Good evening and welcome to the Eloy City Council work session.

Today is Monday, March 31st.

The time is approximately 5 30 p.m.

Celine, may I have a roll call, please?

Councilmember Vorasca.

Here.

Councilmember Curtis.

Here.

Vice Mayor Tarango.

Here.

Councilmember Schneider.

Here.

Councilmember Garcia.

President.

Councilmember Galindo.

Here.

Mayor Sutton.

Here.

Thank you.

Thank you very much.

Can we all please rise for the Pledge of Allegiance led by Councilmember Garcia?

Legislation to the flag of the United States of America.

And to the Republic.

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

Okay, that brings us to item number four, unscheduled public appearance.

And I have a Mr.

Bob Shu.

Would you like to come up and say a few words?

Just introduce yourself and the city where you live.

Can you hear it?

Yeah.

Sorry, Bob.

There you go.

Okay, Bob Shu, 6010 West Houser Road.

I know you were gonna ask me for my address, too.

So I want to uh thank all of you for the opportunity to address the City Council, the Eloy City Council, the Eloy staff, and any citizens of Eloy in the audience.

The topic of my brief discussion here is to bring to light again the Hauser Waterline Extension Project.

Marlo Shu, my wife, uh has been a champion of this for some twenty something years.

Um unfortunately she couldn't be here tonight, so she asked me to say a few words.

She's out stuck in California right now doing a tide delivery for me that went sour.

Anyway, um I'm saying here, you know, to say words on her behalf and also behalf on what I'm gonna coin as the Houser Road 7.

That's the seven residents that live on Houser Road currently, the way this project is supposed to be done.

Although unplanned, this project was vigorously discussed and information previously unknown was brought to light in the May 20th, 2024 City Council budget work session.

A lot of discussions happened there.

Be they good, be they bad.

It was it was done.

We are looking forward to seeing that this uh project uh you know promised by the staff is is will come to light.

Looking forward also to the proposals by the staff and the council uh on the proposals for the budget for the April 14th meeting and uh to make this this project come to fruition for the benefit of the Houser Road 7 as well as the future development of Eloy in that area.

Thank you very much.

Thank you, sir.

Okay, with that we'll move on to this number five, which is discussion items that would be Mr.

Wright.

You could take A or B in either way you would like, sir.

I will just we'll start with the number A, which is the revenues.

Let me bring it up.

Okay, so good evening, Mr.

Mayor, members of the council.

Um, tonight um we're gonna um go ahead and present uh the first part is our revenue uh forecast for the city.

Um, and then after that, uh during this presentation, we will also uh uh seek a little guidance from council when it in regards to property taxes.

If the council um gives the guidance on the uh adopting the maximum tax levy for the city, and that will be part of the this uh revenue presentation.

After that, uh at any point in time during the presentation, uh if you have questions, please stop me.

Um and uh and I'll address those.

After that, we'll go to uh the capital improvement plan and talk a little bit about our fund balance and some capital projects.

So that's kind of the agenda tonight.

Um again at any time let me know.

So the first one we're gonna talk about is the revenue forecast for 2526.

Um when we look at this, we're gonna go over some of the key impacts that uh I looked at for the the revenues.

We'll jump into the general fund, talk talk about the uh property tax levy, we'll talk about the special revenue funds, the major special revenue funds, and then talk about the enterprise funds.

But as we look into this, the key factors kind of influence the influencing the 25-26 budget.

Um we looked at is uh the inflation impact inflation for the last really several years has been impacting our revenues because as inflation goes up, you know, the cost of goods and everything, actually, our sales taxes uh benefit from that.

So that's one of the impacts that that we looked at.

The next one is the state economy.

Uh the state economy, when when I look at that, that's everything from the job or the employee um population growth that we've had in the state, but also to the key legislative issues.

Um I'll get into a little more of those as we get into this, but uh and how it's affected our budget.

We also look at the sales tax, and that's kind of our sales tax trends, historical costs, you know, when it comes to the major categories with our retail and restaurant and bars, state share revenues.

Um we'll address that a little later on, but that is actually a pretty key factor for us because state share revenues make up over 37% of our general fund revenue.

And then also the ma uh the property tax levy.

Um historically, council has been very favor in favor of uh always adopting the maximum property tax levy, and we'll get into that as well.

But those are some of the five major key things that when looking at our general fund revenues, these are the the major uh areas that I looked at.

But when we talk about inflation, you know, this kind of gives a little bit a slide of what uh where we're kind of looking at when it comes to like the Phoenix Air the Arizona um economy from a year ago, it's still you know, everything's up about 1.8 percent.

Um I kind of threw in a chart of when it comes to the major consumers, like look eggs, for example, they're up 60 percent more from a year ago.

You know, fish and poultry, you know, they're close to about eight percent.

You know, household food at home, they're up about two and other overall that everything's up about 1.8 to 2%.

So the cost of living, the cost of goods and services has gone up tremendously over the last year.

However, when like I had mentioned, that actually impacts our revenues in a positive aspect to it.

So, yes, we do pay more for ourselves when we go, but on the flip side, that helps our tax base into what we try to accomplish within our budget.

So it's kind of like a a give and take when it comes to some of our our revenue stream.

But when it comes to the Arizona economy, um Arizona State growth is is projected to be about 1.9 percent.

Um, a lot of the growth right now is in the retail construction industries, and that's fueling a lot of the the growth, and that comes in the form of with state income tax and state shared revenues.

Um so that that's uh a positive aspect.

Now, when we get into some of the legislative actions, um one of the uh no council member uh Glendo addressed this question to city manager earlier today, but one of the things that we're that we're looking at in the it's kind of going through the legislator is capping food tax for home base consumption at two percent.

Well, right now Eloy is at two percent.

So we could not go above that as it is right now.

So with that moving through the state and the legislator, we're already at the 2%, so it really won't affect us.

The only way it would affect us if they say eliminate it.

If we do a limit, if it ever is eliminated, that really doesn't affect our general fund revenue in our programs and services because when council back in 2010, 2011, when we uh dropped the food tax from 3% to 2%, actually historically went from 3% to zero, and then council redid it back to 2%.

But when they moved it from zero to two, they dedicated it straight to the community and economic development fund that we have.

So that money is allocated that that fund itself.

So if it ever did happen to go away because it went to the vote of the public or however, that's affecting that that fund, not our general fund itself.

A lot of the cities and towns have it built into their general fund operations.

Um can I ask a question?

So take me through this, Brian.

So if someone is traveling through Eloy, they get gas, that's the highway tax money, right?

But if they go into the pilot, let's say, and go to subway, that's capped at two percent.

But if they go and buy a soda and chips and maybe something else within the store area, that I'm sorry, that's capped at two percent.

But if they go to subway, then that's the a different tax.

So Mayor Sutton and Council Member Glindo.

So if the way our tech the in your example is the if someone's truck stops off of the truck stop, that we don't get that tax from them filling up with gas.

That goes all into with eight odd into a pot of money and it's distributed to cities and towns based upon population.

But when they go into the store and they shop, if they go into Denny's subway, that's your restaurant bar tax.

So that's at 5%.

But if they go in and they buy a package sandwich, chips, candy bar, that's considered food for home based consumption, and that is at 2%.

So that's the two percent that uh goes to the community and economic development fund.

It restaurants, subway, Denny's, Blackberry Diner, that's all the restaurant and bar tax.

And that's not um for debate right now.

No, so what is it?

What is the process?

Is this gonna be a legislative action or is this something that's gonna go to um actually they're moving towards having it to vote of the I don't think the legislators want to vote on that, they almost want to have it go on the ballot.

So that would like a ballot measure in 26?

It'd be in this November of 25.

Oh, okay.

Yep.

I didn't know there was an election this and the the last thing that I mentioned kind of as a legislative action is they're actually gonna start adding some new uh timelines and stipulations when it comes to changing the tax code.

How would that affect us if we ever wanted to do anything currently?

Council votes to say we want to reduce uh a tax, it takes about 90 days after the ordinance the resolution's passed because you have to have 60 days public uh kind of like has to wait 60 days and then for implementation and goes to the department of revenue.

Now what they're doing is putting a 75-day period before that that you have to notify the taxpayers.

So if they do if this passes, it just makes the timeline that we have to prepare.

We just can't do it.

We have to wait almost take another three months before it gets to council before it be in the 90 days after.

So it just expands the timeline.

So it would just be a little more encumbersome on that.

That's a legislative action that's more affecting um some of the the processes on the um when it comes to taxes.

When it comes to corporate income tax, um when it comes to our income tax, corporate income tax takes about 25% of our total tax base.

That's about 1.8 million 1.8 billion annually, but it's supposed to be estimated to decline, you know, based upon the new tax changes when it comes to income tax.

So when as we move forward, that's actually one of the taxes that is affecting the lower income tax.

When it comes to income tax, this is the last year that we will see a decline from the implementation of the flat tax.

So that actually affected us about 365,000 annually.

That's what the the projections were from the league a couple years ago.

Um, but I'll address a little more of that when we get into the state share revenue side.

And then lastly, transactional privilege tax due to inflation, the cost of goods, everything, they're anticipating four to six percent growth when it comes to transaction privilege tax throughout the state.

So the the next slide I is is more of a little bit of a SWOT analysis when I when I look at some of our revenue categories or how eat-less tax base is.

But you know, just to kind of highlight a couple of the strengths, we do have a stable tax base.

You know, we have a very low property tax rate.

You know, I-10 corridor for us is our main bread and butter when it comes to uh retail tax.

About least over 70% or more comes just right off the I 10 because that's where all of our retail is.

You know, core civic is a big positive impact to us when it comes to our tax base.

You know, council adopting the utility rate plan several years ago, and then also one of our strengths is is our area, it's prime.

It's prime for you know residential and commercial development.

You know, some of the upper uh weaknesses we have, yes, we do um have a what is considered throughout this throughout the state still of a high tax rate for retail or for restaurant and bar, but we do lack retail development.

That's that's a weakness.

Um limited tax options to generate new revenue, and then kind of our population growth, it's kind of slow when it comes compares to a lot of the other municipalities throughout the state.

But some of those weaknesses also turn into opportunities.

Um, you know, when it comes to the growth of residential and commercial development, you know, we're looking at modifying our landfill fees, you know, so that's a good opportunity for us to look at what we're gonna do with the landfill.

And you know, we could increase our local taxes, our tax rates, and we could look at selling our cap water for a higher um rate than what we're we're at right now.

So that's that is an opportunity that we have.

But some of the threats, it's kind of already talked about is legislative um actions, you know, them wanting to eliminate and capping some of our tax base, just like they they did when they uh eliminated the rental on long-term rentals.

That that was about 140,000 annually for us.

That was not as much as it is to a lot of other places throughout the state, but that was some of those legislative actions that they only look at politically versus how does it affect us operationally and when it comes to small towns.

Uh a threat is kind of that fear of recession, you know, slow down of the economy, and if it does slow down, how does it affect the travel on I-10?

And then kind of just the lack of retail growth, and then um the loss of state income tax.

So those those items I mentioned, um, I'm now gonna kind of transition over to kind of our general fund revenue.

Um, this the graph before you is kind of uh the last four years of actual versus more of the projected of our total general fund contribution.

Um we're looking at ending this year, just a little over 21.4 million.

That's actually down a little bit, about 700,000 over last year, mainly because of construction sales tax out there, you know, because gold bond is coming to a head slowing down on that.

Um but uh kind of the the key some of the highlights from it is I mean, over the last three or four years, we've had steady revenue growth.

As you see, per year it's about 5.2 percent.

Our population has increased about 2,988 or 747 a year.

Um residential building permits, we've had over 730.

Uh property tax rate, it's is on a decline again.

So this year um we're looking at uh just over three cents on it, I believe, but I'll I'll jump into that.

Um but we've collected over the last several years over 189,000 dollars in new construction or new property tax and with valuations going up and new construction.

