Welcome to the Mesa City Council study session for November 13th, 19 uh 19.

Wow, where's where's my brain this morning?

How about how about 2025?

Um council member Adams is participating by Zoom and all count other council members are present.

Council item wants to review the agenda we have for Monday, November 17th.

Uh council, if you want to go through that, if there's any questions, uh let's uh do that mayor just to um confirm six A is coming off the leave.

Are you potentially uh Mayor uh council member?

Are you potentially looking at a previous version of the six A was the Sun Devil auto right now?

Six A is the capacity fees.

So okay.

Yes, I was looking at a previous version.

Whatever Sun Devil Auto is.

Yeah, Sun Devil Auto, I know was put was um asked for a continuance right till December 8th.

That's right, yeah.

Okay.

So it's not sun double.

Yeah, so if you've refreshed your maybe try refreshing your own, I I still get six A Sun Devil.

Okay.

Uh I do as well.

It won't be sense.

Okay.

So IT needs to require okay.

Uh yeah.

Okay.

Well, APER doesn't do this.

Yeah.

Well, yeah, that that will be the final that's posted today.

I apologize.

I have uh I have a preview version in my hand, so uh so my apologies on that.

But you um so the Sun Devil Auto has just asked for a continuance that they will for the December 8th agenda so apologize for any confusion there.

Do you know so capacity fee is still 7A or that's now 6A?

Uh on the new agenda that you will receive this afternoon, uh that will be the new 6A.

So uh Sun Devil Auto will come off and then that just slides everything up.

So capacity fees become 6A.

Sorry, I'll wait for it to refresh then.

Thank you.

Yeah, sorry about that.

So 6A doesn't stay on and just say continuum.

Right, it'll just come on.

Yes, sorry.

Okay.

Oh, Miss Goforth, good thing you brought that up because uh there will be a change there.

Yeah, thank you.

I'm gonna ask a question on 4C, the FFAD for the uh Sun Air.

Um my question is how many rooms are there?

And again, what are we purchasing with those dollars?

I know furniture's fixtures and equipment, Candace.

You could just give us an overview again.

Yes, good morning, Mayor and Council.

The furniture fixtures and equipment related to the Sun Air Um project is the for the 64 rooms.

So there are 64 rooms in this particular facility, and this covers all of the the bed frames, the tables, kind of a shelving unit that would be in the place of a wardrobe, so a shelving and the mattresses.

No playground equipment or anything.

Not in this contract.

This contract is with Goodman's, and so this contract is specifically for outfitting the rooms and the uh small office area.

Okay.

Did we obtain uh competitive bidding on that cost?

Um Mayor and Councilmember Adams, this is through a state contract, so it is off the state contract.

There were two vendors that were reviewed, and we toured sites, the staff toured sites to look at those particular the um furniture that was associated with each vendor.

This vendor was found to be the best fit for our facility, and so this is off of a state contract, so we get that pricing.

How often do we compare those prices to to the market?

That uh mayor and council member Adams, that is probably a procurement question.

Um we do have the ability to go out for RFP.

We also have the ability to come off of a state contract.

We have found that the state contract does give us very good pricing.

And staff is coming up right now to help answer that, Councilmember Rams.

Hello, Mayor.

Um, Chris De Garcia Procurement Administrator.

Um we can typically when we use a cooperative contract, we tell our departments to review at least three cooperative contracts to make sure that you're picking the best contract.

So they in the state contract, it is competitively bid, and it look it looks at state usage.

Um so when you look at percentages of the state contract or a save contract or any multiple contracts, we're getting the best pricing.

And we do ask the departments to um review those different cooperative contracts that are available to make sure they're picking the best one.

Mayor, I'd like to I appreciate that answer.

And uh just uh mayor, the reason I'm not going to be on video much of this is number one, the picture looks better than what you're looking at now, and I've got a very bad connection here.

So I'm here.

I'm just gonna put that profile picture back up.

Thank you.

Ms.

Steph.

I just wanted to note it um on the council report for that furniture purchase, it does provide a 10-year warranty as well on the fixtures.

I guess my question is I just wondered how Mesa businesses could be competitive in this bid process, you know, for procruits like this 430,000 is a lot of money.

And and you know, I think if if it was split up between Mesa businesses, if they have a chance to bid on or if they even knew about it, you know, how we can do that in the future and and keep that within our Mesa.

Yeah, Mayor, um we do have the option to do our own solicitations and do our own proposals.

Furniture is unique in the fact that it's hard to spec.

There's lots of different pieces and manufactures and um so it's always an option um to do our own solicitation.

Um but when we do our own solicitation, our quantities are our quantities versus using a state contract where quantities and spend are you know looking at multiple usage and quantities versus just our quantities.

So, you know, we hope that we're getting the best pricing using a state cooperative contract, but we do always have that option to do our own solicitation and spec those items and then you know contact the local businesses or if they're registered through our system, then they get notified.

But usually cooperative contract, we just look at those that are available and then do our due diligence and comparison off of those contracts that have already been competitively bid and awarded.

