Next, uh, thank you for staying with us.

Welcome to the special council meeting on June 1st, 2026.

All council members are present.

First, we'll conduct a public hearing on the proposed fiscal year 2026-27 budget and proposed secondary fiscal year 2026-27 property tax levy.

I declare the public hearing open.

Miss Mosley, do you have any requests to speak from the public?

And the blue cards that you received are all I've received.

These this is everyone?

Yes.

Okay.

All right.

First, we'll start with I'm just how they were handed to me.

Mr.

Winstanley, uh, you're first.

And followed by on deck is uh Dennis Miller.

Mr.

Miller, you're on deck after Miss Wins Mr.

Winstanley.

And Mr.

Miller, if you'd like to come to the front.

I don't know where you're sitting at, but anyway, you can come to the front if you like.

David.

Good evening again, Mayor, Council members and staff.

My name is David Wynn Stanley.

I live in District 6 near Eastmark.

I would like to make three comments regarding the budget you are about to pass.

The first is to thank you both the city council and city staff for listening to us and responding to our comments.

Thank you for holding three community sessions very early.

And while there wasn't great attendance of these, our community was impressed that you made the trip all the way out to talk to us.

Thank you for understanding specifically our concerns regarding the structural deficit and addressing it sooner than had previously been planned.

It is the sign of a great city when citizens feel like their voices are heard and responded to.

Secondly, may I ask you as the city council to ask the question more often is this within the budget, or is it an increase or a decrease?

I have heard this asked, but suggesting perhaps more often.

For example, in recent presentations in study sessions on the budget, the transit budget was mentioned for being the source of increased spending due to changes between Prop 400 and Prop 479, but it was not mentioned at all during the discussion in the January council meeting.

Next week you will be asked to approve a $2.4 million increase in transit spending over the prior year, even though you just approved something in January.

Is that increase justified?

Lastly, I would like to ask you to remain vigilant on how our tax dollars are spent.

You have the subject on your priorities under uh council strategic driver of intentional government and transparency and in the city operational priorities of effectiveness and efficiency.

Using the transit system again as an example, uh according to Valley Metro's website, the Fairbox recovery for transit is five percent.

That means the subsidy is 95% of all the bus rider cost.

Saying it another way, every time a bus rider steps on the bus, we taxpayers are charged $13.

Valley Metro ridership data suggests that the downtown buzz carries seven passengers on a 23 passenger bus.

I know these are averages and details, uh and the details matter.

I'm just asking that they be looked at as an example of the details of how our money is spent.

I understand from Transit Director Jody Sorrel, who is an excellent, wonderful person, helped me a lot, uh, that there are bus network redesigns about to come from Valley Metro, um, but there's no mention of it in the county council report.

Um, and so I'm simply asking that we look into it in detail as the budget goes forward.

Thank you for your time and thank you for your service to your community.

Thank you, David.

Dennis.

After Dennis, we have a Tony McElpray.

Praing, uh, you're on deck.

My name is Dennis Miller, uh Mayor and Council, thankful to be here tonight.

Appreciate the chance to speak.

I'm a 40-year Mesa resident, and I've taken some time and gone through and looked at the budget.

Uh, and I wanted to talk about some of the things I see because part of it is a little bit confusing and misleading.

The police department budget shows a decrease of 14.5 million or 4.6 percent.

That got me excited.

It's a real cut.

We're making progress.

But then look further in the budget, and I also see a brand new department, Mesa Public Safety Support.

Budgeted at 23.8 million.

When you add those two together, public safety actually went up by 9.3 million.

So that was not a cut at all.

It was a reshuffling.

And that's not the only example or circumstance.

And centralized appropriation shows the biggest budget increase of 50.6 million.

But then looking further at the details, human resources is it up 22.5 million, and trust funds are up 22.9.

So when you put those two together, the real savings in that group is about 5 million, not 50 million.

Community service dropped 6.2 million, which sounds good.

But a new office of urban transformation showed up with a budget of 2 million.

Overall, the budget totals tell a real story.

1.732 billion last year versus 1.732 billion this year.

That's an increase of 225,000, which is basically flat.

After all the announced cuts and reorganizations, actual department spending did not go down by a single meaningful dollar.

So my question is whether the council would push and publish and share with the citizens of Mesa a breakdown showing which are real budget reductions and spending cuts and which are just shuffling moves between department.

Further, I would ask and encourage the mayor and the council work with the city manager to present a career reconciliation at the next council meeting so that the council and the citizens of Mesa would know what are real spending cuts and which are just moves and shuffles.

Thank you for your time.

Thank you, Mr.

Miller.

Next we'll hear from Tony McElprane.

Tony?

Hopefully I said it somewhat correct.

It's very phonetic.

Mayor Freeman, Council members, and City Manager Butler.

Thank you for the chance to speak.

Tonight, my name is Tony Maclepring.

I'm a Mesa resident and taxpayer.

I want to talk about something that almost never comes up at these meetings, and that is the retirement funds for Mesa Fire and Police employees.

There.

That is more than the entire general fund budget of 596.9 million.

Pension experts will tell you that anything below 60% is in the danger zone where the long-term mass starts to break down.

The budget puts 145.8 million toward pension payments.

110.9 million from the general fund, and it is not enough.

Under the PSPRS rules, which is a public safety personnel retirement system.

Those rules indicate that unfunded pension debt grows at 7.2% per annum.

That's every year.

The long-term math begins to break down at that point.

