Yeah, well here's the next book.

This is where you have to right here.

Do you see the eclipse?

I see it.

Yeah, you want to see that so we can have two options.

Um I don't know if they would have fun to do that.

But there's no possibility.

I think it's a little why it's more than one of the action.

Uh here.

Yeah, so I'm gonna get some problems.

Yeah, probably just gonna get great.

I have five oh eight, ma'am.

Good evening, welcome to tonight's uh work session.

It is Monday, April eighth, twenty twenty four.

Approximate time is five oh eight.

I call this meeting to order.

Councilmember Sutton.

Here.

Councilmember Warwata Rodriguez.

Here.

Vice Mayor Curtis?

Here.

Here.

Councilmember Snyder.

Here.

Councilmember Garcia will be a late arrival.

Councilmember Tranco.

Here.

Thank you.

We can all stand for the Pledge of Allegiance.

Any public appearances?

Probably not.

Discussion items.

Item A presentation by Brian Wright, Finance Director on Revenue Projections for the Fiscal Year 2024, 2025, and seeking guidance on the primary property tax rate.

Um tonight uh I've I got a presentation to go over our kind of our twenty four twenty-five uh revenue revenue presentation.

Um we'll go over um various items between the general funds, special revenue funds talk about the property tax.

But I'm gonna go ahead and jump into it.

Um this is just one of three presentations tonight.

So let's see.

I'm just not sure why it's not uh why it's going backwards.

She's always ready to just bring up the uh PDF.

I'm just gonna bring the PDF up real quick.

Oh I'll just go to the PDF.

I'm a little frustrating.

So we'll talk about the uh just want to expand it out.

There we go.

So we'll the so kind of looking at the uh key factors influencing kind of the 24 or 25 uh projections, kind of looked at the inflation impact.

What's inflation look like?

Uh the state of the economy is a big one because you know, with sales tax, uh you know, with prices going up, uh with the state legislators, there's a lot of impacts going on with local government when it comes to the state economy.

We evaluated the sales tax.

Uh we looked at you know, trends within our retail sales, you know, with the restaurant and bar and other categories that make up our city of sales tax when we were looking at our revenue projections.

Uh states state uh shared revenues.

That's a big one because when the city when the state implemented the flat tax, that was a big um decline in our our revenues we get on that one.

So that was a uh influencing factor on our projections this year.

And then looking at the property tax, you know, is will council continue to look at the adopting the maximum level that we've been doing on that.

So those were some of the key factors when we're looking at our general fund revenues.

When it comes to the annual um annual inflation as of March or as a February, it was about 3.2%.

So, you know, that's been kind of the it's been around 3.6 to 3.2 for the last several months.

So inflation has been playing a big part of it because it affects not only our collections, but when inflation goes up, the prices go up, so we get more revenue collection.

So it does have a positive impact on our revenue stream, but out in the for everybody's pocketbooks, it cost more.

Then I kind of went through and I conducted a little bit of a SWOT analysis.

I wanted to kind of show what what was considered our strength, weaknesses, opportunities, and threats when it's coming to our revenues.

You know, kind of looking at it from a strength standpoint.

We do have a stable tax base.

We have a low primary property tax rate.

The area is prime for residential and commercial development.

That's a strength of ours.

We have the I-Ten corridor, another strength.

Core Civic.

And then also we the council went through and adopted a utility rate plan.

Those are some of the our strengths that we've had in our revenue streams.

Some some opportun um some weaknesses that we have is we do with something that council addressed.

We have a uh a high restaurant and bar tax.

It's a lack of uh retail development, limited tax options to generate new new revenue.

And then we have slow growth projections, you know, slow growth.

Some of our opportunities out there, they're kind of go against the weaknesses on this we growth of uh residential commercial development.

That's an opportunity of ours.

Modifying landfill fees to support um uh future operations.

Opportunity could be increasing your tax your tax rates, secondary property tax and diversifying investment income.

Those are all opportunities that that uh our revenues can see.

The threats, you know, state legislators with them eliminating some of our taxing sources, that is a threat.

And then the next one is they eliminate the rental tax.

We look at uh the slow-in economy.

If that happens, it could affect the travel long I-10.

That would be a threat to us in our retail base.

Lack of retail growth, inflation, loss of state income tax, and then stagnant development.

Those are some of the items that when we're looking at a SWOT analysis that come to mind to me when I'm looking at our revenues.

From if it's general fund all the way to water and sewer.

Those are some of the uh SWOT analysis of our uh revenue forecasts.

Brian.

You don't consider uh grant opportunities as uh an opportunity, more grants.

Well, since that's not an ongoing and operational, those are like special revenue funds.

So when you get a grant, it's gonna just pay for that one opportunity instead of how do we get when we forecast our these for operating revenues versus operating expense versus special revenue funds that they're dedicated to that type of uh opportunity.

So next we'll we're gonna dive into the general fund a little bit.

Um the revenue general fund revenues have six categories, and so as we go through I'm gonna highlight just our six main revival revenue categories in the general fund.

The first one is the city sales tax.

You know, for those that don't know, the city sales tax is really our our biggest revenue stream in the journal fund, and it's taxed on the goods and services that you find at stores, hardware stores, and and stuff.

Our next one that we look at is property tax.

Property tax is considered the most stable revenue source.

Um, our primary property tax for FY2324 is a dollar six four eight.

We'll get into as it goes on what the uh the new rate would look like.

Franchise fees, another category that deals with a lot of right-a-ways, leases, uh APS, you know, if we have cable franchise fees.

State shared revenues is another major category.

That's our prior second biggest one right now, and that makes up of uh state income tax, state sales tax, and vehicle licensing tax.

Charges for services, charges for services are off of building permits, business license, plan reviewed fees, plan check fees.

Um we'll go on one of the presentations.

The last one will talk about the consolidated rate and fee schedule of some of the modifications we're looking at for the 24-25 year.

So going off of that, our departments go through and they analyze that on an annual basis.

We bring it to council adopt, and we'll be adopted in one master fee schedule.

And the last is just more of our miscellaneous revenue that's made up of numerous categories.

