other people that have uh looked this through and made the recommendations.

Your assistance committee last time was a very valuable process to go through.

I think um they really looked through the items, understood sort of the needs and the challenges, um, you know, and came back with a very good recommendation, and it felt like they had done a really good amount of vetting.

So that's always the benefit of a citizen's process.

If you come back with the exact same thing, the thing I would warn is like as uh Councilmember Solaro said, it is the needs are still there.

So instead of saying we're doing this again, you know, or anything like that, it's we still have needs and we're trying to address those needs of a growing community.

That's how I I would definitely frame it.

Okay.

So oh, sorry, Councilmember Weiss.

Paul, thank you for the presentation, and I want to thank the bond members for what they did.

Um my answers are yes, go back out in the future, no to another bond committee.

I think they did a great job the first time.

I thought that the handouts were excellent.

And then I live near that area, and there were no signs everywhere.

So I'm not surprised that this failed up there.

And I think with some education in that area specifically, we would be fine.

Um and keep it focused on public safety.

So did you get what you needed?

Yes.

Okay.

All right.

Thank you, Paul.

Appreciate the information.

Thank you, Renee.

Okay, on to item 4B.

Ron?

Yep, Mr.

Mayor and Council.

Uh the moment everybody's been waiting for, we're gonna talk about the budget.

Uh Renee Wetherless, your financial budget director will kick us off, and we have lots of people helping.

All right, good evening, Mayor, Vice Mayor, and Council.

Um, we're here tonight to discuss the fiscal 2027 budget.

So um we have talked a lot about where we are in prior years, about getting to years where the revenue has fallen off.

We've lost our residential rental sales tax.

We're seeing that in our trends.

And so tonight we have um compiled a draft budget and we'll be needing some direction from council um on some things.

So we'll be going through the the first the priorities and um then look at um some assumptions.

So in those assumptions, we're gonna get into some details about how we built our forecast, our five-year forecast, things that we're looking at, um, impacts on the revenue and our expenses, some of the pressures that we have, um, and then cover some of the details inside of this draft budget um for council's direction, as well as looking at what our compensation and benefits are doing and have a CIP update.

So, first off, um, starting with the fiscal twenty-seven budget is um looking at these are our current strategic plan outcome areas.

Economic growth and prosperity and community well-being, resilient infrastructure and transportation, connected and engaged community and innovative and effective government.

So beyond just the strategic plan outcome areas, if you recall in our fiscal 26 budget, council also had some budget priorities.

So within our 26 budget, we had economic development being very high priority, parks and rec, public safety, again connected communic communities, services were priority.

We wanted to maintain services, and then focusing on personnel to retain existing personnel.

So just wanting to make sure that these still align with council's budget priorities as we go through this process.

So let's just kind of dive into our forecast.

So when we look at our forecast assumptions on the revenue side, so we're saying that we don't have any structural changes factored into this five-year forecast.

So that means if you have listened to potential bills and over the past few years, we lost our residential rental.

We talked about that.

There's been conversations about food sales tax, et cetera.

In our forecast, we have no assumption of losing any additional revenues like that.

What we are aware of, however, is if you look at our state shared revenue, we are planning to lose some recurring revenue.

The first is due to the incorporation of Santan Valley.

So this is one more city taking money out of the same pot of revenue, which means all the other cities receive a little bit less.

So what is the impact of Santan Valley Incorporating have on the city of Avondale?

Well, it means our general fund is losing 670 uh 667,000 of revenue in one year.

Same impact on our HERF funding.

We will be losing approximately 143,000.

So you can see over the course of five years what those kind of numbers will size up to three to four million dollars over a five-year forecast.

The second is an anticipated loss of revenue for tax conformity.

So what that means is there have been some federal tax incentives as part of HCR1 where your federal taxable income may be reduced.

So in order for the state to apply the same definition of taxable income, because right now state taxable income is equal to your federal taxable income.

So the legislature has to make changes in order for all of these new tax incentives to apply to the state.

That is being discussed right now.

If the state chooses to go to full conformity and align with the federal wages, then per the JLBC, the City of Avondale would lose as much as 1.2 million.

So depending on the range, JLBC's estimates were from $600,000 to 1.2 million dollars of revenue loss.

For our purpose in our forecast, we currently have $880,000.

So if we learn there's um a full conformity and we do lose 1.2 million dollars, that means we have to go back to the table and look at making adjustments in our five-year forecast of the general fund.

On single family homes permitted, if you look backwards in time, we typically are conservative in that we would run this between 200 and 500 permits per year.

We have looked at our trends and seen that we've actually beaten those estimates and we up those a little bit to 300 to 600 per year.

Now council has had a lot of discussion.

We had discussion back in the November budget retreat about property taxes and the property tax rate.

So we heard council's wish, we've built this budget, this draft budget, with the assumption that we will not be increasing the 2% allowable increase in FY27 only.

Now, if you recall last year when we had this conversation of setting the tax rate, the one year of 2% increase amounted to about $83,000.

But when you factor that over five years, that number grows to almost half a million dollars.

So for right now, in our five-year forecast, we have not increased for just one year.

And then we have contracting sales tax revenue.

So contracting is a cyclical revenue.

We don't like to, although we may be hitting or beating our budget now, we don't like to depend on those monies going forward.

Um so we are conservative and we do return our future budgets back down to more conservative levels.

Now just looking at sales tax revenue as a whole sales tax revenue is our largest revenue source in the city.

Over 10 years of history shows that our sales tax has grown on average 7%.

But if you look there on the slide we have fiscal 27 projected to grow only 2% 28 at 3% 29 at 4%.

And then the outer years of that five year forecast we have it returning back to a more historical trend.

So a couple things we also have some revenue that we know are coming online being the data center data centers once they're up online they're going to be generating some more sales tax revenue for us.

So we do feel very comfortable in raising those outer years back up to our historical trend.

Now if you look at the expenditure side of our forecast so we have some compensation increases included so for the general staff we have and merit to the tune of about 1.1 million and 7000 and then council has already seen and approved some adjustments for public safety that included the PD as well as a new STEP program and the fire MOU.

So those salary adjustments alone run about 2.2 million dollars.

Inflation is factored in to the five year forecast we have it currently set at 3% per year.

And then we've already had some conversation about the Southern Avondale public safety station.

We have the hiring of that staff to begin in fiscal 28 that is factored into our five year forecast.

And then I will note that this year we're seeing a significant increase from prior year in our medical expenses to the tune of about 4.3 million dollars and that is being driven by inflation that which is almost 17% for next year and high dollar claims inside of our plan that we're self-funded and this will be discussed later on in the presentation.

And then lastly the transit costs so we've seen transient costs increases every single year we've had to subsidize some of those transit costs coming out of the general fund but as we're going to show you in a minute the general fund is really tight so now we are moving those increases into dedicated sales tax some other items that are included in our forecast so through the process as departments prepared their budgets we come together and review them departments have reallocated 3.7 million dollars that means in baseline budgets that have taken $3.7 million dollars out of things in order to reallocate it back into the budget for new priorities and new requests if you recall we did this back in I believe it was 25 we had done the same thing and so it's just a reallocation of existing budget.

In addition our capital contingency has been about five million dollars now that is something that we set aside it at first it was driven due to significant inflation increases but it has helped us manage cost with capital projects along the way in our fifth year of that five year forecast we are having to reduce that down to four million dollars and we've also had to take some money out of some capital projects being our vehicle replacement as well as asset replacement so this is in total over five years we've taken a total of three million out of vehicle replacement and two million out of asset replacement now we just finished a presentation about general obligation bonds I do want to put this on the radar of council that we are going to have to issue bonds this year.

The first that we're planning is to come before council on June 1st because we have the parks general obligation bonds which we have authorization up to 68 million dollars we plan to make the first issuance next fiscal year in fiscal 27 and every two years thereabout so we will be coming to council for approval to make that first issuance.

So we would need council's approval on June 1st and then the plan would be to then close those bond sales the week of July 6 so we would be able to receive our bond proceeds and begin spending those dollars on those bond projects.

So when we come on June 1st you will get more detailed information on all of the projects that are involved in in that issuance.

So same thing for enterprise we're going to talk about this a little bit later tonight but we need to finance a couple projects the first is for the wastewater treatment plan expansion as well as for the PFAS treatment and Bartlett Dam.

The first is for the wastewater treatment plan expansion, as well as for the PFAS treatment and Bartlett Dam.

So with these, we need to issue those a little bit sooner.

So we do plan to come back to council on May 4th to get approval for the first issuance in the water and wastewater areas and plan to close those bonds on June 8th.

And then lastly, the LMR CFD.

This year, Alamar CFD will also be issuing approximately $3.4 million of bonds.

And we will return to the CFD board for that approval on June 1st and look to close those bond sales also on the week of July 6th.

So now in looking at our five-year forecast, what you're seeing here is our general fund.

Ongoing revenue and ongoing expenses.

So the revenue in blue, the expenses in orange.

So this is probably the first time where you've stood where you have seen our expenditures start outpacing our revenue.

So going from left to right, we lost our residential rental January of 25, and you see that flatten out.5 going up to 119.

You're seeing that 2% growth, very minimal, and then 3% in fiscal 28%, 4% and 29, and then you start seeing that line uptick a little bit more because we're back at our historical rates of 7%.

So what we have today is we have a structurally balanced budget of ongoing revenue and expenses in fiscal 27, and then not again until fiscal 31.

So a couple things to note here.

And sorry.

And those um expenditures for compensation, and you'll also see the impacts of future health insurance claims because we have those escalating in future years as well.

Now on the one-time revenue and expense side, you see this expenditure outseding revenues because we're spending down our reserves for capital projects.

So this is assuming that we will complete all of our capital projects in 26.

But when you put it all together, where does our fund balance above stabilization in capital reserve?

That means we set aside that 35% in our financial policy for stabilization, as well as that $5 million and $4 million out in $31 for that capital contingency account.

We set that money aside, what do we have left?

Well, you can see that the balance here of fund balance is paying for those years where our expenditures are outpacing revenue.

So when you look at fiscal year 2031, we have a balance of less than $1 million.

So as we talk through the decisions that have to get made for this fiscal 27 budget, one thing to note is that that $1 million in 2031 is really one time dollars.

So that means if there was an adjustment to our fiscal 27 budget for an ongoing expense that would occur in every single year, then one dollar today is five dollars off that total.

So that's something that we have to take into account if we make any adjustments to this draft budget.

And then we have other projected fund balances.

So the first is public safety sales tax.

So in public safety sales tax, um, this the majority of this money goes towards police and fire salaries, and because we have ongoing expenses built into that fund, we have set a minimum reserve requirement on this fund.

So our projected balance in fiscal 2031 is 2.8, which meets that minimum balance requirement at the end of five years.

On dedicated sales tax, our projected fund balance at the end of 2031 is 12.8 million dollars, whereas our minimum requirement is only 800,000.

Obviously, we have fewer ongoing expenses being charged to that funding source, so that requirement is low.

However, I would like to note that that cash that we have built up in there, that 12.8 million at the end of five years.

We want to keep in mind that we have some other conversations about bonding in in enterprise for wastewater, for example.

That project is going to be the debt service is going to be funded out of development impact fees based on growth as well as the water rates.

So if our growth projections are not meeting what we have when we bond, then we need to have some a backup plan to be able to pay that debt service.

This is a funding source that we could go to.

The other thing is we have a large project for the lower Buckeye Widening, where it there's grant funded, but again, a grant is a static dollar amount, and if prices change or things go up, we also need to go somewhere to cash.

That would be an opportunity to go to look at that $12 million.

And then lastly, we have the HERF fund, highway user revenue, where our projected balance is $700,000, and currently we do not have a minimum requirement on this funding source.

So when you look at the draft budget as it stands right now, we have a total of 7.5 FTEs, additional FTEs built in.

But if you look at the middle of this page under parks, lifeguard, temporary to part-time, what we're doing is we're taking temporary positions which are already built into the budget, already being expensive, and we're just turning them into FTE.

So it's a cost neutral change, but we are adding FTEs for that.

And then four more FTEs are in public works.

So really we're talking about a 0.5 park specialist being built into the budget for fiscal 27.

Now, what is included right now in this draft budget as far as the supplementals and the programs that have been requested.

So in looking at general government, we have some small amount of expenses in city admin for the ambassador program and the fellowship program.

In the city attorney's office, we have some legal services research and city prosecutors.

Now these aren't necessarily new expenditures, but they may be one-time expenditures that have to be requested every single year.

In the city auditor, we have a consultant assisted audits.

So one thing to note here, which we will also discuss later in the presentation, is the request came in at $100,000.

We have approved 60 in the draft budget at this point.

We have some maintenance dollars for increasing frequency as well as some overtime in facilities and some software and contracted services in finance.

The big dollars here is in human resources.

So in there we have $1.5 million included in this budget to replace our HRES payroll system.

So $1 million of one-time implementation and half a million dollars of ongoing expenses.

Now that process is currently being vetted by the committee, and once we get to the point of having a more refined price, then we may be able to adjust that.

We just have to wait and see on the final pricing.

So this is where all of our systems and software reside, and this is the standard inflationary expenses that will be increasing next year.

Moving on to public safety.

If you look at prior years, we've had to bring budget transfers to council in the spring because we've been under budget in the overtime, so we're trying to make sure that that is not the case in future years.

And if you look at our our um vacancies are our vacancy savings for payroll as a city, we have come down significantly.

A lot of it was we used to have a lot more vacant positions in the past.

We had millions of dollars of vacancy savings.

That has decreased as positions have been filled.

And so some things that we used to pay for and afford out of vacancy savings, we don't have to budget for this being the vacation sellback that's per the new fire MOU that has been approved.

So that is now being budgeted as a line item.

On the police side, we have some expenses.

The first being for the Southwest Family Advocacy Center lease.

This is currently being negotiated, and we'll see an increase in those costs.

As well as the CAD or computer aid dispatch mobile app, which will expand our current system so it allows officers to access the information from their cell phones.

We have some redaction software as well as new officer equipment.

And we also have the drone as first responder program included.

But I will note that this is currently being funded by holding a vacancy open to afford that program in 50 in 2027.

And then lastly, the license plate reader cameras.

And that is currently being funded out of our RICO funds for two years.

Now on to community service.

The first is in neighborhood and family services.

Contributions assistance.

That's a one-time supplemental request, but it is still funded at the $200,000 level that you've seen in prior years.

Same thing for public safety home buyer program.

That is currently budgeted at the level it was prior in prior years.

Now bridge housing is new, and we will see some operational costs coming online for bridge housing.

That is included, as well as some educational support funding, which actually funds some avi temps and some steam enrichment.

In parks, we have some library materials and have funded the Contra Mercardo and Event series as well as things like the funding for the holiday lights.

We have some maintenance equipment event software as well as um irrigation repair costs.

And then in public works, we have some we ride and bus shelter cleaning.

Moving on to development services, we have some existing our existing permitting software.

We have monies in the the current draft budget for support for that software as well as our text messaging service.

In economic development, we have of that 1.4, 1.3 is to fund our economic opportunities fund.

So in there it includes small business support and um land improvement costs for Western Avenue properties, as well as some development incentive.

We also funded some memberships and sponsorships, which will be covered later on in the presentation.

In engineering, we have continued to fund some um external contracted construction inspections.

And in IT, again providing the technical support for our permitting software system.

And then in public works, you're saying these costs are uh increases to operational costs for fleet streets, solid waste, and then that last line of water purchase and operations, that is just inflationary costs.

That does not include any new rights um for water.

So if you pull together our fiscal 2027 um operating budget, what does it look like?

Right now, um 37% is attributed to general government, 32% to public safety um utilities, etc.

So at this time we're going to cover some budget reductions that are included in this fiscal 27 draft budget, and I will turn it over to Ron.

Thank you, Renee.

If it pleases Mayor and Council, do we want to?

That was a lot of stuff.

Do we want to take a quick break and you guys ask questions?

Do you want to go through some of those slides?

Or do you want to go through the cuts and then start talking about some stuff?

Yeah.

Okay.

You guys want to take a five-minute break as well?

Five minute break.

Thank you.

Yep.

Did council want to talk about anything that was presented so far, or do we want to wait?

I see one hand to your right.

Okay, we'll start off with uh councilmember Slorio.

Taken back.

On the um Southwest Advocacy Center lease, who helps pay for that?

I know several cities use it.

Do they share, do they divvy the cost?

Uh Mr.

Mayor Council equally so that it's divided by four.

Okay.

And we're actually adding a fifth city.

They won't pick up a fifth, they won't pick up a whole percent, but they're going to help pay for some of the bill as they join.

Okay.

When we move to the new facility.

Okay.

That's what I had.

Anybody uh council member white, do you have any questions over what was presented earlier?

I think we'll address it somewhere else.

I I was just concerned um about the well, actually the IT expenses for HR.

I was wondering why that's not considered a part of IT since it's technology we're purchasing.

That was one question.

Um it's over 1.6 million.

So I I wanted to kind of understand is that actually tech costs or is that administrative cost for HR?

And then I also want to hear a little bit more about the audit cut back because we seem to be using those services full.

Mr.

Mayor, Councilmember White.

So first to the um uh new uh uh payroll system, uh it's 1.5, about a million of that is for implementation.

This is a uh uh uh system-wide upgrade, uh replacing ADP plus a couple other systems.

Um it is very important to me that and to I believe council that we pay employees per uh correct 100 percent of the time.

As council knows over the last three years, we had to settle a few things and and and uh pay some outstanding paychecks, and we believe that uh a better system better suited to public sector pay might uh do us assist us a lot better in making sure employees get paid correctly.