Yeah, not to get in the weeds, but I'm thinking if I know we're buying refrigerators and microwaves, right?

And we have some large appliance dealers in Mesa.

Yes, those type of mayor, um, those type of items when it comes time, um, yeah, we can contact our local vendors.

I know there's lots of local vendors that are on contract for appliances and those miscellaneous items that we can definitely do that outreach and see what is available for us to use or do or do a quote um depending on what the spend is, we have multiple options to look at.

So are appliances part of this 430?

Mayor, they are not.

This is just the furniture, the outfitting again for the the rooms themselves as well as um office furniture.

Okay, so and and just as as a note, mayor, this is um specialized furniture, and the fact that we want to make sure that this is durable over time for this particular use, and so that does make it a little bit unique um to the type of furniture that we would normally purchase.

Okay, that was a question.

I'd uh I just suggest that as we look at these things in the future.

I uh concur with the mayor's comments.

I think Mesa businesses should be given preference um or at least a shot.

Um I know it's a little late for that here, but uh the more we can keep business within the city and um allow our Mesa-based businesses to uh have an opportunity to bid on these things.

I know that's a broader question for another day, but uh I'll just close my comments on that with with that.

I I would agree, and I think it's hard to say we've got the best pricing if we don't go outside of the cooperative contracts.

So I think that that um is is a good idea to do just to to measure whether we actually do because I just want to confirm when you say we got the best pricing, we got the best pricing of the cooperative contracts that we that we have uh agreements with.

Yeah, mayor um council member go forth.

Yes, that is correct.

It is the best pricing off of the cooperative contracts that we looked at.

Do we know that that's the best pricing versus doing our own solicitation?

No, we don't know that for sure.

But you know, historically we, you know, cooperative contracts usually are the highest discount because they look at state volume versus our spend or our specific need.

But you're correct.

We don't know that for sure until we actually do it.

And mayor and council of community services.

Is your mic on?

Lindsay Blinky with community services.

I just wanted to add, um, in doing this search, we've done a very thorough discussion and site visits with many other programs that do this type of work throughout the region.

And so we really looked for any type of vendor.

We would love to use a local vendor to your point.

Any type of vendor that does this work in the specialized furniture, and we really look at durability and um a lot of the furniture that that we're talking about for this contract was really customized for social services and all of the wear and tear that goes into some of this use.

And so I I feel confident that we have explored, even though we only had two contracts to look at, those were that was what was available.

Um, and there were not other viable vendors that we could include in this option.

I I'll just chime it.

We've had this conversation before.

We tend to have it when we discuss uh purchase of vehicles or automotive uh you know repair services.

Are we getting our Mesa businesses engaged?

And I think this is where working with through our staff to make sure that they're aware that our businesses are aware we have the the Mesa business builder, the Mesa Chamber of Commerce, making sure that our businesses are set up to be part of the competitive bidding process for the state, for the county, and for the city as well.

That's where we that's where we'll make our most bang for the buck.

Um but I think you mentioned you know, we're we're when the state buys in bulk, it's gonna be hard for a local business to compete against that.

So again, we have this conversation all the time, making sure that our local businesses are able to compete at a state level and get in part of the contract.

I think that's what we should focus on.

And Jim's getting nervous because that's not really necessarily the part of the this conversation.

But um thank you for answering the my question also that this is robust material and it's not IKEA, because that'll break and we're just gonna buy it over and over and over again.

I think dorm room furniture is the type of thing I was thinking we need for for for this, given the the nature of the use.

So thank you.

Mayor, vice mayor, um the vice mayor's right.

I mean, uh as long as long as I've been here, we've been uh we've been having that that balance too, right?

Um we we want to get our businesses involved, and I think procurement business services have done a great job of uh of doing that heating council's discussion for at least the 20 years that I've been here about striking that balance, right?

You can you want to engage the Mesa businesses and you see it a lot.

We highlight that on our agendas, right?

And you'll see as we procure services, there's a lot of Mesa businesses um throughout the course of the year that um that we do award um these contracts to, but there's also um trying to be good fiscal stewards as well, and if you can get uh better, you know, better bang for the buck off these cooperative contracts sometimes as we discussed a few months ago.

We lead those cooperative contracts, right?

And so we try to maximize those opportunities from the state or other cities or from ourselves when we can buy in bulk and drive down uh that pricing and to get a better price for the taxpayers on that.

But we we hear you we're gonna continue to be um diligent with that and make sure that we're engaging our businesses as much as possible.

I we would we would love to spend our money local if we if it makes fiscal sense to do that.

And I would like to add that even though Goodman's isn't uh a Mesa business, they are an Arizona business, they are a local business for the state of Arizona and and reinvest in the community.

So um, even though we can't say Mesa, we can say it's Arizona, so we're not going corporate outside of Arizona, and they do a lot of community good.

And they are a default business for commercial industrial um office type of uh furniture and equipment.

They're a go-to for so many businesses, they're common knowledge and uh you know a go-to business, so they're reputable serve the community well and um have due volume to for our state.

And and mayor, the last thing I'd add the line if you get the sales tax.