Investment income passed through with core civic fines, forfeitures.

This slide, it's a where's our money come from?

As you see, around uh 80, just under 85% of our money comes from two main categories city sales tax and then state shared revenue.

The other 15% is made up of those other four major categories that I just highlighted.

So that's why when we look at the SWOT analysis on those, city sales tax, it's huge.

I mean, it's it's it's it drives our general funds.

So I mean, as we when we look at things, and there's an opportunity or a threat from the legislators of cutting our rental tax and eliminating that from our tax base.

That's a major major effect that not the local body made, it was the state legislators that made that and the governor.

So that's that's a major impact on us.

But this next slide kind of gives a more of a view of what are we looking at for 2024.

And I'm just uh for the audience, I'm gonna blow it up a little bit.

Is uh in 2425, we're seeing that our city sales tax, and right now, these projections um we're looking at a total of about 8.7 million, and that's a that's a combination of our retail, our construction, every every category within our uh local tax base.

That's about 11% increase.

A lot of that is gonna be because in the past last year's budget, I was really I didn't uh capture all the construction sales tax.

I was conservative on that because of the just on some of the growth on construction, but this year we bumped that up.

Um, but overall, it's uh it's just uh over uh eight hundred thousand, I believe.

Let's see, actually.

Just it's about an eight hundred and seventy-four thousand dollar increase over the last fiscal year for local taxes.

Property taxes are up.

Uh those projections you'll see in the future slides.

Uh, those projections you'll see in the future slides, it's based upon new construction that we got in, and also valuations of homes and businesses have increased over the last fiscal year.

Franchise fees are going up nominal, you know, a little bit, probably close to the six percent, and a lot of that is just based upon the when we have to go out to uh our right-of-way permits that are on an annual basis, it's increases on the consumer price index.

APS goes up every year based upon about a three to five percent uh increase in franchise fees from them.

State shared revenues, it shows about a two percent decrease.

We talked about this uh a while back at a another council meeting that this biggest decrease from the two percent is from the state income tax, the flat tax that was implemented.

Um it's about a four hundred and thirty-eight thousand dollar uh negative impact to the city in fiscal year 2425.

Um to offset some of that is our state sales tax and VLT state sales tax that's coming in.

There the uh estimates from the league right now is just about a two only a two percent growth in state sales tax.

That's so it's coming out from ADOR on their estimates.

VLT is coming in flat, so we're not looking at much of an increase in uh vehicle licensing tax.

So that's where we see the two percent decrease in state shared revenues charges for services are going up.

We've increased those because when the solar we have a lot of solar projects coming in, they'll be paying plan review fees.

So we've captured those because we know those are some projects coming in, and then the miscellaneous revenues going up, and a lot of that is in that category is from our uh investment income.

Investment income is ranging anywhere from 250 to 400,000.

So, you know, last year's budget, I think was around 75,000.

So we're we're capturing those in our in our base this year.

So you'll see the overall the general fund is is shown about a seven percent seven point six percent increase over last fiscal year.

But when we kind of back out, that difference is about 1.4 million between the two fiscal years.

When I'm looking at some uh these for more of a what's our continual, you know, not some of this one time of maybe charges for services or the um investment income.

That's it's that's our it's about about 750,000 more.

It's gonna be more of an operating side of it.

So we are seeing the increase.

There are some one-time costs associated, but those when I look at the projection of our state of our general fund, it's moving up about that five to seven percent on an annual basis right now.

So now I'm just gonna dive in a little bit to our local sales tax.

Local sales tax, like I mentioned, is the collection of goods of services on food from stores, alcohol purchases at the bar or in a store sales of food at a restaurant.

Those are some of the items that make up the local taxes.

But where does the money go?

It's not all the general fund.

We it actually gets broken up between the general fund, the streets one-time fund, and the community economic development fund.

So this slide here kind of gives you uh you the the view of the taxing categories that make up local tax or local sales tax.

Um I gave three years of actual kind of a projected for this year.

We're projecting it coming around about 10.8 million.

The forecast is looking about 9.5.

That 9.5 encompasses all of it, the money that's collected in the general fund to the uh streets one time and the community and economic development fund.

Whoa.

So when looking at our sales tax, the previous slide shows kind of like the average.

The average is about 8.5 million.

And so I'm this slide just kind of will let you know how is that money really broken out.

So out of that 8.5, 7.8 million is goes to is considered a general fund.

430 is streets one time.

Streets one time is one time revenue collected from sales tax apportion.

33% of it goes to the streets for street projects.

And then the economic economic development fund is about $311,000 the average.

And that fund is from our food for home-based consumption.

That's a 2% tax that we have there.

So the streets one time and the economic development fund, those are its main sources of revenue for its operating purposes for those funds.

So when we look at the general fund of that 7.8 million, you can see how it's broken out even further.

Not all of it's all general fund operating.

Out of that 8.07.8 million, 5.8 million is considered for ongoing operation maintenance of the general fund.

We transfer about 873,000 average to the capital projects fund for CIP purposes, and that's off of one-time revenue.

Then we owe ropes and on an annual basis about 864,000 from the economic from their incentive.

And we have about 201,000 right now is the average for uh payment for national gypsum of their uh construction.

That should be phasing off, and we've looked at that this year.

And then we have our express fuels agreement that averages about 30,000, a little over 30,000 annually.

So those four categories make up some of the incentives that go out from our collection of revenue.

And some of the items that when I looked at our city sales tax this last year, how you know how will housing construction do?

Will it continue?

Will uh low in if the Fed's lower interest rate, will it generate housing?

Those those play in a factor when I'm looking at construction sales tax.

Um commercial development.

If we get any commercial help with our one-time revenue through construction sales tax, you know, inflation hasn't peaked.

It's been kind of hovering around the 3.2 to 3.6%.

Um but inflation is also like I mentioned earlier, it is good.

We get actually get a little more money in our tax base on it.

You know, travel on I 10.

80% of our really our retail that we get from our city sales tax comes from a long I-10, all the businesses out there.

So if gas prices go up and people decide to hold back on traveling, will that affect us?