So again, about a million dollars is implementation, one-time cost, um, and that's uh technical support, that's it's implementation cost, that's training costs, that's the whole uh gamut uh when you roll out a brand new enterprise system.

And then the uh half a million dollars is ongoing, is which is uh going rate for a enterprise uh system.

Um we budget uh most of the IT equipment stuff in IT, but we hold the departments accountable.

HR and finance are leading the project with significant input from uh the IT team uh and others uh involved in in the process.

And then we'll you're right, we'll get to the audit uh in just a few minutes.

Yeah, I got one.

Vice Mayor Nelson, further on that 1.5 million or whatever.

That replacement in my mind, it replaces ADP.

So we bring it in-house, it becomes part of in-house.

Do we pay people to oversee ADP or something?

Is there an expenditure monthly whatever?

So does that now become a savings kind of whatever?

I wish.

Uh Mr.

Mayor, Vice Mayor.

Uh that was my question, was I was hoping that um, but no, this is uh a new cost.

It's not it's not well in those contracts, but those all cost money as well.

There's nothing free, uh, but these will be the new new ongoing costs.

Okay, thank you.

And I'm not sure if Councilmember White was done with her question.

So I thought I heard her say thank you, but I'm I'm still here.

I was done.

Thank you.

I appreciate it.

Anyone else?

Okay.

Thank you, Ms.

Mary.

Now going on to uh some uh items that were reduced.

I have had a couple council members want to make sure that we were transparent in some of these things.

So I'll go through them in our city manager's office.

Remember, each department was asked to cut 3%, and so we went to the 3%.

Most of ours is uh most cuts are administrative training, travel, admin efficiencies, rotating who goes to conferences, coming back and doing training in-house.

Uh we feel very comfortable with those.

Um the city clerk is switching, and this isn't all the list, like I said, there's 3.7, these are just some of the highlights.

Um, is uh switching to on-site storage instead of paying to store records off-site.

They've also been doing a uh project to uh uh destroy uh according to the state uh law uh appropriate uh records uh following the um the schedule.

Uh marketing is recommending a few cuts.

Um the city page isn't as um popular as it used to be.

Um and so they're uh offering um that up to 15,000 there.

Uh Avondale uh uh youth advisory commission travel.

Um we spend about 18,000 a year.

Um we're offering to cut that.

We had none, uh no students go this year of their own.

It was offered to them, and we ended up having no students go, so we feel like um that uh can happen.

We're gonna talk more about parks, that's why the double asterisk there.

Um but basically they're moving their ongoing expenses, uh, about 200,000 on to one-time expenses, and we're also offering to cut, I believe, about a 100,000 dollars, if I remember the slide correctly.

Then in addition, between some reducing the overseeding here at Civic Center and some other places, uh the uh VIC, um also reducing some of our land kit landscaping services and then reducing our mowing at Crystal Gardens, the resource center, and City Hall to biweekly.

Um we believe we can save as you can see there well over 100,000.

We are also holding two vacant positions for the next few years.

Um one is a security officer vacant position, and the other is a senior planner.

I'm asking that we not eliminate the FTE.

If things change, our our um development starts to pick up our need for planners, uh, or if we have to end up adding additional security to one of our locations.

We'd like the flexibility to not have to come back and ask for FTA.

You know, of course we have to find the revenue, um, but we'd like to keep that in there.

And then um development services is found that it's best to bring in their inspections and plan review in-house.

We had increased their contract um there she is.

I'm trying to make eye contact with my directors to make sure I'm not saying something wrong.

Um we brought them in-house.

We found that it's uh more effective for those to be done in-house versus outsourcing those.

Moving on, um, uh, kudos to the finance team.

Um with permission from council, we are now or will soon be uh passing along the credit card fees uh for users to the actual people uh using them.

That's expected to save us about 200,000 a year there.

The fire and medical um talked about returning their medic training, their paramedic training back to normal levels.

So except for the last two years, we normally send two firefighters to paramedic training on duty.

So that means not only do they pay for the class, but then we pay for the overtime to backfill those positions, and that's really where the cost is.

So for the last couple of years, we were able to send four.

Um we're just not in that situation to have that extra money now.

Uh speaking with uh the chief, um, we believe that we're currently staffed to a good level with paramedics.

The two will allow us to continue at the needed level to provide high quality services to our community.

In addition, if there's a young charger, or doesn't have to be young, I guess, if there's a hard charger, um, it's not uncommon for firefighters to do it on their own and then get tuition reimbursement uh through the paramedic program.

They just don't have uh they do it on their own time versus on the clock.

And we are still funding the tuition reimbursement for our our employees.

The information technology, they submitted about $380,000 uh worth of savings uh uh through their uh line items.

I don't have enough slides to go through all of them.

A lot of it's $10, $20,000, $30,000 at a time.

But one of the ones I thought was really neat was uh thinking outside the box, really going back to old school, and that's moving the council live screen from swaggett uh to YouTube, Microsoft, something like that.

A couple different options, but we're gonna move it to a more traditional uh format that way.

The other thing, they also have undergone a uh significant review of licenses to making sure that we're not uh uh paying for Microsoft licenses, uh licenses, or any of the license that we don't actually use, and we're removing those.

That saves us money.

In addition, they are finishing up a study on printers and deciding uh can we do away with some of our leased uh printers?

And a lot of departments, especially our city hall, have uh reduced um several printers uh to save several thousand dollars uh per uh printer.

So I've been very uh very happy with IT stepping up to the plate there.

Uh again, uh police uh saved a lot of money, uh offered up some uh resources.

Some of it was uh made sense.

Uh since we opened the jail service, we've sending less people over to the county.

Overtime, the 152.

I want to be very clear, that is not cutting the overtime for work for uh service calls over report writing or those kinds of things.

This is just moving the uh training schedule around and adjusting it so most of the training was happening on the clock versus uh on the weekends or on their off days where we have to pay overtime.

In addition, there's a plan to do more in-house training versus sending people out, and so very uh common for the PD to have regular trainings, uh, whether it's leadership training or regular um use of force training or whatever it is to bring more of that in-house versus sending people out.

Public works also offered up a significant uh amount of money, including um uh better managing supplies and uh uh what I call just-in-time uh supplies, so they don't keep as much on hand and they ordered as they need it.

Also improving the security with our uh security gate got fixed with lots of signs.

We're hoping it doesn't get uh ran into again.

And so we're eliminating in July our uh 24-hour um security services.

All right, so I'm gonna go through this, and this may be a time for uh we're gonna talk about parks first for parks to um correct me if I get something not exactly right.

This is our proposed list of events for uh 2027.

Our signature events are still there, our big ones, Trace Rios, uh Kids Fest, Avondel Fiesta, you name it, light up the sky, uh 4th of July, we're all proud of, especially given it's America's 250th birthday and on the list.

We're also still gonna do two runs.

Our vet run, our partnership with the college will continue.

Abundell Dash 1510K.

We had a significant turnout this last Christmas, so we want to keep that one going.

And then the community events, I know that these are close uh important to some of the council members, the movies in the parks will continue.

We'll have two of those.

Uh Wave Fest uh over at our pool.

We'll have uh at least uh one day of egg hunts, and the list just goes on and on, uh, including a couple of Mercado and Melody's events and our more popular events.

So, what I want to point out though, this is where we're recommending um some reductions.

So we're recommending reducing the Trace Rios Nature Festival down to one day.

This would be the first day.

Um, this is uh will help we think uh with our vendors who often have low sales on the second day.

It'll also, of course, reduce the uh amount of staff time it does for that second day.

We believe we put on a very good event, uh, especially now that we're doing it back in our own backyard.

Uh Billy Moore uh Day's Festival is a one-day reduction where we would keep the day with the um uh parade and those kinds of things and eliminate the the second day.

The festival, the the rides and those kinds of things are still continue as is.

Yeah, the carnival remains the same.

Just wanted to double check that.

Eliminating two of the less uh successful runs, hopefully bring them back in the future, the Hoot and Hustle, the Duck and Dash.

And then um community impact events.

We talked about um reducing our egg uh hunt down to one day, allowing the um HOAs to continue to do what they do uh in our community.

Uh Steam Fest is a uh expensive.

Um I did have our council member attended uh this year, but we've actually had a lower attendance over the last few years as we've been keeping track.

And remember, unless it's parks and rec staff, all the other staff that support these things, public works.

I know Joel's team and facilities put on a big show at Steam Fest.

Um cost a time and a half because that's not done during uh their work week, very expensive.

And then uh International Yoga Day uh is on the list, and then we really want to do two Mercado and Melody's events.

Um do fewer very well, is our is our goal.

So I do want to pause, Mayor if I can to make sure with parks and rec.

We still have a couple other slides to go through, but is this gonna cause great heartburn for anybody for the parks and rec suggested reductions?

I don't I don't see any comment.

Yep.

And then so now we do need direction on council.

Um these are a couple of requests that were not included in the FY27 budget.

So this really uh needs if I'm directed to put this back in, we'll need to figure out where that money is coming from.

Uh but this is currently not in the budget.

The first, as Renee explained, is the auditors we uh her ask was 100,000, and we cut out 40,000 to make our uh balanced uh budget, and that um I think if I remember correctly, Barb was about one and a half audits done by an external auditor, was about the the number that she would be able to do less of.

She still will be able to do several audits herself, and she still will be able to hire an outside auditor with the uh 60,000 uh that was uh allotted.

Economic development and uh neighborhood family services had two programs for 70,000.

Really, uh one of them replaces the um facade uh program that we used to have in old town where we would go in and fix the front of stores on Western.

Um that that program has gone away, and then one is to really help uh restaurants with brick and mortar to get up and started or help them in an emergency.

Now, that did not make the budget, um, but we are putting in for grants for this.

So I do believe uh we did not get on Grajalva's list, um, but we did our putting in for the senators a direct spending, congressional spending uh through the senator.

So we're still working to get that money, so hopefully we'll bring it back through a grant program.

And then with the high school senior art contest scholarships, this used to be funded out of the art fund.

The art fund is paid for uh by um developers.

So just pinning on the size of your project, you're required to either put art in or pay uh uh uh an amount into this thing.

Uh it was uh recommended that that's not the best use of those funds for that cause for that reason.

And so uh we started using the general fund money, and we also believe that that's probably not the best um way to spend uh general fund dollars.

So I I'll take another breath before I move on to a slide and take council directions on these uh four items.

And before uh any members of council uh provide their feedback, where and when would we uh be notified of where this money would come from?

If any of this was added in, how do what do we know that the money would be coming from to replace it?

Well, we'd have to, Mr.

Mayor and Council, we'd have to have that discussion.

Uh there's a couple ideas.

I know some of them are not on the table.

We still have the $80,000 in the property tax, 2% levy that could be added.

And I think there are other projects that people may want to cut um that we just haven't got to talk to talk about yet tonight.

So my guess is um you can continue to eat into that point nine, but that is cutting it very close.

Um, or we find another place to uh reduce uh to add things back in.

I think there's a couple other items in a future slides that may you know be debatable with council.

So um we'll keep track and um see what it does to our budget.

And remember, this is a draft budget, so really are seeking input from council, and uh we'll bring back a recommended budget in in April.

So but uh we I would highly encourage us to uh if we put in we take out if we take out we have a capacity to put back in.

Got it.

Okay, councilmember Weiss.

Thank you, Ron.

Um, what is the food and beverage grant program?

I'm gonna where's Jim to my right.

Jen, do you want to talk about that?

You have to keep holding.

Thank you, Mayor.

Council Weiss.

Um the food and beverage program is designed to provide either existing restaurants or new restaurants who often have a barrier to enter um this business community for lots of costs of construction and cost of doing business.

So to help them find success, we created this program to help them with grants up to $10,000 per restaurant capped at $50,000.

We've lost a couple of businesses in the old town recently just because of the costs have been really um impactful.

Okay.

Are there any other members of council that council member Connidi?

Maybe.

Oh, Councilmember White, do you have any questions or comments?

No, I I um think it's a priority for us to um stay fiscally responsible and sound.

I think um as important as managing the budget is for all of us, having consistent ongoing audit practices is very important as well.

Um we're also facing up peer audit to become a certified audit shop.

I think it's untimely to cut our auditors' budget by 40,000 in the next fiscal year, um, considering um our peer audit may not happen in this fiscal year, which means we would also have to um be prepared to um receive peer auditors.

So I I just would hate to cut that 40,000.

I know there are three of us who serve from council on the audit committee.

Um I I I would like to uh hear their perspective as well if possible.

Councilmember Solerio.

Uh I'm gonna agree with Councilmember White.

I know that um Barb they're asking for certain cuts and whatnot, but quite honestly, as a member of the audit committee, it makes me a little worried that we're gonna cut 40,000 out for an audit.

I understand that we can swing it and do that, but um transparency is what's most important to our community.

And any kind of audit is needed, but that's just my opinion.

M Mr.

Mayor and Council, uh, know that their audits will still occur.

We're not cutting it to the bone.

I think it cuts about one and a half audits out.

Of course, the auditor is still fully employed and engaged.

So again, I'll take direction from from council on this.

Um, but it's we did not eliminate our audit program whatsoever.

Um we still have uh money to hire an outside consultant to do a couple audits.

And I think based upon the fact that this is just a discussion.

If you're hearing that there are multiple council members who want to put anything in as of right now, it stands with the audit, the 40,000, uh when we come back at that moment in time you'll then share where that will be coming from.

Are you saying once tonight we move forward that money is in what then comes out?

That that's what I'm saying.

No matter any of the because you know, any of this could be important, but I also want to be very cognizant of the fact that whether it be audits, whether it be economic development or parks, that this a give and take, and that we're more mindful of that.

So I just want to be aware of where that's coming from.

Mr.

Mayor, that's uh really a council discussion.

I would prefer it for council, and we've got a couple more slides to go over some other programs, but I would really appreciate uh direction of what program they would want to give up.

At the end of the day, we'll figure out a way to balance the budget without direction if this is put in.

But I've only heard from I'm looking for um uh majority direction um for this uh uh decision.

Um not that we're voting, we're not voting, but I need to know uh two council members are important, uh, but I need to see what the the majority of count that's not the right word.

The consensus, thank you, uh city attorney.

She's keeping me out of trouble here.

I need to I need to get a consensus.

Uh because the goal is to bring back a recommended budget that's very close uh to what council hopes to achieve.

Okay, I'll I'll let the others go and then Councilmember Condi.

Thank you, Mayor.

Um, I agree with um Councilmember White and Soloria.

I would like to um give the city auditor what she requested and see how we can come up with that 40 and see where it comes from.

Councilmember Garcia.

I believe if it's we're still gonna get the audits that I'm okay with this in front of me with the 40 dollars being reducted.

Um sorry, Victor Nielsen.

I'm just impressed that you're able to find these little things in the whole budget and the whether they can end up being 450 million, 500 million dollars, whatever it might be.

And I just need to remind myself and I guess everybody else here, this is a one-year item that these things are picked out in uh this high school scholarship if we seem to determine that that's necessary for next year, or we're not missing it, or the young people going back to Washington and they're not missing it, or there's something that we just have to have.

This is just again the discussion to say one year we do without it, and uh next year we pick it up, or we find some other health that comes up and then hits us in the face that says we really want to do this.

So we appreciate all the work that you've done.

I would go ahead and agree with the $40,000 for the audit included in the thing to be out of the $100,000 if we can there, or even $80,000 if whatever it might be.

So Mr.

Vice Mayor, what one more to you?

So you're you want to split the 40,000 back in.

Yeah.

Thank you.

That comes up to 100.

I don't know if if we can get by with 80,000.

I don't know if she put in the hundred.

I don't know if uh one audits two or twenty thousand.

I don't remember what audits are as they go out.

I mean uh in the in the hundred thousand, is that two audits or five hundred fifty thousand dollars apiece?

Does it make um four for a hundred?

I don't yeah.

They thank you, uh Mr.

Mayor, Vice Mayor.

Based on what I just received, we'll see what we can do with the 40,000.

Um a hundred thousand is what she was given this year to complete her audits.

So it would be uh a level funding.

Okay.

And as for me, I mean you've heard I think direction from the rest of the council was to move your consensus.

Sorry, I almost used the word direction.

What's gonna call that?

I'm waiting for the ruler to come smack smack.

Uh I myself, uh I'm I have a different opinion, and I do see the value of the audits.

I know that I've had a conversation with Barbara, and uh as the spouse of somebody who does audits for a living, I get the importance of them, protects us, protects the city, but I'm of the opinion that you know we're if we're cutting the budget and all the departments here are looking for requests that haven't been funded, uh, that we don't fund any of them.

That's my opinion.

But uh you've heard the others, and so um I guess we'll move forward with the consensus.

Again, Mr.

Mayor Council's reminder we'll have uh uh at least two more uh easy bites at the Apple.

Uh we have the recommended budget and um the tentative budget before you approve the final budget.

So you got really two more good chances to make changes, and technically you could make changes of the last budget.

Okay, thank you.

Yeah.

Um other questions on this slide.

All right, moving on for some more discussion and direction from council.

Nicole did say, Mayor, I don't know if you heard that you can give direction.

Council can give direction, and I can get consensus.

And Ron, if you wouldn't mind, I'd like to hit each item one by one so that we don't muddy any of the waters.

Yes, sir.

So the first uh item up for discussion then is city council discretionary spending a reduction of a thousand dollars.

Uh just to clarify, that's uh uh goes from nine thousand down to eight thousand uh per year moving forward.

Remember about um two years ago, maybe three years ago, we had it at 7,000.

Uh we upped it last year to 9,000.

Um and then um based on input from the mayor, uh we have reduced it.

So we currently do not have that total of $7,000 uh in next year's budget.

Um so um if council directs us, we'll we'll add that back to the list of the things we're adding back in.