The actual actuarial rate set by the PSPRS board on the $691 million, adds nearly $50 million a year in growth cost or in growing costs to the city of Mesa.

Mesa is falling further behind, not catching up.

Chandler paid off its entire PS PRS debt, saving $8 to 10 million a year.

That no now goes to city services.

Gilbert has been paying its pension debt down fast.

Mesa has not.

Sure.

I'll summarize by suggestion that the public would like to see a plan.

I've read here recently that if we continue at this rate, in fact, the city has determined that they'll try to retire this responsibility or have the fund to 100% by 2042.

Well, that's another 15, 16 years at 7%.

That's nearly three quarters of a billion dollars that the citizenry of Mesa are going to have to shoulder.

Thank you very much for your consideration.

Thank you, Tony.

We had an in-depth discussion on that in our study session below.

And I would ask Sam over here, he's our budget and finance analyst so you can have an conversation with him on that because he has some great questions.

But basically, we have an amortization schedule to pay down our debt.

We're not like Gilbert and Chandler.

We're twice the size.

Consequently, we have twice as many public safety personnel.

And getting the debt that was incurred on Mesa was because of poor financial services by the public safety of public retirement system.

And the legislator incurred the debt on the municipalities to make up the gap.

So that's why we're in where we're at, is because the legislature intervened.

So we're doing that today.

I would appreciate learning more.

I picked up a few bits and pieces of that on the video downstairs.

Yeah, monitor downstairs.

Sam is quite knowledgeable on that.

Thank you.

That's a little past history.

Mr.

Hathcock, you're speaking, followed by uh Mr.

Scott Webster on deck.

Good evening, Mayor, Council, and staff.

Thank you for hearing from me.

I'm a Mesa resident of District 2.

I want to talk about the biggest single piece of this budget that gets the least amount of public attention, and that is what the city spends on its employees.

Total pay and benefits for city employees in this budget come to 763 million across all funds.

That covers 4,817 full-time positions.

When you add up the salary, pension, and benefits, the average total cost per employee is about 158,000 plus dollars.

Here's how fast it is growing.

Human resources spending is up 15% to 22.5 million.

Trust fund costs are up 14.6%.

Self-insurance, 14.9%.

Every category tied to employees is growing at double digit rates, two to four times faster than the budget as a whole.

On top of that, two new departments were created this year at a combined cost of 25.88 million, and only one department was cut at 2.4 million.

And hanging over all this is the pension problem.

Mesa has a $691 million in pension promises that it is not yet funded.

And this year's payments toward that are $145 plus million.

Um $110 million of that from the general fund alone.

That is more than the entire budget of most city departments put together.

Question one has the council set a target for what share of revenue should go to personnel costs and is $763 million within that target.

Question two, will this council publish a year-over-year staffing comparison by department, not just totals, so residents can see whether the workforce is growing or shrinking.

Question number three what is the plan to deal with a $691 million in unfunded pension promises?

And has this council looked at different retirement plans for new hires?

So residents can see where the 763.

Thank you, Bob.

Mr.

Webster.

After which uh Mr.

Kerry Davis here on deck.

Mr.

Mayor, members of the city council, thank you for giving me the opportunity to speak.

This is probably going to be a little tangential to the discussion this evening.

Um, and really what I'm looking for are just some assurances here.

So I'll raise some points, and I'm really looking for just something that says no, this isn't impacting our budget.

So if you'll hear me out.

Um for some time I've been under the impression that uh I live out in District 6, way at the far east end.

Um, for some time I've been under the impression that we had two or three data centers going in out there.

Somebody just recently informed me, and so I'm taking this at their word that there are actually many more than that going in out there.

Um I was told that there were 15 approved, and something like two or three more that are supposed to go in out there.

And uh that caused me some concern, and so I had some questions.

Generally um speaking, the land requirements, the electrical requirements and water requirements for say 15 average data centers.

And I use the term average because I don't have any data on what they are, um, are substantial and could potentially impact the infrastructure and rebite reliability of both our water and electric and electrical infrastructure out there on the east side.

Um people who currently live in District 6 probably aren't aware of these things.

The folks that I talk to, I uh will say that they're not even aware that there's one data center going in out there, so they're very unaware of what's coming at them.

The kind of expansion that we're talking about goes well beyond the changes taking place, like in the electrical infrastructure out there at Signal Butte and Elliott Road.

And they're also true concerns about the ability of of uh SRP to deliver that the kind of power that these centers will be able to do.

Mr.

Webster, I have to ask you, is this regarding the budget itself?

It is, and that's why I tried to preface my remarks.

And if I'm out of line, I'll sit down.

I apologize, but really ultimately what I'm looking for is some assurances.

It feels like we have a lot coming at us out there, a lot more than I had originally thought was coming at us.

And the question is is this going to show up in our is this going to show up or impact in our our budget?

It is not.

It is not.

And you can work with the vice mayor on that.

I'd send him an email.

I'd send it to the Did you get my email back?

Uh no, I haven't read it yet.

Okay, you had round noon.

You can't.

Okay.

Just send me any specific questions you have, and I'll get you answers.

I will.

I'll just say that we'd what I'd like to watch this more closely.

This is a lot.

There's a lot going on here.

Um, and if these things go awry, I I worry that we could potentially be feeling something from this, but I'll go ahead and just leave it at that.

Yeah.

Appreciate you coming.

Thank you, speaking.

You bet.

Mr.