Those are things that I always look at on it.

Um when it comes to our retail or our city sales tax, and then lastly is the uh rental tax deduction.

Effective the first of uh 2025, the governor signed uh all rental taxes stopped.

There's no more collection on that, distributed to the cities and towns.

For us, that's about a hundred thousand dollar annually uh impact uh out of our city sales tax.

This this graph just kind of gives you a little highlight of how our total city sales tax has looked in the general fund.

As you see, a lot of it when it goes to the high of 10.4 million, that's when we were collecting a lot of our construction sales tax is just over three million dollars, and it's starting to taper down a little bit on that, and that's due to one of the major projects, which was national gypsum coming to uh end of a lot of uh the construction sales tax.

So I mentioned a few of these, some revenue impacts that's gonna affect us.

One of them, state income tax.

We talked about this, that uh state income tax this year and the falling year 2526 will be uh declining before it starts to taper back up.

Um in 25 and 2425, we're looking at 483,050 or 13.2 percent um decrease over last year's budget.

And this the general impacts could have a negative impact on current and future expenditures in the general fund.

That's one of the impacts that um is uh due to this.

The other one which I mentioned several times is rental tax.

Uh we talked about that January 1st and has a about a uh it's anticipated about a hundred thousand dollar impact on uh general fund revenues.

So kind of looking at on our on our general fund revenues is my ex my forecast and what I'm looking at uh trends and everything is we're still trending positively, even with the decline in our state shared revenues, especially state income tax, we are moving in a positive direction more than what we have in the past, and some of that is I have been probably conservative on some of my projections, just because it the economy has been unsure of which way it was going.

And some of that is I have been probably conservative on some of my projections, just because it the economy has been unsure of which way it was going.

They talk about oh, you want to have a recession.

That was talked about all of you know, all last year to the beginning into this year, and it hasn't happened.

So those projections got moved up because it's been talked about, but it really hasn't happened with it.

So in this year's budget, it got moved up to where um you know I think it's sustainable, it's not uh overly aggressive, but it's covering all of our basis, meaning our current and uh historical projections based upon inflation and past growth and historical uh collection of our city sales tax categories.

Brian, I got a question.

Other than construction sales tax, what other revenue would we get from the hospital that's being built here?

Uh from the hospital, you'll get well one the property taxes.

Once the uh property tax the hospital is built, you'll get a the property tax, which is part of our revenue base.

Um they don't do any really sales off of that, you know, because unless they have a you know if they're selling maybe crutches or anything like that.

I mean, but there's not a lot of the uh items being sold on that.

So if they if they're being treated and they're obviously the bill through the insurance company or whatever party they're paying, wouldn't that be taxed for their services?

Uh Mr.

Mayor, members of the council, yeah.

One of the things I'll have to look at because I haven't had to have to find a talk to like Castogrande or another community that has a hospital and find out uh you know what are some of their benefits of the taxing jurisdiction with the hospital then get back to you, so I can give you the right information on what they sometimes see from uh taxation of a hospital.

Okay.

And then also um you don't you don't do projections on future projects, say the loves that's coming in.

Do you did you already add that into this, or do you wait till once they start submitting plans building or and then you started doing the revenue source on that?

Um when it comes if a project is going to be done within this fiscal year.

I'll look at maybe the retail side of things of the city sales tax, but I look at the one-time construction on most of that until the project's complete because sometimes when it comes to some of our truck stops, because we have six, seven and in our city limits.

What it I don't want to say, oh, one's gonna bring in three hundred thousand dollars.

Well, what's it gonna take from the one of the other ones where it's servicing?

So I want to look at the current collection on some of those and see how it's gonna impact some of the other ones before I I build it into my projections because I don't want to overestimate, oh, we're getting another one, and they bring in the annual $300,000.

I I want to see what's actually coming in and then see what the other ones are affected by it because they offer the same type of service, but maybe a different restaurant.

So somebody might come in.

Okay.

All right, thank you.

Anybody else have any questions for Brian before we go to property tax?

Yeah, just real quick.

Um, the city sales tax.

What percentage of that is the online stuff, the Amazons and whatnot.

Uh the online uh Mayor Powell, Consumer Sutton.

It's hard to tell because it's um that's in our retail collection on it.

Um I would have to go back and maybe look and give you a percentage of what is I call it wayfare, the online portion.

Um I know that when they started the wayfare collection about three years ago, it if it affected it brought in an additional, I think close to 150 to 200,000 more for us.

Yeah, I was just curious.

Thanks.

Okay.

So we'll just in the next few few slides we're gonna talk about the property tax.

Um little property tax insights.

You know, for the last several years, council has adopted the maximum property tax rate.

Um the property tax, like I mentioned, is uh one of the most stable revenue sources we have.

Uh the support general fund operation and programs.

Last year, council adopted the the maximum, which was a dollar six forty not 48.

That was the maximum amount.

Well we're looking at the maximum amount this next year is a dollar one five.

So that would be if we council adopted the maximum, it'd be roughly about a five five cent decrease on that.

This slide here is kind of what this slide shows is I call it our truth in taxation.

This is what we utilize to try to um show what it would look like from if we took the construction versus clutch or if we didn't take the construction on new tax or or not.

So in this column right here, where it just says new construction, we get new construction that's taxed that really doesn't go against our maximum rate of collecting two percent.

The most that the city can ever go up in property tax is two percent a year over last year's.

So in this sense, if we just did the new construction, it would be at 99 cents.

But if we took the new construction, which you see them circling right here is an additional 67,000 in new construction, that takes our property tax at $1 and 1 cent and point one or 1.115.

So the to get an additional 67,000 would cost about two cents.

So kind of moving forward, you know, the one of the items was looking at council, you know, should we build in uh if there's a consensus, keep the maximum property tax.

You know, as we move forward in this budget, then we bring forward the resolution with it.

It's just more the the seeking a little guidance like yes, let's keep the maximum property tax, which would be the one point zero one one five, or look at the just the construction of 99 cents on it.

That's kind of the um a little bit of the guidance I'm looking at because that's about an additional to go up that two cents is about sixty-seven thousand dollars.