So I'll go ahead and and kick this off.

Originally, I actually thought that the three percent would be more in line with seventeen hundred, so I was pleased to see that it's uh a reduction of a thousand dollars.

And um quite honestly, if you go back to page or to slide 30, and you don't have to, but slide 3738.

I couldn't look any of the directors or departments in the face and say, thank you guys for shaving down your budgets, but for us, no thank you.

We're gonna keep the budget the way we have it.

So the way I saw it was we need to eat these budget cuts just as well.

Uh again, thinking that it was 1700, but learning that it's only a thousand, I can't see how any council member would disagree with that uh that we would also reduce our budget just as you've been asked to reduce yours.

But I'm one member of council, so I'll allow the others to speak on their own behalf.

Mr.

Mayor, can I clarify though before we go on?

We did cut other funds out of your Yeah, I saw that some of the I food.

Yeah, we we reduced the state of the city by a few thousand dollars and we did some other minor little things.

Uh we did do that.

But specifically from our discretionary accounts, I thought it would be a total of seventeen.

But it's a fact, but it's a thousand.

So uh I'll turn it over to council and um we'll see what the consensus is in terms of direction.

Uh councilmember White.

I see Councilmember Weiss has her hands up.

I I just want to show respect if she wanted to say something.

Well, we'll go with you first.

Go ahead.

Okay.

Um well I'm in a very difficult uh different situation.

First of all, I have to thank each and every one of you as members of council for appointing me to serve um in the transit space, which has allowed me to participate um on the board of directors for Valley Metro as well as the Maricopa Association of Government Transportation Policy Committee.

I serve on the League of Arizona Cities and Towns in their transit space as well as the National League of Cities.

Let the public record show that I covered my own hotel expenses and my own air travel to attend the last conference.

So I appreciate the city covering the registration, but I have outspent my budget serving the city of Avondale, and now I'm spending my personal money.

And that is with the $9,000.

So I have framed some artwork, I guess, in my room, a piece of the Constitution is in my office that was paid for with my discretionary funds.

But I have given out of my own pocket to support city things.

For example, you know, I I don't mind making charitable donations to the Southwest Family Advocacy Center as a board member.

I've donated charitable funds to Avondale firefighters and to separate police causes.

But I think when we start looking at cutting back our funding, um, you know, we only get about twelve thousand dollars as council members, so to start having to pay for all of my expenses in March, and I am in this role through December 31st.

I just find that it's a lot to ask, um, knowing that you know I'm taking money from my family, and I'm a retired person.

So even though I retired younger than the average bear, um, the reality is I had to cover my own flight, and I had to cover my hotel expenses with things that could be used for my family, and that's a lot to ask, especially since the council's asking me to serve with honor in these spaces.

And and a lot of the work that I've had the opportunity to do extended more opportunities because then our lines of business, our departments were able to apply for grants, and the work that you set me out to do has brought millions, uh upwards of 25 million dollars back to the city in grant funding, transportation funding, infrastructure funding.

So, in a situation where I know that you appointed me at this time to do this work, and we have real results in the millions of dollars that are coming back to the city, I would have to respectfully decline taking any reduction because I'm already paying out of my pocket to represent the city of Avondale, and I'm honored to do it, but it's expensive.

Councilmember Weiss.

Thank you, Mayor.

Thank you, Ron.

Um I think well, not all of us are on different committees, so maybe there is some kind of a thing we can look at for people who are serving and needing to travel for the city.

Um I have no problem lowering my discretionary fund.

Um police and fire making cuts to their training and travel.

The city management team is making cuts to training and travel, fire is making cuts to their training and travel.

So from my standpoint, I will be well within my budget, but I am also not on other committees.

So maybe there is something that we can look at for certain members who are who are serving in in other areas.

But I'm fine with mine being cut.

Councilmember Condi.

Thank you, Mayor.

So first of all, thank you, Councilmember White, for serving in the capacity that you do.

I do know that it pulls you away from your family.

And you and Councilmember Solorio um serve at a different level than a lot of us do on this council.

And I know that it takes your time, it takes money for travel for hotel.

Um I don't use all my discretionary money, however, but if one person on this council needs that and we have to vote as a whole to reduce or just to leave it at is, I want it just to leave it as is so that she can continue serving in the capacity that she has because she truly has made an impact.

I know that she's gone, she's advocated and she's brought money back to the city.

Councilmember Garcia.

I don't really use my discretionary fund, um, so I'm okay with lowering it, and I agree.

Like if everyone's cutting, we should be able to cut ours, and that includes sacrificing not going to the conference, maybe doing it over YouTube or whatever video they have to offer.

And that's a choice that people make uh to join those committees and to serve in those things, and we're really thankful for it.

But you could also not go to each event if necessary, if that saves us the city money.

Um the discretionary fund is not like public, like we don't know what people spend their money on.

So if if we made it public, it would be it would be easier to see like where the money's going, where it's spending and how it's going, because I think it's wonderful that people want to serve nationally and do all those things, but being in the community here where there's so much training in Arizona already that I don't think it's necessary to be traveling every month for a new a new kind of training that we could do here in Arizona.

Vice Mayor Gilson.

Ron, is that $7,000?

I mean, if we're nine and just pack one, does that come to eight?

Or is it that is that number supposed to be seven?

What's the number supposed to be there?

Mr.

Mayor, Vice Mayor, the 7,000 is how much it would reduce the budget by seven council members for the thousands.

Yes, it's not equal to your fund.

I've had discretionary funds and I've traveled and I've done things like that.

I think I get the more bang for my bucks, keeping it right here at home.

I can't tell you how many times, and if I get a motion, I apologize for that.

At least two different organizations have come up and told me thank you for what you've done.

You've been able to help me get through a difficult time on whatever.

I've been able always to carry something over for the next year.

And if Gloria or Max or whoever it might need be needs some of my funds, I would be willing to transfer some of that to them.

I think we need to reduce it, as uh Jeanette said, and I can be a little bit more gracious with my funds if that would need be, but I think we need to keep it here with these good people who actually need it on a daily basis between all the nonprofits.

Uh Tina and I kick in our little bit, each uh interfaith one like that.

We're covering all the expenses there.

And so I I yes, we got a good each one of us about a little bit in there.

I'm all right with doing what's been suggested here, taking the thousand dollars off, and if if Max or anybody else needs some, get a hold of me and I'll transfer it the other way.

So it sounds like oh, Councilmember Solario.

Um I'm gonna have to agree with Councilmember White.

I'll be very honest with you.

Some of the training is not involved in Arizona, it doesn't even exist in Arizona.

I know that um last year, actually two years ago, I made a commitment to run for a board of directors position on a national level.

That's not cheap.

We have to go to three of those conferences a year.

I had the support of our city then.

I also had the support of the state league.

It is a state league training that involves that commitment.

You have to get, let me phrase it, because we can't just do it in Arizona or on YouTube.

We have to get the state league's permission.

They don't give permission to everybody.

My first year I was very fortunate to get the state leagues permission to do that and go forth, but it is also a process.

They go and they look into your city.

You receive three letters of recommendation.

One from you can get it from whatever.

I was very fortunate to have it from current mayor, past mayor, and prior mayor.

So this is a commitment that I gave for two years.

It's not cheap.

Travel is not cheap at all whatsoever.

It is three conferences a year.

It is a regular conference that's normally three days, that is now five days.

I use my vacation to attend this, so that is my of my decision to do so.

But it is also getting what I received was the go-ahead from us in the city at the time, knowing that it was three conferences a year, and then on top of that, committing to those things, commit getting all the permissions to do so, because like I said, it's not available here for the training.

It's also getting, we went out of our way to get a dual letter of recommendation from two senators.

As this is not only representing Avondale, it's also representing the state and putting us at the front of the line, which we haven't had representation here at this city since Marie Lopez Rogers was on the board.

It is very hard to get on the board.

You can ask anyone.

I know that we not only speak for people here, we we get Avondale to the front of the way where we're able to voice our opinions, but it's also on a state level, it is an honor.

I will tell you that when I went back and they said, What did your city say?

I'm like, well, I discussed it at the end of the five minutes, and that was it.

But it is not something that is cheap.

Again, I I get it, we do it to ourselves.

We signed up for it, but it's a two-year commitment that I gave.

So I mean, while we can cut back on a few things, there are things that I'm looking on here that's coming up next that I've been asking for the past three years to be looked at to into.

And it hasn't until now.

So that's just where I'm at.

Well, I understand that some people choose not to.

That is in your own right to choose not to.

There is things that we are involved with here as well locally.

And like Councilmember White said, some of those grants, they're not just handed out locally.

You have to provide the advocacy.

You have to go up to Capitol Hill to ask for these things.

Some of them are public safety needs.

Some of them are needs.

I was appointed to the Military Communities Council.

We went and asked on behalf of Luke Air Force Base.

These are not opportunities that are done here locally.

It matters to serve nationally.

Not everybody has to, but some of us choose to.

Base loss what I heard.

Three are in support, four or not.

So reduce to a thousand.

So I think you've got to do that.

Well, mayor, I have Mayor.

Yep.

Councilmember White.

Uh yeah, I my question is this.

I I I don't think the discretionary fund is really the concern.

I really want to restructure how we look at our spending.

Um and uh there was uh email that was sent out by um our senior management analyst, Aniso Romo, because other cities just do things differently.

Um they have separate travel funds in some cities and a smaller discretionary account because from what I'm hearing, the majority of councils not spending all of their discretionary funds, and I'm probably the only person who is out of discretionary funds at this moment, and so this discretionary fund thing, maybe we got it wrong.

Maybe we should have a travel budget and a separate discretionary fund.

Um I'm I'm just concerned that the removal of the thousand saving the city a total of seven thousand dollars is not a percentage of value to the city, it's it's seven grand.

Um, which I'm sure all of us on council have, right?

Um so it's not a big big deal, but I guess maybe we need to look at how we're spending it.

It seems like we're just check marking, let's take a thousand away.

But I think for those who have to travel, or who those who have been selected to travel.

So again, I'm humbly appointed by all of you.

I think that we need to re-look at it.

Because it doesn't make sense for some people to have money left over, and for me to be spending my money.

That doesn't make sense.

So maybe we need to have a discretionary budget and travel funds, and if you don't see the need to travel, then there's no money lost there, and your discretionary funds can be looked at differently.

I just think we have to find innovation in every every stretch of the means, and if people take a thousand away, they'll still have money left over if they don't travel versus people who travel.

So I I I would like to challenge us just a little bit more to look at how our discretionary funding is set up, and maybe we reimagine what we're doing with our money as we get it for a council because that's a big expense for some and for those who don't travel, they're gonna have money roll every year.

If I may, really quickly uh Ron, um this is a discretionary account that I know I've had since I've been on council, and it's up to the discretion of the council member to use it as they see fit.

What I'm hearing so far is some travel, so the discretionary account becomes their travel fund.

Some don't spend it there, like for myself, I donate it to local organizations as long as they go back to the community.

So I don't travel um per se, I don't get on a plane or any of those sorts of things.

I think I I've been to the the League of Cities twice since I've been on council, so over the last ten years, two times where I've actually paid to attend.

So I don't think it's necessarily whether it's a travel or whether we're you know taking the discretionary funds and donating to the community.

It's one discretionary account.

How we choose to spend them, I believe is kind of where we're at at this point where the discussion centers around.

So I I don't really see the need to add additional funds to travel or no, no, not one.

That wasn't what I would need to I'm sorry, I haven't finished.

But I think that as far as the overall reduction is concerned, we're reducing the discretionary spending in total by a thousand dollars.

I mean, it's it's pretty simple in my opinion.

Mr.

Mayor, if I can help uh move the item along and and because I did hear a couple things.

Uh I got consensus on what to do with the item, but I also heard some opportunities for uh sharing.

Sure.

And it is their discretionary fund.

So I think uh we might be able to come up with a solution that I think will make um parties happy and still have the uh thousand dollar reduction.

And I don't know if no Nicole if that if that involves your office or not, but finding the mechanism to allow one council member to uh I got it, Mr.

Mayor.

Okay, all right.

Thank you.

Oh, sorry, Councilmember Solorio.

Um just to state, I get what you uh Councilmember White was saying, and I say that because we received this email where it says like, and we're not as big as Glendale, so I'm trying to find like the closest one, like in Goodyear.

They have a discretionary amount of five thousand per council member, seventy five hundred for mayor, but they also have a travel account that's used for both discretionary and travel.

But they also have a travel account that's used for both discretionary and travel.

So Goodyear picks up their travel.

Where Buckeye would be the next one.

5,000 per council member, 7500 for mayor.

There was no information yet for the council travel.

And then Tollison, each council member receives $9,000.

The mayor receives $15,000.

All this is all inclusive of travel, which is the notes that you could use to through donations or whatever you'd like to do with it.

So I save the taxpayers' money where we can.

So I've not ran out of my money, but I know that the way it's looking, travel is getting more expensive, and we don't go to every single thing.

We make it, you know, I paid for myself to not commute back and forth, but that's between us, you know, but on my own from the state conference that we have, but we don't have to attend.

I know I just have a you know, just a I guess it would be a duty to attend three of them, but I've never run out of money because like I said, I am fortunate.

And I've also extended that to other members of the council as well to be able to get them a discount on travel for hotel rooms.

You have your direction, Ron?

I do, Mr.

Mayor, thank you.

Next up was a request to add the Greater Phoenix Equality Chamber of Commerce for 750.

Uh uh annual.

This is not a this a budget discussion because um council never gets together to talk about spending on their priorities.

And so again, I do think we can afford the 750.

It's not currently in the budget.

Um, but this is a chamber of commerce that promotes equality, equitable business community opportunities for the LG LBGTQ plus uh businesses in the greater Phoenix area.

And so I wanted to uh get uh some consensus on whether council wants to support this uh as a as a council.

Okay.

Any members of the council that are council member white councilmember weiss, do you have anything to add?

Are you okay leaving that in the budget?

Mr.

Mayor, it's it's not in the Oh sorry, it's not in the budget.

So I'm not gonna make the purchase.

Correct.

Are you okay making the purchase?

Yeah, I mean for me it's $750, but um it and I don't know you know who's who's asking to have it added.

I know that there's probably other chambers of commerce, so my only question is is if we add one, are we gonna continue to add multiple ones?

And then who's attending?

So I guess it's just a matter of how are we gonna staff it?

And are we gonna just open the door to keep adding more and more chambers?

Uh Mr.

Mayor, Council, I can't answer all those questions.

It would really be up to council if they wanted to add other chambers.

There are many other uh chambers.

Um but if council directed us to attend it, we would find a way to uh attend it and support it uh best we can.

But um it would be uh another meeting for for my team, but if if this is really a policy decision from council, not not for we'll we'll do as council directs on this.

Okay, councilmember Solurio?

The way I understood it when it was asked if we participated in that was for the businesses that have members of the LGBTQ community, which we don't have.

I know we've talked about it in the past.

We don't have like the um special language that like Tullison and Tempe and Tucson do that provides fairness and inclusivity.

This the way it was explained to me was to become a member of this so that we are LGBTQ friendly uh towards the business community.

Um it wasn't for one person or another, it was just putting that out there since we don't have that other language, like I said, from like that other cities may have.

That's inclusivity.

Thank you.

Councilmember Condi?

So this is just an annual SOL 750 for the first year to see kind of so do they I guess what do we get for the 750?

I'm just curious.

As count uh Mr.

Mayor, if I can, as Councilmember Sorry said, it shows our support to be inclusive uh uh for our businesses run by members of this community.

It uh may give them access to some additional uh support from their chamber, and of course their chamber actively uh promotes um their businesses, you know, the the community.

So I'm okay with the 750.

Councilmore Garcia No, it's a no for me.

Um, we already are in a chamber and it's all inclusive.

It includes everybody.

We don't discriminate.

Uh the chamber of commerce that we already have doesn't discriminate, and I don't think we need special language.

Um thank you.

Vice Mayor Nielsen.

And I agree with Jeanette if we're going to talk about the Chamber of Commerce next.

That's something we could maybe do there.

We I would know on that particular one.

Okay, reminding with what you had said there.

But it has to be not included in the budget.

Councilmember White I um I am trying to be fiscally conservative but socially responsible.

And I would like to learn more about the Greater Phoenix Equality Chamber of Commerce.

And paying a $750 annual membership is something I could pay out of my pocket.

And if we don't do it as a city, I think we should probably look to make sure we're supporting those businesses and directing them to the Chamber of Commerce that we're a part of.

And as we transition into that discussion, possibly giving some of those organizations the 10 free memberships we get.

Mr.

Mayor, if I can add uh uh councilmember white.

Um I don't have the number in front of me, but there are single elected um memberships.

Um this was an ask uh on behalf of the city, which is why I brought it to this discussion.

But yeah, at a lower rate even than the 750, individual council members can become a member.

Thank you.

I would like more information, and I think we should support them.

Thank you.

Um I I tend to agree with Vice Mayor and uh Councilmember Garcia in that there are several other chambers of commerce that uh I would like to belong to as a city, uh, but I've never moved forward in and searching out membership uh just because we belong to a chamber as it stands.

So uh I for the the the reasons listed by other members as wanting to be a part of this.

Uh you know, I I get it, there's no problem.

It's just for me.

There's about two other chambers of commerce I'd love to join, but then we just be adding to the to the price tag.

So for me it's uh it's a no, but I believe there were four.

Am I correct?

She was a no.

I wasn't sorry, sorry, Mayor.

Sorry, Ron.

I wasn't my my question is who's going to go who's staffing it?

And then there was a really great comment that got brought up that the commerce, the chamber of commerce, and I love what Max just said, giving some of those memberships, you know, that we have to those businesses.