Davis.

After Mr.

Davis uh Kathy Carlson, you're on deck.

Good evening, honorable mayor and city council.

My name's Kerry Davis, and I'm here this evening to encourage you to vote no on agenda items one A and one B.

I have compared the City of Mesa's 2025 year-end annual comprehensive financial report to our two neighboring cities of Chandler and Gilbert.

For the City of Mesa, the report reflected total liabilities for general governmental activities of 2 billion 787 million dollars, or not or 79% of total total assets.

The combined total liabilities for Chandler and Gilbert equaled 1,017 million, or only 30% of total assets.

Our city has more than twice the amount of liabilities of those two cities combined, and those two cities are actually larger than the city of Mesa.

Mesa reported a deficit of 59 million for general governmental activities, while those two cities reported a combined surplus of 205 million for 2025.

Our deficit was offset by a transfer of 138 million from the utility fund.

The current proposed budget for 2026-2027 reflects general fund revenues of 502 million and expenditures of 596 million for a deficit of over 94 million, which will be offset by a transfer from the utility fund of over 157 million dollars.

I believe it's time for the city council to put forward a requirement for our city manager to live within its means of resources generated from the general fund and stop rating the utility fund to cover its deficit.

It doesn't have to be done in one year, but it could accomplish, but I believe this could be accomplished by the attrition to reduce the size of government.

I believe it could accomplish this goal, which would allow the city to fund some of the capital improvements through internally generated surpluses instead of such heavy reliance on bond financing.

Thank you.

And again, I encourage you to vote no on the current budget.

Thank you.

Thank you, Mr.

Davis.

Uh, Miss Carlson, followed by Mark Kimball on deck.

Mayor Freeman, um, members of the council.

Thank you for this opportunity to speak.

My name is Kathy Carlson, and I live in District Five.

Miss Goforth, I am one of your constituents, and I have something you need to hear.

Every family and every business in our district knows the difference between a rough patch and a bad habit.

For 17 years in a row, Mesa has spent more than it brings in.

In year one, you call it a year a rough patch.

In year five, it's a pattern.

In year 10, it is a habit.

By year 17 tonight, it is just the way things are done, and that is the problem.

And here's where that leads.

It works until it does not.

The utility transfer that covered up the deficit at 50 million dollars is now 157.6 million.

Savings are going down.

Debt payments now cost 213.6 million a year.

Every year the city puts off dealing with this.

The fix gets harder and more painful.

Um Ms.

Goforth, I looked up your voting record.

The only no vote I can find is on a homeless shelter in 2023, a social policy issue.

On every fiscal matter, utility rate increases, $18 million for light rail, data center approvals, $42 recorded votes and not one no.

You found the courage to vote no on a shelter, but not on a single dollar of spending during a crisis going back to 2009.

That is not fiscal conservatism.

You have never said no.

Can you tell the district?

Can you tell the people of District 5 tonight what it would take, what number, what threshold for you to vote against a budget, or is there no line?

If a budget that has run a deficit every year since 2009 does not deserve a no vote, what does my ask is that the city manager stayed on the public record at the next city council meeting a specific fiscal year when Mesa's general fund will balance without pulling from savings?

Not a target range, but a year.

Please show us tonight that you have the independence to push back.

Thank you.

Thank you, Ms.

Carlson.

Mr.

Kimball.

And following Mark is uh Mary Maybino.

Mary, you're our last speaker.

Mayor Freeman, City Council, it's good to be with you this evening.

Uh before my comments, I have to admit uh I'm a bit envious of Mayor Freeman's bolo tie collection, and uh I mean that sincerely.

So thank you.

Keep up the good work.

Um I'm not.

Uh I need to make progress in that area.

I can help you.

But I that's uh it's a goal.

So I want to start by saying something that I think is important.

The Elevate Mesa framework you introduced at the February uh 19th retreat set exactly the right standards.

Transparent government, measurable progress, fiscal sustainability.

Those are the standards this city needs.

I read the official minutes from that meeting, and I agree with every word.

That is why I'm here tonight, not to criticize a framework, but to ask whether this budget lives up to it.

Your transparent government standards says progress should be measurable and public.

Your priority filter says every major decision should be financially sustainable and produce results people can see.

Those are good tests.

The question is whether this budget passes them.

Here's what concerns me.

The projected deficit for this budget more than doubled in 60 days, from 16.8 million to 35.9 million.

The city has been spending more than it uh brings in every year since 2009.

And no one has named a specific year when that changes.

Your high ground survey found that Mesa voters ranked transparency as their number one priority.

4.62 out of five.

The people of the city are asking for exactly what your framework promised.

I believe you meant it when you said it.

I am asking you to make sure this budget reflects it.

Question one, Mayor Freeman, can you help us understand how this budget meets the financial sustainability required in your priority filter, and what measurable outcomes we should look for over the next year?

Question two.

You said discipline today protects Mesa tomorrow.

I think you meant it.

What steps is this city council taking tonight to start turning that commitment into results for the public that the public can track?

So I ask that the city manager show at the next city council meeting how this budget passes each of the five tests in the Elevate Mesa priority or priority filter.

Mayor Freeman, the Elevate Mesa framework set the right standards.

The residents of this city are behind you on that.

We're asking you to make sure this budget is beginning or living up to those standards and not just beginning uh the beginning of talking about them.

We want to be proud of what Mesa is building.

Please help us get there.

Thank you, Mark.

Thank you.