Did you want that answer now?

We could if now or at the end of the presentation, kind of since we're here right now, is just seeing what that the council has any guidance on how they think we should uh look at the property tax moving forward this year.

Question?

Anybody on council?

Usually we've done the maximum.

Yeah, I I'll make a comment.

I think it to me it's like almost like an insurance policy.

I mean, it's you take a maximum now, but everybody's really affected by the uh appreciation houses, not but our tax rate and that's why the amount goes down.

But looking at it in the other side, looking at from a city budget point of view, if for some reason we do have a big downturn and appreciation houses start dropping like crazy, then we're still protected a little bit because we've got that maximum built into it, so our income is still gonna be there.

So I look at that as a little bit of an insurance policy by taking the maximum now.

If that makes sense, consensus.

Anybody else?

Comments?

Max?

Okay.

All right, thank you.

And then the these next couple slides are the ones I always show council about the dollar breakdown between the ropes and toll tech area and the Ely proper.

It's still all about the same, about six percent of the 100 bill goes to uh is the city's portion, about six percent on a hundred dollar bill, and the Toltec Robeson's around seven percent.

In this last set of slides, is just more going to just on the the note of uh as you see our susvaluation for the city just keeps climbing, and but and it's just like but once valuations start to go down, property tax go up on it.

So it's like that teeter-totter effect.

Um into the last set of slides is about six or seven slides.

I'm just gonna talk about our special revenue funds, and I'm gonna talk about our enterprise funds.

Special revenue funds I'm gonna talk about are the streets, water and or sorry, streets, airport, and cemetery.

Those are our main special revenue funds.

Everything else that we have special revenue, like impact fees, it's a dedicated revenue source for dedicated expense.

These are our some of our main special revenue funds with operating.

But as we look in for the highway user, we're looking at just over about 3.4 million.

Um that's this is an increase of about a hundred and a little 130,000 dollars over a lot of what we're projecting to collect in this year.

The main the main revenue sources in this is our HERF that we get from the state.

That's gonna be more flat of collection this year.

But the Pennell County, the hasn't sales tax we get that's currently that they came forward, we get about roughly about 1.6 million right now, and it's almost getting up to about 1.7 on that.

So you know, as we do more move forward, and as that initiative is on the ballot, that's a very important measure for our streets department.

That's half of the revenue that we get in our for our repair of our streets.

That's very important to think about, you know, as this comes up to the initiative on the ballot of how important it is for that measure to keep going to help fund and maintain our streets.

So the streets fund is moving up in a positive direction.

The airport fund, it's kind of flat.

The reason it's flat, it's going up a little bit because uh this year um we we threw into the current rates on airports is just our three percent increase so that we have we can do it on an annual basis.

But right now we're doing um we're working with the University of Arizona to help put us together some information for rates and fees.

So we'll be bringing back here in the new this in probably 24-25, a new rate and fee schedule for hangers.

So we didn't build that in because we don't know if we do get it, it'll be brought into the next fiscal year on that operating budget.

Cemetery, uh cemetery, it's going up.

We're looking at over last year's budget, you know, just about 20 about a little over 25,000.

This we didn't go back to the cemetery board last year, they did a really big increase on our cemetery rates.

We didn't go back and do any types of adjustments this year, so it's just based upon our cemetery rates are based upon current and historical um plot sales and and uh liners and other factors when it comes to the cemetery.

So as they may say, it's kind of a dead issue on it.

So I had to throw some type of year.

That's a bad dad joke.

That's a bad dad joke.

Um enterprise funds.

Enterprise funds are made up of uh water, sewer, and sanitation.

Um the water fund, we're looking at uh again, this is what will be the third round of uh increases for water and sewer, it'd be effective November 1st uh 2024.

And when it comes to sanitation, at the beginning of the fiscal year, uh our current hauler, garbage hauler rad always passes a fuel adjustment fee.

They're anticipating another maximum pass along, which is five percent.

So we built that five percent into the rates as far as a pass along for the fuel adjustment fee.

Um, it is taught um they in 2425.

It is anticipated that we will be doing a study to look at our current landfill fees and garbage hauler, and so if there's any adjustments, those will be reflected in the following fiscal year.

But this one we have built in the uh five percent uh fuel adjustment fee in the revenues.

So when we dive into the water fund, we're looking at collecting just over three point five million.

Um our water accounts have you know increased a little bit, you know, does a lot of infill projects around the Toltec area that's affected our water connections, uh water capacity fees that we have in.

So that's going up.

The surprise water, that's going up uh a little bit based upon the current models that they have out there for CAP.

And that's the one thing to think on the cap water.

We get about 10 months out of the 12 collected from surprise.

That's based upon their what they allocate and pull on it.

And then currently in this model, we're not projecting, it doesn't show any transfers from the general fund, but there will be on the once we get to the final end of the budget process, we'll be transferring money in from the general fund to cover the capital projects that's coming from the reserve fund.

So that would be built in on the tail end of the project.

But revenue-wise operating revenue, we're looking at just over 3.5 million.

Uh the sewer fund, we're looking just over 1.7.

How's that?

If you look at if we take out the projection of the 210,000, that it's up about just over you know, three or four percent over on our revenues, and that's because of our um collection of uh and toll tech, they're building, but those some of those homes are on septics, so they're not bringing in the revenue on those aspects when they're on the septics on it.

So if we get uh we haven't had a lot of new homes that are connecting to the sewer, a lot of them are on the septic right now in the infill projects.

The landfill sanitation fund.

If you look at the this fund, this funds actually um we're looking at about just under 4 million in operating revenue.

Um here, and we're looking at just over five percent on the sanitation side.

Sanitation itself has actually gone up quite a bit because between the homes in the Toltec area, the homes and ropes and ranch, we're getting new connections on those.

So we are seeing increase landfill fees.

Um we'll talk about that on the under the consolidating fee schedule.

We're recommending some changes there from public works on our landfill fees.

So I'll wait to bring those up, and then roll offs, roll off fees are projected just over 575,000.