You know, to you know, to I feel like we have that the chamber is inclusive.

But I was just wondering, because I know that you know you could probably go down um a slippery, not a slippery slope, but you if you bring in one chamber and you bring in another chamber, like at what point do we stop and who's staffing them?

That's my my question.

Mr.

Mayor, uh Councilmember Wise.

I don't think this is an issue of staffing for this one.

Um I don't expect any real time um by our staff.

It's really a symbol of equality, uh, of inclusion, um, more than a staff issue.

All right.

Uh the next uh item is the chamber of commerce, but I'd like to skip that one because I've got a couple slides on that one.

Um but do know that 40,000 is in the current draft budget.

Also in the current draft budget is NASCAR sponsorship at 25,000.

This includes um both races, it includes some log logo placements, some ads, social media posts, speaking opportunities, and entrances and parking tickets uh for uh elected leaders and others uh for the two races.

That's a little bit of history.

Uh before I got here, and I think even the first year I was here.

Uh our contract with the chamber of commerce provided admissions into the suite up on the top floor, and it was included as part of our chamber uh contract.

Uh they ended that with us.

We mutually agreed to end that uh arrangement.

It was getting too costly.

The the suite is very expensive.

The following year we used GPEC, and so GPEC did the same thing.

We brought in some local businesses.

I think it was Jen, she was brand new to the city, she was having a great time.

It's where we learned we were the center of it all.

She really came up with that logo, we created some stuff, had a great time.

But GPAC has decided not to again partner with us.

And so this year we kind of scrambled at the last minute to uh create some sponsorships out of non-assigned dollars per se.

Uh and so I'd really not like to do it half hazardly.

I'd like to have a plan.

And I just want to make sure that if council as a whole still wants to continue this level of support uh for for NASCAR, of course.

This doesn't include all the other ways we support.

We have tourism dollars set aside where we advertise the events.

This is really about actual events, the day of the two races.

We'll still uh uh Nikki and team and uh Susalee will all do the regular great stuff that they do with our hotels and all the other stuff.

This is really about access and advertising on site during the races.

As you can see, it's 25,000.

This is one area that is in the budget that if we took out would create a little space for the 40,000 dollars.

But that's uh up to council.

I'll take direction or questions.

Councilmember Solorio.

So this is in conjunction with NASCAR, correct?

We've spoken to them about the sponsorship at 25,000.

Mayor, Councilmember Soria, correct.

It is a sponsorship through NASCAR and Phoenix Raceway.

Okay.

Personally, I would let it go.

We have plenty of other opportunities.

And Councilmember White serves on the NASCAR accelerator program, which already represents us.

That's just me.

Councilmember Weiss.

Thank you, Mayor.

Thank you, Ron.

I have to agree.

I I just want to make sure that we are continuing to advocate for the racetrack through our social media posts, which I think we do.

We paint, you know, our triggered um crosswalks.

I really do feel like we support it.

I think we can skip the races themselves and the parking tickets.

Yeah.

I agree.

Councilmember White.

Thank you, Mayor.

Um I am a volunteer.

I will represent the city to the best of my ability.

Even for me to be an accelerator, that costs money.

I think that costs $2,500.

So yeah, pulling off uh $25,000.

Um ten times what I would have to spend as an accelerator.

So yeah, we can we can back out of that graciously.

Um but I would still be spending money to be an accelerator or asking the city to sponsor me to be an accelerator.

So that's just uh put that out there, but $25,000 is very expensive.

Um and maybe I don't know.

Does that mean maybe it's a question?

Does that mean we don't get a table or we have to find money to go to their ignition luncheon if they have stuff like that, Ron?

How does that work?

We have a yeah, that's why that uh uh Mr.

Mayor and Council Councilmember White.

No, that that's a separate uh fund, a different project that we have set aside through our tourism dollars and other uh funds.

This is directly for supporting the two races.

Um we do not have money to sponsor you in the accelerator, but depending on the amount, we might you know be able to handle that depending on what that amount is.

But this is we've over the last few years find ourselves struggling on how to get to the race, and we've always had to spend extra money.

Uh you know, and so I just need to get direction.

Do I have direct I I sound like I have direction now to end this of our sponsorship this point?

I'm sorry if I interrupted.

Yes, sorry.

Thank you.

So I'm good, Mr.

Mayor, unless there's someone who has strong.

We have that was three.

Well, I got nods.

I got eye contact from others.

I have consensus unless they feel strongly.

I'm okay with not including it.

Yeah.

Same.

Okay.

What's the okay to take it out of there and use it some other place?

So uh we are still about 15,000 in the hole.

Uh by removing this, that uh reduces the 40,000.

So we're still about 15,000.

I'm in favor of taking that and put it towards the 40,000.

I thought you might have to.

I'm not a national thing, but um moving on.

Um we also put in the Litchfield Heritage Center 10,000 sponsorship.

This is uh one of our um only uh organizations that um keep our history.

They have a lot of our pictures, they have some of our artifacts, of course they have our history, uh verbal history.

Um they do a good job of supporting the region, including Avondale.

Um we found money in our tourism dollars um uh to make this happen.

So this is in the budget unless council for some reason um wishes me to remove to remove it.

This could not go towards uh the audit uh because it's not out of the general fund.

Uh councilmember White.

Thank you, Mayor.

I've taken a tour of the Heritage Center and I'm grateful that we can continue this support.

I don't know if we could support at a lesser level just because funds are tight, but I do believe we need to continue the historical support of the center.

They do amazing work and folks should go take a tour if they haven't seen their location.

Vice Mayor Nilson.

The only thing I wanted to say, I was at the ribbon cutting the other day for the Heritage Center.

They're gonna move from their little tiny box to a new place up on the hill and talking with the director there.

She would like to make that equivalent to the Herd Museum downtown.

I think we need to do the $10,000 just to get it in there.

She was explaining how it was Avondale, Goodyear and Litchfield that started this whole thing.

And without Coldwater Springs Stagecoach Center, there wouldn't be in Avondale.

So it's just a matter to get it.

They've gonna have something upstairs.

They're gonna have downstairs a place to have archives and everything else where we can have if you wanted to go study some histories you could.

I'm in favor of the 10.

Thank you, Mr.

Mayor.

I I'm good with uh um direction.

Okay, I want to talk uh briefly or or as long as council wishes about the chamber contract.

Um this is what's going on currently this year.

Um, of course, um uh for the 40,000 dollars.

Um so the collaborations on brand strategy event we had in August.

We had lots of introductions to banks and financial institutions.

As you know, one of the big asks of m of when I was hired was to make sure we had a financial institution south of Lower Buckeye Road.

It was actually through our contacts at the uh chamber that was able to get this across the finish line, and you will see one, maybe two financial institutions open up uh south of uh Lower Buckeye Road uh here uh in the next uh twelve months.

Um they had uh so far 18 highlighted reels of Avondale businesses.

They did a business resource fair already.

One is scheduled for for um can't be February 2nd, that's past tense.

I think we missed that one.

Uh two jelly pop-ups, and I I've someone has tried to explain these things to me, and I don't understand.

Jim, do you mind telling us what a jelly pop-up is?

Yes, City Manager Corbin.

This is the co-working environment where they set aside hours for uh businesses to network and interact with the chamber.

Awesome.

And then we have the uh leadership circle luncheon at our Avondale Conference Center, our Canadian consultant event that happened here at the Avondale Conference Center.

We have uh five sponsored memberships of Avondale Business, five more to go.

Avondel as award sponsor for the 2025 Gala, five awards for Avondale businesses.

We had a great showing.

Avondale is a presenting sponsor at our legislative breakfast, board and committee representations.

And this year also we had the leadership circle luncheon.

We got to meet with the Canadian consultant.

We're gonna participate in the taste event uh coming up, another business resource fair, and of course the West Valley Manufacturing Summit.

We've had a great year.

And I do know that the Chamber has been uh uh talked to uh people of council members have brought this issue up with me about overpaying.

Um I had asked for this last year to really let Jen dig in and make sure we would get in our money's worth.

We really believe the chamber is a force multiplier.

They help supplement where staff uh isn't able to get to everywhere.

So uh we did put the 40,000 in because we believe that is um where we get the most bang for our buck.

But I do want to go through there is another option at the 25,000.

Uh that's as low as we would recommend going, but of course you could go all the way down to zero if it uh so please council.

Um the biggest difference between the titanium and the platinum membership um has to do with the the highlighting reels of Avondale businesses each month and the two business uh services, two business resource fairs, and of course the quarterly jelly pop-ups, if you understand what they are.

And then going on to a couple other big differences, it's really about speaking engagements.

Uh this one was about the um three to four business introductions per month uh that we get with the titanium uh level.

In addition with the um customized engagement, this is really where we get our money's worth.

Uh with our uh 40,000, we get 20 tickets to the annual meeting uh where we are award sponsor, award sponsorship for the awards gala where we get two tables.

Last year we had one full table full of local businesses that were able to attend at no cost.

Uh it really uh they really really enjoyed that.

Um presenting sponsor at the legislative breakfast uh for 10 uh tickets, 20 tickets to the city to city update.

I think uh some of you just came back from that.

10 membership scholarships for Avondale businesses.

Um and I believe in your Monday report we sent out um a list of who's currently participating in that.

And then uh 20 ribbon cutting groundbreaking ceremonies.

And and I have to tell you that's probably for me one of the best uh benefits because it's very time consuming for staff.

And we don't really have a staff member dedicated to ribbon cuttings, and we actually have a lot going on.

So with that, I'll be happy to go over any of those lists or go into more detail.

I uh I know it's getting late, so I wanted to go through fast, but uh I just need uh direction uh from council.

I'll just go really quickly.

I mean, based upon what you've just mentioned, and quite honestly, you know, I I I'm aware of of everything that they've done, everything that they do for us, almost quasi-staff so so so to speak.

Uh but when it comes to Jen and everything that her and her team are working on and how much we're trying to grow the city, the fact that the chamber steps in to assist in so many different ways, and more importantly, the fact that Jen sees this as a and uh leadership sees this as a wise investment.

Me personally, I'm okay with the 40,000, but we have the rest of the council to to hear from.

Um we'll start over here.

Councilmember Condi.

Thank you, Mayor.

Thank you, Ron.

How how long have we been titanium members at the chamber?

Do you know?

Uh Mr.

Mayor, Councilmember Conde, we've been a titanium member for as long as I've been here.

It may have been different names, but early on, remember we paid a big uh big chunk because we got the suite.

So when we did away with the suite, we actually lowered it a little bit.

I don't remember how many, how much we lowered it, but we lowered it a little bit when we did away with the suite.

And then I did have a question earlier because I know that they do some events in our city, so they use our visitors' conference center.

So they do not pay us a fee to use our center, is that correct?

Yeah, Mr.

Mayor, uh Council, that's correct.

But remember uh that goes with any nonprofit partnership.

So when we co-brand, when we host, when we are one of the uh um organizers, then we don't charge our nonprofits for those things.

When it is truly a nonprofit or another organization's event, then they have to pay whatever costs are associated.

But as part of the partnership and a part of the sponsorship program.

And then it says here on the platinum.

So if we did choose platinum, so they could customize it so they could actually we could pick and choose some of the bullet points from titanium.

Okay.

Mr.

Mayor Council, that is a hundred percent correct.

It's really hard to say what that would be exactly, but we would if if council says go to the platinum, we would send Jen back to talk with Jeffrey and we would figure out which ones were most important to us.

Okay.

Um and this is an annual membership, right?

Yes, ma'am.

Okay.

I'm in favor of doing the uh the platinum for a year and kind of see what that looks like.

Okay, so Garcia.

I see a lot of great things that the chamber has done.

It's great to meet with other cities during their events.

It's a great exposure for Avondale, especially supporting the businesses.

They support a lot of small businesses.

Um a lot of the ribbon cuttings are at small businesses, so I think keeping the titanium and that relationship is great great for the city.

Um if we did the platinum, I just feel like we will end up adding all the things that we like, which ends up being the titanium again.

So I would say keep what we have now.

And I and I think they're all inclusive, so it would include everybody in every business in Avondale.

I'm in favor of the titanium one.

Councilmember Solorio.

Um let's see.

I would say, since we're talking about it on a yearly basis, that it would be nice to try the time um the platinum.

Other cities get the same exposure, they're not paying all that money.

Look at the chambers website.

Look at the chambers Facebooks and social media and whatnot.

Goodyear has a far more openings than we do and far more things and they're platinum.

We're the only ones that are titanium.

As far as I understand, we've been the only one that's been titanium.

I did confirm that with them.

That was their highest level of sponsorship at the time when we had the suite.

When we got done with the suite, we still kept it.

Um I understand we're getting these opportunities, priority sponsorship opportunities at 25,000 if we're trying to save money in other areas.

Cool, but you know, I'm looking at we have to sponsor 20, we get with the titanium, we get an award sponsored an annual meeting for 20 tickets, gala, two tables.

It's like we're paying to play.

It's a pay-to-play game.

I don't like those kind of things.

Buckeye and Glendale have a far better chamber if we're in regards to pay-to-play.

Um the sponsorships for Avondale businesses.

Um, it would be interesting to see.

I'm curious to see where those how long we've had those and who they've gone to, because from the list that's on there.

I mean, I don't know how is that the is it one year that they've been on there?

The people do we rotate them out?

Do we pick different ones?

Like I'm curious to see what happened in 2024, 2025, or 2023, if that's what it was.

Mayor Councilmember Solorial, this was an add-on to the contract last year, so it's in year one that we had the first nine members.

So it is on a um annual basis, and then we'll look at evaluating a new set for next year, provided which um engagement we pursue.

And then the ribbon cuttings and groundbreaking ceremonies as a person who's been on the other end of that, great that they help out and do that, but sometimes they take our talking points.

And they feel the show is about them.

So I would say try the platinum, but again, I think we're gonna be outnumbered here.

Um but that's just my opinion.

We're looking to save money.

I don't think we need the gallas and the all the other stuff.

That's fluff.

Councilmember Voice.

Thank you, Mayor.

Thank you, Ron.

Thank you, Jen.

Um I support the platinum or the titanium.

Councilmember White.

I I don't feel included when I attend their events.

I will go with the consensus.

Okay.

You got your direction?

Yes, I do, Mr.

River.

Thank you.

All right, I'm done for a minute.

Um, way too long.

Do we want to take another five minute break before we start uh on the next section?

Okay.

Five minute break.

I'll keep timing.

Um good evening, Mayor Vice Mayor Council.

My portion of tonight's presentation will cover the recommended compensation and benefits changes for FY27, with the overall goal being to remain competitive while balancing uh fiscal responsibility.

So when we talk about employee compensation, the um before you is an overview of the recommended compensation increases for our various employee groups, which have been incorporated into the proposed budget.

So for our FIRE MOU, um they will receive a 5% step merit increase or 2% one-time payment for employees that are at the top step.

And just a reminder for council, they also um successfully negotiated a 6.5% MOU increase to the STEP plan overall.

For our public safety group, which we're kind of defining as our officer sergeants and lieutenants and battalion chiefs, um, they'll receive a 1% or I'm sorry, a one-step increase ranging from 3.8% to 5%, kind of depending on um what group they're in.

Council may recall that we transitioned our lieutenants and battalion chiefs to a step plan during those um the mid-year public safety adjustments.

So they're on a on a step plan going into the new fiscal year.

Um they are also eligible for a 2% one-time payment if they're currently at the top step as well.

Um this will also include a 3% cost of living increase that would apply to the step plan scale.

For our general staff, um a 2% merit increase or up to 2% one-time payment at the top step and uh 3% cost of living adjustment.

So when you look at at these overall, and and I think this was referenced in a prior slide for FY27, the uh total combined salary cost budgeted for the MOU and for the public safety group is roughly 2.2 million.

And the total salary cost budgeted for general staff is 1.8 million.

And these adjustments reflect uh balanced approach to maintaining competitive compensation and supporting recruitment and retention here at Avondale.

Uh before we review the proposed health care premiums for FY27, I'd like to provide some context and how we arrived at the recommended rates.

So for medical um health care costs continue to rise significantly.

So they're driven by increased medical services, prescription drug costs, and high dollar claims.

Um but these increases aren't unique to Avondale, so rising health care costs are happening nationwide in both the public and private sectors.

Um additionally, medical inflation continues to outpace general inflation.

And this is the third year of transitioning to a four-tier premium structure, which helps better align costs with the employee coverage level that they choose.

So as a result, most plans and tiers will see premium increases in FY27.

When we talk about dental for dental coverage, we're proposing a minor rate increase to keep pace with cost trends.

For vision coverage, it's important to note that the one-time sub uh city subsidy that was provided in FY26 for our new buy up plan option under our our new um contracted vendor VSP will not continue in FY27.

Um so you'll see that reflected in in the rates as well.

For open enrollment, um, open enrollment is tentatively scheduled to begin in mid to late April, allowing employees to review and select benefit options.

Um we are gonna make it an active enrollment so that employees are able to um evaluate any changes in the in the premiums.

Um, if there is a desire to move premiums based upon cost or where really what the needs are for themselves or their family, um, giving them that opportunity to do so through an active enrollment process.

What we're trying to avoid is a passive enrollment where someone may uh move forward with their current coverage and not really evaluate those costs associated with any um increase to the premiums.

And additionally, human resources will continue to provide education and support during this process.

Um a component of this will actually include a presentation by our vendor, Blue Cross and Blue Shield and our benefits consultant on our various medical plans before we get into FY27.

So this slide outlines the proposed medical premium uh adjustments for FY27.

So the highlighted FY27 columns show the proposed rates across all plans and tiers, including the per pay period uh premium dollar amount increases.

So when we're reviewing this, our goal is long-term plan stability.