So that's been a great uh uh thing to see.

And then also state shared revenue.

You know, it's grown 37% over the last several years, um, a little over two million dollars in um from total tax distributions.

So when those state share revenues go up, that's a reflection of your population increasing.

This is kind of where does the money come from?

You see that 41% is our sales tax, that's our biggest chunk uh intergovernmental revenue, which is state sales tax, income tax VLT, that's at 37%.

So 78% comes from two, you know, or four revenue sources.

So everything else is uh 22% comes from the other seven or eight categories.

So I kind of want to dive in a little bit when it comes to general fund revenues.

This is kind of a uh the spreadsheet kind of will show three years of actual uh kind of what I'm looking at projected for 2425, and then comparing the 2425 to what I'm looking at in the 2526.

So I'm kind of just gonna focus on that percent change category right now.

Um we're looking at sales tax increasing about six a little over six percent when we're looking at um local sales tax, and um at this point, um councilman Curtis sent a uh question earlier, and I'll I'll get to that uh coming up when it comes to the the sales tax um with it.

Um but uh on property taxes, we're looking at about a little over 5.6 percent.

That's because valuations are going up and the rates dropping.

So you know, we're looking at just over you know about 90,000 more in revenue than we did last year on it, and that's due to all the the valuations going up and new construction.

Uh franchise fees, we're looking at going up about 24 percent, license and permits 22 percent.

Uh intergovernmental revenues, which is our state income tax VLT state shared revenues about a little over 5.6 charges for services will go up, and it's not uh uh you know, our fines were showing going down a little bit.

Uh there based upon trends, you know, when it comes to uh court fines and forfeitures, it's just that they're not showing the uh the current trends of of going up, so we show a slight decrease, but in interest revenue or interest income, yes, it's gonna go.

We're projecting it going up 241 percent.

Sorry, Councilmember Barasco.

Yeah, mayor, maybe go ahead.

Yeah, Brian, very good.

Um, I do have a question about the interest income.

Um it's a huge number, right?

Um, and I believe I remember in a council meeting last year, you were you were given direction from council to move funds from uh a real safe savings bank account to a more I don't want to say aggressive, and I'm sure it it had uh some risk but not high risk investment.

Is that the reason why we're seeing this high increase in that interest income?

Um, Mr.

Mayor, Councilmember Varaska.

Um there's a a portion of it.

I mean, overall, um, the money we move from first interstate to um Western Alliance.

That that brings in, you know, at locally at uh first interstate.

We actually have um worked with them to bring almost all of our accounts up to a rate of it used to be only 50 basis points, very not even for the whole year on it, and we got them to uh look at our accounts and agreed to move it up to about three percent on all that.

So that that was a change on on all of our accounts.

The one from with Western Alliance, that's running about uh 3.5 percent, which is higher than what it is at first interstate.

But we most of our money that we have in our investments is with PFM, our they manage our assets, and that's that's the they're that's bringing in roughly a little over a between all of our investment accounts, just over 100,000 a month on that.

So this is just a portion of it uh when we move the money over.

So do you know is that that rate of return with the investment uh for PFM?

Yeah, PFM it it fluctuates because a lot of it's in treasury and agency bonds.

Okay, so it depends on.

I mean the average rate of return.

I would have to get back to and send council a response email on that one.

Okay, I don't want to give a false one.

Yeah, okay.

But it it our investment income, what we're getting now since we did move from first interstate to Western Alliance has helped us.

Oh, about uh probably about five five hundred thousand, but better than what we did before, just sitting there earning one percent before.

So Brian, uh if I look at the fund balance, uh the trend from 2122 up to 25, it's significant, it's been steadily growing.

And I assume this budget year, 2425, by looking at just all the expenses rejections in there, uh well, you're gonna be at 34, you're projected 34,000, 34 million.

I noticed in the budget 2526, you've got a healthy increase in uh uh again in the um interest income.

What do you think the budget fund balance might be 2526?

What do you but what are you budgeting for uh fund balance?

It's kind of uh council or Mayor Sutton and Councilman Schneider.

I'm kind of looking at the end of our 24.

If I had to forecast a year of that that moving up, we'd probably still be around.

Actually, I'm gonna see if I if based upon what we are looking at with capital in the year fund balance, will probably be close to about 20 21 million.

If we do everything when it comes to because one of the things that the reason the fund balance went from 21 to the 33 was the ARPA money, the CARES money that was put in that we got during that time, that was roughly in between think about seven and a half million that we got in from the ARPA and CARES.

Now we are starting to spend all that.

So I guess that's my question.

They just don't want to keep building that fund balance every year.

No, it's we're tapping into it now.

You'll see when we do capital, we're looking when we're looking at capital.

We're actually we committed also five million of our that fund balance towards economic development in the 25-26 budget.

It's being moved out of the general fund into its own fund for tracking.

That's five million.

So that'll drop down to let's say 29.

Then we have roughly about seven, about eight and a half million or close to nine.

That's gonna be for uh infrastructure.

That's water and sewer, that was part of the the ARPA money.

So if we take another eight almost nine million out of that, that'll drop it down to twenty right there.

So just uh to finish up with the general fund revenues, we're looking at about 11 um 11, a little over 11% increase in general fund revenues over last year.

And it's between pretty much our sales tax, the uh intergovernmental revenues, and and a lot of it is in in fines and forfeitures.

And what we end up doing when it comes to that our fines, we take a lot of that when we budget, and you'll see when we probably go through our budget, a large contingency, and that's gonna be built on the the interest.

If interest rates drop, it's gonna be tied to that contingency fund instead of our operating revenue or operating expenses.

So the give council, since we do have a few uh new members, I'm gonna just spend a couple minutes um just kind of sales tax overview.

You know, the kind of going through that a little more in depth on it.

So um the next couple slides, you know, what funds rely on sales tax?

We have three funds that rely on sales taxes the general fund, the streets one-time fund, and the community economic development fund.

The general fund sales tax supports please, community services, community development, general administration, the streets one time, that money it comes directly from our construction sales tax.

That is so our construction sales tax is at four and a half percent.

One third of it goes straight to the streets one-time fund.

So it's all one-time money.

The next one, community economic development fund, that is our food for home-based consumption tax, and that's used to support economic development and community uh related projects.

So when we're looking at this um kind of the average collection of all those three categories, the average collection, we get roughly about a little over 10 point, a little over 10 million dollars.

9.6 of that just goes straight to the general fund for its purpose.

Streets one times average is about 576,000, and community economic development fund or food taxes roughly average is about 385,000.

And that's just taking the average over the last three years with it.

So when we look at this, how is the general fund though?

Because the streets one-time fund is a hundred percent sales tax.

Economic uh community economic development funds a hundred percent of the food tax, but the general fund is kind of broken up into almost six different areas.

The first one is six point five six point eight million goes straight to the um ongoing maintenance and operations.

One point a little about 1.1 million goes is allocated transferring to uh the capital projects fund, and that's based upon our construction sales tax that we get in.

The next one is ropes and ranch, the incentive agreement that we have.

So each year we have to um pay ropes and uh part of their the incentive package, so when they incorporated into the city, and on an average, it's a little over a million dollars a year.

The next one's the national gypsum incentive.

That's kind of dwindling down, but the average that we've been looking at is a little over 523,000 from its construction sales tax.

And the last one is the express fuel agreement, and that's uh that agreement there is for when they did off-site improvements, they get uh they get half of their food for home-based consumption, they get half of their um uh retail inside, and um another one more tax category that we have to reimburse back to them.

For my education here, um, these rebates, these contractual um obligations, are they set dollar amounts or the percentages, or how are they determined in their contracts?

Yes, uh Mayor Sutton, Councilmember Baraska.

The so ropes and ranches 65 percent of construction sales tax, the national jetsum is 75 percent of the construction sales tax, and the express fuel agreement is 50 percent of there's three categories of the the sales tax categories on a month on a quarterly basis.

I I go on and get that information and and we reimburse them based upon the tax information that we get in.

Okay, so um the are these uh allocations do they have a sunset agreement in them, or is that for the length of their service in Eloy?

Um Mayor Sutton, Councilmember Glendo, so the express fuel that it's up to the amount, it's like I think it's uh 10 years, or it's a certain up to a certain dollar amount that they did for off-site improvements.

Um, so it's there's a threshold on that.

That we're in the about third year of that agreement, so they have about another seven years on that one.

The national gypsum, it was up to a certain dollar amount for construction sales tax.

There's there, I don't think that there is a sunset clause.

It's a it's a it's a caps at a dollar amount um on that.

I want to say it was like maybe 2.5 million on that agreement.

Ropes and ranch, they're they had to meet certain thresholds for their development, and I believe that they've met those.

So it goes on for another, Dave.

Do you know like 10 to 15 years?

So it's a leak, it's a very lengthy agreement.

So they provide a lot of their services too.

What I'm sorry.

They provide a lot of their own services too.

Correct.

But yeah, they get uh 65% of all construction sales tax in their in their uh planned area of development.

So um one more question.

So the you said that express fuel, the incentive program with them is they get uh a certain percentage of 50% uh back to them on retail on the food and the for like food for home based consumption and then for use tax.

So that means that they we get one percent from them, but we get two percent from Circle K and Yeah, it's so if if they get if their sales tax is at three percent, then we have to rebate them one and a half.

So they get 50% back to them on all their taxes that they pay and you know up until they reach the amount they did for off-site improvements.

And what were those off-site improvements?

That um out the top of my head, I don't know.

It was the right it was the right-of-way in front of the the express fuels.

So they went and they redid that culvert area, they relay the the sidewalk, they've got the curb and gutter, they did all of those uh improvements that you see directly in front of uh express fuels.

So that was part of their agreement.

Okay, thank you.

So kind of jumping into this, this kind of um looks at all the categories I just talked about, all the sales taxes that we've that we have, which is the general fund, the all the transfers, the incentives, um, the food tax, the one-time construction.

This is just taking all those categories and and doing a chart of comparison.

So kind of uh Mayor Sutton and Councilman McCurtis, you're asking the numbers a little different between what it will be on slide 16 to 9.

This is slide nine was just for the general fund only.

Where when we get into slide 16, this is kind of the before picture.

It takes them all into one and shows the budgets of what it was in 24, 25, and what I'm looking at 2526, you know, for all the sales tax categories on it.

So um when we look at this, we're looking at the general fund, for example, jumping up from 6.6 million or from 6.2 million to 6.6 for the general fund operations.

So going up just a little over 400,000.

We're looking at more of the transfer to capital being the same uh 850.

We're looking at ropes and ranch about 1.2 million.

Uh we're looking at food for our streets one time, roughly about the same, about 410,000.

Um food for food, the food tax about 444.

Um the national gypsum, it's kind of I'm putting it up from 50,000 to 150 because they still could have a few off-site and construction improvements that is still part of the agreement.

So I'm just putting the budget number up a little bit and then uh uh the express fuel is around 50,000.

So all those will make up our our grand total as we're looking into it.

Um but kind of some of the factors that I look at when it comes to affecting our sales tax locally.

Um a lot of it is inflation.

Inflation is pushing up those prices, it's pushing up uh the cost of goods, like I mentioned, is pushing up how much we're collecting.

You know, too the as inflation does go up in some of these policies, decisions, decisions being made, what's the consumer confidence?

You know, will they hold back on purchasing on Amazon?

Are they you know online?

Because online, when people shop online in Eloy at Amazon or Staples, we get the sales tax here locally.

That's part of they call it the wayfare tax.

It's it's you shop online, it's where you click okay and have it sent.

That's where you're getting tax.

So, you know, and that goes into the national policy.

Some of that, the national policies being done, you know.

Yes, there's a lot of talks of tariffs.

How is that gonna affect things?

Are people kind of hold back?

And then the state policies and some of the ones that we talked about earlier.