So overall, our enterprise funds, the only they are self-sustaining this year, but once you get into some of the capital projects, they're being supported by the general fund.

The water and sewer, based upon the art money we got three years ago, that's funding some all the water and sewer projects for the sanitation fund.

It is being recommended through the budget that uh about three or four capital projects be funded from the general fund to the sanitation for some capital projects that they need to for compactor, a new bull bulldozer.

So that will be a general fund support on those because we don't have the reserve funds because the landfill uh sanitation funds in the whole based upon the the landfill closure fees.

So the general fund would be supporting the the landfill when it comes to some of the capital.

Brian, did you pick up the error on the page that you got the bottom says total airport revenue should be?

Yeah, okay.

If you didn't pick up well on the presentation, it's not that way, it's just uh I I saw that.

Okay.

Any other questions for Brian regarding uh this part A.

No.

Nope.

Nope.

Keep going.

Okay.

Just jump into part B.

Yeah, we'll just jump right into the I'm gonna jump right into the capital projects.

So the capital projects fund.

Um this is just the we're I'm kind of give you since we presented the capital projects fund at uh several months ago, there hasn't been very much change to what was presented, but I wanted to give an overview of it, kind of uh let you know where it stands on a departmental base, and then um see if you guys have any questions at that point.

But the capital improvement plan, um, kind of what is it to you know the it's a strategic outline uh for us.

The CIP serves as a detailed roadmap for upcoming projects and at enhancing infrastructure facilities and assets.

We use as a long-term planning tool.

We look at it as an asset and infrastructure enhancement, and the CIP is used for resource allocation guide.

We look at all these when we that's what when we're looking at CIP, that's what our the CIP makes it up.

But some of the benefits of a well-structured CIP, you know, is prior prioritizing, prioritizing of capital projects.

It enables um the city to prior prioritize our needs and impacts to the community.

It provides a long-term financial plan, so we can look at things from uh either one year or five-year plan to help our planning aspect, and it enhances uh transparency and accountability.

It provides a community and our you know, our citizens uh uh a guide to what are we looking at, what are some of the needs that we're looking at from roads to water, sewer parks, etc.

Some of the key challenges in a capital improvement plan, you know, is balancing competing projects, adapting to economic changes, and timely and budget concise projects completions.

These are some of the key challenges that not only myself but other department heads uh tackle in when ensuring projects are meeting timelines to budgets.

Funding strategies that we look at for the CIP is pay as you go, our current revenues one time municipal bonds is another way you can look at funding capital projects, lease to purchase agreements, grants, or improvement districts.

A lot of our current methods that we have currently that we look at are the pay as you go and and through loans or bonds.

A lot of it's those are our two main uh sources that we look at uh currently for our funding strategies.

So the next several slides is just uh high level view of the projects that we're looking at.

So just starting off at the airport, there's six identified capital projects totaling about 2.1 million.

Um outline some of the the major projects that are being looked at for the airport.

When it comes to the funding on it, the airport is uh airport capital projects are funded three ways state, federal, and local matches.

So you'll see this next year.

We have about just over 1.8 million identified on the books as being from state and local funding or state and federal funding, and this out of those projects, the airport fund would pick up about 280,000.

The cemetery has one project identified for 75,000, that's the fog seal, and that would come from cemetery revenue or its fund balance.

City manager's budget has one for 205,000.

It's a video audio upgrade to the council chambers.

We're gonna name this the mayor Powell project.

The uh community development, uh, they have five projects identified for 290,000.

Um you can see here their their projects from the airport site to the general plan update to purchasing a trailer for neighborhood cleanups.

The community services has 11 projects identified for 710,000.

Those range from a new uh generator here at the city hall to replacing HVACs on city facilities to park enhancements like Ramadas tables or pool or pool improvements.

Finance has uh three identified projects for 230,000.

It's uh replacing.

We've talked about it replacing the phone system uh for the city, accelerate repeater enhancement on this building, um, and then also a UPS backup for the city networks.

Sanitation has four identified projects, totaling 200 2.3 million, and those were the landfill or the rate studied master plan, a landfill scale, bolt new boat bulldozer, and a new compactor.

And those would be funded from the general fund for about 2.3 million through a transfers.

Public safety.

We're looking at eight projects for a little over 1.1 million.

Those include a training facility upgrades, uh, equipment upgrades to the training facility, uh replacement of seven vehicles, equipment upgrades to dispatch and evidence, and some emergency operation sends those are the main ones.

You'll see down here when it comes to seven vehicles, five of those are funded through the grant, a DEMA grant, and then the other two would be funded through the enterprise lease program, and then the remainder would be through our general fund or construction sales tax, public works three identified 960,000.

Those are the uh a new forklift service truck and shed and main street landscape project.

Those are the three identified from the public works.

Sewer, there's about six a little over six million dollars identified.

The main ones identified are the uh sewer treatment plant expansion from the plant, uh sewer line from the plant to 11 mile corner.

Looks like pumping replacements from list stations, sledge belt handling press, and then the 11-mile corner sewer line expansion.

That's the big one.

That's a little over four million.

The streets funds have six projects identified, totaling 2.8 million.

Uh a million of that is the street preservation.

Uh staff will come back to council identifying those street projects, but then also identifying uh chip seal project on Toltec Road.

On that one, I guess.

Did you want to talk about that one, Dave?

The Toltec on that we with on Chip SEAL on that one.

The just an update on that one.

Yep, mayor uh members of council.

Uh some of you are aware sent a communication out to uh council members over the weekend.

And basically, staff met with the general contractors responsible for ropes and ranch construction, and they have shifted their construction plans from the west from the east side of the ropes and ranch communities, which is along the Toltec community, to the west side of the Toltec communities, which is along Overfield.

As such, the construction team responsible for new home construction has decided to withhold um doing this project at this time, doing any road improvements to total tech.

So because they're not doing theirs, we're not gonna do our portion of it.

We'll do it as a conjoining project as it was proposed this year in the CIP.