Um therefore the adjustments reflect current claims experience on overall health care cost trends.

As previously mentioned in FY27, it also includes a third year of transitioning to our four-tier premium structure.

We found in in I know finance rants a few different models and looking at a structure that we would include for for recommendation.

Um we found that short-term suppression of the premiums often leads to larger spikes later, which is something we're attempting to avoid with this proposed strategy.

Um we're attempting to balance employee affordability with fiscal responsibility, and these rates were shared with our employee benefits trust board earlier or late last week, and they did um approve recommending these to council.

Moving forward to our dental envision premiums.

So dental premiums will see a modest increase of 5%.

These adjustments are relatively small compared to uh medical, reflecting more stable and cost trends, um, more stable cost trends in dental care.

The goal is to maintain cost uh strong coverage while ensuring plan sustainability.

Envision rates remain flat.

However, as I mentioned previously, the buyup plan option is not is not being subsidized in uh in the city for FY27.

So employees enrolled in the buyup plan may notice an increase as a result.

It's a small increase, but it would still be an increase to uh to what they paid last or this current fiscal year.

And even with this change, the plan remains competitive and um is able to provide value valuable coverage options.

Just to talk a little about about the buyup last year, um, because we were switching vendors, they actually had an expanded um a base tier and a buy up tier.

So for this first year, we wanted to ensure employees had the opportunity if they wanted to try the buy up plan option to be able to utilize and see if that met their needs before having the full cost associated with that.

So we we subsidized to kind of keep those um those costs flat with what they had played uh or paid the prior fiscal year.

So that's really what what that's about.

We're just um removing that subsidy as we go into FY27.

And then as we talk about our priorities for FY27, so looking ahead, we're focusing on enhancing employee support and engagement through several initiatives.

Um, one is implementing a employee leave donation policy to support colleagues in need.

So eligible employees would be able to donate vacation time to employees who have exhausted leave for an FMLA qualifying serious health condition.

The next few items were a direct result of feedback that we received from our public safety employees.

So we're increasing um the military leave hours from 240 hours over two consecutive years to up to 300 hours based on the employees' scheduled number of hours worked.

Um so, for example, if an employee has a 10-hour day, they would that would that would uh transition to up to 300 hours of military leave for them.

If an employee traditionally works an eight-hour day, it would be 240 hours.

We polled our uh comparator agencies here locally, and it it the majority of them are on a similar um schedule.

So we felt that it was appropriate to ensure that we're we're competitive from that perspective and sought that feedback and implemented that based upon our uh input from our public safety employees.

Additionally, the the Craig Tiger Act provides public safety employees exposed to certain traumatic events with up to a max total of 36 licensed counseling visits paid for by the employer.

Um currently our policy covers sworn detention and dispatch staff.

One of the suggestions or recommendations was that we expand that to include our community service officers, our animal control officers, our park rangers, and our ID technicians, which we uh have agreed to do, and we'll be moving that into our policy.

And lastly, our um in the in the public safety space, currently our fire employees covered by the MOU are mandated to contribute one and a half percent of their gross salary each pay period to a post-employment health plan account that can be used post-employment or retirement to pay for health care premium specifically.

So, this is something that the association implemented for their members, and they all agreed to from a man a mandatory contribution perspective.

We've received feedback to expand this mandated participation to positions of fire marshal, battalion chiefs, assistant fire and police chiefs, and our fire and police chief.

So thinking about if if you're elevating out of just using fire for an example, um, being able to contribute to that, and then you promote out and you're no longer covered by the MOU.

This allows you to continue to commit that one and a half percent of your salary up until the point that you actually achieve retirement age.

Right now it's cutting off after that MOU eligibility exists.

And so got feedback from both our fire chiefs and our and our police chiefs about because this is really an employee funded um contribution, and and so that mandated participation, there was agreement to extend that to those ranks that that I just mentioned.

In addition, um kind of going back into more the general employee population, uh expanding access to parks and recreation programs by extending the 20 percent resident discount to Avondale employees, increasing awareness of discounts through Life Mart, including our pet insurance uh options, gym memberships and child care.

We found that there's just um we have some opportunity to do a better job of educating employees about some of those programs that exist.

We get lots of questions frequently about these types of things and making sure that we're just keeping it at the forefront.

It's not something that's shared once a year or when they are new hires, um that we're just keeping that um dynamic and in front of employees on an ongoing basis.

Additionally, while health care health care costs are rising, we're expanding preventative wellness initiatives.

So we're looking at um free on-site health screenings and partnering with Blue Cross and Blue Shield to do things like cholesterol readings, BMI, blood pressure.

We're also looking at the potential of partnering to bring a nutrition counseling uh resource on-site periodically to meet with employees.

Um mental health support resources, mental health was one of the larger um uh areas of of claims and and um needs from our employees and their dependents.

So continuing that, such as our EAP on-site classes and continuing to just educate about the different options that exist for employees and their families in that EAP space.

And just continuing to enhance employee education.

Um as we continue to see increased health care costs that we're doing our part to ensure that employees have information available when there's a time of need.

And so just a really small example of that is we've created a magnet that employees could put on their rear on the refrigerator on somewhere that they're gonna continue to see on an ongoing basis, and it really helps them to know where to go for the type of care that's needed.

So whether they should seek out telehealth, um, urgent care, their PCP, or an ER visit, uh just something that's kind of top of mind and in front of them at any point in time.

Um, because again, if if it's something that could be handled through a means of them not going to an ER, the cost of that is going to be significantly less.

And so just making sure employees are aware of of what those options are.

Um there's a QR code on there to make it convenient.

So that's just one example of something that we're looking to expand upon in the coming year.

So this concludes my portion of tonight's presentation.

I'm happy to answer any questions that council may have.

Thank you, Andy.

I appreciate it.

Um Councilmember Solorio?

Andy, uh, just for reference, I know that I had to use the telemed one time.

That's quite different than from what some of like the practitioners offer, some of like those minute clinics.

Could it be possible to get more education in regards to that as well as what if we're out of town?

Yes and what that looks like.

Because I know if we're out of town, we don't we're not seeing the same way.

So some options regarding that so that we don't have to go to any R.

Yes, absolutely.

Councilmember Weiss, you have any questions?

Okay.

Councilmember White.

Thank you, Mayor.

I um was just looking at the changes in the benefit plans.

Um I think those are the slides with the blue cross blue shield offerings.

So um when I look at the percentage change, it looks like it's going up a lot for families.

Is that because what the city is able to contribute is going down.

Uh no, ma'am.

I so uh Mayor, uh Vice Mayor, Councilmember White, um essentially when we look at so there's a couple of things that are that are at play.

It's it's also looking at the fund, our self-funded plan to ensure that we have um enough money there for us to uh respond to the claims, the trends that we have uh coming forward.

And additionally, it also has an impact from the tier.

Um, as I mentioned before, we have transitioned to the four-tier program.

So making sure that the um allocation of uh health care costs are appropriately distributed, where before we only had a two-tier plan.

And so some of that is also playing into those percentages in which uh the increases are are coming up.

So, Mr.

Mayor, Councilmember White, if I if I can add an example.

So before you had employee and then employee family.

So someone with an employee and spouse was having to pay the family rate, and so they were paying a higher uh percentage of what the cost of the plan uh was.

So this is you'll see a lower increase to the spouse and children plan um because we overpaid for years and we're trying to balance it out, and then um the families having to pay more to pay their fair share again, as the Andy said, to make sure that each tier is paying for its uses.

And then the families having to pay more to pay their fair share again as the Andy said to make sure that each tier is paying for its uses.

The real goal here and that I hope people will pay attention to one of our goals also is to help people move to the high deductible.

So for example the employee family instead of having um a $53 increase if they went from PPO to the high deductible would actually see a hundred and eighty dollar reduction by just moving from the PPO plan to the high deductible health plan, plus that we get the 5769.

So part of that is structuring to make sure that our base plan is the high deductible health plan is the most affordable and Renee's got her hand up to Mayor.

And to answer um councilmember why's question no the amount for the employer for the city is picking up is higher than that percentage you're seeing for the employee so I I thank you so much for that clarification.

I think what I'm also noticing is that an employee and a spouse cost more than an employee and their children.

Am I is that right?

Mayor Councilmember White yes that is correct.

I I can just only imagine I I only have one spouse but I have three kids so can we can somebody help me understand why it's cheaper to cover my kids than it is my one husband Mr Mayor Counsel these are actual numbers provided by our um consultants who do the math I would argue just by example is my wife is very expensive to insure.

I love her to death but she's very expensive to insure compared to when I had my uh two children uh who very very reldom spent money unless they were injured.

So I think it has to do with the age and just the total cost of a spouse because if their spouse there could be that they've already gone through the children phase if that makes any sense and so they're the older we get the more it more it cost.

But these numbers are not done by us they're done by uh an actuarial but Renee also Mr.

Mayor Sorry Mayor and um councilmember White um when we made the initial transition from two tiers to four tiers do we used the recommendation of the ratios from our um our consultant thank you so much and then I just la last question um about the children we we are able to have our dependent children who are in school actually just dependent children on our insurance up till 26 correct is that still correct?

Mayor vice mayor councilmember white yes that's correct thank you thank you thank you that's awesome questions Councilmember Garcia I know you mentioned that it went up because we have a lot of high dollar claims can you give example of what those claims are yeah so we've had um something significant um sorry I'm going back to my notes here um we had one where I believe we had an an employer or a dependent that had a uh liver failure and needed to have a liver transplant um we've had cancers certainly uh a number of cancers that that have hit the the health care um our claims I'm trying to think of another just significant um whether it's for an employee or their dependent um things that would really essentially make them um in some instances not even able to continue in in their um their status with us and in their job because it's had such a significant impact uh on them and obviously we've they have we helped them transition a long-term disability or other things like that but they have been significant enough that they've not been able to um to perform their job anymore in some instances and I know I mean just in general and how well do we do in educating on like living better to be healthier um because I think that's real so important and I know we're surrounded by Mexican food which I love and it is the best right we have such good food here in Avondale.

So I know that um we have the park right there that people could go walking during their lunch and stuff how often do we give them the opportunity just to get outside and walk and do those things just like after lunch or maybe you guys have like a walking thing before work together just to um push that you know a healthier lifestyle mayor vice mayor uh councilmember Garcia I can actually tell you that we've we've really um embraced implementing a wellness culture here over the last um the last few months the last several months uh one of the things I'll just give an example we have uh once a month here over the next couple months doing uh what's called Avondale in motion where we can come into the council chambers and have one of our leaders lead a stretching exercise for five to ten minutes for employees to get them up and around so many of us are spending a lot of time in front of a computer sitting down all day um we routinely have um employees throughout the city who go on walks during their breaks a little more difficult as it gets hotter but doing things like that are within the building um some of the other things that as I mentioned in my in my last slide we are looking at um other options for us to enhance our

Uh one of the things I'll just give an example, we have uh once a month here over the next couple months doing uh what's called Avondale in Motion, where we can come into the council chambers and have one of our leaders lead a stretching exercise for five to ten minutes for employees to get them up and around.

So many of us are spending a lot of time in front of a computer sitting down all day.

Um we ha routinely have um employees throughout the city who go on walks during their breaks.

A little more difficult as it gets hotter, but doing things like that are within the building.

Um some of the other things that as I mentioned in my in my last slide, we are looking at um other options for us to enhance our wellness initiative.

So one of the things that we're doing even in our small fitness room on the second floor is replacing our treadmills in there.

So we have some that um we have some that are out of commission or or getting old in age.

So replacing those with uh with new ones, we have wellness rooms that we've started to um to incorporate to allow employees an opportunity to kind of break away from um from their day-to-day or even from a break room where maybe others might be in there and they have a quiet space that they can be alone for a period of time.

Um we have a sound machine and and the ability for them to kind of just take a break and then and then re-engage um once that that time passes.

But certainly something that we're continuing to look at.

We we seek input from our benefits committee members as well on priorities.

So things that we are looking to implement, we want to make sure are meaningful to employees and not just something that we think would be good and and there's no action taken from an engagement perspective.

Awesome.

Well, no, thank you so much for saying that because I think it's important for the public to know everything that you guys do and pouring into our employees that way is so important, and you know, people don't hear about it often.

Um, but even the employees might not know that that's available, especially if they're like off-site.

Um so thank you for sharing that.

I appreciate it.

Uh Ron.

Mr.

Mayor, council, councilmember Garcia.

I wanted to also share um uh another great example.

We've been doing those wellness screenings with thyroid checks and blood pressure checks and glucose checks and you name it for years.

And I know personally of one employee who caught a cancer early and reduced money.

So we've actually saved the city uh money and the taxpayers' dollars by doing those early programs.

So I would argue that while I think the exercising we're moving towards, I think historically, as far as the uh wellness checks, we've done a good job with that.

In addition, um I know that our police department has implemented over the last little bit some mental health um uh programs uh to encourage uh uh wellness and mental health over there in the police department.

So um and our gyms at the fire station are all in good shape.

Uh nice Vice Mayor Nielsen?

Andy, I just have one question, maybe logistics right now.

If we go to open employment, we sign on to ADP and we do whatever we need in there.

This new software that we're gonna get for next year is that really entryway into that.

How will we do open enrollment next time when it comes time to open enrollment?

Absolutely.

So uh Mayor, Vice Mayor.

Um this year's open enrollment will continue on an ADP, so it'd be no no change than in prior years.

Our new system uh once implemented will have a different platform.

We'll have a lot of uh of training and resources to ensure employees and uh other our elected officials have the information that that you all need in order to enroll.

Um it will look totally different.

It'll be a different system altogether.

Uh the timing of it, again, looking at when we actually go live with it.

We may have one more year in ADP depending on that on that timeline and and implementation, but we'll certainly uh communicate and make sure that um because it'll be new for everybody, so ensuring that everybody has the support and resources necessary.

Thank you.

Councilmember Solorio.

Um do we know who the new company is that will take over for that?

Mayor Vice Mayor, we have a uh we have one a couple of organizations that we're currently looking at, but there hasn't been anything formal yet as far as uh an agreement signed or a contract, anything like that.

And was it ever said why we are getting away from ADP?

I may have missed that.

Yeah, so um Mayor, Vice Mayor, Councilmember Solorio.

Uh looking at one of the challenges that we've had at least over um, I think since the time uh City Manager Corbyn's been here and and myself, we've had some instances of uh having some payroll issues or payroll challenges that we've had to have some uh claims paid out on where looking at uh potentially ADP being set up in such a way or the system being set up in such a way that um wasn't accommodating in in that in that sense.

So requiring us to really kind of take a deep dive, not only on the payroll side, but also on the HR side.

What I can tell you from my evaluation of it is um our needs are expanding because we're a growing city and we have a growing workforce, and we want to ensure that whatever system we currently have in place is allowing us to be efficient and effective and able to keep pace with that.

Um a lot of the processes that we have currently in place are manual and rely on a lot of um manual intervention, which creates that um that risk of of having errors made.

And so those are some key factors for us, and also being able to provide some modules for our uh workforce and uh overall that just don't exist today.

Okay.

No other questions.

Thank you, Andy.

Thank you.

Appreciate it.

All right.

So at this time, I would like to introduce James Melanese, our city projects administrator to cover our capital improvement.

Thank you, Mayor, Vice Mayor, City Council.

Um I'm gonna cover the same basic presentation I've given you the last few years, but in the interest of time, I'm not gonna cover every single project.

Um but certainly if there's any questions that you might have, please feel free to stop me.

If I can't answer it, we have the directors available who can answer those questions.

Uh so as always, we like to start with wins.

We've gotten a lot of projects done this year.

A couple highlights right there.

The top photo is Civic Center Park.

I know Councilmember Garcia just mentioned it, seeing that staff are walking around there.

Every day I leave here, I see residents out there.

Um so that's a pretty awesome um ad to our campus.

And then this the bottom photo isn't of construction, it's the Nature Fest being held in the freshly remodeled basin meridian um area.

And then I want to touch on here the fire training tower is our next project that's wrapping up.

Just a reminder if you haven't seen your calendar invite, we are doing ribbon cutting on April 27th.

So please please attend.

We're talking about all our projects and spend to date.

We got a little over 42 million dollars here.

Uh one thing I do, or a couple things I want to highlight on this chart.

Obviously, we invest a lot in public safety.

So that's that big, that yellow, that's the fire training site, that's the canine facility, that's police comms.

Um, and then you see also the asset replacement in blue.

It's gonna be a little larger than the number you see um later on in the presentation.

The reason is there was carryover from asset replacement.

So that's why you're gonna see that real deference.

And then a little bit of what uh Ms.

Weatherless touched on that we've kind of pulled back a little bit of asset replacement just to make the books balance.

And then obviously our continued investment in parks and recreation.

You continue to see these um be a large section of our spending in the CIP.

That is not changing, as you'll see in my cutting slides.

All right.

So program to be completed again in FY20.

Again, I'm not gonna spend too much time on here.

Um but I do want to touch on Donatella Park.

We just had the ribbon cutting on that in February.

That's the first new park uh north of I-10 since um friendship went in.

So it's a big ad to that the community up there.

Um the signal at Avondale Boulevard and Miami.

This is to support the fries coming in down there outside of the Almar area.

Uh Old Town Plaza, um, taking a vacant part of parcel of land on Western Avenue and really creating a gateway into Old Town.

Uh one of the key things is we're working very close with our parks and recreation team to make sure that that project is complete prior to Billy Moore days.

Um and then the signal at 1111th and Thomas, because I know we've had a lot of discussions on that.

We met with both the HOAs on it.

And I'm probably gonna say this wrong, but I believe we're remodeling, we're doing some landscaping on the south side, but not necessarily the north side.