Well, I I we do we do give extra points, please correct me on how I say this too, on when we score Mesa businesses because they get credit for the local sales tax that's that's generated, so that helps them when we are rating businesses and looking at the comparables that Mesa businesses get though those extra points uh in the process for for what they return back through the local sales tax.

due volume to for our state and and mayor the last thing I'd add the line if it's the sales i well i i we do we do give extra points please correct me on how i say this too on when we score mesa businesses because they get credit for the local sales tax that's that's generated so that helps them when we are rating businesses and looking at the comparables that Mesa businesses get the those extra points uh in the process for for what they return back to the local sales tax well just my follow up uh I did a breakdown six thousand seven hundred twenty dollars per room I just want to make sure we're getting the most from them those dollars for each room and and I I like to encourage again Mesa businesses whenever possible and reach out we have new big Mesa businesses come in all the time uh especially on the appliance side and and I don't know about the furniture side I don't buy furniture much but I've been in plenty of fire stations that uh buy furniture and I don't know how they do it but uh perhaps uh we can coordinate with them and it's durable furniture for fire stations trust me so uh mayor freeman uh mayor freeman if I may I'm I was gonna add the we do outreach to local businesses we attend multiple vendor fairs and in fact last night we just attended uh local first economic development outreach for Mesa businesses um showing them you know how to do business with the city how to respond to a solicitation we do lots of outreach to local businesses um and Arizona vendors to help them learn how to do business with the city good and perhaps us us as council can help because we do a lot of ribbon cuttings throughout the city and maybe we can invite vendors to apply to when we're out and about a few what's that I've referred a few okay yeah good that's all the questions I have uh Mr.

Adams uh that's a nice picture of you um anything else well thank you I appreciate that uh no um I I have no further questions on this item thank you all right where are we leaving this item to go forward as on agenda or are you suggesting that we go back to bid uh I I will have the conversation on Monday on that too um I'm I just wanted to have the conversation about the furniture fixtures and equipment so we'll leave it at that are we planning a uh mayor are we planning a presentation on Ford I'm sorry 5D if it's still 5D on Monday are we gonna go over that here I thought I saw it on Monday but I didn't put a lot of documents.

Mayor and vice mayor I believe Jeff uh is here and has some slides that that is the presentation that council received a couple weeks ago that's the same one it's the same one right that that was uh to present to council and then this is the adoption of that micro mobility plan that was presented but Jeff do you I'll I'm gonna disagree with the the boss for for a minute this is Councilmember go forth mayor council member go forth this is the presentation I presented you or promised you on implementation on on scheduling for when we're gonna get signs changed okay the implementation I I just pulled it up Monday what I saw was the uh Mesa connected plan so that's different than the plan should be under okay go over the there should be there's a lot of plans in my defense I think we're planning what do you think I'm sorry Mr.

McGway so this is the parking signage um drop off areas for uh uh ride share so forth and so on uh and and nothing beyond that is that correct um mayor council member adams um this is actually we we put together a slide deck to to talk about all the implementation that would happen in the short term and those are all the all the implementation that we can do under our current programs and our current budget without having to come back to council as part of our capital improvement program discussions okay so this is this is essentially the implementation of uh making parking downtown Mesa more accessible and identifiable correct that for sure is a big part of this yes okay okay does this involve the uh and I'm sorry we've seen so many things here recently does this also involve the center street uh bike lanes roundabout and and that uh planning or is this not including that yet uh mayor council member adams that is a discussion that you will have uh I I I saw that uh Eric Eric's snuck up to the front row so that'd be a separate discussion outside of this um implementation okay all right Eric Eric can stand down I was just curious if it included that or not council member Adams um the presentation was done on October 23rd so I don't remember if you attended or not but it's it's thought line item from October 20 the study session on October 23rd and now it's on agenda okay I'm just simply trying to understand the scope of what we're gonna be voting on understood.

Okay, I'm just simply trying to understand the scope of what we're going to be voting on.

Uh understood.

Um, Mayor, Councilmember Adams, the the scope of what you're you're gonna be voting on in Monday is on the micromobility plan.

The micromobility plan does have recommendations as it relates to to the parking as and which we can present quickly the the implementation efforts that we can have and the timing for those implementation if we move forward.

It also includes the recommendations as it relates to to the streets um and the striping plans that we have that the can um transportation will be implementing over the next four years as part of their pavement preservation plan, as well as some long term longer term goals that would include um removal of traffic signals as well as um relocation of curb lines um that would require uh capital improvement um program um funding that would be a kind of a longer term discussion.

Um so the the we could quickly run through if you if you'd like the the implementation slides and give you an a sense of what you can expect in the short term if you move forward with uh approving the plan.

Let me just be really direct with my question.

Is a vote for this, so vote for the roundabout, all the restriping, the narrowing of center, and so forth, or is it simply a vote for the parking?

Oh Mayor Council Mayor Adams, the vote for this plan is a vote to for essentially a planning and policy document.

So this is a is a guide for moving forward that includes the restriping that does include recommendations for center street, but center street is that there is nothing in this plan that requires uh you to move forward.