Um, you know, residential development.

We do have a lot of infill projects that are being happening out in the Toltec area.

That's good, you know.

The those homes being built, you know, ropes and ranch is still doing, you know, 80 to 100 homes annually, you know.

You know, but those as the price of those homes that because the cost of those homes are going up, the building permits go up because of valuations, that's more tax revenue.

Our sales taxes go up on that.

So it's kind of a, you know, as everything goes up, all those permits go up, all the fees, and then our taxes as well.

You know, on commercial, the solar, there's gonna be solar projects that are still on the books that are coming forward.

Those will generate building permits, you know, some construction sales tax dollars.

Property taxes, I'll have to say that's there, it's a very small amount and on it, but you do get to the construction, you do get uh um the permits and fees on those, you know, and then manufacturing.

I mean, you know, there could be a you know, there it's been a lot of talk, and McKinsey's been tremendously busy with a lot of the piss on on you know, with some of the manufacturing.

We land one or two of those because they want to be here.

That's an effect our permits and our construction sales tax, and then in years a year after that, our property taxes.

So we do have a lot of things that would be affecting our sales tax, but in within this next 12, you know, this next year and 25, 26, there could be the solar and some manufacturing on it.

Um when it comes to property tax, you've um like National Gypsum or with Goldbond, they haven't got their CO, if I'm saying it right, the CO.

So once that they get that, that property tax will come on our tax rolls, and it will affect us and also the the fire district, because right now they're on the temporary um occupancy, and that's not on the tax rolls yet.

So when that comes on, you'll see a little bit of a a boost and what I'll show you in our property tax spreadsheet of new construction.

That it's not in our figures at this time.

So that will affect us in the 2627 budget year.

But uh this slide just kind of wraps everything up that was on the bar graphs, you know, the the step.

Uh, we're looking at just our sales tax overall, about seven nine point seven million.

That's all of our taxes between the three um the funds that we have the economic development fund, the streets one time the general fund.

So we're looking at just over 500,000 increase in local taxes.

So just to kind of touch base kind of shift in to state income tax.

Um last year, the flat income tax.

Um, we're looking at a decrease um in in budget-wise of about um it was it's probably estimated more I'm more around about 285,000 that we're looking at probably when it comes to with our increase in population from from where we were collecting it now to what we're looking at.

However, the impacts on the general fund due to our population growth and conservative budgeting, there the impact will not affect our estimates moving into 25-26.

The reason why is last year when we did the the budget and the revenue and we adopted it, we took the league gives us um estimates, and those estimates come out like we just got ours about uh a week ago, the preliminary estimates.

The final estimates didn't come out with the new population and final numbers until late June.

Our budget was already adopted.

So we our revenue that we're getting in from income tax uh state share or the state share revenue, they're gonna exceed all the budget figures we have in this year's budget.

So as what we're getting in, that state income tax, they're gonna take off the three like 308 or 285,000.

Our net effect, we're actually growing only, we're growing 25,000, our estimate for state income tax with it.

So with those budget figures coming in late is prompted us not to say we're going to come up with 300 and dollar reduction in revenues because of the the lateness on that and the growth in population has actually helped us when it comes to our estimates with uh state income tax and actually state sales tax and VLT.

So we're we're actually with with those two things, those two measures and um policies that I've I've used, we we won't have a uh a net negative effect on our income tax this year, even though we are losing it.

So this uh slide here just kind of takes all of our state shared revenues, kind of gives a comparison of past actual years to the the budget, but this year state income tax is going up 0.73%, so not even 1% over the prior year.

State sales tax, we're seeing almost about a 9.8% increase.

So it's gonna go up from 2.6 million to 2.8 million vehicle licensing tax and go up 11 percent from about three point or 1.3 to a little close to 1.5, and then highway user, and that highway users are the streets fund.

That's how they uh we do our roads.

That's going up about 12.8 percent.

So that's gonna go up from 1.6 million to just over 1.8 million.

So almost a little over 200,000 more to that, the streets fund.

So overall, our state shared revenues because the numbers that I was talking about that's in the column for 2425, those are what we got back in March of last year.

Then all of a sudden, boom, they'll give us the final population numbers in June.

But we've already adopted our budget.

So that's why we'll we won't see probably a change in the state shared revenue column until our budget's already adopted.

We will be ahead of the game for when it comes to next year.

If there is a downturn in the economy with the reception, you know, we're taking a lower number, but it's also a positive number for us.

So it's meeting the needs of uh when we're looking at the revenues, everybody's favorite category property taxes.

Um, like I mentioned earlier, I'll look uh ask the council a little guidance after the the presentation on it.

But property tax, um council has approved the maximum property tax rate for the last several years.

Um the property tax is considered one of the most stable revenue sources we have in the general fund.

Um when we're looking at this year's property tax rate, uh, we're looking at 0.9769.

That's actually a reduction of three cents, if you want to say from the a dollar eleven or dollar one that we had adopted for the 2425 budget.

So this is our property tax worksheet, and when I was talking about council seeking guidance, so right now in the column that you it says just new construction.

We can adopt the the property tax rate, take the new construction, and if we just did the new construction and not looking at the taking the the maximum limit, that would give us $52,000 just for the new construction.

And you'll see that property tax rate would be 0.957.

But by the city council given the guidance of saying let's keep the maximum, we would collect an additional 29,000 on top of the 52, and that property tax rate would be 0.9769.

So the difference between going up to the maximum and keeping um and only just taking the new construction, it's about 29,443-wise, you're talking less than 1.1 cent, 1.9.09 cents.

So uh what would it look like on an average home?

If we took the maximum, it'd be $97.99 on a home that has assessed valuation of 100,000.

The next couple of slides is just kind of shows the history of our property tax.

Um back in 22-23, that was kind of our peak in the last several years of dollar eight.

It's kind of dropped down to 0.969, taking that maximum rate.

But as you see on the flip side, valuations are going up.

Valuations went up for us around uh about 23 million this last year.

So how does it look kind of uh in our dollar when we're looking at it?

Still in the toll tech area, we only get about on the for every hundred dollars.

Eloy, the city of Yelway gets about seven percent of that.

But in the Eloy proper, it's about six percent per hundred.

So as I as we were talking on, I'm just gonna go back a couple slides.

You know, this council look want to um would like us still to keep that, you know, and guidance, put the maximum uh tax rate in built into the budget and bring it forward as part of the um 25 or 2526 budget, or look at the um you know the guidances to look at the other measure, or is there a preference?

I'll preference we take the higher one.

I'll preference the one the higher one.

Okay, yeah.

The maximum.

Yeah, maximum maximum limit.

Yeah, Brian, help me here.

I think give me a little history.

You that if we don't take the maximum, I don't take it, you're still limited next year to what that maximum could be, right?

I mean, you can't even though uh I guess there's a downside if you don't take it.

I remember in past years we had some discussion about it.

Yeah, yeah, yeah.

Could you explain that?

If the council wants just to take the the new construction, um what we what you do is you're at 95 cents in this case, and next year it it drops to in valuations go up again.

Um you just lose the ability, not you don't lose the ability, you just don't it's gonna be a little harder to say now I need to increase it four cents to get to the maximum instead of one cent because the you would keep being below the maximum, and so the the amount that you actually are collecting the proposed rate will kind of be at this level, and the next year it drop it jumps another 29,000.

So to get to that maximum level, it'd be closer to 58.

So your property tax rate will be a little higher.

You know, your variance will will grow.

Right now, it's it's kind of it's a very minimal one cent because we've always taken the maximum limit on it every you know for the last several years.

I I guess I was thinking more of if the if the valuations appraisals drop and you really don't have much option to try to make up that gap because you're already locked in to two percent of maximum go, right?

Two percent, yeah.

By law, we can't increase it.

Yeah, so even though see the appreciate the appraisals drop or property taxes drop, you really don't have much chance to make up any deficit if it's more than two percent.

Correct.

And so sometimes I think the thinking has always been a lot on council before is when you have the opportunity to appraisals are higher, let's go ahead and take the maximum.

The effective rate is not going up that much, it's pretty flat.

And so take it now because when it does drop, you won't have an opportunity to make up the difference.

So take it while you can.

If I guess is another way of saying it.

Well, and and also uh councilman Snyder and uh Mayor Sutton is that we're kind of putting saying we we don't want to collect another thirty thousand dollars and you know towards public safety it goes to or community programs.

That's that limiting tax base we have, and this is one of the taxes that's is stable.

It's not due to when a recession happens, we're not gonna collect that money.

So, you know, if when valuations do start to drop, the tax rate will go up.

There's only been one, I want to say maybe two times in the last 20 years.

Council said, let's just hold it steady from you know compared to last year's.

Yes.

So council's kind of guidance is build the maximum rate, bring it towards us with the the hearings and the ordinance when it comes to the budget process.

Anyone else have input?

I think I know the answer, but basically, we're looking at going down in percentage by three cents, three and a half cents.

Max, yes.

Yeah, to the max of 98 cents versus 96, which could be an option, but that we're saying 98.

Yeah, okay.

Yeah, I'm good with that.

Okay, thank you.

So kind of what we're gonna do when special revenue funds, the ones I I kind of um focus on is our our streets fund airport and sewer or cemetery.

Those are the main special revenue funds.

All the other special revenue funds that we have for the city, they're tied like impact fees, and and I'm not gonna go through all those.

I'm just focusing on more of the major operational uh special revenue funds.

But the the streets fund, we're looking at overall, it's gonna grow about uh close to 11%, 10.7%, uh a little over 280,000 over last year.

The highway user fund is the highway user revenue fund is comes from our the vehicle the the gas tax throughout the state, but the other major one in this one is Pennell County half cent sales tax.

Um this one is distributed to only tax cities in uh off the half cent sales tax in Pennell County.

Um there was a question from Councilman McGlindo that uh she sent to the city manager about how does the incorporation if it goes through a Santan Valley, how does it affect us?

So at this time I want to kind of address that because the incorporation of the Santan Valley, it would affect the general fund, but mostly the streets fund.

The reason why is because the general fund, when you take if it uh Santana Incorporates, they get a piece of all the pie when it comes to say sales tax, state income tax, VLT, and HERF.

But you've got 90 cities that it's gonna be broken up into.

So for the city, we're looking at about a just in the general fund purpose of probably around about a hundred thousand dollar, probably loss in income tax, state shared revenue and VLT.

But on the flip side, when it comes to the streets fund, that could be close to four five hundred and twenty-five thousand.

The reason why is you have HERF that it will affect maybe about fifty thousand, but the half cent sales tax will probably be more like four hundred thousand.

The reason why is because that half cent now has to be given instead of six cities in Pennell County or seven, it's gonna take away a piece of that pie and fund a community on a population, that would be the biggest one in Pennell County.

So our pie could drop, you know, estimate about 400,000, 450 off that 1.7 million.

So that would be a that incorporation would affect more streets, which might be more of our um street, you know, towards preservation operations versus um the general fund wise.

So yes, the incorporation, if it does happen, that votes in November of 25.

If it does pass, that all tax will be the 26, 27 fiscal year would be implementated and and reduction would happen in the 26, 27 fiscal year.

And do we have some kind?

So my assumption is that the it will probably pass.

It's got a lot of support, specifically from the county leaders as well as the community of Santan Valley.

Um I would I guess my my biggest concern is how is that gonna affect our operations?

Is it gonna be that big of a dip in the revenues that we receive that we would have to prepare for, you know, reducing operation cost um laying people off?

And if that is the case, do we have a plan to be able to absorb those costs?

Um Mayor Sutton, uh, Councilman McGlindo.

Would it affect general fund operations?

Very little at all because of kind of the population growth that we see and what we would get away from because it's gonna be distributed on a much larger scale, it would affect the streets fund much more.

You know, how would you make up 450,000 in the streets fund?