They asked us not to do anything.

Um, but that project is moving forward and will be complete uh September and October.

All right.

Okay, and then we've got a lot of projects, so several of these.

I've been talking to you now, it seems like for as long as I've been here.

Um these are some massive projects that take a long time to get done, right?

Um but a couple on here that you may not be as well aware of Holly Acres waterline replacement.

In years past, we've had a water line replacement project, and every year we kind of added more money to it.

Well, really, it was Holly Acres.

Um it's a large subdivision that has very aged equipment.

Uh so that's allowing us to go through and replace all the equipment and then also bring some services out of the alleyways and make sure they're more accessible to staff.

Um I also want to touch on the Southern Avondale Fire Police Station.

Um so I'm showing their 25 million dollars.

And I also have a little bullet point there.

And the reason is we have programmed this for that future bond funding.

So if that if the direction was not to go forward with trying to do another bond offering, um, we would have to go back and figure out how to make this project move forward.

Um and then the last one I want to touch on Awafria Trail, Lower Buckeye Road Crossing.

We talk a lot about how we align projects with each other.

So this is just a great example.

That project has been pushed kind of out to FY30.

So what this is doing is creating more of a trail along the west side of the Agua Freya Trail all the way down to festival.

But we're expanding Lower Buckeye Road right in the middle.

So what we don't want to do is build a brand new road and then have people crossing a construction site, or worse, have to go through and redo a lot of the improvements we just put in.

So we're gonna time this so that's done right after we've opened Lower Buckeye Road.

Very shortly thereafter, we shall have this crossing and people should be able to make it safely across.

Alright.

So new projects for FY7 to FY32.

Um and I know it's it's 27, 28, 29, 3031, but I'm gonna highlight a couple projects that are in year six, so bear with me.

Um the first two bullet points here are the same that I talked about last year.

Um we we definitely have a cash flow approach.

Um and what that means is we appropriate funds in the year we think we're gonna spend them, right?

So in years past we've appropriated all the monies in year one, thinking oh, it's gonna be a 20 million dollar project, and then we don't spend that money, and then that the the high peak that Miss Weatherless has to show every council meeting, it just keeps getting bigger and bigger.

So by spreading it out, we we aren't doing that.

And it makes budgeting easier, it makes how we plan out easier.

And then we're also constantly looking at workflow and adjacent activities.

So, like I just said, we're we're we know another projects are coming up, we know when developers are coming in, so we're asking to move projects around to work out for the benefit of the city.

The second thing that we've talked about in years past is the measured approach.

Um so we're phasing projects.

So I'm gonna highlight a couple projects later on that rather than come forward with a very vague scope and trying to guess at the overall dollar amount, we're asking for smaller bites of the pie so we can do studies, we can do design, and then get the appropriate cost, so we don't have to keep coming back to you.

Um and then if we that does happen, if a project is unfunded, we're not losing track of it, we're continuing to track it, it's just it's shown up as unfunded.

Um and then obviously the big thing that's changing our CIP moving forward is the bond funding.

Um, and I do apologize here.

I'm showing 63 million, it's 68 million dollars.

Um, so I just wanted to highlight there.

And then the the impact on that on the other side of that is with what Miss Bodhos has shown, and what you're gonna hear some more on the the water wastewater side, very, very little um new projects coming on those sides for the next several years.

So I'm actually not even gonna present any of those projects.

If you have questions about it and you see it in your spreadsheet, please let me know.

All right.

So going right into it, parks, bond projects, these are the new projects, right?

So these are the ones that we talked to, the bond committee that we got their buy-in on seeing some of these are the most important projects.

Again, I'm gonna highlight just a couple of these.

Festival Fields Park Shade Um expansion.

This is really over the splash pad and over the spectator area for Little League.

Um, so it's to give them more of that shade that we know is the number one thing that people are talking about, um, and specifically hit those two areas.

Um another one in here that's a little bit different that we didn't we kind of touched on with the the bond committee, and I think we touched on a little bit with council, but we didn't get in a lot of details this idea of land, right?

So we put language in the bond, allowing us to purchase land.

We know that we have there may be opportunities throughout the city to grow park acreage.

We know we have a need for it through the transportation master, or sorry, the parks master plan and the studies that they have done.

So what we're doing here is we're kind of setting a placeholder.

This gives us that permission from council to go ahead and start having those conversations.

We'll still follow all the legal steps.

If we get any further along, we'll come back to council and make sure you're involved.

But again, it allows us to have those base conversations.

Um then uh another one I want to touch on real quick the Trailhead Avenue Boulevard and Base Meridian North.

This is interesting, it came up from the city of Phoenix.

They actually had a plan uh several years ago and they built the 99th Avenue treatment plant.

Um this is a lot cheaper than what you think a trailhead would be because they have federal grant capacity.

Um this will be a multi-stage partner um project.

Uh the city of Phoenix will provide the grant um funding for us, like they'll they'll work with the feds to get the dollars.

It will be built on a Army or sorry, the uh Maricopa County Flood Control District land.

We will pay a match, and the US Army Corps of Engineers would actually construct it.

Um but it's it's a little different, so I wanted to make sure you're aware of it.

And then again, Las Legas Park, we know that this is a priority for council, we know it's a priority for the community down there at Las Legas.

One of the things again that we're trying to do that that that elephant in the room of lower Buckeye Road winding, we want to get more design done before we start design on this park, just because so much of the design of the road will affect the park.

And so that's why it's being phased in where it is.

And that was one of the ones where I said, hey, bear with me on that 32, because I didn't want to say it'll be done in 31 and we're actually programming it to be completed in 32.

So funding over two years, 31 and 32.

All right, and then some ongoing um projects.

So again, these are projects that we've talked about in the past, but perhaps we're um we're simply taking some of the funding that might have been general fund and converting it into more of the bond dollars.

So the bridge, we've talked about the bridge.

Um that was originally programmed to be a general fund project, and we pulled it back.

We tried doing a grant, it didn't work.

So this would provide funding through the bond.

Um and then the trailhead agua fria and MC85.

I say ongoing.

This is a uh council approved us purchasing land to the county.

That land cell just completed and closed the other day, so we'll have funding to do design in a couple years.

This will also tie in with that MC 85 Buckeye Road project.

So everything has to work together as we time these projects.

So we don't want to build a trailhead before we have a trail, right?

So the trail has to come first, then we build the trailhead.

So there is a pattern of sequencing that we're looking for when we're asking for these projects in the order in which we're asking for them.

All right, and then transportation projects.

Uh city parking lots resurfacing.

That's right out here on the North Parking Lot, Civic Center, it's uh main PED.

The Roosevelt Half Street Improvements, this is part of our commitment to MBC Suites.

So we're going to expand Roosevelt from Avondale Boulevard uh over to MBC Suites.

Um so it's a full street section that it's supposed to be.

Um the two projects there at intersection at Van Buren and Dysert and the Dysart Road improvements.

I attend a Rancho Santa Fe.

Again, I've got those little stars on there, the asterisk on there, because those are two projects that are very complicated scopes, and so we're asking for initial funding for design and some right-of-way acquisition, and then we will come back in future years funding availability to request um to construct them.

And then also two stars on the lower Buckeye Road widening, 107th Avenue to Richfield, uh sorry, 107th Avenue to Lichfield Road.

Um, the way this works out, this is an ADOT project.

We'll be bringing an IGA to you very soon to start design on it.

The way the ADOT works is we prepay for everything.

So when we bring that IGA to you to ask to do design and right-of-way acquisition, we now have to pay for that before any of that can actually get started.

Once the design gets done, they will take our cost estimate and they will bill us for the full cost of construction at that day before it gets bid, before it gets awarded, everything else.

Now, if it gets awarded and it's a lot higher, we can we'll come back and we'll have more conversations about what we do at that point and with ADOT.

Um, but that's why you'll see in the funding, it calls for funding in like 28, but we're actually not gonna have the road done in 2030.

So I just wanted to make sure that was clear um for everybody.

And then Van Buren Whiting, 107th Avenue to Avondale Boulevard.

This has actually been in the Magtip for a long time.

We're starting to see it roll into the current pattern.

And so once it starts pulling up, there's federal funding that will be available to support us.

But that would be right now what we believe our match would be for the entire project.

Um we're starting to see those costs though in the out of the five years.

Okay.

Um asset and vehicle replacement.

Um these numbers are largely unchanged with the exception of IT.

IT was able to make a lot of their purchases in this year, and their need was a little bit less than it was previous years.

Um but other than that, that's the majority of the decrease you see there.

Overall, you see um uh about a million dollars spread between the rest of them.

So we're taking that big hit this first year and then spreading it out through the rest of the years of the five-year CIP.

And last year when I showed you this, I also had uh uh fire apparatus on here.

Um but it's getting a little complicated, so I just wanted to cover that real quick and cover the investment we continue to make in making sure that our fire department can get to where they need to get to as fast as they can.

Um so you see several projects listed here.

And again, to help with any confusion, S0013.

If you look at that project, it doesn't say fire apparatus, it says Southern Alvendale Public Safety Fire Station.

We included the apparatus in with the truck, so that's where I wanted to call that out to make sure it was clear to everybody that truck's already been purchased, it's already coming online, um, as is the other growth S0399.

The other one I wanted to call it looks a little bit weird.

So we have all these projects are S0302.

Um our budget team uses a single project for future years, so years two through five of the CIP, and then as projects come into the current year, it gets an actual project number.

Right now that's showing up as the auto 111 um in there.

And then of course, that star for the estimated, that's really because we're we're kind of guessing at when these equipment will be available and well they'll be available to be in service.

Right now we're seeing anywhere from two years to 30 months, Chief.

That right?

Yeah, so um that could change, it could go less, I'd go forward.

Um, but that's where we're trying to plan ahead right now is two years before we believe we need it.

And uh that concludes my portion of the presentation.

Thank you so much, James.

Are there any questions?

Councilmember White, do you have any questions?

Thank you, Mayor.

I'm just looking at the um equipment replacement slide.

I just want to make sure I understand that's a new engine, it looks like every other year.

Or a new engine to fully have the new fire station have the correct amount of apparatus.

Is that correct?

Yes.

So uh uh thank you, Mayor, uh Vice Mayor uh Councilmember White.

Yeah, so the S0113, that was the new fire truck for Fire Station 176.

Um, what will be the number, the fire station number for the Southern Avondale fire station.

Most of what you're also seeing here are replacement equipment.

So this is part of our aspect asset replacement.

I threw in there the S039 that was a growth engine.

Just to like I wanted to give you a clear picture of the overall investment that we're currently making and fire apparatus.

Is it a status of good repair that we have to make sure all of our apparatus are in, which is why we have to kind of plan this replacement cycle.

Uh Mr.

Mayor Council, yeah, yes, Councilmember White.

Um I was hired uh uh almost four years ago, three and a half years ago, um we were deficient in our fire apparatuses.

We um were limping along to the point we couldn't send apparatuses out of state.

We had some breakdowns, uh we were on the verge of borrowing apparatuses from other organizations.

So the previous city manager, even before me began the investment given the turnaround time, and we've continued with that investment.

In addition, we've added two employees, one employee who manages the fire department's assets, including fire engines, and another one that helps maintain uh those heavy engines to really invest.

As you can see, these are very expensive.

And so, yes, we are bringing up our standard um in our fire engines, and we have them on this asset replacement.

We don't just automatically replace them though when it comes time to order them.

We make sure that we do have a need.

We have inventory, we watch the miles, we know how much money we spent on the to fix an apparatus.

So we'll make decisions at the time of purchase on when and how and which engine exactly.

But this is a good schedule.

We wanted to make sure we could afford the fire service that we currently have.

We did not want to go back to days of old.

I I am very excited and I'm thankful that we're planning these investments into public safety um without a bond.

Thank you.

Thank you.

No other questions.

Okay, thank you so much, James.

Mr.

Mayor, while while Renee is coming up, I do want to mention um the importance of that uh public safety bond.

So as the community is listening, as you notice, that was 10 million dollars that we don't have in the general fund.

We currently don't even have a lot of general fund projects, a lot of SOPAX projects or utility projects.

It's gonna be really important that we get that.

If it fails and we continue, which we'll need to with the building of 176, a substation, we will have to be very creative to find that.

As you see, we only have 0.9, and so that would put us 9 million in the hole if we had to use the general fund.

Uh we would be in a in a very different discussion today.

Had we not moved.

We tried to put it into the general fund when we started the budget process to see if we could afford it.

Um it's gonna be a struggle if we're if we're unable to get a bond.

Right.

I think it's uh just as important as you mentioned uh to have and to keep that schedule, you know, so that we're not worrying about this last minute and trying to figure it out.

Thank you so much, Ron.

Renee?

And Mayor and Vice Mayor and Council, and also another project uh that uh Mr.

Milanese has presented, which is Holly Acres is also a project that we are going to need to debt finance, and we'll see that um later on tonight.

So as um Mr.

Corbin mentioned, we do have at the end of our five-year forecast just that 900,000.

I think we touched on um the decisions and some some directions I should say that that were given tonight.

Um so at this point in time, um we're wrapping up to receive any other um direction from council as we build this budget.

Uh tonight we want to hear it before we come back in April to present the city manager's recommended budget.

Um as Ron mentioned earlier, we do have a couple shots at this.

We will come back in May to present council with the tentative budget adoption and then have the final budget um adopted in June.

So this concludes the budget portion of um tonight's presentation.

So do you have any questions?

Any questions, council?

Okay.

I believe we have the direction.

Thank you.

Ron, next item.

Yep, Mr.

Mayor.

But we will again have uh Renee Wetherless, your finance budget director kick us off for utility rates and debit issuance.

All right.

So we talked a lot about bond issuance and and we have the need for some projects inside of our utility rates.

So tonight we're going to talk about those projects in water and in sewer and the need to debt finance the major costs associated with those and the impact that it will have on future rates.

We are not looking for any um decisions on rates.

This is not what that is about, is about helping us to determine what direction we need to go with building this bond estimates and and scenarios and how we build the budget going forward.

So with that, we will start with water, and I will turn it over to Kirk.

Good evening, Mayor, Vice Mayor, Council members.

The first thing I want to do is to go over some of the cost drivers to the to the water utility.

So what what causes rates to be increased or expenses to go up?

So first off is growth.

Growth creates revenue.

We love all the new customers, they pay for for what they use, but growth does add infrastructure.

It adds more operational costs.

We use more water, we use more chemicals, and those expenses to maintain those things continue to escalate year over year due to inflationary pressures.

Renee touched on during her budget, water delivery costs, or we called it the water going up.

So we get our water from Salt River Project and Central Arizona project.

They have increasing expenses and they pass those on to us.

So we have to cover those.

Additionally, we have other costs of our own that continue to go up with inflation, electricity to run the pumps, the pressurize our systems, chemicals to treat the water, those are all things that we see increases year over year.

Also, personnel expenses.

We saw the information on the benefits and the merit crate increases and cost of living adjustments, those get factored in.

And then rising construction costs, luckily, construction costs have kind of stabilized.

They were inflating quite a bit a few years ago, but we still see some regular inflation year over year.

In regards to drought, you've probably seen in the news the Colorado River is in bad shape.

But we are expecting a cut in our Avondale or our Colorado River allocation, and that could have some impact on the expense of water.

Additionally, we're gonna um we have regulations like PFAS.

We're gonna go into that in more detail, but that certainly drives costs.

I do want to update some active projects.

So you know exactly what we're doing right now.

We are in the process of developing four different wells.

One of them is an is a uh replacement well, that's well number 25.

The other ones are new.

The average cost for a well is about four to four and a half million dollars.

Um interesting to note that the city has not added a well in nearly 12 years.

So while we've continued to grow, we've used the same amount of wells.

We need to add wells in order to keep up with the demand.

Uh the crystal gardens, lake dredging and the recharge base and cell removal, those are two projects that are addressing water quality and operations.

If you've driven through Crystal Gardens, you've seen the big bladder in the street.

We're getting the silt out of there.

Those that'll be wrapping up, and then our recharge basins north of uh Friendship Park.

We have to clear the silt out of those so that the water will percolate into the ground effectively.

And then Old Town, we're working in partnership with uh the capital projects team and engineering when they're doing the street work, they're also doing water line replacements in those neighborhoods as well.

Some upcoming projects when we talk about the need for capital, Holly Acres water line replacements.

James touched on this.

So this is the area of Southern and El Mirage.

The water system there was purchased by the Rigby Water Company in 2010.

And uh the lines are aging.

They're asbestos cement pipe, they're undersized.

Um there's no um fire protection in the area, no fire hydrants, the lines are in the back of the houses.

We want to bring them out to the street, upsize them, and make sure that we can pressurize the system to the rest what we see in the rest of the city.

That area runs at a lower water pressure because we pump it up too high that we start getting breaks.

Bartlett Dam.

This one is a kind of a ever-changing project.

So we are one of 22 partners in the Bartlett Dam project.

And the allocation of the water from that project has been kind of vacillating back and forth.

Some of the partners want more, some want less, but we've basically landed on what the allocation for Avondale would be, which is 4,500 acre feet.

So by comparison, our Colorado River allocation is 5,416.

So it's very close to what we get in CIP or CAP.

So the Bartland Dam project will help us to make up for shortfalls in our from our Colorado River reductions.

The issue with this project is what was once about 2.0 billion is now up to 4 billion.

And so that number that Renee mentioned, 44.5 that million, that's our share of the project to get that 4,500 acre feet.

The good news, I guess, is that that's about $9,900 per acre foot for that water.

That is still cheaper than a lot of our other options.

We could lease water or purchase additional water rights for a cost of anywhere between 20,000 to 100,000 dollars per acre foot today.