Mary My name is Mary Mabineau, and I'm from District 5.

We need a budget to balance without pulling from savings.

I've just spoken on how you can't blame decreased revenue on the flat tax and the no rental tax because the urban revenue sharing is now 18% instead of 15%.

And also because cities now get taxes from online sales.

The ever increasing budget deficit can be blamed squarely on overspending.

Even if we did have a primary property tax, it would only generate approximately 50 million.

Instead, the utility transfer fund, which is justified to replace a primary property tax, has now risen to over 157 million per year.

Savings are shrinking.

Unfortunately, the city can't be all things to all people.

Families have to watch their expenditures, and so should you.

Thank you, Mary.

That is all of them.

Okay, thank you.

Mr.

Butler, excuse me, I made some notes, maybe you did as well to address some of the items.

Yeah, Mayor, if uh sorry, go ahead.

Well, I if you can talk about, you know, first the utility transfer, you know, that seems to raise the forefront.

Of course, as you know, we've been doing that since 1947.

It's not a new thing.

But as uh utility rates increase, uh, then the transfer obviously increased to our general fund.

That was done by the council way back in in 47.

But regardless, uh, that's why we don't have a primary property tax.

We're on the few municipalities that have that.

But I think the question was raised do you feel this budget is uh physically sound so far?

And can are we spending more than we're taking in?

Yeah.

Mayor and council, um, forgive me for repeating some of this um downstairs from downstairs, but um, for those who weren't able to watch during the study session, just again want to thank you all um for your encouragement, your direction uh to do more than where we stood at this point last year in our fiscal situation in our five-year forecast.

And we have uh heeded your call and responded by finding more efficiencies, more budget savings.

We've now, with this this budget once adopted, will equal $56 million in general fund cuts that um we have made over the last three fiscal years to again uh address a situation that in all due respect to others' beliefs on this were not created by um by our doing, and it certainly wasn't created by overspending.

It was it was um made by the legislature taking away revenue from the city of Mesa that we had counted on.

Uh, we do not have a primary property tax, we do not have a food tax, and so any major disruption to uh and expenditures or to tax revenue like we saw with residential rental in particular, but the compounding impacts of incorporation of another municipality, conformance with the federal HR 1, and yes, uh conformity to the state flat tax all added up to uh the budget deficit that was not of our making and was not something that this council created.

But because we had been responsible as an organization over the last several years when uh after COVID and we saw higher than expected uh revenue, higher than estimated revenue, instead of spending those dollars, we put those away into our rainy day fund in the event that we did have a catastrophic event or unforeseen circumstances happen.

Little did we know that all of those circumstances would happen in a short period of time.

So we're uh now sitting at some of the most robust reserves in the city's history, and so we're able to responsibly draw down those reserves so that we don't have a shock to our citizens that we do not have to cut services only then to add them back because this was something that was an unforeseen circumstance.

And so when you can reasonably, just like as a private citizen, if you have a safety net that's saved up for when that air conditioning unit goes out unexpectedly, then you can pull from that.

But as I said downstairs, and I'll say it again, we're the equivalent of the air conditioning went out and the car broke down on the same week.

And and so we've had to draw from our reserves.

But even by doing that, even by doing that, we stay ahead of council's overly ambitious policy of our reserves.

So we're not doing this at any sacrifice to um to our reserve levels.

Those stay very robust.

And so you don't have to to trust me or the hundreds of pages of publicly available documentation that supports this budget with backup materials with line items with line by line expenditures.

This is also validated through our annual audit that looks at our expenditures, and then also by um the rating agencies that again have given Mesa some of the highest financial marks uh in the country.

Triple A rating uh by Fitch and a double A rating um by SP.

And you don't get that by fooling people whose job it is to look at city financials.

They know that we have sound footing, they know that we have robust reserves, they know that we spend responsibly.

And just because some people don't like some of the programs that are being funded doesn't mean we're spending irresponsibly.

That's a philosophical and policy difference.

That's not a financial difference.

And so people can take umbrage with that, but that doesn't mean that's financial mismanagement.

And to say otherwise is a gross misrepresentation of what this budget represents and the hard work that um all of our departments and our budget office have gone through to deliver a very fiscally responsible, extremely transparent budget, which many of the folks who um raised some of the questions, all of that is available and has been available ever since the first budget introduction went online.

And yes, some of those numbers will change, and we've been able to explain to that.

Um we've spoken to that for hours on end at council meetings, and I understand not everyone has the ability to follow our meetings day in and day out, but that's what you're elected to do, and that's why we have been presenting that information to you, answering questions uh throughout this process over the many months um that we've responded to your individual questions, going back and addressed issues that you've had.

You've had good questions and you've pressed us and you've asked us uh to explain.

And so we believe that what's represented today uh is a very sound fiscally conservative budget that reflects the priorities of this community, many of which includes items that were voter adopted and that we have a responsibility to our voters uh to deliver um it's per the commitment that they made at the ballot box requesting those items.

And so that is the direction that we're moving forward with.

We're I'd be glad to have Brian come up to address some of the specific items about the deficit.

Again, you can't apply, and I said this downstairs, because of the way state law structures some of the requirements that we have to account for all expenditures and all possible expenditures and expenditures that we don't even know could potentially happen, and we have to build that into our budget uh in the event that if that does happen, um, as has been alluded to, a micro burst at Falcon Field, and then we had to have repairs.