It would be hard because you don't you would end up having to, you know, council could look and saying, well, you know what, since that came in, we may have to increase retail sales tax and dedicate that retail sales tax straight to the streets department to keep funding our our roads at the level we're doing.

I mean, it could be like it uh is mentioned in the fund balance slide.

You could pay off the excise tax bond, which is paying the debt on the this building right here, and take that money and transfer it over to the streets fund.

That means the general fund is supporting the streets fund.

There's really no other new taxes that you can put on roads.

We can't do toll roads, so you know that's about the only roads that tax.

So it it would be that incorporation would be very detrimental to Coolidge, Florence, Casagran, Maricopa, Eloy, a part of Queen Creek, because we we've been that half cent sales tax is huge for us.

The other way is unless the county put back on the ballot that other half cent sales tax, and that money comes in, but it wouldn't be something new, it'd just uh be maintaining where we were at uh revenue-wise.

So it would be something that staff would really have to look at and bring back an option or two of you know when we're going through that budget if it passes.

And that would be that's that half sense tail sales tax that they've tried to pass for third time now.

Um they've tried to uh I mean they did pass, it just got so that that's but that's all it's very hard to make up uh revenue in the streets fund.

It would have to be a transfer from the uh the general fund support on that.

So if that did if that um incorporation passes and stuff, we have at least a year you have over a year, yeah.

Yeah, to be about 18 months decision to the next budget.

Yeah.

Because I I know other boards that I've been on, we've like woke up the next day and then we're like, okay, now you gotta fire your staff.

And we're like, no, no.

No, I'm not I'm uh I'm not doge.

Yeah.

So thank you.

I let me tell you, I've been working with that issue and other boards as well.

So but yes, this the it the incorporation is a very serious issue when really when it can't pertain to the streets fund.

Brian, I got I guess I sit here and I keep hearing about these corporations, but thing that I'm struggling with that maybe I've got a dumb brain here, but the county's paying for a lot of services for Santana now.

I mean, they're taking care of the roads, they're doing the police, they're doing all that.

So if it incorporates, the county's gotta quit doing that.

Because so it means the county should be saving some money from someplace.

Now Santana's gonna have to start paying for that.

And so they kind of get that back.

So somehow you start looking at these balances.

Yeah, if you just took a total population spot, but somehow there's got to be unless the county starts building more buildings or something like that.

But you know what I'm saying?

There's got to be when when Santan starts paying your own taxes and they don't have to rely on the county, that means it should help some of the other small cities as well.

Now we're gonna lose.

But you know what?

I'm struggling a little bit with that where that balance where it comes out.

Yeah, uh, mayor Sutton and Councilman Snyder, so oh I actually it's funny you brought that up about new buildings because the county is proposing a hundred million million dollars in additional buildings and infrastructure.

So yeah, there it goes.

Well, and and uh what I was gonna mention was take when Maricopa Incorporated years ago, they had to pay for all the officers that were already patrolling that area.

They had that they had to pay the county back.

The county did not reduce their property tax by uh the what they're getting back, you know, from those services being rendered.

They went out and they hired more officers still to patrol those areas.

So for years, Santana would be paying the the county until they build up their own department, and once they build it up, you won't see the county going, oh, I'm gonna reduce my property tax rate to everyone around by that 50 cents because they're just gonna take that money and shift it somewhere else.

That's why we have to pay attention to who the supervisors are.

Yep.

So but that's kind of you know, looking at this, the fund balance in this about estimated about 6.5.

Uh, when we look at in the capital we go through, we're looking at maybe about a million dollars that we're gonna use in fund balance, probably in the streets fund for uh um a capital project in the roads that we'll address when we go through that.

Um airport fund, we're actually showing a decrease about 23,000 23%.

The reason why hangar one.

When once hangar one was vacant, we had to vacate it and it's gonna be torn down.

That's uh that was our biggest hangar rental.

So once until we get that up, we're showing a decrease in our our uh uh airport charges for that.

But that's we're also looking at right now.

Um, I believe Christine is looking at it uh for us to get new leases on board, you know.

So that's been looked being looked at.

Once that's uh been looked at, vented through, I believe it'll all come to council for new rates and fees on that.

Last one is the cemetery.

Cemetery we're looking at going up about 15 percent.

That's based upon a lot of this the the revenue in this, it's historical what we're getting in based upon barrels and and uh liners and cemetery rates, you know, plots.

So um this last year it's actually projected to go up about 40,000 in revenue.

So our projections kind of went up based upon the historical on that.

So we're looking about 258,000 in total revenue in the cemetery fund.

Right?

Yes, real quick, if I may ask.

Um, so are burial fees gonna be increased, or are we just saying that there's the mortality rate is going up and then just because of that, we're collecting more fees.

Correct.

Uh Mayor Sutton and Councilman Varoska, yeah.

The the amount of uh barrels and and number of plots being sold have increased um compared to the prior year back in when we did the budget.

Oh, so you know, looking at those costs, and then two um council several years ago increased the rates out there, and we've had a little more um out of town burials versus you know, people buying plots, so that's increased the uh the rate of collection on it.

Thank you.

Um, and this is just for my own personal interest in so the the cemetery is that the property of the city of Eloy.

Uh Mayor Sutton, Councilman Glendo, no.

That's actually out in the county.

So do we pay property taxes to the county for this cemetery?

No, the city doesn't pay any property taxes.

Okay, so because it's the city of Eloy cemetery, we're exempt from taxes.

Yeah, any any building that is the city, city property, we don't pay property taxes.

No matter whose property it's on.

Okay.

Is there any possible way that the board of supervisors could say, you know what?

We want to take that property back from the city of Eloy.

Is there an agreement?

Is there a it's ours?

We we own the property, the properties in the county.

Um, the reason that we have been unsuccessful in the past of annexing that into the city limits is due primarily due to the property owner across the street, because you got to have over 50% of the property owners willing to sign it and the annexation petition, and that property owner has historically been unwilling to sign.

We've talked about it about going back because it's been about two, three years.

We kind of trickle back and say, hey, do you want to help us with an annexation?

So we're at that point now.

I've talked to Dan Seimer about it and McKinsey and I've had conversations, so we're gonna reach back out to that individual and see if they're willing at this point in time to sign the annexation petition so we can finally get it into city property.

Okay.

Do we provide the water out there?

There is no water out there.

It's uh cap water.

It the only water that's available out there is cap water through our draw allocation that we have, and that's just for flood irrigation, but there are no um no access to running water out there.

It's actually the service area is global water, it's not even the city of Eloy.

Okay, thank you.

Kind of looking at the next the last bit of the the with the revenue presentation enterprise funds.

Everyone's favorite uh topic is uh enterprise revenue.

Um each of the funds this year are gonna see an increase.

The water fund and sewer fund, those rates will go up about 11% starting November 1st.

That's gonna be the fourth uh of the five rate increases that uh council adopted.

Um we will kind of take an sidestep on that here in April, uh April 28th, actually, to be exact.

Dan Jackson with Wooldown will come before council and give a presentation on um updating the the rate study um and trying to continue another expanding another five years after the year, you know, our fourth and fifth year.

And trying to continue another expanding another five years after the year, you know, our fourth and fifth year.

So that's based upon because when we did our last rate study, we didn't have the inflation like we had in our prices, you know, the cost of goods going up projects.

So it's looking at a lot of our projects on it.

So that will come before council on April 28th to look at that.

But this 11% is based upon the current uh rates study that we have in place.

It's in this rate study of 11% allows us to begin to look at funding, debt obligations for water and wastewater.

That's what this 11%.

So once we start this, we'll be looking at going through WIFA, GATA, you know, USDA to expand some of our current infrastructure, a lot of repair of our current infrastructure.

In the sanitation fund, uh rates will go up.

Residential rates will increase by 23%.

Uh that's that three dollar, a little over three dollars on that.

And that's due to the new hauling contract with waste management.

So each of the enterprise funds we'll see uh will have revenue increases in those.

When we're looking now at the water fund, we're looking at uh well revenue going up approximately 270,000.

And the reason why that you when you look at the water rates, that doesn't look like really 11%.

The budget that we had this year, about 2.6 million, it's gonna come in, you know, projections just underneath that, about a little about close to about more of the 2.6.

So when I'm looking at our projections and um looking at the 11%, we're looking at about $2.7 million in uh rates and fees.

Um water costs will rise, but the the surprise water agreements about 650.

Um staff has Dave McKinsey and I we've you know re-looked at that agreement, and I think we will we're gonna ponder it a lot more of what we can do because we could probably get a lot more than what that current agreement is, but we need to look at it.

We need to talk to surprise because they have almost a hundred, almost a four four to five month leave ahead time uh no, actually it's 180 days.

Um you would have to, if you're gonna get out of the agreement, you have to give them 180-day notice.

So I mean, we're trying to look at that because that's something that the water fund can capitalize on if we maybe go to the open market.

That's something that we need to look at very seriously.

And then interest income is going up quite a bit for this fund.

Um the fund balance is about 4.5 million.

Um, we will be using a little bit of that fund uh the 4.5 one will be um that's based upon the capital improvements is the the housing water line extension.

That that way we're not waiting for um through funding WiFa for that.

That'll be something that we've done right away.

So we'll be looking at utilizing the fund balance on that to capitalize that that project itself.

All the other capital projects when we look at um will we'll be going through a lot of the loans on the sewer fund.

Um we're looking at roughly about oh 190,000 or just over about 200,000 on this one.

Um a lot of it is interest income is jumping up tremendous.

Um the allocations that uh we've kind of moved around for the interest income in this, but the the sewer funds, the 11% it's going up.

So that will also help fund the um the debt obligations for that.

We will be utilizing um probably close to 1.7 to 2 million dollars out of that fund balance to track to complete some of the projects in the sewer fund, and we'll go through that when we hit the capital projects on it.

But the the sewer fund, you know, it's it's tough.

We we raise the rates 11 percent.

That will give us you know about 5.5 million dollars in debt obligations, but we just don't have the customer base to spread it out even further.

So, you know, we've got tremendous needs in our sewer.

Um, you'll see that in the capital projects when we go through it, but it's one of the the funds that you know we have to look to keep expanding and repairing, you know, to promote growth.

And the last one, the sanitation fund, um looking at based upon probably the current contract that we're looking at, uh landfill fees, roll-off fees.

We're looking at just over a million dollars more.

Um really landfill rates and fees are one of the biggest components.

Um Arizona City Sanitation, they they do dump in our landfill, they are bringing in for landfill fees a tremendous amount more than what we've had in the past.

So that's the reflection in the the landfill fees.

So you know, we're we're looking at just about 3.3 million on that based upon the new hauling contract and the the landfill fees.

So Brian, that that's mostly volume, is mostly volume-driven then.

Uh for the landfill fees, yeah.

Yes, it's it's uh based upon uh uh Arizona City coming in and and doing the residential and that uh kind of a little wrap-up on it.

You know, the general fund, we're looking at increasing local taxes going up by six percent, state shared revenues are increase just over five percent.

Property taxes will decrease, you know, just about three cents, but revenue will jump about eighty-two thousand.

And then investment income, you know, it's it's soaring right now.

Um, and that's going up about 241% due to the diversification and the higher rates of return on what we're we have in our all of our savings accounts.

Um throughout the special revenue funds, HERF revenues are increasing over 10%.

Airport revenues are are decreasing again, 23% due to the uh hangar one being torn down, and cemetery revenues are going up about 15.

And the wrap up of the enterprise revenue water revenues are increasing about 7.9%, sewer revenues are going up about 11, and then sanitation revenues are going up about 41%.

So kind of wrapping everything up.

Um, you know, what we talked about what I talked about, I know that after eating pizza and listening to this, it's like it's kind of like watching a horse show or a dog show with dogs running around, but try my best, you know, after eating pizza and long day at work.

So sorry for the uh bunch of numbers, but uh overall I'm I I'm very comfortable with these revenues as we move forward.