When Colorado River allocations are reduced, those expenses are likely to increase.

So we're making by by getting involved in Barlow Dam, we're investing now for something that's probably going to cost a whole lot more ways down the road, and we may not even see the need for that water for 20 years, but we'll have made the investment a day while it's still cheaper.

And the thing about trying to find additional water, it may not be available when we want it.

Um because again, everybody's gonna be looking for water.

And then the last item that's a major cost driver here, and we're gonna talk about a little more detail is PFAS.

So PFAS, just a reminder, that's the forever chemical.

It's been strongly associated with increase for cancer, including kidney, testicular, breast, and brain, among others.

Um the regulatory limit that we've seen is still in place, four parts per trillion for PFOS and PFOA.

There's four other uh PFAS related compounds that are also being regulated, but not to the level of of the of the two primaries.

Uh the EPA recommended a new compliance date for achieving note or the achieving the regulatory limit by April of 2031.

It was previously 2029, and I think it's important to note that that April 2031 date has not been promulgated, meaning it is not the regulatory law right now.

By technicality, the regulatory law is 2029.

However, um I don't expect that that the EPA's recommendation will be ignored.

I do believe it'll move to 2031, but there is no indication that there'll be any other extensions beyond 2031 at this time.

So it's important for us, it's a problem for us because 70% of our city's water production capacity exceeds the PFAS limit.

So we have 16 wells.

11 of our 16 wells have PFAS in them.

The project cost, as you develop things and you start from a feasibility and you start getting the details, costs have a tendency to go up.

Our estimated cost for this project is 167 million dollars.

That's up from 120 million that we talked about in in prior meetings.

We really have refined what what is needed, what kind of treatment, the extent of the equipment that we need.

So that's where the the cost drive.

And then on top of that will be annual operating increases of approximately four million dollars a year once the system is in place.

So that's a lot of money.

And you'll say, well, what other options have we looked at?

And we looked at a lot when we did the feasibility study, but just to remind we talked about these, but to remind everybody, one of the options, and the EPA simply stated this, just shot off the wells that are that have PFAS.

Well, we'd have to shut off 11 of our 16 wells.

We wouldn't be able to provide water to the city, so that's not feasible.

You could construct additional wells that don't have PFAS.

Well, we don't know that until we actually get down there and drill a hole and find out what the water's like.

And you just can't locate wells just about any place.

There's a procedure how the how that works.

So not feasible because we may not be able to find a spot that's PFAS free and or even be able to drill the well.

Construct a surface water treatment plant.

So a lot of the cities in the valley have surface water treatment plants.

So they're treating water that's coming down the canal or from Salt River Project or CAP.

So they don't have the PFRAS problem that we have because they have the surface water treatment plant.

But for us, for us to do something like that, it takes many, many years, probably close to eight to ten years to develop the project like that.

We don't have the time.

It costs significantly more.

We're talking five to six times what our current estimate is for the treatment that we're looking at.

And when the canals dry up for maintenance, those plants don't work, and you have to revert back to the well water to get water to your customers, and we would that's the wells that we have to treat anyway.

So again, it's just not feasible for us.

And then finally, we could look at connecting to other cities.

We do have a connection to the city of Phoenix right now that they deliver a portion of our Colorado River water to us, but for uh Phoenix or a Goodyear or Tollison to supply Avondale with all of its water needs would not be feasible for them because they'd have their own issues of their own services they have to provide.

So treatment for us is really the most cost-effective and most feasible option.

So where we stand with PFAS right now, we've pretty much wrapped up our feasibility studies, so we know for the most part what we need.

We do continue to do some sampling.

We are involved in some class action lawsuits.

We've collected about five million dollars through those lawsuits.

And just to note, there's actually another lawsuit that's um been brought by the American Water Sex Water Works Association against the EPA battling the MCLs and the implementation of this.

We are in the process of acquiring some land for the additional treatment vessels that we need at these at these uh at our sites where we're gonna do it.

Um council's approve those acquisitions.

We purchase one parcel near Garden Lakes.

We have a couple others that we're working on right now.

We are in the process of seeking a program manager consultant.

This is a large project with a short timeline with a lot of expertise needed, so we're looking at a consultant to help us out with that.

We plan to start design on all these sites in July of 2026 and construction and January 2029 so we can meet that 2031 deadline.

But funding is a concern.

The uh to meet the April 2031 deadline, we need to finance quite a bit of money.

Renee is going to show a model with rate increases that show that compliance, and then she's gonna show another model that will show compliance achieved three years later than the regulation in 2034.

That is not compliant with the regulation we have today.

We could hope that the that the regulation date is extended.

That's always a possibility, but we don't have that certainty.

Um I will say that if we do not keep compet compliance, there are some ramifications for that.

Um obviously it would be a violation of federal law.

They could result in consent could decrease, it could result in some direction to provide alternate water sources until we get into compliance.

I think those are things that are way down the road.

Uh but I don't want to just say meeting not meeting compliance is an option.

It's an option from the standpoint of we can do what we need to do, but it may not be the best option.

So with that, I'm gonna turn it back over to Renee to go through the uh rate information.

Thank you, Kirk.

Okay, mayor, vice mayor, and council.

Um I'll be going through the water rate projections.

Um, what you're looking at right now were the last rate increases approved by council.

Um so this is uh for a typical residential customer using 9,000 gallons per month.

The rate increase scheduled for January of 27 means that that customer would be paying approximately 42 dollars and sixty-six cents.

So as we look at water rate projections, we have some goals to keep in mind.

One, we have to keep pace with the inflation and infrastructure needs of the water system to be able to um update our equipment and our infrastructure, and to maintain fiscal sustainability.

And to as Kurt mentioned, we have to invest in the city's water portfolio.

So we've talked we're talking a lot about compliance and federal regulations related to the Safe Drinking Water Act.

We want to be transparent on the purpose of our rate increases.

And so I would like to take the opportunity tonight to discuss with council.

One of the one of the requirements in our current city's financial policies when we issue debt is that we must meet an operating debt coverage ratio.

Now we haven't discussed this a lot because our city has not had to issue this size of debt in our utilities, and so we haven't run up against it.

But now we are looking at needing to issue enough debt that this is something we have to be calculating, projecting, and making sure that we meet.

So our current policy says that we must maintain operating debt coverage ratio of at least 1.5 times the funds, maximum annual debt service requirement over a prospective five-year period.

So what that means is in this case for water, take your water revenue less your operating expenses, and that balance left over needs to be one and a half times the amount we pay back for bonds, the debt service payment in a given year.

And as I mentioned, with our current ratio is set at 1.5.

When you look at the average ratio, debt coverage ratios when you have covenants that are written into bonds, you will typically see 1.2, maybe even up to 1.3 times in a standard bond covenant.

Anything 1.4 on up to 2.0 is considered favorable from a rating agency.

And as you know, we have high ratings in the city here.

So as we look at where do we stand, we have three projects that we're really looking at needing to finance.

So the first was mentioned Holly Acres for $6 million.

The next one is PFAS for design and construction with the total estimate of $167 million.

Kirk mentioned the compliance deadline of fiscal 2031.

And the last is Bartlett Dam.

So when we first committed to this project, Kirk mentioned it went from $2 billion to $4 billion now.

It started out less than $15 million.

If you look at our current CIP, we have it in there at $15 million.

The current estimate is $44.5.

So we provide we're providing tonight two scenarios.

The first one you're looking at is to be compliant by fiscal year 2031.

So there's a lot of information here, we'll go through.

The top three lines are the projects, Holly Acres, PFAS, and Bartlett Dam.

In the fiscal years going across, for Holly Acres, we would need to come to council and request approval to issue $6 million in fiscal year 27.

For PFAS, we would also need to issue bonds in fiscal year 27 for 13.5, and that is to pay for the design of the project.

The construction would then fall at where we would need to probably break our issuances out over three years between fiscal 28 through fiscal 30.

And then the next project is Bartlett Dam.

So for today's projections, I left in the 15 million that is currently sitting in RCIP.

Now, as mentioned, this this price tag keeps going up.

But for right now, it's we're assuming we would borrow 15 million for Bartlett Dam.

So then we move to the green section.

That top line is what the water rate increase would need to be over a prior year.

So starting in fiscal 27, you see 6.1%.

That is what council has already approved.

But with those issuances, we would need to increase those rates to 12.5% in 28, again in 29, 10.5% in 30, then down to 8%.

And at this point, until future projects are identified, we don't have any future increases slotted beyond 32.

The next two lines are water treatment fee and water resource fee.

So these percentages don't represent your overyear increases.

These are actual percentages on the bill, on the total bill.

So today for water treatment, it is 7.5% of the total water bill is being charged.

And this money, this revenue that's generated, is to cover the PFAS project.

It's the treatment costs.

So that 7.5% would need to increase to 30% in fiscal 28 and remain at that level to be able to sustain the debt we need to issue for this project.

And then we have the water resource fee, which is currently 6.2%.

So water resource, which would cover the Bartlett Dam, at this point, the revenue generated from that water resource fee is adequate to cover $15 million worth of debt.

Now if at some point the decision is to proceed with the Bartlett Dam commitment of $44 million, then at some point in the future we may need to come back and increase that water resource fee.

So what does that do to the customer and a monthly bill?

Well, we showed you in fiscal 27 with approved rate increase, we're looking at about $42.66 per month for the average residential customer.

In 28, with the rate increases, that number would go up to 5753, which is $14.87 more per month.

And the monthly bill would then go on up to $77.23 in future years.

Now I've also included that last line.

So again, we're now starting to be in the position to need to issue sizable amount of debt where we need to monitor and maintain a debt coverage ratio of 1.5 per our financial policy.

So at these rates, you can see that we get down as low as 1.59 in fiscal 29, but we would meet our current financial policy.

Now the second scenario is meeting compliance by fiscal 2034.

So starting at the top with the projects, we're using all the same project totals, but I will note that if we push construction out several years, it is very possible the cost of that construction will go up.

But we're using the same project totals to do our calculations.

So you're starting 27 from the 6.1, we would need to increase the water rate to 10%, then 8% for the next two years, and 7% for the next two years.

The water treatment bill, instead of going up to 30%, would only need to go up to 18%.

And that would be because we would start collecting that revenue to be able to afford those issuances of that construction, but it would need to remain at that level.

And then the resource fee again would cover that $15 million for Bartlett Dam.

So in this scenario, the monthly bill estimate would go from 4266 to 51.27, which is an increase of $8.61 per month.

And that monthly bill would continue to increase up to that 6850 number.

Now, I will point out in this scenario, debt coverage ratio begins to fall.

It falls below that 1.5 in fiscal years 34 and 35.

So going back to what is that ratio, it it maintaining those excess reserves and it's favorable for credit ratings, but is it also a policy, a city policy that council has the authority to change?

So that is something that council has discretion over.

Whether we choose to keep it at the 1.5 or something else, we wouldn't recommend probably dropping it below 1.4, but it does have an impact on the rates that would need to be charged.

So if we take the scenario and say we're going to keep the ratio at 1.5, what does that mean in this scenario?

Then that means in fiscal year 33, we would need to attack on another 4%.

And in 34, that would go up by 3%.

And you can see there we would maintain the city's financial policy debt ratio requirement.

So at this point, we need council's direction on a few things.

The first is you've seen a couple scenarios, and that's just based on compliance date.

The first being design and construction completed by the 2031 compliance or something later.

The second is Bartlett Dam.

So Kirk talked about the cost of water, the cost of water increasing in future years, and maybe not being available even in future years.

So that is something that as we look to come back next year to council to approve rates.

Is this something we start building toward now?

We you know we've had conversation in the past about smaller increments of rate increases as opposed to coming in and having to institute a large one.

That is something that we could start when we bring rates back next year with that resource fee.

But that would add on to these numbers.

That is in our city's financial policy.

So we do need to make our first bond issuance this year, and we need to come back to council on May 4th for that approval to do so.

So we are looking for direction on these three items from council so we know how to prepare for uh a bond package, how we to prepare for the budget going forward, and how to prepare for the rates that we will come back in the spring of 27 um to present to council.

Thank you, Renee.

Okay.

Do you want to add anything?

Okay.

Uh so I'll I'll I'll go first.

Um obviously uh bar recover your years.

Remaining in compliance is gonna be important.

Uh but based upon what I've seen on here, we really have to be cognizant of the fact that and I'm sure many of you have all seen the news and and read about what is happening with other municipalities as they've increased their utility rates to the point where uh it's been outrageous in in terms of of the cost to the to the resident.

And and I'm um very and I understand that and I'm very sensitive to the fact that you know many of our residents um uh in terms of income are either fixed income, low income, both.

And so for me, I think that it's it's important for for us to maybe use that hybrid approach of um the uh second version of compliance by 2034, but with maintaining the debt coverage ratio at 1.5.

In addition, based upon what Kirk said, is water is only gonna get more expensive and the reductions are gonna happen at what rate we're not sure.

So I think it's it would behoove us to plan now for the Bartlett Dam project, uh being that it would be another piece of the portfolio, and you know, from what is it, nine ninety-nine hundred dollars per acre foot to potentially twenty to whatever it was.

Uh, you know, I think for our residents now, while the utility rate would increase, at least we're covered in that aspect of being able to communicate to them.

One that the increase wouldn't be as sharp as it could could potentially be.

Oopsor, if we are to be compliant by 2031, but also keeping in mind that we are understandably um looking for here.

That we understand the fact that that water is a resource is is being challenged.

So by preparing now and budgeting that in there now, in the short term it's gonna sting, but in the long term, Avondale will be better positioned when all of us are no longer on council.

So those are my my uh three cents or you know responses to the three questions, but I'd like to hear from from council.

Uh Councilmember White.

Thank you, Mayor.

Um I am very concerned with our PFAS compliance um and our um Bartlett dam buy-in, however, looking at the debt coverage ratio.

Um I I'm I have no appetite to issue uh additional debt.

I'm very I'm very concerned about going back out to our voters.

I think we might find that if we have to um go out and ask for another bond for something as vital as water, and we are possibly putting another bond redo on the ballot.

We might get two no's um because people don't want to see increased cost.

So um I I believe there's some things we have to do.

We have to get in compliance.

We have to have water.

Um not sure how I feel about issuing debt.

Thank you.

Mr.

Mayor, I just want to be very clear.

Um, these bonds don't go back out to the voters.

These are revenue bonds, and so this is a council decision, uh not voters.

Thank you.

Thank you.

I appreciate that clarification.

Thank you.

Thank you, Councilmember White.

Councilmember Weiss.

Thank you, Mayor.

Thank you, Renee.

Um you said exactly what I said earlier today in our meeting.

Um sorry, Kirk, I'm going for the 34.

I'm going for the 34.

Um forgiveness over permission.

And I also agree with the second option where we do not affect our date our debt coverage because we don't want to have to pay more for that money.

Councilmember Solario I will go with what Sherry said.

Compliant by 34.

Councilmember Conde.

Thank you, Mayor.

So by fiscal year 3034.

And you know, I would like to keep our um debt cover ratio at the 1.5.

Councilmember Garcia.

I also would say 34 as well.

And I know that the talk is always, you know, the headlines.

There's no water, where are we going to get the water from?

I just sat in a room with the Salt River project as well as Epcor and other experts in the area.

And they are not concerned about the water as much as the headlines are and that people seem concerned about it.

I know that Arizona legislators are working right now to um with California to get more of their water and to help pay for one of their projects so that they can have water from there, and then we get more water from the Colorado River.

So I would just say that for the Bartlett Dam.

Yes, we need water, but also the utility companies are not as worried as the headlines and most people uh make it out to seem like so.

I'm just interested in maybe having experts come in and speak to us about that water issue from all perspectives.

That way we get multiple different um perspectives on it and not just like that there's not gonna be any more water.

Thank you.

Vice Mayor Nielsen.

Renee just have a question, an estimated monthly bill amount, the last line right there.

Nope, go back where you were.

So if I'm a resident here in whatever 2027, my bill goes up to $57.53.

By the time I'm done in 3031, my bill is going to be $68.50.

If I put it out to $3034, my bill starts out at $51.

But at the end of that time, I'm gonna be paying $73 and 28 cents.

Is that correct?

So Mayor, Vice Mayor, and Council, um, I used all the estimates.

So that 6850 is not meeting the 1.5 financial policy compliance.

So if it sounds like we want to keep the 1.5, then it would go up to 7723 in the compliance of 2031 and 7328 in compliance of 2034.

All right, so it starts off less and goes up.

I was just looking at the one.

Now, by the time you're into the future, you're less you're paying less on your bill.

Mr.

Mayor and Vice Mayor, I I I think we got that square not perfectly right.

If you go back to the slide that talks about the scenario in 2031, the last month bill is 7723.

What she's trying to say is a 6850 is if you go to year 34 and you allow your ratio to drop down to 1.24.

So we put it in the wrong uh location.

That summary page, go back to that summary page with the three options.

Yeah, if you if to be compliant by 31, the the bill ends uh in uh FY35 at 77 and 23 cents.

Is there a hybrid that if you put it to 3031 or 3032, we do not know right now whether it's gonna go to 3034, right?

So, Mayor Vice Mayor Council, at this point the regulation is actually 2029 with uh a recommendation from EPA to 2031.

We have no idea what's going to happen after 2031.

You were going on a string in a prayer that by 3034 they may do something about it.

So I did I just look at looking at it, you know, is there a hybrid in between the two of them?

If we do it to 3034, that's the best way financially to look at it for residents or whatever.

But that's not realistic because we're just saying, okay, let's pump this out three more years to stay above our one and a half percent debt ratio, but we don't know if that's gonna happen.

And in the meantime, in those three years, could there be some other complications from feds and everything else that would add to the price anyway?