If we did not build that into our budget and a safety net into our budget, we would not have been able to spend that money, even though we had it, and even though that had caused critical damage uh to an important facility in the city.

You and I don't have that restriction with our personal savings account.

If we have an unexpended uh unexpected expense, we're able to dip into that account um if we if we have saved up that money.

Under state law, if we have not set our budget to uh prepare for the unexpected, then we can't even we can't spend that money even if we have saved for it and can responsibly spend it.

So what you see is a budget that is now almost two years ahead of being back in the black than when we sat here a year ago.

I'm very proud of that.

And I'm very proud that our departments rose to the challenge.

They heard you, you challenged us, and we delivered.

And I feel very uh positive about the trajectory of this budget.

I love the direction that we're going into.

We never know what the future holds, but this economy has been very resilient, and so we've been able to responsibly manage these while um doing everything that we can to continue to tighten our belt and look at expenses.

And so I feel very strongly and passionately that this budget addresses those issues and moves us very positively in the right direction.

But I do because there's misinformation that's out there because we've heard it from numerous sources about a 17-year budget deficit.

That's just flat out inaccurate.

And so um I'd love Brian Richel to come up and be able to address that in particular, and then if there's any other areas that council would like us to expand upon, I'd be glad to do that.

Okay, Brian.

You've been called up.

Good evening, Mayor and Council Brian Richel, director of the Office of Management and Budget.

So, in particular on the topic that the city managers mentioned about having a deficit spending for the past 17 years.

I created a chart, and actually, when we go through our presentations when we have actuals to budget.

So for the past five fiscal years, four out of the five fiscal years, we have had actual um surplus net sources and uses.

So, for instance, in 2021, we budgeted, yes, a negative 11.1 million dollars of uh net negative net sources and uses.

The actuals that came in was 76.6 million.

So there's a positive right there for uh revenues coming in higher than expenses.

2122, the budget was 0.6 negative.

We came in at negative 18.2.

That is negative because we had revenues, unexpected revenues increases that we decided for as one time we would transfer those out for one-time costs.

Uh in particular, we were seeing significant increases in our project costs, so we set it aside for project inflation, and then also for uh just our municipal or uh buildings and our infrastructure, we set some monies aside for those one-time costs also.

Now, the three years after that, we've had actuals of 30 point 34.7 in 2223, positive 27.8 and 2324, and a positive 16.8 in 2425.

So we have had uh we may budget very conservatively and show a negative net sources and uses.

However, our actuals have come in above our budget, and we have had positive net sources and uses.

Okay, while you're there, council, do you have any questions for Brian?

Otherwise, I will allow council to ask, you know, any comments.

Any questions for Brian?

So just for everyone listening, you're basically saying we have not spent more than we bring in.

Mayor, council member Taylor, that is correct.

On the actuals, our revenues have come in higher than what we have expended.

And and again, mayor and council.

Oh, sorry.

And you're saying that according to state law, we have to fill up every single drop in the glass so that we can budget for unforeseen circumstances in the future.

Right.

Unlike what we would do with our own finances.

And that makes it look like we're spending tons of money.

Right.

It does.

We fully load the budget as Mr.

Richel has talked about during this process.

We we budget as if every expenditure, every uh position would be filled.

Um, and then on top of that, we have to add those um the safety net that's required by state law in order to forecast unforeseen circumstances that could happen.

And just to give you an example, uh, and and I know uh Brian had shared some of this with you, but in our CIP, we uh budget every project that could potentially go under construction that year, even if we know that that project isn't going to uh actually happen, just to give us the flexibility.

Maybe the priorities change.

Maybe as Mr.

Wynn Stanley said, we we run into an SRP issue and we have to pivot to another project that's in the queue.

And so that gives us that flexibility in FY24.

We budgeted 700 million dollars into our CIP and we ended up spending 297 million dollars that year on projects.

That shows you, though, we fully loaded the budget in order to make sure that we had the flexibility uh to adjust and adapt to the needs out in the community as that changed.

That is exactly the way that we have always gone about doing that.

And yes, that is different than the way that you or I manage our personal budget because we have different restrictions and different requirements under state law that ensure that transparency, but it also overinflates what the number is that we'll actually spend.

But we always reconcile that.

And what Brian has said all along, we use very conservative revenue estimates, and we make sure that we uh take into account all expenditures, and so that's why on almost every year we outperform our numbers and that we come in for the black for those those different years.

And so it's a very fiscally conservative model that has served us well, hence the reasons why we get such superior ratings uh on our bonds, why uh every audit comes back of the sound financial principles that this organization employs, and that has allowed us to be a fiscally responsible organization that is a great steward of taxpayer dollars.

Mr.

Adams, did you have a comment?

Yes, thank you, Mayor.

Um, Ms.

Taylor, are you good right now?

Mr.

Richel.

Oh, I'm sorry, no, go ahead.

Mr.

Richelieu, I first want to start by uh telling you that I was impressed with the job that you did at uh one of the public meetings that we held concerning the budget um out at Power Road.

I think that was a great move to uh bring staff forward.

You answered some tough questions, and I think that was very constructive, and I hope we can continue that that process.

Um just a couple of questions, Mr.

Richel.

I I think I'm looking at the uh spreadsheet that you just referred to with the budgeted and then the actuals.

Um these numbers um in total, these are these are audited, these are subject to the audit that we perform.

Would they not be?

Mayor, council member Adams, they are so this is the general governmental fund, which contains the general fund and the quality of life fund, and they are audited uh uh on an annual basis by our independent auditors.