Um over the next several weeks, you know, I'm gonna keep tracking our trends.

There might be a slight upward or downward in you know, one or the two of the categories, but ultimately it won't affect our overall analysis very much on it.

It's just you know, I'm I'm gonna really look at our revenues a little bit more locally to make sure they're on track to what I'm looking at.

And uh, if we get any updates on state shared revenue, I'll make those updates, and then those will be all brought back to you if any changes when we do the the final um the budget hearing in May on it.

So Brian, you really have not included anything in the budget for increased uh construction taxes other than just what we've seen the last couple years.

So now I'm thinking of the solar farms, any other manufacturing that's not in here.

So if something happens, it would be a plus force, apparently.

Is that true?

Yes, uh, Mayor Sutton and Councilman.

I do have you know, some of the construction for the um like the solar based upon our last one.

Um, but when it comes to if in talking to McKinsey, if some of the things on the horizon, they might just be going through their planning stages.

So if they break ground, it's not gonna be later until early 26.

So it's not gonna probably hit us fully in the 25-26 year.

Yeah, and then two, if it is construction, that's one-time revenues that will hit the capital projects fund and the streets one time.

So it won't really hit our um ongoing revenue costs that much.

You know, I will be tracking, you know, one thing I'm gonna look at tracking a little closer over the next year when it comes to revenues is with Goldbond coming on.

What does that do to like our utility tax?

Because if their utilities, you know, the electricity they're using goes up, we're getting three percent of that.

So that utility tax might creep up a little bit.

I don't have any historical data on it to throw it into our projection.

So uh and then um just real quick when it comes to the revenue.

I just want to um bring up this slide real quick just to talk about the budget calendar real quick, and then I'm gonna go to the next uh presentation.

But tonight we see that March thirty first.

The next thing that the council um I'm gonna um get with um Michelle and and then Slain to schedule the little two, two to maybe three a group to go over the budget, and that's the week of April twenty-second through May 2nd.

So if you want to just put if you have a good time, like you know, a few good times, please send it to me or Celine and then I'll work with Celine to um schedule those meetings, you know, two at a time if it's only one because it's better for you at a certain time, you know, versus other will work with you during that week, but please keep in mind that you know when you're looking at your calendars in the next month, that's kind of when we're gonna do the the council budget meetings on that.

Um and then May nineteenth and twentieth, that will be when we present the whole budget to council.

I anticipate it will only be the nineteenth, but we always plan for two just in case something happens.

So but that will be that's uh uh odd Monday and Tuesday uh in May.

So I just wanted to bring that up right now, just to let council know if keep on your your calendars if you want to put it on for that April 28th and May 2nd that week.

Mayor, did you want to take a five-minute break before we jump into the uh the next one?

Okay, let's uh let's go for a 10 minute up bio break, everybody.

We'll see you back here in a few.

Okay, thank you.

What's the research?

So I'm gonna chip on the water.

But don't worry about big Google outside.

We're supposed to go.

Anything paper?

I mean me personally, I would have the burn barrel.

Oh yeah.

No, understand.

So I think that one small one and two and a half.

We have both lines to go.

I have to do that.

Did you have the look and see if I don't know?

No, I didn't have a uh I just do it we won't have to three rolls.

I just couldn't bring it down there.

So that's the one I'm building out on one car.

What's the second I don't want to go?

Yeah.

Yeah, then you can go right here.

Then you go down the side of them.

So you click on that.

I was clicked on one of those parts there.

Yeah, but just for that.

Kind of puts everything in perspective.

Yep.

She wouldn't have been here, but thirty point.

Well you have unloaded.

Oh gosh, yeah.

So it's like the ties.

And um, this is the second time with the same customer for the major delay also.

Or down camera.

Well, I think I'll have four team is what we're gonna do the presentation to the options, so hopefully something can get settled with all you guys that day and press press go.

Screw it up in the last direction.

Oh, tell your customer they better damn well unloaded.

Yeah, yeah, yeah.

Yeah, I guess that's what I want to say.

Six hours.

Okay, yes.

That's right.

Well, I know like the air conditioning out here.

I mean, is it warm in there?

Okay.

Yeah, I think you find your hand.

Oh yeah.

Yeah, thank you.

Yeah.

I I don't get it.

I was thinking tax or restaurant.

So they're going to be here.

And then we can reject it.

Now it's actually one.

Yeah, I think it was hard with that.

There's two extra options.

Oh my god.

If you want to see the max go on the architecture, yeah.

Well then actually wouldn't be fine.

Yeah, that is true.

I guess I checked in with the subject.

So we can also want to be hard.

Yeah, you can hardly argue.

So we can do it.

I don't know if I'm just gonna scream.

I didn't know I lost it off.

Oh my different part.

Thank you, Mr.

Wright.

All right, Mr.

Mayor members of council.

The next one that we're just gonna talk about is a little bit of the capital improvement plan and uh kind of uh go over the fund balance.

Um this won't be as long as a presentation as the the revenues.

I know um I probably have a laser hitting me in the back of the head from somebody in the crowd saying, let's move on.

So I'm gonna try my best to get us out of here very quickly on it.

But um the fund balance.

Um actually, this is not the one I want.

This is um kind of before I jump into the capital improvements and talk about the capital improvement plan.

I just want to spend a few moments talking about our uh some fund balance, fund balance recommendations because it kind of leads into the capital improvements.

Um we kind of went over this at the budget retreat that we had there in February, but uh for the council members that that weren't able to get uh attend, um the general fund um fund balance um is around 34 million that we talked about earlier.

Um the fund balances think of as fund balance is like your savings account.

That's what you you know when you're looking at your personal uh life and trying to bring into this, that's kind of like our savings account.

Um importance of a healthy fund balance, it provides stability and financial um health of a of the organization.

When we look at our bonds, uh they look at our fund balance to see if we have good policies in place.

We um we look at it for more of our financial stability, like I just mentioned.

But when we're looking at this, when we're looking at the general fund, um, and when I did this, this was as of uh 1031, but we have roughly at that time we had roughly about 33 million dollars in fund balance for the general fund.

That indicates strong financial health.

But of that 33, 19, roughly 19.1 million is considered uncommitted, which means you can we don't have any commitment.

Council can use it for whatever purposes they would like, allowing flexibility for capital, for one-time expenses, downturns in economy, whatever it's uncommitted.

We do have five million dollars of it that is committed, and that's for the economic development for the purposes of water and wastewater infrastructure.

And we also have about eight point nine million that is assigned to water and wastewater, and that was through the ARPA money through general fund contribution to expanding water and wastewater lines.

So a solid the foundation of our uh general fund is just learns us a foundation for our investments for sustainable growth for the city.

Um when we're looking at this, kind of diving into that 19.1 million uncommitted.

Um when you kind of look at it, a good rule of thumb that I always look at um kind of the GFOA, you know the I say the the the rule of thumb on that is have at least 75 percent of your operating funds is assigned to that's where your minimum balance should be.

So in our case, 75% of our general fund operational budget, that would be about 12.9 million.

So what's that out of the 12.9 from the 19.1, that would leave about six point two million of that uncommitted fund balance that can be used for, you know, in this case what we're gonna be talking about is available for debt reduction or one-time capital costs.

You know, when we look at this, that 6.2 million, that that can capture a lot of things.

So staff when staff started looking at some of the strategic uses of our uncommitted fund balance of that 6.2 million, these are the things that came in mind.

The excise tax bonds are the bonds that you were used to fund the construction of City Hall.

That balance to pay it off was about is about $4.7 million as of uh right now.

We can use that money to pay off multiple WIFA loans.

That's the water infrastructure finance authority.

Those loans are the loans that fund water and wastewater projects.

If we looked at paying off four of those loans, that would total about 2.8 million dollars.

And I'll get a little more in depth into that in a moment.

But you also can use it just to and pay cash for the cap for those capital infrastructure projects.

So scenarios, possible scenarios is the ones that we're looking at staff that we would uh look at and seek guidance from council on is paying off two of the water WIFA loans.

That outstanding debt on those two water WIF loans is about 968,000.

That's saved roughly about 88,000 in interest over the the terms of those loans.

We also would say pay off two of the WIFA loan uh wastewater WIFA loans.

That debt's about 1.9 million.

That would save roughly about 133,000 in interest.

So just between the water and wastewater side alone, that would cost just over about 2.8 million, but it would save over a little over 213,000 in interest over the the life of those the bonds that we still have.

The last one, when I talk about the excise tax, that only affects general fund operations.

And so when if we actually see where we're losing some capacity in taxes, it would be recommended to look at paying off that excise tax bond because the debt on it is about 4.7.

That would free up about 385,000 in debt capacity, which means that's budget capacity in the general fund.

Where the water and wastewater loans, that would reach a greater need because we could end up one expanding more infrastructure than what we have.

But the biggest thing is by paying these off, we will not it would next would have no impact on our utility rates.

We would not be asking any of our citizens to pay for these improvements that we would be seeking because these the rates already have these loans built into it.

These next couple slides are just more information that council can see.

Um the first two are the ones that I would be looking at, and I just gave more of it, it just gives what they were used for the loans back in the day.

These first two were done in one in 2010, and the other one was in 2012.

So you can see there, you know, these are loans that we took out WIFA loans many years ago, some of them close to 15 years ago.

And then the other one is the wastewater debt.

These are the two we'd be looking at the 09 and then the 2015 WIFA loans on those.

Um, but uh the the part that kind of wraps it all up is these are the projects.

If we were looking at you know, some of the recommendations that if we were able to pay off the WIFA loans, we would we would look at these projects is probably our our top three to uh to utilize is kind of upsizing the sewer main on Bitagular Road because right now that line is a six and an eight, it goes six to an eight inch, and it's at pretty much capacity.

So that qualifies under WIFA, you know, for utilizing that funding source to upsize it up to a 24, give it the capacity, but it would also give us the open up development out there in Esperanza and beyond because of we have a larger line.

Um the next one is looking at the Sunland uh water line replacement from Mountain View to Tonno.

This is uh expanding an eight-inch water line about two miles out on uh Sunland Gin.

And this wouldn't be considered like a WIFA, but we would end up going through USDA GOT on that, you know, in that capacity, but that cost is about 1.1 million, and then the next one is the water line extension loop on Sunland Gin.

And it would it would create a water line loop, which is better for our system.

And that estimated cost is about 1.7 million.

So with those kind of project costs.

And looking at it, if we did pay off those two WIFA loans, the water capacity, we would have about an additional 2.5 million in bonding capacity for the water fund.

Because by paying off 968,000, we would have bonding capacity of 2.5 almost 2.5 million.

By paying off the WIFA, roughly about 1.9, you would have a bonding capacity of about 7.4 million.

So we would be able to do some of these projects by paying off these loans that are a little more, they're older, they're becoming mature on some of it, but it allows us to capture them now and uh benefit the our water and wastewater systems and for development opportunities.

And lastly, if we did pay off the excise tax, that allows budget capacity in the general fund of about 385,000.

Um I think if staff uh was looking to give you what type of recommendation, we would probably look at the water and wastewater hands down, would be our number one and two choices on that, because it would give us that flexibility to keep improving our systems.

But we wanted to bring this to you tonight.

Um to see if this is something that if council would agree that yes, look at bringing this and putting it in the 2526 budget, because we would need that budget authority to pay off loans in the 2526 budget, because we have to have that capacity with it.

So we wanted to bring this fund balance policy or use to council before we kind of got into the capital because it does.

I think it does a lot of good, and it's actually good use of our fund balance.

Um, because it's it's not really increasing these projects, any of the rates to the customers, because based upon the rate study, it's already built into it.

Thank you, Mayor.

I have a question, and I'm not sure how to word this.

The five million dollars that we put in as a placeholder for um economic development.

Is that included in this amount?

No, it's totally separate.

Correct.

So okay.