We know that center street is a separate discussion, a separate vote of council that would have to happen to move forward with.

Thank you for that clarification, Mr.

McVeigh.

Thank you.

You're welcome.

Mr.

Adams, did you want a brief presentation or you want to wait till later and go through it?

No, I I don't need it now, no.

I was simply seeking clarification on that last question I asked.

And I believe Mr.

McVay has provided it.

All right.

I do have one question though.

I asked about uh how many permits you have for parking, and you didn't know that number, you know, based on the overall parking spaces in the city that are available, and I just asked a random question about how many permits are out there.

Yeah, uh based on the number of parking pay places.

Mr.

Mayor, actually, we did not look that up yet.

I can give that for you and send it over today.

Yeah, let's do it to council so we we know.

I mean, there's all the different colored parking places and to make parking easier for people.

I know we're looking at some beta programming, AI, you know, put in addresses, what parking is available.

And and Mayor, to that point, I I do want to make sure that we we clarify, and and we have our our our Department of Innovation Technology folks here as well that can pop up.

We we are working right there.

Do it is working on a parking app, and they and that parking app that they have, and I think maybe that you have seen and had demonstrations of is pretty robust where it is applied, and it but it's only applied in a few lots so far.

It's kind of a beta test.

And so there is some effort that would need to be uh that would have to happen in order to get that parking app to the point where it's ready to roll out to the general public.

So we do have if you could go up a couple slides.

Um there you go.

There is and just just as a as a as a note, if this is something that council is is um interested in moving forward um more rapidly, um, there is some additional cost that would be associated with it.

It's not a huge cost, but around 30 to 60,000 to to finish getting out all the cameras that we need to do.

Um has done a good job of when PD is out putting cameras out on the streets or in the garages as part of their crime prevention that they're they're looking at those projects and where they're able to, they're adding cameras to to those projects in order to get the coverage that we need for garages and things like that.

But there is some effort necessary in order to get that parking app to the point where it is ready for public consumption.

So for clarity, the cameras that you would be asking us to invest in would also be used as part of the real-time crime center, the safety downtown.

What and I don't know if Harry won Harry wants to drop jump up, but there's been more than one uh one instance where PD is out there putting cameras out for the real-time crime center, where do it has you know, grabbed on to that and said we're gonna add a few more cameras, and then we get all the coverage that we need for parking, and it's it's kind of a good collaboration, yes.

So dual use, I like it.

Mayor uh Vice Mayor.

Yeah, that is correct.

Um that has always been part of the uh main focus of this project was not to invest in something that just has a single use for for uh parking, which uh you know doesn't really have uh a uh clear ROI like in other areas where uh there's uh paid parking in our downtown, most of the all the parking today is uh free parking in our lots and garages.

Um so most of the projects, uh most of the vendors out there that uh provide systems for this type of service um bank on you charging for that parking.

Um so when we've looked at the ability to get third-party vendors in to do similar uh similar apps and uh uh parking management, it's a potentially a seven-figure investment, um, hundreds of thousands of dollars per lot in some cases, um, where they're expecting you to be charging for that parking.

Uh with our free parking, uh, we've we find that uh internally just uh applying some application development staff to it and um investing in the cameras that have the dual use for uh for public safety uh gets us a lot of bang for the buck.

Thank you.

Excellent.

Just go forward.

I just want to say thank you for putting this together.

This is this is helpful and and more specific as to when things were done and when they're they are gonna be done.

I was just uh for the life of me, I was like, what is a smart park appearing?

Parking.

Yeah, thank you.

Smart.

Smart.

Smart in your parking park app.

Anyway, thank you.

I appreciate this presentation.

Well, last night I was at uh Cedar Corps having a little pizza there with my brother's birthday, and there was overflow parking, you know, going there and you know, spilling into the alleyway, and then the old Mesa Tribune parking lot.

So it's being, you know, just having these apps or availability for people to know where to park because the street parking was not available.

And of course, I I drive a little bigger vehicle than most people, so I'd look for a larger space to park.

But uh anyway, found it, and just making availability, the parking, the ease of it, having that accessible, I think will help our downtown businesses significantly.

So we encourage you, Harry, to you and your team get after it.

Thank you.

All right.

Anything else, Mr.

Adams?

Are you good?

Yes, sir, thank you.

Sorry, my bad.

Okay, council.

Did we cover all the agenda items you wished?

Okay.

Other than that, we'll move over to two A follow-up presentation on the water utility recommended rate adjustments.

Uh Brian, Chris.

All right, good morning, Mayor and Council.

Brian Richel, um, management and budget director.

Along with me today is Chris Hassart, the water resources director.

So last week we presented um an update of the utility rates and council requested uh a uh scenario, and so we'll go through those scenarios, and another one was uh requested over the weekend.

So I'll prevent present those two.

First off, what I wanted to uh remind council is the recommended rate adjustment with capacity fee, the forecast here.

Um what I wanted to highlight here was at the end of this forecast, uh years three, four, and five.