Okay, and that that firm would be Clifton Larson Allen, a very well respected nationally known uh accounting firm.

That is correct.

Okay, I for what it's worth.

I I have experience with CLA through my service on a bank board, and they do a tough job.

You know, they do a very thorough job.

So if you're telling us that these numbers are uh subject to their audit, I have no reason to doubt their accuracy.

Um, I'll just make the comment.

We've we've had a lot of numbers thrown around tonight, and I've received communications from concerned people who are throwing around a lot of numbers, and I guess the question that I would ask is I I'm comfortable relying on these numbers that you've provided us because they're audited numbers.

Uh a well-respected firm has audited our books.

And I would just ask, we've heard some interesting numbers and dates and 17 years and things like this thrown out tonight.

How do you know that information is accurate?

I know this information is accurate.

So I I'm not trying to downplay the concern, and I think the questions and the inquiries and the demanding that we are transparent is a good thing.

But this information starts to flow, it gets my attention.

I want to find answers, but the first thing I always ask is how do we know those numbers are factual?

And I think that's something that we have to keep in mind.

But so thank you.

Thank you, Mayor.

Ms.

Duff, did you have any?

Sure, I'll make a comment.

Um we go through this budget process for multiple months, four or five months.

And you know, it's been really hard the last couple years making the cuts to programs.

We're a growing city, we have needs, we have more library, another library um police station, fire station um utility infrastructure.

It goes on and on to really make sure that we are serving our residents.

And well, we don't have a sales tax increase.

We don't have a property rate increase.

We have uh what was our utility?

It was one and a half percent, something like that.

Um that's what we're not increasing any costs, there's service fees, we're trying to make ends meet, but the average person is not incurring a huge amount of increase for this growing amount of services that we provide, but we keep on cutting programs.

And the thing that bothers me about programs and serv community services, looking at our streets and our neighborhoods and the quality of those.

And as we can continue to cut more and more, but at what point do I say, I want to live here?

I don't know.

I want to be in a place that's a great city to live, and we're doing our darn best to keep it that way.

But shall we cut more?

Should we just be a police state?

Shall we just only have public safety?

Maybe cut our parks, maybe cut our libraries, maybe cut our arts programs, um, our street improvements, our code compliance.

You know, each of these um departments, they're they're not huge budgets, but they mean a lot to our city.

We have to think about the quality of our life that we're trying to achieve here and be in a place that we can be part of and have the amenity and the common good, the common pride of the city.

We have excess reserves that we accumulated during COVID as the city manager had mentioned.

We're using them responsibly to bridge a lot of other cities are increasing their sales tax, increasing their utilities by double digits.

We're doing pretty good.

But think about what you want cut.

We can kick keep on, we can keep on cutting, but at what point do you still want to live here by aggressive cuts if that's where we want to go?

Or we're making moderate cuts and making ends meet, but we have to retain the great place that we've known to be.

Thank you, Brian.

You can sit down.

Oh, you have okay.

Yeah, I just looked to my right.

Um, so Brian, that we've heard, I think Scott mentioned state law requires us to balance our budget, right?

We we've heard a couple of comments about deficits.

We are required by state law to balance our budget, correct?

Mayor, council member go forth, that is correct.

State law uh requires every municipality to adopt on an annual basis a balanced budget.

And what a balanced budget is your total expenditures equal your revenues that come in plus your other resources, which is your fund balance.

So that is a balanced budget.

Okay, your expenditures cannot exceed your resources.

That is correct, and that's what we do every single year.

Yes, every year.

And then for what our reserve savings is for those known planned costs and expenses, as well as what Mr.

Butler stated, any contingency that we may not have planned for, correct?

So we may know in a couple of years that we want to make some sort of expenditure, and so we start putting away in our reserve fund in order to make that purchase or make um make that expense.

Is that is that how we use the reserve fund?

It's not like a oh goodness, we we we spent more than we have, we should probably dip into this.

Mayor, council member go forth.

Yes, that is that is correct.

That's the the philosophy that the city has is so, for instance, the example I I give is the the police radios.

We know we replace the police radios, it's a significant amount.

Um we do it over a two-year period, but it's about 18 million dollars.

We do it every seven to nine years.

So we know that's coming.

We do have a forecast.

We present a five-year but um in-house we have an eight-year, so we know it's coming up.

So we plug in that expense in the outer year, but since we know it's coming up, we want to make sure that we have the reserves and enough revenue that are coming in these fiscal years to be able to pay for those amounts.

Yeah, so any smart like any smart organization, we plan for those things and we put them in reserve.

Um, and we intentionally dip into it when we're ready to make those purchases or or or incur those expenses.

So Jim described the budget, and I think it was very it was um it was a good way to s to describe it to people, which is it's a maximum expenditure limit, and and you alluded to this too, Scott.

This is not necessarily we we as he said, we we budget extremely conservative.

This is the maximum we can spend by law, not necessarily that we're going to.

And just to remind everybody, every expense then comes back to us, every project, so that we say, yes, we still believe this is a priority, and we want to make this.

So if it's uh we we decided as a council, if it's a hundred thousand or more, you will come back and get permission to make to make that expense, correct?

Mayor, council member go forth.

That is correct.

So the adopted budget and the tentative budget, that is, as you mentioned, that is the maximum amount that any municipality can spend.

That doesn't mean that they're gonna go ahead and spend it.