I just wanted to be sure because I wasn't sure if that five million was included in that uncommitted no okay.

Thank you.

Totally separate.

Thank you.

I have a couple of questions.

Um so this interest rates that if by paying off these loans that we would be saving in this interest rate, is that already in like the forecast for the budget?

Is that money that we would be able to add to the general fund as well?

Um, Mayor Sutton, Councilman Glindo, it the interest, if we paid it off, that's the interest that we'd be paying on the bonds that's part of the expense side of it.

It wouldn't come back into us as revenue.

If council's guidance says yes, look forward to doing this.

Um, I'd probably pull back a little bit on my interest income projections because I'm paying off some of our debt with cash, which then would reduce our interest income actually on that side of it.

So uh of fiscal policy-wise, if we pay it off, I'm gonna reduce my interest income because we won't have that money in the bank earning income on it.

But the inch the interest expense is what we had save paying to the organization the interest.

Right.

I mean, that I was thinking like you've already forecast that that was what we were gonna have to pay.

Um, my second question is by paying off these WIFA loans, does that put us at a higher grade?

If we ever had to go out and seek more WIFA loans?

No.

No, we we don't have any we're not need um there's no penalty for paying things off early, anything of that nature with these loans.

No, I meant like is there any benefit for the benefit is we're saving on interest and we we're trying we turn around and actually reapplying that debt that right that balance back into them to get another loan on it for expansion.

It doesn't affect our standard and poor rating.

I think that's what you're asking.

Does it affect our standard or standard and poor rating?

Yeah, no, no, no.

No.

No we just have more money to pay off a bond because we pay off it wouldn't it wouldn't increase our bond rating it wouldn't increase our bond rating because that's going to come from your excise tax bonds and they base that upon that on your ratio of your income to expense ratio and all those other factors but not for water and wastewater that doesn't have any bearing on unless you did a revenue bond and that would be a vote of the public which we're not doing.

Yeah no I'm just thinking like you know using your own personal budget if I you pay something off that kind of early it kind of gives you a higher rating.

Yeah it won it won't give us anything by paying it off.

Okay.

Anyone else with questions yes thank you mayor I did have um I guess would it behoove us then if we if we were to pay off say two and a half of the loans say the water wastewater loans or sewer whichever one they are and then half of the excise tax bond would that make any sense or would it just make sense to save that tax bond until maybe next budget.

But then you have to pay uh bond insurance costs underwriter fees it wouldn't be worth any refinance on it.

This is sort of like your personal finances you know this is something we all do very differently you know some of us carry debt some of us will pay this off and not that I don't think there's an extreme right or wrong answer to this but I do like your approach with the the two water bonds paying those you go back a couple slides one more yeah this one I think uh of the total personally I'm uh google back I think we have how much we we we've got available we can play with I say play with here we go yeah the uh so like like seven yeah six million I like the idea of not trying to use all that six million and so your approach of taking uh the water and wastewater which is uh three yeah a million roughly yeah two million and using it that way you still got a little bit of more cushion than the 75% that's probably with the uncertainty of uh Santan with the uncertainty of other things that uh I like just doing a little bit not a lot if that makes sense yeah okay we will uh we will look to uh build that in the budget process and then we'll have that part of the uh uh looking at it from council's guidance on on that just to make sure we're talking about two water and two wastewater councilman yes Mike Mike Mike put your mic on mic I'm sorry so the two water with a loans and then the two wastewater with loans uh two point nine million dollars correct correct yes okay thank you okay thank you we'll uh look to incorporate that into the CIP into the total process on it sorry that's more than what council member Snyder was talking about so if we do the two WIFA or the two water two wastewater like you're saying it's around three million dollars which is half of what our unfunded balances were you were talking about 75%.

I was saying not don't go below 75% I was saying so we would in this case because it would be 50% we'd have to expend of the of the fund go back.

Oops he said we would still be below the we wouldn't be using all that 6.2 maybe using 2.9 of that 6.2 uncommitted correct he had mentioned that he didn't want to go below 75% expenditure of the fund balance but if you use three million then that's below 75% of the fund balance which is what council member Vodorowski said.

Right I said it that way so I just want to make sure that council member Snyder and the mayor still it's it's it's about it's a little over 50% of the expense well a little less than 50%.

Well a little less than 50%.

Yeah, so that's we're okay with that.

I remind the one like I think maybe I'm confused yet because if you spend all six million, you still have 75% of the correct.

Okay.

So if you only spend three million, it means you're gonna be right here 80%.

Right here, the the 6.2 is what's available.

So you we have 19.1 committed.

12 million nine is we spend all this.

We're saying it's our 75, which 6.2 is I was looking at the six point.

Is that so I'm with you?

All right.

So yep.

So we will uh incorporate that into the budget and uh look at that.

And I think that's uh personally, I think that's a great use of our uncommitted fund balance to do that and uh improve our infrastructure.

So all right, the kind of the last part of this is uh capital projects.

Um we had uh presented to council.

This is kind of uh the if you want to say the little higher level view.

I've sent every all the council members part of the packet a link that if you really want to dive in the 400 and I think it's like 412 pages of the capital improvement plan.

This is kind of a condensed um, but since we uh brought forth at the um February 7th, when we brought the CIP plan to council, um there was actually at that time only one capital project was taken off, and that was the card reader, the access card reader.

Everything else kind of was maintained the same.

Some of the um projects, and we dove dot we dove in a little deeper with water wastewater of trying to get funding to the uh 13 million for water and wastewater over a two-year period because that's the current debt capacity that we have on this.

So some of the water wastewater might have been fluctuated back and forth projects, but general fund-wise, which is in the police community services, community development, those projects all stay the same except the card reader came off.

That was the only uh capital project when you're looking at general just really general capital.

Um council member Curtis uh brought up um, and I'm gonna I have some questions that I'll read that she brought forth that McKinsey and Dave will answer with the CIP on it um as we go through.

But ultimately, when we're looking at this, we're looking at a CIP for the whole entire thing of just over about 26.8 million dollars, 26.8 million.

Um this for 2526.

The city manager kind of has about a 370,000 dollar uh one community development, about 660 economic development sixty-five facilities.

Um that's a new category we did this year, and I mentioned it.

Anything to do with any facilities on it is about 715 parks has about 150,000.

Um, but I'll just kind of go through.

I mean, does council have really instead of going through the cat uh a lot of these capital um as we're going through is there any particular department that you would like addressed a little more instead of just kind of going through these capital projects with it.

Um I'll focus a little more on water wastewater, but does anybody have any questions with the city manager CIP?

It's pretty it's nothing really changed on that.

The only one uh question that came up from council member uh council member Curtis was um and Dave would probably answer this is uh didn't we do it?

Her question was didn't we do a comp and class study um already?

Is this something different than what we just did?

Oh yes, I'm with you.

Yeah, so what we've done with that is we did the big compet class study last year, if you recall, where we brought everybody up to market value, we were able to go 100% and an additional four percent uh cost of living increase as well.

What we're doing is this is a maintenance CIP.

So every two years we're gonna commit to staying ahead of the curve, look at all of our rates for what we're paying our employees, make sure that that's comparable to the rest of our folks around us.

Should we need any major adjustments outside of proposed cost of living increases as part of our general budget?

But this gives us that ability to just continue our commitment to our employee wellness, health, and recruitment and retention efforts to, as they say, keep up with the Joneses.

Make sure we're we're given competitive salary wages.

So you'll see this this year, but then the next fiscal year you won't see it.

Is there any questions of city manager?

Okay.

How about community development?

Any questions with theirs that we have on here?

Um none of these have changed since we we brought it uh before council in February.

Umic development uh really self-exploited on that one with their 65.

Um the one in the facility that uh um councilman cruise had um was the chain link fence uh for the heart of Eloy.

Um there were some questions at the February 7th meeting um about uh using it.

Uh Dave, if you wanted to bring up the it's for 15,000, which one the main street rec or the 10,000 right here for the heart of Eloy?

Basically, my question was just oh sorry.

Uh last time I think we were talking about um to put that in for a um a charitable business.

Would that money should that money be part of what we like all that we divvy up to the charities?

Or is that a separate thing?

Like it it because it it's basically we're we're giving it, we're putting it to a structure where a charity is run.

Should that be part of that overall budget?

Was my question.

Okay.

Uh good question.

We kind of viewed that we viewed that as no because it's our building.

So as a as a landlord, it's our responsibility to make sure that our tenants have safe conditions to work and operate under.

So that's where we've become didn't really took out the equation of it's a charitable organization, it's only paying us a dollar a year to rent, more over looking at it as we're a landlord.

So should any other tenant be in there where they come to us saying we have an unsafe environment in this building, we've got issues behind.

Um we were requesting that the city as part of it being landlord help secure the facility, make it safer.

So that's what we went off of on that.

So, regardless of who's in there, wouldn't it?

It would be an improv it would be a responsibility to us as a landlord to try to do our due diligence to make our facility a safe facility for who's ever in there.

Yeah, I um I thought um one of the concerns was that it seemed like a really high amount just to put a fence back there.

Is this like an estimated budget amount, or is it actually been that's about what they cost?

We we've got a fence issue that um Christine and I are working on out at the airport, and we got preliminary estimates on that.

That's just to repair an existing fence, bring it back, and that's 25,000.

This yeah, they're expensive.

This is uh Brian have one before on the uh housing feasibility study.

What is that?

Yeah, no, I can take that.

So the housing feasibility study is essentially going to be a study that we're gonna use to help market uh for housing development because that as it stands right now, a lot of the kind of debates and uh rhetoric that we're hearing when we're bringing in home builders or developers that are interested in developing an Eloy is uh it never pencils out the costs, don't make sense.

So we want to make sure that we put all that data.

We have it and we're able to provide that with them so we can kind of dictate and show them, hey, this is what the costs are, these are the locations that could potentially work for your investments, and so we're not getting into those situations where we're fighting back and forth with them on what they think is gonna work.

We'll have that information ready for them.

45,000 to put data together we already have to put data together that we already have.

Is it a consultant that you hire to do that for you or what?

Yeah, so that would be through a consultant, correct?

We don't have that data on hand.

Oh yeah.

Okay.

Any other questions with facility or when we're looking at the parks?

Kind of no, there's no changes with the parks or on it for 150,000.

Um, I and I know I've already um mentioned this to the uh community development director, but there's a there's an Eloy Park in North Toltec that um just like to see a little bit more improvement in it.

It it is a like the city manager was saying it is our park, it is a city park, it's just not up to the standards of the rest of the city parks, and I I often get complimented at how beautiful the Eloy City parks are, whether it's in front of the the one in front of the the museum and the one on Main Street and stuff, and it's kind of hidden in the back, but I know the the community there knowed it knows that it is not quite to the standards.

Mayor council member galinda, we actually have that on our schedule for the next couple of weeks.

We have an irrigation system that needs to be repaired, broken sprinklers.

Unfortunately, uh we've received a number of uh issues with vandalism out there.

So we're always dealing with broken sprinkler hands and they actually get into the irrigation lines and break them.

So we're gonna repair the valves and get all the water running.

We also have some issues with the block fence there if you as you've noticed where they're breaking the caps off of the block fence.

So we'll come back, try to ground those columns out and try to do some sort of slurry seal on top of the block so we don't have a cap exposed for them to break.

Yeah, and Paul, like in the future.

I know one of the things is it doesn't have bathrooms, it doesn't have a bathroom facilities, it doesn't have water, there's no like water fountain and stuff.

So maybe it like in future budgets, maybe look into investing a little bit more in there, you know.

Maybe they could I know they have a basketball court, but maybe some more like recreational type activity.

I I thought tetterball, but you know, that's just me.

Uh thinking about like what else we could do to improve that area.

We can definitely explore the possibility of a bringing forth new amenities if possible.

Yeah, we have a restricted space there, so we don't have a lot of space.