So we'll make some amendments to the CIP projects, uh, remove that and push that out probably year four or five, and then continue to work with our ropes and partners to identify when the appropriate time comes in the next few years that they're able, willing, and ready to develop again on the east side of the ropes and community, and we'll get that Toltec project done.

In the meantime, though, uh, there were some concern about the dust mitigation efforts along Toltec Road, as you know it ends uh pavement and doesn't pick up again until a long time, and the continued use from residents out of North Toltec.

So Matt Renscher, our public works director is working with our streets team to find ways to help do that, whether it be some type of uh surface treatment that they can apply, but we'll work towards figuring out a good solution to help that dust in that area so that those residents can live peacefully without having dust all inside their homes.

So I know this is just brought to your attention, but where would that money go that we set aside for that?

Where would we where can we place that at another project?

Uh the public works director Matt Rentcher is working on that right now.

He's got that's he's got a lot of projects in the we got streets needs and wants that are available in our community, so he's he's not hard-pressed to find where to put that additional money.

He'll identify that, and then we'll make that adjustment to the CIP at that time.

Okay.

All right, thank you.

You're welcome.

And we'll make note of that when we bring the budget back to council.

So we want to make sure everybody hears that it's not the council or the city's fault.

It's Robeson's fault.

So yeah, it's it's a it's like any of those projects, you know.

We work really closely with those folks in that community, so we want to make sure we're our priorities are aligned right.

Okay, the last uh one is just identifying what the water fund has four capital projects for just over just under five point or one point five million.

That's gonna go to the nitrate facility improvements, rehab of reservoir two, repel, repair of well casing at well number three, and water line extension at the airport.

And those are all paid from the general fund through the ARPA.

So just kind of a recapping our 24-25 capital projects.

We have a total of 57 capital projects identified.

Um there's 12 departments affected by those 57 projects, totaling 18.4 million.

So at that time, that kind of goes through our capital projects.

Is council have any questions about some of the projects that we've talked about in the past to just updating tonight of uh what's been presented.

Thank you, Brian.

Anybody have any questions regarding this item?

No.

Hearing none, let's go ahead and continue.

Okay, the last uh last one we're gonna go through is the um consolidating fee schedule.

Um solid rating fee schedule.

Last year, the city um brought forward the council a consolidate and fee schedule.

That is our first one.

Usually it's been individual-based, and last year we combined all of our rates and fees into one master schedule.

Um so just to let you know per Arizona revised statute, a city and town that chooses to levy any tax has to give a 60-day notice.

So with us changing this, it kind of starts to 60 day because we have to um before we discuss it, we have to put out there on the our social media about like a public notice of intent saying we plan to raise um our our rates and fees.

So when we look at that, it kind of starts the the the clock this week.

I would go through and put it out there so it can be brought back in the the middle of June for council to look at the adoption of the rates and fees.

That's a right around the a little over 60 days, and then it would be effective 30 days after that.

So we're looking at an implementation date uh prayers on a revised statutes of these rates and fees if uh council approves later on in the budget process um effective August 1st.

So we we have time it goes through that we just have to give the notice that we are proposing these, and then we would hold a public hearing on these.

Um it would be uh in at the June 24th, we would be bringing this to council on it.

But so tonight, anything that you see on this schedule highlighted in yellow are the change changes recommended from the departments.

Um the PD recommended uh a couple adjustments to their fees based upon uh what it would cost for CDs making copies and stuff, very minimal.

Uh parks and rec had a couple minor changes to bring the fees uh kind of in uh that coincides with other recreation program expenses on it.

Nothing really major, nothing new.

Um community development has quite a bit of changes, but that's bringing it up to current codes and recommendations from the the business the building permits and their communities.

So those are some of the major ones, and then we'll get into sanitation has a recommendation or public works does to our landfill fees.

I'll make note of that and bring that that one up on here.

But as we just go through this, you'll see anything in white.

There's no changes.

If there are changes, there's a justification made to the side, like in community development.

Anything in yellow, you'll see anything in the what's proposed in white in this column, and then the changes are identified in yellow.

Um, you know, Dan is here.

You know, if there's a question on any type of fee, I'm sure he'd be loved to get up here and explain that fee.

But uh he went through and he did a real thorough analysis of all his fees, and noticed that they were all out of if you want to say out of whack at a line.

So he made the recommendations on current standards.

So I'm not gonna go through every single one, but uh these are all recommendations from the community development.

Um, as you see, the majority of them are bringing them into line to uh cover current uh services or ads postings on that.

He did some uh text amendments updating the language, but uh one of the big things coming in, he did go through and re-evaluated our for our our fees, you know, based upon building permits, those are going up based upon the analysis on that um as you see over here on the right.

These price increases uh are related to industrial standards and plan review fees that we have.

I've got some questions.

Did you want to go first?

Go ahead.

Okay, yeah.

Brian, I have a question on on the fees.

There's uh a lot of fees there for home improvement stuff like water heater condition units, things like that.

Is it the responsibility of the homeowner or the contractor who's in who's installing that equipment to get pay for that fee?

You know, if I'm if I'm gonna get a new air conditioning unit, I'm gonna hire you know get a contractor to do that.

So does he get the permit for the fee, or who whose responsibility is that mayor members at council, council uh councilman Schneider, ultimately the property owner is responsible, unless there's an agreement with the lease agreement to get those permits.

The contractor 99% of the times who we see come in and get the pays for the fees and then back charges the property owner or lessie for that matter, but it's really what it is there.

And um what you'll see in most of these particular ones is one of the things I was asked about is why are we charging one, but our third party reviewers charging us another.

And that really what it comes down to is the way their fee schedules are structured.

It's seven most of them, not all of them, but 75% of what we collect, they charge, or their fee schedule.

So the way it's kind of works right now is works in their favor.

So when I analyze this and look at all the adjacent property, all the adjacent communities, it really came back that our fees have not been updated since 2021.

And the construction costs have uh significantly increased, and that in turn increases the cost of permitting and plan review because of that.

We were actually losing money because of the fact the way our fee schedules are set up.

And I do foresee if maybe mid-year, probably more next year coming back and re-evaluating this, because based on the time that I had, um, there are some things that are ridiculous.