It's a plan.

It's like if you budget for a vacation, you have a plan.

And so you may uh not go and hit that plan.

And so that's what the uh city has done is this is the maximum expenditure.

And as uh Mr.

Butler, um City Manager Butler mentioned, even about the CIP.

We budgeted 700 million dollars.

However, plans change, and we only spent 200 million dollars.

So, for instance, fire station 223.

We budgeted the whole thing because we were look we were hoping that we would be able to get that fire station done within a year or two.

Well, plans have changed.

We had to push it out, so now we have to push out that budget.

So that's how we're when we um budget it, we want to be able to make sure that we're able to finish those projects or finish that expenditure that fiscal year just in case.

But plans change and um things maybe may need to be pushed out.

So it's kind of safe to say this budget process isn't one vote.

It's not a well, I'm just gonna decide how I'm gonna vote today.

This is ongoing.

The this happens throughout the year, whether when these expenses come in to us as a council, we we get to evaluate it again.

Is this a priority?

Does this continue to be a priority?

Do we have the bandwidths to take this on?

Um so this happens all throughout the year, and we you we re-evaluate the team at OMB evaluates the budget and the forecast all throughout the year.

This the budget cycle, the budget process is three months.

We go through, we've been discussing this since February, and the major a lot of it happens on the dias during study session, but a lot of it happens just behind the scenes.

We ask you questions, we have meetings, we try to understand, you educate us, we make changes, we ask for changes.

This is a long, this is a long process.

Not only does it happen throughout the year, but it intensely happens in three in three months.

So that's where the governing happens, not necessarily on the yes or no vote the night of.

If you're doing if we're doing our jobs, we govern for every day, day in and day out, and for this process in for in particular, it happens, it's intense for three months.

So I just wanted the public to know this is not a we get it, and tonight we're deciding.

We've been through this process, we've been in meetings, and we've asked questions and we've made changes in this process, and tonight we should come knowing what we can support or not support.

Um, it shouldn't be a surprise, and it shouldn't be um if we've done our job right and we've collaborated, we should all get to a position that we can we can support.

Thank you.

Thank you, Miss Goforth.

Ms.

Taylor, do you have any closing remarks?

I do.

Thanks.

Um again, I like to stay on time, so I wrote some of this out so I wouldn't go over more than like two minutes.

Um I don't have any questions for you, Brian, but I did want to say genuinely thank you so much.

I know you spent Brian spent time with me today for almost two hours walking me through even more information with the budget.

And I have lost sleep over this.

I have been nervous for one of the first times being up here.

Um the budget is a big deal.

It's incredibly important to the Mesa taxpayers, it's important to the businesses, it's important to me.

I think it's important to my colleagues on the council.

And I am so so thankful for the hours that I have had to ask incredibly annoying questions over and over again.

Some of them I'm sorry, I know I've probably asked three or four times.

And I want to thank you, Alicia, because you have made a really good point that we do govern throughout this entire process.

Um, so just yeah, just thank you.

I also want to thank all of the City of Mesa staff um for the tremendous work that went into developing and refining the budget.

This includes meetings that were held in three different locations during our budget season.

Um, Brian, you gave an excellent presentation three times.

I saw a lot of people come in with what I would say were stern expectations, and then I saw their heads bobbing up and down as they were starting to put a lot of the pieces together because of your presentation.

I am a new council member.

This is my first budget that I'm voting on.

I have asked a lot of questions, I have sent many emails, I have been asked a lot of questions, and I've requested many meetings.

Every staff member that I have worked with has maintained an incredibly professional demeanor demeanor.

They have been patient, they have been helpful, and I am so grateful for their efforts.

I want to acknowledge that this budget addresses multiple things that I even campaigned for.

There were priorities that I heard from residents while I was campaigning.

Safer communities.

That was a big one.

Um we have granted the MOU to public safety.

We want to keep public safety top tier in the city of Mesa because that is something that matters to us and to our residents.

We voted down the sun air.

That was important to my residents in district two.

We said that we wanted to have better roads.

Well, the expanding of Valvista is happening, and yes, I live right by it, and I know it is obnoxious, but it is to give us safer left-hand turns and more space for traffic, and that does obviously cost money.

Um, economic development and revitalization.

It was one of the things that I was advocating for as a district two council member because my district has areas that are suffering from blight.

There are crimes being committed.

I am the hotspot for the crimes in Mesa.

It's in my district.

So I recognize the need because the residents are asking me, what are you gonna do with this dilapidated property?

Um working on becoming a fiscally responsible government was something that we said we were going to do, and I have had so she is correct.

We have had so many conversations behind the scene.

What does this mean?

Why are we spending it?

How long have we spent it?

What is it gonna do?

Is it gonna increase the budget?

Is it gonna decrease the budget?

Our treasurer Mark, I don't know if he's here, but he was very hi.

He was extremely courteous and asked answered a lot of the questions that I had because I didn't know what the treasurer did for the city of Mesa in detail.

This budget does seek to invest very wisely in public safety, infrastructure, economic growth, and it includes meaningful efforts to control spending and address long-term structural budget challenges.

I have learned about social equity platforms and bonding that look to spread the cost of a project over the years that residents will live in that area so that if that resident moves, they did not just bankroll that entire project up front and didn't enjoy any of the amenities they paid for.

I didn't understand that philosophy.

Now I do.

It is very, very pragmatic.