A water fountain would be something that we could consider though.

Yeah, in addition to replacing the benches and looking at replacing any of the the basketball amenities that are there as well.

Yeah, and I know I know it's kind of secluded out there, so it it runs you know the risk of being vandalized and um quite a bit, you know, it's very easy to get away with being mischievous out there and stuff.

But you know, like I said, that we're we're hoping to like build Eloy as like a more of a family community, and I think that's prime area for us to look at as possibly like building more houses and and bringing in more um families to live in that area, and it would be nice to also have like a nice park and nice facilities out there as well.

Noted you're welcome.

Okay, the next one uh is public safety.

Is there any questions, comments with the capital projects uh outlined in public safety?

Okay, hearing none streets.

Like, can we get more officers?

That wouldn't be a uh a capital, that'd be uh OM.

The next one, uh the streets we're looking at just under over seven million dollars.

Um there's one project that we added to this from the um the the February 7th.

It's a million dollars, it's the toll tech, it's part of the I believe it's the agreement, the um development agreement between with ropes and ranch and the city, they reach a certain part uh milestone that we have to do some uh road repair work out there on uh Toltec Road.

So we're we're throwing a million dollars in on that.

Um it has to be uh I believe a coordination with ropes and the city, so we're putting our uh a dollar mountain placeholder for for that.

Um and this would be actually the million dollars would be coming from the the reserve and the streets fund.

So other than that, these the expenses or the projects you see are the ones that were brought forth at the February meeting.

Thank you, Mayor.

I have a question.

So we're not spending money until Robson says yes, they're going to come in half with us, correct?

That is correct.

Um we have a meeting with them tomorrow, actually, to it's one of our quarterly update meetings, and we're gonna be addressing that with them, tell them that this is in we've heard a lot of complaints.

Tell them that this is in we've heard a lot of complaints.

We need you guys to back this.

So we're going to see what they have to say after tomorrow's meeting.

Okay.

McKinsey's going to be bad cop.

That that was that was my question because I saw this and I'm like, oh, so Robeson has agreed to fund what they've agreed to fund.

Okay.

We need may need your uh handcuffs to help, you know.

Muscle muscle yes out of them.

Okay.

So that says chips feel is that chip steel or is that a full paving?

Um, gentlemen, do you Mr.

Renscher can help?

Mr.

Mayor, this project is a so uh soil stabilization and chips, you know, it's not the full curb guider sidewalk improvements.

But we like I said, we just put that in as a placeholder um for dust control measures primarily.

If we can get the full improvements for the for the million dollars that we have, we certainly will do that.

But for we we understand the need for the dust control, so we're looking at it at a minimum, having a soil stabilization and a chip seal on top for the dust control.

So you guys are just gonna lean on Robeson tomorrow.

Amen.

Yeah, the the price why it's so high because everybody looks at that and says million dollars for chip seal.

Wow, that's a lot, but it has to do with a lot of what Matt can obviously tell talk way more intelligently than I can is raising the bed up.

There's a huge drainage issue right there, and that whole bed's gotta be brought up, correct?

Right, and that's one of the issues that we have is that the road right now is at the same level or lower than the drainage than the surrounding properties, and so all the runoff from the properties comes on to the road.

So that's that's one of the things that we have is to to build up that base so that it's it's out of the out of the uh the low water area.

That million is that our portion of the cost is that gonna be the total cost?

That's our portion of it, our portion.

And how how um many miles, quarter miles, whatever it is, the test span between Aztec and a coma?

Uh it's about if I recall it's about three quarters of a mile.

Yeah, yeah.

On the um Shed Road Meeting Landscape project, did have we I know we're kind of been going around back and forth on this one, what to do with it.

So I see we've still got the money in there, which is great.

Um, what kind of strides are being taken to figure out exactly what we're gonna do with that project so that we can not see it next year listed as rollover.

Because there's an address.

Yeah, no, so I can jump in on that one.

So um obviously, as you can see too, the price on this one has gone up.

Um, the originally scoped project, I believe, was around 600,000, but that was back in 2020.

Um, based on that feedback, and then also the feedback we received at that February 7th budget retreat.

We've come with the option of the 1 million, which would be for the kind of original scoped project with the addition of the median cut throughs and then the additional irrigation that's required for that project.

And then based on that feedback that we're receiving the budget retreat, also maybe the kind of appetite of council may have shifted.

So we're gonna bring two other options that are kind of a middle option that'll be a lower cost, and then we'll do kind of more of a minimalistic approach that might have some uh metal streetscape art and stuff like that that would reduce that cost.

So then, based on that feedback that we received from council, uh, we're looking to bring this to council out May 12th council meeting.

Uh, then we'd be able to move forward with pretty aggressive timeline that could see construction commencing in October or November.

So I like that answer.

Um, just one more question related to that.

So if we did do like a lesser option, could some of that money still be allocated to that area, like improving the bike lanes further down or something like that?

Or is is that an option?

I I remember we mentioned that in the budget meeting, uh just somehow still putting you know it into that area, but maybe not all on really expensive irrigation or whatnot.

I mean, maybe Brian can touch on that a little bit, but I'm sure we could.

You'd have to engineer that in, so that'd be a whole nother timeline with having to incorporate that.

Um, and and uh Mayor Sutton, Councilman Curtis, where the money's coming from, there's really no it's not HERF money, this is that economic um the food tax money, the two percent.

So the stipulations, if that's something that council wanted to expend the money on for that, that's gonna be council's wishes on that.

If it fits within your the budget and scope.

And mine for your options.

Yeah, uh I I likewise have heartburn on this one.

I guess uh when this was part of a project uh along with Frontier Street when it originally started.

And we went out uh going back in history here with Shed and Frontier is a project.

We put them together, and turns out that uh nobody really bid on the cost was too high, so then we split them, and we went ahead with frontier one.

And I hate to say that uh I'm a little disappointed the way the frontier ones turned out.

I mean, yeah, okay, we've had some irrigation problems and we get had replaced trees, but still it's been two years, and it still doesn't look like I thought it was gonna look.

And so I just I have some heartburn now thinking about spending a million dollars on that strip up in Shed Road, and that million dollars could be spent some other places and maybe some little bit more return on investment.

Now I'm not saying we don't do something out there, but I think I like the idea that uh council member uh Curtis said of looking at the whole shed road, even uh there's a lot of traffic between uh sh uh tumbleweed and uh Australia.

Uh not just that one little stretch.

Uh the speed limit's pretty slow.

What you're trying to do originally was try to keep people from driving across the median.

But I think that that road needs to improve a lot between uh Australia and Tumbleweed with all the new developments that are out there.

So I think I'd like to see is maybe keep there as a placeholder, but let's kind of re-evaluate, go back to the drawing board and think what we want to do in that area.

It makes to me, it makes a lot more sense.

Do you want me to respond to that at all?

Or it's just a statement.

Yeah, the only problem with that is just kind of going to um council member Curtis's comment, trying to reevaluate that.

Obviously, it's mayor and council's wish that they want to kind of scrap this and look at it in its totality.

We can do that, but then that's going to push the project off because uh if you remember the work that John did, he had open houses, neighborhood meetings, and all that kind of stuff.

So we'd be re-engaging that entire process, which I don't know, he probably did over the course of a year with all those meetings.

And the result was not very good if I look at Frontier Street.

And so I don't want to repeat, don't want to re personally don't want to repeat that same thing out on Shed Road.

And so if we're gonna do something, maybe we have to go back and reevaluate what makes sense there.

And if it means we don't spend that money next year and we spend uh $50,000 to figure out what we're going to do, I'd rather do that and have another uh bunch of uh trees that don't grow or that we don't get the result we're looking for.

That I mean that's my personal opinion.

Just one more comment.

I think you know, an option would be we do something with the median that maybe doesn't use up that whole million, but keep the rest of those funds earmarked for improvements in that area as we figure out what they are.

That would be a way to move it forward and not you know wait forever, but just kind of have an idea of what we think those things are gonna be.

I do think we need to move on that project.

It's been a while for that community there, even if we have to overlap this between two fiscal budgets in order to get it done right.

I like the idea of amenities that people can use, like the bike lanes or a walking path or something.

I'm I'm very pro on that okay.

All right.

All right, the we're gonna get into the last view of the the water fund.

Um this very first page we have the the water well, the well case at well three.

Um that one uh this particular one.

We are gonna probably have to drill a new well right next to well three, so that will be um more instead of repair that one, they'll probably be uh drilling a new well, and if you want to say well 3.1 on that one.

Um the the rest of these uh with the in the water fund, the the reservoir uh at pump station too.

Um this one particularly I want to just uh make uh say that Verigi, who the city entered into an LOI with um, they're getting some final numbers on this.

So this project might uh we might be bumping it up just to make sure that we have the budget capacity to complete this project.

Um this 800,000 here is coming from the the ARPA money that we have.

Um if there's if it's over that amount, it would come from the the waters fund balance itself.

So I just wanted to uh make note on that project.

Um this one right here, the 450.

There's it's broken out into two fiscal years, 450 this year, then it would be another 300,000 in 2627.

Um Matt can probably explain a little more on the 450 if council wishes, but this money would actually come from the fund balance and the water funds, so we can get it done um you know in 2526 without waiting for uh of funding through a loan on that.

Um but this is the water line that uh Mr.

Shu spoke about earlier on the rest of these the water line replacement, um Sunland Gin, the water line.

This one is part of that.

Uh we would be utilizing to pay off the the loan, and we could you know utilize the and and get it completed.

So that's this is more the design of that, and then same with the water line extension loop on Sun Lin Gen.

That was one of the projects mentioned that we'd be utilizing um paying off the debt to increase to jump start that one, but that's the engineering.

But everything else is uh on this would be bundled up into like a WIFA loan, and then as a package for funding through those through a WIF loan project.

So these are all individual, but most of them all will be bundled up so we can get a WIF alone.

There's gonna be a few that we would like the housing water line that we'd utilize the fund balance and get it done right away.

The other ones would be through a loan process, except the uh water reservoir pump station and the well, but those are cash um that we have from our fund balance through the ARPA loan, the ARPA money.

Thank you.

So the houser waterline construction.

This is how long has this been a rollover on this budget?

This is this is coming up on the third year that we've rolled it over from from year to year.

The third year that it's actually been on the budget, but it's been talked about for several more years than that.

Okay.

Um because have we done anything out there to look at what's going on out there?

Have we covered up the line as we had told them we would?

Yes, we have.

And as far as what's what's been done with it, this project is already designed.

We have the design on it.

Uh, we've met with the property owners.

Um coming up on the 14th of April, we will bring several options to the council and get the direction from the council.

We're prepared to move forward with that starting on July 1st with the construction of Houser Road as the phase one of this project.

Uh we realize that that regardless of whatever option that the council chooses, ultimately the the houser road will in three of the four cases that we have, the houser road will be uh part of that.

And so we'll we'll do the housing road construction uh first to extend the waterline on housing road to tie in all the people on that south that are fronting houser road, and then in the following year we'll come back to address the Charleston Road, which which services the the Yarus property and Mr.

Shu's property.

Okay, so you said April 14th, you're gonna give us options on what we want to do.

Okay, that will fit in with the 750,000.

Okay.

And then the other thing, the Santa Cruz Village water line replacement.

I know that's only I don't want to say only $50,000.

But sorry, I speak like it's our money.

Um, what is that water line replacement?

That's a water line replacement in the area of the um it's it's the neighborhood north of the high school, I believe it's the La Siesta neighborhood.

We have a um a project to go in there to upgrade some of the lines in that are there that are all they're falling apart, so it's it's the the rehabilitation of the water lines in that area in that subdivision.

Okay, because Santa Cruz Village is right there, just to the south of us.

I thought, but that's a whole that that's not that Santa Cruz village.

That's you're talking about La Siesta, which is north of the high school.

Yes.