What we did during the budget process was water resources uh worked really hard in uh looking at their budget, and they pushed out about a hundred and mil 180 million dollars worth of uh cost of um maintenance projects, just to be able to kind of look at the forecast and keep it within our um within our financial uh principles and policies.

So with that, we pushed out 180 million dollars worth of projects.

However, with the capacity fee, the um we're able to move 400 million dollars of projects uh within the next 10 years out of the forecast that would be funded by capacity fee.

So that's why you see an increase in net sources and uses and the uh positive uh percentages for the fund balance.

What we'll be doing this coming budget year is taking a look at those that 180 million dollars.

If it's still 180 million dollars, it might be a little bit more with inflation of those projects and bringing them back into the forecast.

So just to let you know that this net sources and uses currently and the percentages will most likely reduce, but we will keep it in with our financial principles and policies.

So what we were presented last week was these are the recommended uh forecast rate adjustments for residential, multi-unit, and then also the commercial side.

The uh service charge for all three, all the areas was a 4.5% increase.

Uh residentials uh tier one and two was a three and a half, along with uh tiers three and four, four point five, and then you see the rest of them down below, multi-unit was twelve percent for usage, and then commercial usage is thirteen, landscape is at twenty.

Just a reminder, we move that from 15 to 20 per council's direction.

And then the large commercial industrial is at 19.

So this is what was presented in the forecast in the previous slide in that forecast and was recommended by staff.

Last week, council recommended a uh asked us to go back and look at a scenario of if we were able to zero out, if we zeroed out residential and multi-unit, and keeping everything the same, revenues, net sources and uses, percentage of fund balance, keeping everything the same, what would the commercial rate adjustments need to be to be able to do that?

So below is what the commercial rate adjustments would be.

So the service charge would go from four and a half percent to twelve percent, commercial usage would be at twenty-five percent, commercial landscape usage would be at 30 percent, and large commercial industrial usage would be at 13 percent.

The next year is where we would go back to our forecast.

Just a reminder that we do uh evaluate this on an annual basis.

So those percentages could fluctuate a little bit.

However, for the current forecast, we would go to back down to those rates.

What was also requested was if we did a two and a half percent rate adjustment increase for residential and multi-unit.

So here you see if we did a two and a half percent across the board for service charge and usage charges for both residential and multi-unit, what the impact would be to commercial, commercial service charge would be at seven and a half percent, commercial usage would be at twenty percent, and then commercial landscape and large commercial industrial usage would both be at twenty-five percent.

So bringing those three, I know one of the things that we're looking at doing is parity between commercial or non-residential and residential of revenues and consumption.

So previously, for about for the since uh maybe two years ago, three years ago, residential was the major can most consuming of the water resources, and the revenues uh came in with that.

However, in the past couple of years, commercial now has uh is consuming more of our water resources.

So, what we wanted to do was make parity between that revenue coming in also.

So, with the current forecast that we have, that parity would be in fiscal year 27-28 with the uh uh council uh requested scenario of no residential revenues, that parity would move a year forward into next fiscal year 26-27, with a two and a half percent across the board for residential and multi-unit, that parity would uh be in fiscal year 27-28.

And then you have the con the down at the bottom, we have the consumption to where you see that residential is now about 48%, and commer uh non-residential is about 52% of the consumption of water.

So a customer impact on this slide.

So reading from left to right, we have the four categories residential, multi-unit development, commercial, general, and also commercial landscape.

So the current monthly bill that we have now for a what we call a typical, and I'll get into the typical a little bit later.

Our typical customer residential use is around 6,000 gallons or six six K gal a month.

So currently their bill is about 43.57.

With a recommended rate adjustment with the capacity fee, their total impact of the service charge and usage charge would be about a 4.2% in increase.

So it would be about a $1.84 per month increase.

If we move on over to the non residential, that adjustment is zero because we'd be zeroing that out.

And then with a two and a half, it would average out about two and a half, so it's just about just over a dollar impact.

Moving on down to the multi uh multi-unit, it's 40 dollars uh and forty-six cents currently.

So with a the recommended rate, the um what we're looking at is an 8.7% increase and about a three dollars and fifty-two cent a month with a recommended.

So what we're trying to do here is also move the multi-unit development because we know most of those uh accounts are residential.

We're trying to move that up to equal about the residential uh uh a month uh bill.

So then moving on over, zero would be zero, so they'd stay around forty dollars and forty-six cents.

And then if we did a two and a half, it'd be just over a dollar also uh increase per month.

Now moving down to the commercial general, uh their current bill is about $78.59.

Uh with the current recommended forecast, it's a 7.4% blended uh increase, so about a little over $5.

A zero percent, that would be a 16.4% blended rate of the usage and the service charge.

So they would see about a $12.88 per month increase.

And then if we did a two and a half, that percentage would be about 11.8%, and just over $9, about $9.24 per month increase.

Now, if we move down to the commercial landscape, currently it's about $177 per month for general or commercial landscape.

With our recommended rate, the blended percentage increases $15.3%, so about a $27, a little over $27 per month.