Like, for example, it's easier just to get a $60 electrical permit instead of counting every electrical socket in a building.

And currently that's how our fee schedule is set up.

So there are some ridiculous things that need to be cleaned up, but looking at the evaluation of those, I'm like, let me get a better handle on what's going on right now.

And you know, that's working, but it is very tedious and time consuming.

So but these are mostly in response to we haven't updated our fee schedule in three and a half years.

So I I know uh in the past a lot of people they didn't want to build here because they said our fees or permits are either too high.

Um so when the question was last time when we raised them, are we still under or comparable to the other communities that has the you know bigger resident or or more of the building?

Are we still under or uh I don't want to be above communities when we if we don't have to be for right now?

Um I don't want to scare these developers and even the ones who are building ones and two houses from building here because our fees are you know drastically larger than somewhere in Castle Grand or even in Arizona City, which I understand that's a county island.

How how can we still be competitive to the market without overdoing ourselves?

Correct.

And the way that's a good question, Mary and Council.

The way I set them up is I may change the bracket, but looked across the communities and kind of came in a lot of them when you equate the dollar value to worth in four or five dollars of each other.

You know, that's kind of how I came in.

Sometimes we're a little higher, sometimes we're a little lower, but we're only a few dollars.

Uh a lot of our fees right now are cheaper because of the we go by this itemized thing, but it's very time consuming for both the outside and the inside.

So um this the rates are bringing us up to that part.

So there's gonna be a little here and a little there.

Uh both sides.

Some are cheaper, some are kind of a little bit more, but not much.

And I was very cognizant of that when I went through.

You know, there's one that I it burns in my brain, it was like $1,364, and the neighboring committee was $1,361.

I mean, and that's all because of the multiplier factor that goes into the these and the way their brackets are set up.

So I just don't want to put the fear in people that we're too expensive now.

Um that's that's always been um a cloud over us with things like that.

So I do agree, and one of the factors that's different from us than others is the fire district has its own set of fees.

And we're I took that into consideration when I did this.

Um, but that's why I do want to take a more serious look midway stream to see where our revenues are atjust accordingly.

Okay.

But we can always scale back too if we need to.

Um if we see that this is becoming an issue with you know developers or you know, no, I get it, but I'm looking more towards the ones and twos versus the four or five hundred developments that are coming in.

So yeah, and that's true, and and I'm cognizant of that as well.

That's why I want to look at how we're doing it and what we're valuing right now with our one of our benefits of our permitting system that we're upgrading to, there are different ways of doing it, you know.

Um a lot of communities are 75% cost recovery, you know, and that's what they charge.

Just everything's 75%, you know, not this itemized budgetary thing that we see right now.

Yeah, I think I saw what light fixtures, like 10 cents each or something like that.

Or you really do you guys really do that?

Wow.

It it's supposedly supposedly, yes.

Yeah.

Yeah, it's it's a little tedious, and that's you got to remember too, is when we're trying to recover the cost of Chris sitting on the counter for 20 minutes to an hour sometimes.

Sometimes calculating fees are a couple hours, you know, back and forth between the apple team getting us the right information.

But uh that one is a perfect example.

Give me the $30 or the $60 one-time fee.

I don't care how many lights I fix you box.

I'm looking at it from the point of view, it takes my permit tech, 15 minutes to issue that permit, it takes the inspector another 45 minutes to go out and do the inspections.

What's it cost for an hour's worth of service?

That's it.

So I'm bringing it up.

That today's rate or wage, I guess you could say it's very cognizant of the fact that when I was doing this, I was adjusting it based on what our budgetary salaries and our budget is.

So don't realize that how much time and effort goes into going in, coming and going.

Yeah, um customer service at the window, things like that.

So it's it's uh it's an ongoing thing.

They don't take anymore.

Chris's time, my time, and everyone that's around it, you know.

So all right, thank you.

Anybody else have any questions?

All right, Brian.

Okay, Mr.

Mayor, members of the council.

Just uh wrap this up on to highlight uh I'm gonna go to the uh sanitation.

The sanitation is one that I would like to point out is currently what's being proposed in the sanitation is make note to council that currently we have at the landfill from zero to a thousand pounds is free.

It's being recommended from public works to increase that to eight dollars from zero to five hundred pounds, and then from five hundred pounds to a thousand, it'd go to eleven.

So there would be no more free uh dumping up to a thousand pounds.

Uh there would be a charge on that.

That's due to um our landfill is you know not the best financially.

We wait we give away a lot, and so Matt went through and based it upon a similar uh size of a landfill with their schedule and fees, but uh you know Matt would be happy to uh entertain any questions from council on this, you know, why the recommended for changing the landfill fees at this time if council has any.

I think it's odd to see a fee of 11 dollars instead of uh like uh ten dollars or something like that.

How how would how did you come up with 11 dollars, Matt?

Mr.

Mayor, members of the council, these fees are based approximately on the fee schedule for a heating county landfill.

The heat of county landfill is a landfill that that processes about the same number of tonnage that that we do in yours, and and we just basically took it from there and say based on the the volume that they have based on the the population that they serve based on the socio demographics of the socioeconomic demographics of the community.

Um that's we basically just copied what they had for theirs.

Is there any way you can round it to the nearest tenths, I guess, instead of 11 to 10, and then from 22 to 20?

Because I don't think a lot of people are gonna have 22 dollars exactly in their pocket.

We could and we can we can certainly do that and and we can bring that back to um back to council, we can revise this.

With that, we what would you uh would the proposal be for the eight dollars?

Would we go 750?

Would we go up to 10?

10, 15 maybe for most people pay in cash or do they pay with car there?

It's about 50-50 split.

What if you did a $10 up to a thousand?

Thousand pounds.

We could certainly do that.

If we were in 10 yeah, first thousand pounds at $10, that would cover both the $8 and the $11.

Add some more here, take away some there.

Andy.

But I when I first came here, I went to the uh the landfill a couple of times.

You know, you're working on a new house, and I was amazed it was free.

I said, This is like cool.

I can come here every day and dump all this stuff.