Uh mayor vice, council members.

So the 2034 buys you some time because we would still start design next year or next fiscal year.

A lot can happen in a year.

And you're we're actually approving rates right now.

You're just approving issuance of the debt.

We'll be back in about a year from now to talk about the rates.

And at that point, we might be very clear on what the actual deadline is.

So just kind of to give you that scenario.

I think just on the other side too, maybe you and I have talked about it.

The technology to pull this out right now, the PFAS and everything else, it pulls it out and it sets it right here on the side.

But we don't know if we're going to have to contain or if that becomes a hazardous waste now, or how we're going to have to handle that.

That's something that we don't know right now, right?

Mayor Vice Mayor and Council, that is true.

They haven't told us yet that the byproduct after we filter the PFAS out that that is a contaminant, we may have to haul to a hazardous materials landfill, and that would be additional operating cost.

Okay.

I just wondered if there was, you know, somewhere in between there if it's uh 2032 or whatever is looking at it a little bit differently as well.

Go ahead.

Um Vice Mayor.

Um the other thing to note um is that we've used the same project cost from today in this scenario.

So when you look at rates, if those those construction costs were to increase by those later years, then that rate would also need to change at that point.

So if you brought it in this way, at least those numbers are not inflated.

There's something that may be realistic rather than sticking them out six years out there without knowing what the inflation rate is on the right.

Yes, I mean short either way.

But I think I think sorry, I'm going to draw uh Vice Mayor.

Um but um I think too, based upon our discussions here internally, that at least we're demonstrating progress, that we're moving towards something.

You know, that we're not just waiting to see what happens, but it allows us to demonstrate that we're moving forward, at least in good faith.

And I like the idea of the 1.5 there that we stay within what our policy is as well.

And maybe that can be adjusted a little bit.

I don't know if you could take a 32 and put it in 2829 and take part of the 80 and put it in 40 years.

Split it out more years so the rate doesn't go from 7.5 to 18.

But if you could elongate it, I mean, and make it yes, we don't need it by 33 through 34, but if you put 16, 16, 40, and 40 uh to the 50, maybe that's another way of looking at it.

And that way you're catching a little bit of it instead of slamming us all at one time with a 18 percent increase.

Mr.

Mayor and Vice Mayor and uh council, there's gonna be plenty of time for dissecting this whole process.

Really, we needed a blueprint to start.

Uh I know that um uh your engineers would like to uh do many hybrids with this to be closer to compliant.

We really just needed direction tonight on the things you gave us, which is the overall plan you want to go, and it sounds like most people want to keep the higher ratio.

Um, but you'll have a chance um to if you need to if you have questions when we come back for permission to issue the debt in May, and then go again in April of next year when we do rates.

Just know that once we issue that debt in May, we'll have to raise rates to cover that debt come the next year.

So that's why we're involving this council because it it will force us because we have to repay the loan, right?

Um and I want to make sure that you guys are are fully educated.

Thank you.

Thank you much.

Thank you, Renee.

Appreciate it.

All right.

And now we're moving on to sewer, and I'll ask her to come back up.

Thank you, Mayor, Vice Mayor and Council, as if I didn't already share a bunch of good news, and I would talk about this.

Uh so sewer actually has very similar um cost drivers, growth and inflationary pressures.

I'm not gonna go over those again, but I'm gonna talk about a couple of active projects.

Um James actually talked about one of these already, which is the Dyson Roads to replacement phase two.

So that's replacing a portion of the sewer line on Dyson Road from um from corral to lower Buckeye.

This evening on your consent agenda, you actually approved the the acquisition of the right-of-way for that particular project.

So that's a great move in the right direction.

Also, we've been doing our large and small diameter pipe repairs, so we're going in and relining some of the some of the sewer lines so that they can continue to to serve the city.

But the big item for on this topic is a wastewater treatment plant expansion, what we call the phase two.

This expands the capacity of our wastewater treatment plant from 9 million gallons a day to 12 million gallons a day.

There is a third expansion, a phase three, which will ultimately take the capacity up to 15 million gallons a day.

Right now, we're anticipating potentially that we would have to start design in 2034 on this project, so about eight years from now.

But again, it depends upon the flows.

So to remind everybody about some of the specifics of this project, again, I mentioned it's nine million gallons per day currently.

We'll expand it to three for a new total of 12 million gallons per day capacity.

Our drivers to start design and construction are based on our permit and the regulatory triggers of inflow.

So we have to start design of this project when the flow reaches 80% of the capacity.

So that would be 7.2 million gallons per day.

Our current inflow is 7.5 million gallons per day.

So we are right on track.

We're doing the design right now as we speak.

One thing I think it's important to note here is that we have made commitments to all of the development that's already in progress up to 11 million gallons per day of capacity.

So the plant only serves nine, but because we know that development takes time and it takes time to build a plant, we're allowed to exceed that with our commitments.

So that would be places like the Shadow Ridge subdivision, Introda, Alamar, the Fry's Marketplace, the data centers.

We've already committed sewer sewer capacity for those facilities.

We have not made commitments to embassy suites or the Avondale Tech Center.

Those are yet, they haven't come to the point where we're able to review the plans and make those commitments.

We have to make sure we keep this project moving along.

Our current status, again, I mentioned we're working toward the 90% plan set.

We have a construction manager at risk on board that's helping us with our estimating and our scheduling.

We intend to start doing our early procurement.

So that would be for our long lead items like electrical equipment that takes a year to year and a half to get to start those in April.

Well, it's April next month, so April, May.

And then we plan to start breaking ground on site, moving some dirt as early as this summer 2026, so just a few months from now.

Our total project cost for this is 155.8 million dollars.

We are on budget right now.

We've spent about four million dollars to date.

The growth that has been tremendous in the city, all of the development that we've seen, and this is just kind of a necessary part of supporting that growth.

I'll mention that the effluent that comes from the wastewater treatment plant is critical to our water portfolio.

If you've heard other discussions about water resources here, we have on project SRP water and off project, which is served by our our CAP water as well as our effluent.

So this water is very important for us off-project in the effect in the event that the Colorado River allocation it's reduced.

So that 3 million gallons per day is about 3,360 acre feet annually.

So again, compared to our Colorado River allocation, that's a little bit more than than half of what we get from the Colorado River.

So I've been asked several times about have we looked at other options, specifically an option utilizing the city of Tollison to treat our wastewater.

And we have we've evaluated it several different times.

When they treat wastewater, they send that wastewater to the Palaverde nuclear generating station.

They sell it to APS, and they get about 240 to 400 dollars per acre foot, depending upon what volume that that everybody needs and what they can have.

So that's way different than the 13 or 20,000.

But remember, this is just wastewater.

This is not anything to any aquifer standard or drinking water debt, or it's just basically dirty water.

The concept with Tollesin has been evaluated many times over the last decade and a half, maybe even two decades, even before our current water reclamation facility was constructed.

But most recently we reviewed this in fall of 2022 as part of a solution to assist Liberty utilities in Goodyear.

They were having some problems with compliance.

So there was some high level conceptual and feasibility studies that were done to see if that made sense.

We're just right across the street from each other, but it's not really that simple.

And it's a costly solution, and given the time considerations we have right now with meeting our deadlines, it just doesn't work for us.

And I'll explain why there's really four main elements of concern for this.

So the first one is we have to make sure that we get enough flow.

So if you think about Tollison is on the eastern boundary of Avondale, our wastewater plant is on the southwestern boundary, and no pun intended, all the flow it all goes downhill.

So our high our lowest amount of flow is actually next to Tolleson, where our our lines are the smallest, and that's the least amount of customers we have.

So in order to make this worthwhile, we have to go deeper into Avondale to pick up an amount of flow that makes a difference.

And when we studied that, the place to pick up that flow, two and a half million gallons per day, is basically at the intersection of Avondale Boulevard and MC 85.

But in order to do that, we'd have to build a pump station and then construct a pipeline four miles long to pump it back to 95th Avenue and Buckeye Road to their plant.

Going through the roadway, avoiding existing utilities, and then ultimately we'd have to operate that pump station and that pipeline.

So there's additional cost for that.

So that gets it over there to the plant.

The second piece, and probably one of the most important, is we want that effluent back.

We don't want it to go to the nuclear plant.

We want it for ourselves because it's critical for our portfolio.

So we'd have to build another pump station to pump the treated water back to our recharge facility north of Friendship Park, and that's about a six-mile pipeline.

Again, rights away issues, utilities, we've got to go under a railroad, we've got to go under a freeway, and again it adds a lot of operating costs after we do that.

If we lost that effluent, if we had um Tollusin sell it off, again, we'd have to find a way to replace that.

And again, as I mentioned before, that could be 20,000 to 100,000 dollars an acre foot if we can even find that water.

The other thing I want to mention is that we already have a reach a pipeline to convey our effluent, and it comes from our our current uh wastewater treatment plant and goes up to the ponds.

It's already size for that 15 million gallons per day ultimate capacity.

So if we were to do something different, we've kind of just wasted that investment that we made years ago to build that pipeline.

The third item is the effluent quality.

Tollison doesn't treat the effluent to the quality acceptable to do aquifer recharge.

Avondale does.

So in order to use that water back in the rechar facility, we would have to make an investment for additional treatment processes at the Tollison plant.

So that would be an additional cost for us.

And then finally at the end of the day, we would be a customer to Tollison.

So they're going to charge us for the treatment of the wastewater.

And we aren't going to have any control on what those rates are.

We can negotiate some of that stuff, but at the end of the day, they have cost drivers, just like we have cost drivers, and those get passed on to their customers.

We would have with really limited availability to control the effluent quality.

And uh we really need to get to that three million gallons per day, and this solution only gives us two and a half, so we're still about a half of a half of or 500,000 um gallons per day short.

We really don't have the time to change course.

We're already well into this right now on our current plan, and ultimately we've got to expand the plant another time anyway to 15 million gallons a day.

The cost estimate with regard to the taller tallison solution back in 2022 was about 160 million dollars, so about what we're spending now, a little bit more of what we're spending now on our on our plan.

Um you go another few years out, and with some really good estimating, it could be as high as 200 million dollars a day for less control, um less capacity, yeah, and uh a lot of other uh operating expenses.

So we looked at it pretty in detail as much as we can given the constraints that we have on time, but that's the reason why going with our current plan makes the most sense.

And I'll turn it back over to Renee.

Thank you, Kirk.

Okay, for so going into sewer rates again, these are council approved sewer rates.

So you can see in January of 27, the um typical residential customer would be paying forty-seven dollars and twenty-one cents for their sewer portion of their their bill.

Um similar uh goals when we're setting the rates and um we've heard um council's direction on the uh debt coverage ratio.

So with the water reclamation facility expansion phase two, the total project costs 155.8 million dollars.

I will note that in February of last year, we issued 11.2 million of general obligation bonds that went towards this project.

So we're really talking about needing to finance the balance of it of 144 million.

The difference with this project is it's gonna be repaid 60 percent through growth from development impact fees and 40 percent through the rates.

So that's 86 and a quarter million of debt is is planning to be repaid out of development impact fees and 57 and a half million to go into the rate, and then as Kirk mentioned, we would also have um a phase three in the outer years.

So with this, we provided um the scenarios, but we heard council on keeping the 1.5.

So, really what we're talking about looking at um projected rate increases would be in fiscal 28.

We would need to increase the rate by 10 percent and then 2% in um subsequent years.

So the bill would go from 4721 to 5192 or an increase uh per month of four dollars and seventy-one cents.

And this would meet our current 1.5 um times debt coverage ratio.

So really with this project, we've already heard um the desire of council, and we will be coming back on May 4th um looking for the approval for that first bond issuance.

So that concludes the presentation.

We'll take any other questions you might have.

Thank you, Kirk, thank you, Renee.

Um councilmember White, do you have any questions?

Sorry.

No.

Okay.

Thank you.

Councilmember Garcia.

I don't have a question.

I just want to make sure I have it on the record.

I do not want to raise rates at all.

Um if there's any alternatives we could do or research on how to get federal funds or charging the people who are contaminating water earlier.

I know these are just wild things that I'm saying right now, but I really do not want to raise rates.

Um it's already hard for a lot of people to be paying the rates we just raised rates.

So I just want to make sure that it was on the record.

Thank you.

Thank you.

Mr.

Mayor Council, if I can add that uh we encourage the elected leaders to reach out to our federally elected leaders for some federal relief.

It really will take some federal action to intervene in the um standards.

Um Kirk, maybe he could talk a little bit about this at our next meeting in April when we talk about water.

Um, but really advocacy is what we really need.

We continue through our city attorney's office to work on lawsuits where we are suing or part of uh litigation where we have tried to gain money.

I think we're at five million so far.

That's not even close to the 140 we need or 150.

But uh we agree with you, Councilmember Garcia, that any anything we can do at the federal or advocacy level would be helpful.

You know, just I just one couple of comments.

One is do you know how much easier it would have been if we could have just connected to Tollison?

But unfortunately, it's not gonna work out that way.

And with that uh being understood and not wanting to raise rates, I'm I'm with you as well.

I I hate to do this, but in terms of growth and seeing where Avondel is headed, considering we're hitting that number, we're getting close to it.

You said 7.5 is where we are right now.

Yes, sir, 7.5.

And and that's in regards to the commitments that we have for the development coming into the city.

We we have to do something, and I know that whether it's through advocacy of our our elected officials at the federal level or anything else, I'm sure staff will be exploring all angles and opportunities.

Uh, but this is what is is before us, and so um it's not fun to discuss, not fun to talk about, but it's it's where we are uh to your to your point, Kurt, of that you know Avila has been successful in growing, but with that growth comes you know, challenges nonetheless.

So thank you, Renee, for the presentation.

Thank you.

Uh uh all uh all those involved in providing all this information and Kirk, your team, thank you.

And that concludes the discussion over the item 4C.

Item five is a summary of current events from council.

Does anybody wish to share?

Councilmember Solorio.

We had a very successful trip last week to Washington, DC, advocating for things such as water because council as vice mayor presented to um representative Grijalva.

And um it was just an overall good conference, a lot of things to bring back home and different grant opportunities.

But I think overall it ron's right, advocacy wins.

We don't want to raise rates, but that's where we went for advocacy.

Any other members of the council?

Councilmember White.

Yes, thank you so much, Mayor.

I am currently at um Delta Days at the nation's capital um and advocating for um issues that really impact uh folks that look like me.

Um also very grateful that um I had the opportunity last week to hear from both Amtrak and Union Pacific um rail um and look forward to setting up a meeting with them locally in Avondale.

Um also very grateful for the um opportunity to have attended um the Southwest family advocacy gala, and I will leave it there.

I think another council member will pick up.

Thank you.

Vice Mayor Nielsen.

I think each one of us had an opportunity to go and listen different uh aspects or whatever.

I did do the water part of it and was quite impressed.

We're not the only one in the same problem.

There are other communities that are worse than we are, and other ones that may be a little bit better.

But uh the federal boys are looking at some opportunities and some bills to provide some additional finance.

So that's one thing that's in there.

The other thing I thought interesting in three of the different presentations I went to, it was on civility, how we can get along better with one another.

And I just like to comment to each of us how well we do get along with one another.

Just some of the things that were said as to what's going on in some of these other communities.

I felt like crying, just so sad as to what some of these other elected officials might be doing.

So I appreciate all of you and what you do to work together, whether it's this, we will overcome this.

But uh just appreciate that, and all of us the opportunity to go back and participate there.

So thank you.

Thank you.

Councilmember Garcia.

The state of the city was so well done.

So thank you to everyone who um poured into that event.

It was so good.

And to see the people who got the awards, um, it was they were really community-oriented, and I just wanted to say thank you guys so much for that event.

It was wonderful.

Councilmember Weiss.

Thank you, Mayor.

I wanted to thank FIRE and all of the volunteers who took their day off to hand out um fire um smoke detectors to um the neighborhood around Mountain Mountain View.

I think we handed out 600, and they also included Narcan, which was great to see.

Um, and then STEM Fast, Steam Fast, SteamFest.

Um I just really want to thank all the staff for being there, and I understand why that takes a lot of our staff time and why that needs to be cut.

Um, also went to the Southwest Family or um Southwest Lending Closets fundraiser this weekend, and they raised some funds.

So it's been a really busy week, but it's been a great week.

Thank you.

And I'll just wrap up with uh over the last month or so.

I've been fortunate that here locally uh our federal elected officials, uh, Gallego and Kelly have all visited here.

I actually got to host Senator Kelly here just last week.

And so uh to be able to talk to all the about the issues that we're talking about here with all of the other mayors, and so it's a pleasure to have their ear here, uh local and have those conversations with them.

In addition, um there was nothing like they say the sound of freedom, but I gotta tell you for those of us who were there loop days over the weekend, um it was hot, and that's unfortunate.

Uh, but who knew that it would be 106 in March?

But yet um just the number of people that attended um and just to see everybody there in awe of all of our nation's power being on full display was so awesome.

And finally, I'll wrap up with uh as uh councilmember weiss mentioned being at um the Lenin Closets Gallup celebrating 25 years.

And if you're not aware, uh is an excellent organization that provides uh medical supplies to individuals in need at no cost, and they are always looking to uh raise more money so they can buy more equipment or take on equipment.

So um that is something that I that I look forward to assisting with.

And then that's it.

I'm sure you guys all are ready to go home.

So at this time, can I get a motion for adjournment?

I'll second.

Okay, we've got a motion from Councilmember Garcia second from Council Member Condi.

Are we doing a voice vote, Marcella?

Um all those in favor say aye.

Aye.

And Councilmember White, how do you vote?

Aye.

Thank you.

Any of you thank you, everybody.

Have a good night.

Thank you for joining us.

I know.