If we did zero for residential and non-residential, the impact for that commercial would be a 24.4% blended increase, so 40 a little over 43 a month.

And then if we did the two and a half, it would be about a 19.6% increase.

So about $34.

So this is kind of the typical, the impact of a typical uh water customer for those three categories.

And what I would like to do is um go back, because I know the question came up of a couple of times uh last week of how do we calculate a typical residential monthly water consumption?

So what we do is we take this is just the support slides, and I can send this out to council um uh after the meeting.

So what we did was we take the residential monthly consumption, we take every bill uh per month, and then we put them in these in these categories.

So 29% of the bills for fiscal year 24, 25 landed in between the zero and three K gal category in the tier.

And just to remind council, is zero to three K gal is included in the service charge.

So all they're doing is paying the service charge to receive that water for those.

Now moving into tier ones, uh four, five and six K gal, twenty-six percent of the bills are within tier one.

So combining those two, fifty-five percent of the monthly bills are usage is K-Gall or less.

And then you see the outer ones, it starts going down, and then you see out there 25 plus um five percent of the bills, but so 55 percent, and this is where we get the typical, so our typical is 55 percent of the monthly bills that uh the Mesa sees, 55% of that is six thousand K gal or less.

So that's what we consider a typical customer is six thousand or less.

So with that coming back up to here with the typical yes.

Sorry, Mayor.

Do you turn it on for Holly's sake?

Do you have that same kind of slide for the typical business as well?

The other categories.

Well, uh, Mayor, Vice Mayor Summers, I I can give you that breakdown.

So uh a full one-third of all our commercial customers using that three K galler or less.

So those are your small businesses, like a hair salon, you're gonna have a bathroom that's not gonna have a lot of water usage or uh any kind of small business that just is not water intensive.

So a full third of our customers are in that zero to three K gal, so they're not paying for any usage.

Um usage that they do use that small amount is baked into the service charge.

And then if you look at the middle third, so actually a little bit more, maybe the middle 35%, 36%, they use from that three K gal and just incrementally range all the way up to about 24,000 gallons a month.

And then it's that top 30 percent, those are our big water users all the way up to megawater users.

So it's that top 30 percent, which is about 1700 or so businesses use from 24 K gal all the way up into seven figures, you know, million gallons.

So there's that that I can count on one hand how many use that much.

So their skew to the million gallons, is that covered by our large water user ordinance?

Or is that a little different?

Well, it's it's related.

Okay, it it forces large business, especially anything over about 300,000 gallons a day that large water user ordinance forces that business to then go on the market, get water supplies, um, deed those over to the city of Mesa.

Um, but they're acquiring those supplies and paying for them, and then we're treating the water and delivering it.

So, what I'd be interested in hearing from you, and you probably don't have this data here, is there the unintended consequences of raising again?

I go back to uh just flushing your toilet is one thing in using so uh a typical single family home is going to the water is gonna go for landscaping, it's gonna go for flushing the toilet, brushing your teeth, all that stuff.

So it's that's a pretty accurate number.

But these small businesses that might be in, say, a strip mall or or or some kind of facility they're renting their space, also have to pay a rent, and baked into that rent are gonna be things like the the water that goes to that business for for landscaping, for example.

So is there a way to break that down what that might cost a small business when the commercial property has to pay for the added water rate for landscaping?

I could tell you don't have the that's that's a math problem, but it's like how do we get our head around?

Could you put that slide back up, please?

Yeah, and just to mayor, vice mayor, just to point out too on the left-hand side, the typical customer, we do have below each category the usage of each typical customer.

So for instance, is that on that slide?

Or the slide right here that I'm on right now.

So the commercial general 9,000 K gal per month is your typical general commercial, and then commercial landscape is your typical customer is 29 K gal.

So and then multi-unit is about the same as residential is six thousand K gal per month.

So we do we do this calculation just to see what what the typical customer is for per category, and then see what the impact is for those typical customers.

So with this commercial landscape, the typical customer, would that be a strip mall kind of facility with multiple tenants in it, or is this gonna be McDonald's?

I don't know.

It's well is gonna be a lot.

It's not gonna be any of those.

It's gonna be more of an office complex that has um has a lot of landscaping, and then so if you look at our commercial customers, there's 5919, and about 33, 3400 of those.

So about 60 something percent um of those commercial businesses do have a separate commercial meter.

Those are gonna be more your office parks that have some decorative lawn and a lot of trees and shrubs, and the 70% of your water usage when you have landscape like that is 70% is gonna be used outside.

So that's why they have that separate meter.

So they don't have to pay the wastewater charge.

So this 177 would then be part of their rent and broken down based on the number of people that are in there.

Would that be accurate?

Mayor, vice mayor, it would depend on the the owner of the property and how they distribute it on that.

I don't know.

We wouldn't be able to answer the question.

I'd like to also put a lot of things.

I can wrap my head around it a little more.

Thank you.

On residential, most families will fall within the six K gal, maybe a little more, maybe seven.

And getting into the higher tiers is reflective of water being used for landscape.