I have also wanted to say that this budget meets Arizona's legal requirement for a structurally balanced budget consistent with guidance from the attorney general's office, and it does maintain healthy reserves.

Thank you again to Brian.

With all of that said, for very sad and unforeseen circumstances, I was gone for approximately a month and a half during a significant portion of this budget process.

I'm sorry, I lost a loved one.

I have spent considerable time meeting with staff, and many people have done an excellent job explaining this to me.

I lost my brother in the middle of all of this, and I didn't think I would cry, so I'm really sorry.

Unfortunately, I lost a lot of the time that I planned to spend asking the questions that would help me go out into the public and properly convey the information that I was very passionate about.

Government transparency was the number one and most important tenant at our council strategic planning session.

And I think it is important that we as a council are transparent as people.

So I will say, I'm gonna quote Dave Ramsey.

He says, Don't buy it if you don't fully understand it.

While this is obviously more important than a purchase, I believe this principle applies to myself.

My vote is a reflection of my own responsibility to fully grasp what I am voting on and approving.

And I cannot express to the public enough that your staff that works at the city of Mesa genuinely cares about your financial well-being, and they come and they tell us exactly why they're doing something, and you can go to them too.

And we, as your council members, can be a voice for you.

So if you don't understand something, do come at the meet to the meetings, but please reach out to us so that we can be a bridge between you and the staff member who's the expert in that area.

So I have to rely on the expertise of the men and women who do this day in and day out and understand things at a much deeper level than I do.

This is an honest acknowledgement that I did not have the time and understanding that I comprehensively need to support the budget of this magnitude.

For this reason, I am going to vote tonight.

But my goal is to be as knowledgeable as I possibly can be, so that from a year from now, I can leave a meeting like this one tonight and go right out and convey the information that I need to listening and questioning ears.

So I just wanted to say thank you for your time.

I think you did a phenomenal job, even helping me now to understand more about it.

But I shouldn't have to ask those questions right now in this meeting.

I wanted to have that knowledge before this meeting.

So thank you so much for your time.

Thank you, Miss Taylor.

My my parting comments before I call for a vote is I want you to know that our city manager, we requested that he set up a department called the Department of Innovation and Efficiency.

They're going into every department and looking at where things are redundant, staffing-wise, subscription-wise, things that we've done in the years past.

And we've saved uh millions of dollars by doing that.

And that department will continue to look into every department.

Just because this budget we vote on tonight does not mean it stops here.

It depends it means that we will continue to look at the budget for the following year after this budget session, but it sets the precedent that July 1 starts our new budget.

And as it's been said before, you know, this this expenditure is just an authorization.

It's capped.

We cannot spend more than what we've authorized, and we continue to hold to that.

And as you found out tonight, there's a lot of monies that carry over from subsequent years to make the budget look larger than it is.

But until those monies are expanded into our CIP projects and others, then we'll use those monies.

For that reason, we have the data, we have the uh KPIs on it, we follow that uh very closely as a council to make sure we're following in the metrics that we set for policy and for voting tonight.

So with that council, if is there is there any comments from anybody else?

If not, I will call for a motion to mayor with with all due respect.

I wasn't gonna I had some additional comments, but I didn't think they were appropriate when Mr.

Richel was at the at the podium.

So if I may, yeah, please.

Uh I'll be brief.

Um last year I did not support the budget.

I voted no.

And that was a difficult vote.

There were many parts of the budget that I supported.

There were a few areas that I did not.

Um, and frankly, I was a new council member.

There's a lot of detail here.

A lot of detail in this budget.

It's not a simple budget, and I've worked with budgets for 30 years.

Since then, I feel we've seen a positive change, and I have learned a lot.

What my colleague just discussed is absolutely true.

There's a lot of questions to ask.

There's a lot of information to glean.

What we have today, though, is we have a new city manager in place.

And the working relationship between management and the council, I believe, has improved tremendously.

I feel communication is open.

I feel uh he is absolutely receptive to the direction of this council and our questions.

There's definitely a new attitude, and that is apparent to me, and that matters.

It matters huge.

You know, over the past year I've through various conversations, I have pushed for a path to a quicker balanced budget.

It's clear to me that management has listened.

And it appears the majority of the council is on the same page with that, if not all of us.

The current fiscal year budget 2627 moves us closer to balance sooner than before.

As Mr.

Butler pointed out, uh almost two years sooner than what we were looking at last year.

I'd prefer to get there even faster, but the reality is I'm not a fan of draconian cuts.

Um there would be a lot of pain involved in that, and I don't think that's what the majority of Mesa residents want.

I support this budget as a step in the right direction and as a sign, particularly a sign that progress is being made in the right direction.

And I support it most importantly as an acknowledgement of the fact that management has heard the concerns of council, they've listened, and they've taken action to move in that direction.

So uh thank you, Mr.

Butler and your team.

Thank you, Mr.

Richel.

Um I appreciate the fact that you have listened, you have taken appropriate action, and I think that's reflected in the budget we have in front of us tonight, which I'm happy to support.

Thank you.

Thank you, Mr.

Adams.

With that said, uh, I'll entertain a motion to approve item one B.

Is there a motion?

Thank you, Mr.

Eddia.

Thank you, Miss Duff.

Please cast your vote.

Thank you.

The motion passes.

With that, is there a motion to adjourn?

So moved.

Thank you, Vice Mayor.

Thank you, Mr.

Edia.

All in favor say aye.

Aye.

We're adjourned.

Thank you for the most important.