With that said, I I like the ten dollar fee for up to a thousand.

Are there any stop gaps in place to stop people such as contractors and stuff from utilizing this because it's free, even though they live here, they could just do that.

That's that's something that we have experienced, we have noticed that sometimes contractors will come in with their residential utility bill, and there's no way that you have 950 pounds every single day of the week from your own house.

How many times are you remodeling your house, right?

Um that's and that's something that that really the only stop gap that we have is the landfill staff knowing who it is and knowing who the the community residents are, who the contractors are that are trying to circumvent the per the prices that we have in place.

We can certainly in and uh your point is well taken, it would certainly make it a lot easier to have ten dollars across the board up to the first thousand pounds.

Dan, you had a question?

Yeah, uh concern.

I remember not too long ago at the council we did had a lot of discussions about the dumping.

Uh certain areas of uh since we have so much land, the people dumping sofas, chairs, and things in the community, and one of the things we try to do is uh get them to go to the uh landfill because it was free.

Are we going to run into a situation where we say anything up to 500 pounds?

So somebody's got a chair, an old sofa that only weighs 100 pounds.

Rather than take it to the landfill and pay eight dollars, I guess we're gonna dump it out someplace.

Are we thinking of promote that dumping as opposed to encouraging using a landfill?

Just a question.

Your point is well taken.

Mr.

Mayor members of the council specifically council member Snyder.

One of the things we propose to do with the implementation of these fees is we will have um city roll-offs that we have that will be out in the community that we will have dumping events.

So if put if somebody has a chair or a sofa or whatever, they can come in and we will monitor those, make sure there aren't any hazardous materials, any auto parts, any bodies live or dead.

Um just call me if that's the case.

Yeah.

But uh we we will be advertising those more throughout the community.

Uh we're looking at procuring additional roll-offs for our landfill that we can do those community cleanup events for one time.

We had talked about uh when we were discussing the illegal dumping issue.

Um talked about maybe putting signage up in some of the areas where illegal dumping is predominant with the fine and the you know the penalty, because I think people don't understand that it's that they can that it's illegal.

I mean they know it's bad and they're not supposed to do it, but they don't really know what you know what the consequences are.

I think if we had some signage in some areas, it might help be a small deterrent, it might not deter everybody, but I think it would be a deterrent.

We can certainly look at that as well.

Um from my personal experience and in some of the other municipalities that we've had, um, they will dump right behind the sign.

Yeah.

But your your point is well taken.

We can we can certainly do more to advertise one the illegality of it into the fines associated with that.

And that's maybe one thing that that we can have.

Uh we've we've kicked around the idea of of maybe having a silent witness program if someone reports something, somebody reports somebody who know they know is dumping it, it leads to an arrest and a citation, then maybe that can be an incentive and maybe use some of the funds that we generate from the the new fee structure to have kind of a not reward but an incentive um kind of like an anonymous tip line, or if they like said maybe to provide an incentive for notifying us for code enforcement or police department of uh if they know of somebody who is dumping illegally to maybe curb that.

The signs could, you know, that again might not help, but they could be more of a positive effect to, you know, they're not just like here's the fines and you'll get in trouble, like keep e little beautiful, some sort of like positive message, maybe slightly educational, um, something that kind of lets the community know, like, hey, this m this is what you know the consequences are for you, but also you know, you want to keep your community clean and blah blah blah.

Your point is well taken, thank you.

I've heard sometimes when they do their legal dumping, they leave personal mail in there.

And that's what they find the people, yeah.

So I noticed the the same thing with Penau County, out customers located outside Panaw County.

Um do we get a lot of customers visiting our landfill from Pano outside?

And to say that they're they're a they've helped us generate some revenue.

Do you think me just thinking out loud?

Those fees are a little excessive for them helping us out at the landfill.

Could we just do a just like a the residents, a ten dollar to a thousand, maybe twenty dollars to a thousand pounds, kind of help them help us?

We could, and what we did is basically we took the the eleven dollars and doubled it for city versus county residents.

And if I may, it not only is it incentive to have a residence dumping our own landfill, but the residents that are dumping it at our own landfill are getting a break on the cost because they already pay property taxes here.

So they're already paying property, they're already paying trash, water, sewer.

County residents coming in are not paying that, they're not paying any other taxation for just other than coming in.

So this is kind of a way to say, Well, you're not a city resident, so you shouldn't have that extra benefit because our city residents are already paying another services to the city.

Okay, that makes sense.

Yeah, okay.

Thank you.

Think about that.

All right, that's why you make good money.

All right, go ahead.

Anything else?

Any other questions?

No.

Thank you.

Thank you.

So that's kind of takes us through the the changes.

We'll make the recommended changes that that came.

Uh I'll work with Matt.

We'll get it our necessary posting um on the city websites to meet the deadlines with our Arizona revised statutes, and we'll be bringing this back again for final adoption through a resolution on June 24th.

So that kind of takes us through all three presentations tonight.

Um, just to kind of uh reiterate a couple things is that uh you know, with the our revenue projections, some might go up or down based upon the last month and analysis, trying to get a better handle on it.

Um, but whatever we do, it's gonna be in line with uh expenses will be balanced to our revenues.

We won't do the other way where our revenues are balancing to our expenses.

So our whenever we go through the budget and we present council the budget revenues and expenses will be balanced.

Um the next phase for council is we will be working this next you know, through April to get the budget balanced.

We have uh council meetings with the budget.

Uh I believe it's that first week in May.

Um Councilman Schneider we have uh we'll meet with you separate after those April 20th or May 20th is when we bring back the uh uh tentative budget to council for adoption.

Um with that, then the property tax will come in June when we do the tentative budget on that.

Okay, and then the consolidated rate and fee schedule.

All right.

So any other questions?

Anybody in the audience um questions?

No.

All right, we're gonna take a little 10 minute break.

Uh this is gonna conclude today's work session.

We'll take a 10-minute break so we can kind of get some water, and then we'll um start the next council meeting after that.

Thank you, Brian.

Thank you, staff for all your hard work.

We appreciate you guys.

And we'll see you guys in just 10 minutes.