Because for showers and toilets and you know, sinks and stuff like that, you're you're in the lower tiers.

So you also have to think about if you want to discourage landscape, this also happens as a residential level.

You mean zero scale?

You want to incur we want to encourage smart water use in the landscape.

Right.

So when you get to the higher tiers in residential, it's indicative of having uh of the water going to landscape.

Yeah, yeah, and I get that we want to encourage that.

And for for folks, there's somebody in my neighborhood that has a lush landscape, uh lazy river.

It's I wish I had one.

I guess if I had that money, I wouldn't care what I'm paying for the water, but sprinklers when it's raining, it's awesome.

I I yeah, no, I I completely understand that.

I think what I've been kind of focusing my questions on, it's I think it's easier to wrap my head around how this impacts a resident because it's all really one bill.

Whereas for small business, you know, some of some of whom are struggling still.

What is the impact potentially here?

And it's not just related to the direct water bill, which doesn't seem too bad, but if they're renting space, that owner's gonna have, and that's gonna you know, impact their business as well.

And it it clearly is difficult to get there.

I have a separate question.

Do you do somebody else want to go?

You want me to ask it?

Well, I want to say something.

When you said small businesses, this dive on that, you said a lot of them use zero to three K-Gal.

One third.

And and so they're not gonna be charged.

I mean, there's it's just a service charge.

Right.

Um, Mayor Freeman, so they would they would pay the service charge, so that's why the increases were recommended.

There's there's it's broken down into both categories.

Uh the bigger one is on the usage, and then the smaller increases on the service charge.

Right.

What's your definition of a small business?

Well, when I say a third, I'm not I'm using a generic term for small business.

Um I'm not trying to categorize small business.

I'm just saying a third, most likely are gonna be businesses that have like one bathroom.

Okay.

And not a lot of outdoor use.

Fair enough.

Yeah, we also have small businesses like breweries, which we give value, um, that uh use a larger amount of water, but they really aren't uh a large employer by any means, but they will be impacted by higher water use because they use a lot of water to make beverages, to make beer, to make cider work.

That's just one example.

I'm just aware of that with the conversations of business owners in downtown who are breweries and sideways and stuff, that the water is affects them as well as all the loom tariffs and everything like that.

Um our philosophy in Mesa has been to have gradual incremental increases um for everybody, including our businesses, and our businesses are very important to us.

We want to be business friendly.

Um we depend on sales tax.

We depend we are trying to attract more businesses here.

I don't I think it's fair to ask a residential customer to for the f the three and a half percent increase, the rate of inflation or the CPI is three percent.

I think it's very fair.

Every product you buy, everything you buy will have that baked in on inflation.

It's very rare that you don't have um products or things that you're buying um increase by the rate of inflation.

So when we think about what our philosophy is, it has been historically, which I agree with, is very small, reflective, you know, small increases as we go along for a business to suddenly have a you know their water rate jumped 20 percent.

I as a business, I would be very upset.

You understand the three percent, five percent, ten percent, but then it starts getting I don't know we want parity, but I think to gain parity again, it's gonna have to be gradually increases so that we are business friendly, and I think it's r fair for a resident to absorb a rate that is reflective of the rate of inflation, and it's what 87% you said last week or something.

Or the percent of residential customers.

So we have some updated numbers.

So last week I said 88% of all of our total meter customers is residential.

So that was from a pie chart we did an earlier presentation, I think over a year ago.

So we went and updated everything.

So we went in current numbers through the end of October, and with all the residential development we've had in East Mesa, Southeast Mesa, up in the Lehigh area, especially too.

Um that is ticked up.

So the percent of single family residential uh customers is now 90.66%.

So it's ticked up from about 88 up to between 90 and 91.

Now, if you add in the multi-unit, so um any kind of metered connection for whether you're talking about a triplex or a 75-unit apartment building, that's another 2.3% of all of our metered customers.

So now you're at 93%, all classes of residential of our 154,000 total customers.

Commercial is about three point, I think they have it written down, 3.84% of the 154,000.

So it's it's just under 6,000 customers are commercial.

And then we have another 2.2% of meters are the commercial landscape.

So now you're at you're about 5% for commercial related classifications.

Most of that is the actual meter for the potable water, and then they there is um a few thousand that are commercial landscape meters.

So those commercial businesses uh going back to what I talked about early, it's it's mainly gonna be more like office parks that have outdoor turf and and landscaping, they're gonna have the commercial meter.

So it gives you a breakdown uh a profile of all the customers and how how it separates out.

Okay, that's starting to clear.

Did you have your question?

Uh yeah.

Um what I wanted to follow up on, Brian is one of my concerns is moving forward.

Uh we've seen what happens if we underestimate other cities have underestimated what it takes to maintain their systems.

And what we've witnessed lately in the newspaper are massive increases to make up for deficits that what was discussed before, the difference between you know small incremental increases and ignoring a problem, and then you you eventually have to pay the bills.

So when I look at the chart on page two, you use this um all the time.

Have you run the same scenario for the two and a half percent and the zero percent?