We'll just double check on that and we'll we'll confirm that that's the case.

Okay, because that's I'm I thought this was all considered um cotton city, but that's why I wondered about that line.

We'll we'll check on it and give you the definite the definite answer.

Okay, thank you.

Okay, we'll jump into the next one, which is the sewer.

Um couple on here, the very first one, the 4.7.

Um this one here um is also another vergie under their LOI.

Um, this project here um may be increasing due to project costs.

They um this has been this budget of 4.7 has been our cost for a long time.

And I we we feel that we're gonna have to verage is gonna supply us with that estimate of what the high end is.

We just need to have that for the budget capacity, even though it might be a high bid, which hopefully we're not gonna be near.

We just need to have the budget capacity to complete this project.

So if this project goes up, then we'll be utilizing a little more probably of the general fund and uh the the wastewater fund balance to complete that project, especially on the books.

We will also use some of the impact fee money that we have in the sewer fund that's left over, and we have about 450,000 impact fee that we can utilize towards this project because this is um not just a replacement, this is expansion.

So we can utilize that as far as funding.

Um the SNEX one, the 2.5.

This is one of the ones that we mentioned about when if we paying off the uh the water loan, this is where uh we would end up looking at utilizing this for.

So this would be a very good or sorry, wastewater.

This would be paying off the wastewater loan of the six point to have the 7.4 million capacity over two years, it's five million dollars to to do the water line.

So we would start the design, get it get construction going.

It'd probably take over about an 18-month period to complete, but um estimated cost over two years would be about five million.

So that $7.4 million capacity that we would end up utilizing would take care of this project, which we we feel is needed.

The belt press is another one that I want to make note.

This project cost might go up a little bit.

Um, this is also under the uh LOI, so we just want to make sure we have the budget capacity, so the project cost may jump up.

If it does, it's gonna take a little bit from the wastewater's uh fund balance on this.

And then uh the the next one just to make note um it's also on the LOI that the sun the the bar screen um just want to make sure we have the right amount so we may end up uh jumping that up.

The primary source on this is from that ARPA money.

So if there's any variance we have to, it will come from the uh sewer fund balance.

They have about three million dollars in sewer fund balance, so it has a capacity to pick it up.

But all the other ones that we have on here that are going down, that would all be part of a waste uh WiFa loan package that we we would come in couple of everything.

So the the rest of the projects would be brought forth.

We'll be get doing that here probably in the next couple months, working with Vergy and myself and with public works to get it's called a project priority list with WIFA.

You get that on, you get it before them so they can start building, you know, we can start building an application with it.

So we uh even with the price, we just have to identify the projects we'll be working with.

Is there any questions with the sewer?

Yes, thank you, Mayor.

Question regarding ARPA money, is there any concern?

Is this money that that we've already been given?

Okay, I just wanted to make sure.

Yeah, the the that ARPA money that came in almost two and a half years ago is about six point three million.

I just want to make sure that the current administration, there's no they can't say no, that'd be this administration.

All right, well, I'm talking about um in Washington DC.

No, no, okay.

So we already have the money in our hands.

Okay, just checking.

Thank you.

So then just finishing up with the uh sanitation.

We have the uh finalizing the in I this is a this place over 250,000 for landfill rate study and mass plan.

That's gonna come before council probably in May on it.

Uh that's gonna be probably not to that magnitude, it'll probably be 50,000 or so, but we're just leaving the budget capacity uh to complete it uh for that uh landfill rate study and master plan on it.

And and so um McKinsey will be has been working on that and we'll probably be bringing it uh probably May May time frame.

No, I'm actually planning to bring that to the uh end of April.

So we already have the contract evaluated, so we'll be bringing that to council for approval, and then that process is approximately gonna take about I think six to eight months for them to come before council with a master study.

And then the last one is uh purchasing a new backco uh for the cemetery.

So now be coming out of uh some the cemetery revenue and then their fund balance on it.

So that landfill study is a big number.

What what are the elements of that landfill study that are in there?

Yeah, so the breakdown of it essentially it's going to be looking at uh several different factors, so it's gonna kind of tie into the uh assessment that we did several years ago when we were looking at privatizing the landfill.

It's gonna be evaluating all those different options and then coming to council with uh some different options of what we can plan to do with the uh landfill, and then based on that guidance, it'll move into kind of uh different phases throughout the process of how we're gonna handle um whether it's mothballing the landfill, whether we're gonna handle uh the city's gonna retain and handle the landfill, and then what those costs are associated with kind of the the full overall value, including closure, post-closure costs, um, you know, adequately providing the resources that are necessary for it, or potentially privatizing the landfill.

So it's gonna be evaluating several different factors um in that process.

Brian, I have one that we I meant to bring up or streets.

Was it Frontier Street Micro Mill and Overlay Hannah Road to SR87?

There's uh $900,000 in the budget.

Yeah, but I think that funding went away, did it not?

You know, that was that Ciscomani money that hasn't been appropriated.

I don't think they fully have taken away.

Yeah, it did, as Katie said.

Yeah, because we still have that in there as a budget capacity in case something happens.

We have it.

It's a it's in the grant fund, anyways.

With it, it's not part of the streets budget, but leaving it as a budget capacity within the grants fund in case you know we get another opportunity for it.

His comment was it was part of the budget that never got approved.

And they put when the uh contending resolution was passed, it threw out that budget.

So now they have to start the budget process again.

I think uh McKenzie asked, does that mean we have to start the grant request over again?

He said yes.

Okay.

So I wouldn't expect that money to come anytime soon for that portion of it anyway.

Yeah.

I just want to leave it as a budget capacity with it, just so just so you know, it's in the grants fund as is uh we've upped our you'll see when we do the budget on the grants.

I've upped some of our state and federal by a couple million dollars just in case.

And then just the last two, just to let you know on airport.

We have the building of the T hangers and design.

These are both federal and it has federal and state dollars to it and uh city mat local match about 21,000 total but for the 800,000 850,000.

So um so overall, you know, this whole CIP for the 2526 is about 26.8 million.

Um, you know, we're utilizing, like I said, one-time money.

We're gonna look at loans, we're gonna look out paying off some of the existing loans to expand our our CIP.

And I think actually it's a very solid, very manageable CIP that's actually gonna do a lot of positive things in 2526 that uh you know staff needs to stay on top of and and you know initiate it.

And these things are being initiated now through design, and it's just a matter of moving forward with it.

So Brian could actually jump into and apologies too, Sarah.

I I didn't realize that the number that was requested there too is the 250,000 amount.

We actually got the estimate back, and it's like 45,000.

So it's significantly less than what's in there, but we wanted to leave that in there as a little bit of cushion just in case.

So apologies for that, yeah, yeah.

We don't spend it, we don't transfer it.

Brian, I I remember seeing it somewhere in the document, and I can't seem to find it now.

But what is the total number of projects for this fiscal year in the CIP?

Was it like 80?

75.

Okay, 75.

Thank you.

Five, yes.

I'm gonna put you.

I need my memory refreshed.

Can you our lease agreement for leased vehicles versus purchase vehicles?

I noticed we had a lot of vehicles we're purchasing for the police department.

Could you explain to me what our lease agreement is, where it applies, where it doesn't apply, and what vehicles we lease, what vehicles we buy.

Could you go over review that a little bit for me?

Yeah, uh Mr.

Mayor, Councilmember Snyder.

So right now, any le any vehicles we get we lease through enterprise fleet management.

So in the budget, the what we do not lease, and and part of that is equipment.

So, like in I'm gonna use the police department's vehicles.

We'll leave we'll go through enterprise, they they secure the vehicle, they do it.

It's a 60 month lease on that vehicle, but we we buy the equipment ourselves outright.

So we'll see a vehicle in parks or water or streets, um, community development, any of those uh sites, we will lease that vehicle from a uh enterprise.

When that vehicle um, let's say it the five the six sixty months is come and gone.

All we pay on that vehicle is uh I think it's fifty dollars a month admin fee on that vehicle.

We could turn it back in, they sell it, they give us cash value for that vehicle because they sell it.

That cash goes back towards uh reducing a lease on one of our current ones to reduce those expenses, or we can actually ask for that cash back and we we just put that back in our as a income on it.

But all vehicles that that we are getting for from that are in our COP are being financed through enterprise, and that expense is an operating expense in our budgets.

Do we recover the equipment then in the police vehicles?

Uh the the equipment we don't do, we buy those outright cash on equipment vehicles.

We just uh so on the equipment on the vehicles, we buy cash on it.

Turn them back, yeah.

Um we pull the we pull that equipment off, yes.

And most of the time on police vehicles, um they're they're for specific vehicles.

You know, it's for the Tahoe, it's for this type.

It can't go into an F 150 or anything of that nature.

But the radios, everything like that, laptops.

Councilman.

Um, one of the things we've investigated with the chief as well is Enterprise Leasing offers the package plan.

So right now we are purchasing it separate from the vehicle outfit, but Enterprise Terra that we work with does have an option where you can purchase all that as part of your lease program.

So they'll outfit it.

I know uh the chief and the captains are looking at the cost analysis of whether that's the best better option to go for a cost rather than buying all this all the equipment out.

Because like Brian said, once you buy it, it's it's it.

And you when you got to replace a vehicle that that stuff's no good.

We can't go and auction it off or do anything with that.

But if it's part of the leasing price, it just roll, they just roll it in.

They more than likely take those cars and roll it to another department that doesn't have the uh you know that can pay for so we're we're evaluating checking that out.

So that kind of wraps up the capital, it kind of wraps up the revenues.

Um now we will go back through the kind of the whole process is if there's any of these CIPs that we need to make sure we got a better number on before we hit the budget, so we're not we're on more on target than not.

It's this is the time we're evaluating it.

If there's any of those changes, they will be made note to council um kind of when we go through our budget discussions with it.

So council's updated on the you know if it there's any of those major changes on it.

Um but uh appreciate um taking almost three hours, but uh I I feel that uh it was getting the information on our revenues and capital and the fund balance, especially um to mayor and council.

I know that was a bit of a close out speech, but I just got one more question.

Um so for the um 2026 to 2030 plan.

Um I was just perusing the airport stuff.

Do we have anything in there?

Is one of those elements um possibly working towards recouping some of the income loss from hangar one?

I you uh somebody alluded to some ideas that um of stuff you guys were working on.

I I see there's some hangar improvements and stuff.

Is that something we're we're trying to do there or did you want to do a second?

I'm sorry, could you repeat that?

So we did have some income loss from hangar one being torn down, and I see that there's some money in various categories in the airport for hangar improvements.

Is any of that stuff sort of um earmarked for doing something that will uh create income like rentals of hangers or tea hangers or or whatever?

So yes, short answer is yes, it'll take a little bit.

So we have in this fiscal year still budgeted for the demolition of hangar one and getting that down at a more than likely the way we're going, it's gonna probably have to be a rollover project in the next year.

The city we don't have to cover that huge cost to build hangers and we'll get rent and whatnot from the from that long-term land lease great and then my last question on the five year thing was I noticed that there was some money um for uh sort of a feasibility uh rehabilitation of Toltec West Toltec and it was later in the the money and I I know it's probably just a placeholder for as that area grows but is that something that at some point we might consider moving up you know it doesn't have to be now but just because of the the growth in that area yes as the growth occurs in that area we'll definitely be evaluating that seeing where we can move that it's all about growth we just kind of pivot as it happens and where it's going so yeah the improvements in that area as growth happens would that include like um street lights uh roads maybe um some sidewalks just those kind of improvements all the above yep we just look at those and start evaluating them as as new demands coming from the residents and go from there good sorry Mr Wright I thank you and your staff for the hard work you did putting this together I know this was a lot of work and it was really digestible for all of us up here I thank you for that and I thank the rest of the city staff is showing up here and after pizza and staying up so anybody else on council have anything they would like to add question so with that I'm gonna I'm gonna call this adjourned