I know you have fiscal year 2627 here, but how does this look?

How's this forecast out through 3031?

Do we have that chart?

Or is yes, mayor, um, vice mayor, in preparation, we did this is in the support slides for any questions like that.

So if we did a zero increase for residential and non um multi-unit.

So as I mentioned in the beginning of the presentation, what we did was we only wanted to look at because what was direction from council was just looking at changing fiscal year 2526, and then keeping the rest of the forecast the same as what it was presented.

So that's where in 2526, what you'll see is the zero percent for water residential tier one, and then water commercial usage is 25 percent, and then the rest of them we did not change.

So, but however, on the outer years, we are still keeping a tier one usage charge at three and a half percent, a water commercial at 13% on out for those water customers.

And then for a two and a half percent.

Two and a half percent water usage across the board for uh water residential tier one, and then water commercial would be at 20%.

But then we kept constant the the rest of the forecast usage uh percent adjustments to keep the forecast.

Why does the reserve balance get slightly better with these other options than the original?

Yes.

Okay, that's darn.

All right, thank you.

Mr.

Radio.

I think just a comment on the commercial side, uh, because uh we know when I came on council, I think we had the inverse effect of um you know residential paying so much compared to commercial, and I think over the maybe five, six years, we've kind of moved it along to balance it more on uh what I'm aware of, you know, slide what is it, six has it's based on usage, right?

As far as the pair the parity analysis, right?

And so I think that's an important uh slide to know uh how we can maintain that balance because as a person that leases out at least leases out about 5,500 square feet of uh commercial space, the cost just gets put down put to the business owner as far as any any additional costs, it gets assumed into the lease, right?

And so you get fluctuations that not only you're paying a monthly lease, but then uh water, uh you know, if you get you know, uh uh uh city uh waste, right?

Um recycling, you know, all those ads, and it just fluctuates as far as a monthly kind of uh uh bill that you get as a small business owner.

And so we just gotta maintain uh awareness of that piece, and it it's a little difficult, I think, to identify uh per what councilman Summers trying to because it it depends on how much you lease out and the the amount you use compared to like there's other users in where I lease, um, and so they have much smaller offices and they do different things, right?

And so it just depends, but it the bill it just gets put back into that operator, right?

thing to identify uh per what councilman summers trying to because it it depends on how much you lease out and the the the the amount you use compared to like there's other users in where I lease um and so they have much smaller offices and they do different things right and so it just depends but it the bill it just gets put back into that operator right like that's been a small business owner that rents out you know either 2,000 5000 1000 square feet and so it it just I think the importance is having that balance uh of how we are uh you know that parity of residentials to commercial as we move forward and how we identify I agree you know if we do zero I think the impact on the small businesses is immediately affected right because you're talking about over 20% of an increase which is I you know is that's not that that's not a uh a a great look either right as far as how we then are passing down to that the small business owner um and so that that's my my point here is you know this parity analysis I think it's an important aspect to where uh we wanted it take over the last six plus years on how we identify you know what residents uh pay and then commercial um and that can get uh we can't get out of whack as well on the small on the commercial side because then it it's gonna hurt quite considerable these small businesses uh and so that that's my point on on here the incremental pieces as far as increase i i think that's where we that that philosophy is what has made us kind of uh uh a better kind of identifying uh the the the costs as far as what we as residents or or you know both uh small businesses have to pay I think that's an important aspect uh to to uh identify and I think mayor freeman in the last meeting you know when we did zero several years back um it did jump you know we had to increase quite considerably the residential rates and so we just gotta that context is is an important aspect to how we uh proceed in in identifying these rates and again every year we we look at these rates right and so the adjustments that we can make on the yearly basis and an important aspect to how we look at the future uh to to this but um I'll I'll leave it there all right thank you uh Mr.

Adams do you want to you have any comments we'll go to you next yeah thank you mayor excuse me just just a couple first I would like to uh thank Mr.

Richel I know that he had to jump in and do a a good amount of analysis work here to provide us uh these various scenarios that uh were requested and uh and they're very informative I appreciate that I you know I also uh uh you know I I probably started some of this conversation and got this ball rolling um in our last session and uh this is because I am I am always more interested in in rather than saying well we've always done it this way I like to look at how could we do it differently and maybe rather than um make the baseline assumption that we must must always increase rates particularly residential rates wouldn't it be great if we could find a way to not have to increase rates.

So that was the discussion that I was trying to encourage and I think what's resulted here is some really good information for us to look at and juggle um you know those those darn triple net leases Mr.

Veretti is absolutely right that will trickle down to the uh to the tenant as the uh in in the case of uh the smaller commercial stuff and the larger so you know that's another important point to consider um you know I uh one comment I would have is uh you know we are we're trying to encourage zero escaping um I'm not trying to suggest that someone who prefers to have a green lawn and is willing to pay for it fine but on the commercial landscape side an observation I would make is uh sometimes cost is a driver in decision making and if we're trying to encourage more zero escape um maybe that's a consideration we should we should talk about um overall the other the only other observation I would offer at this point in time I know we're gonna take this conversation up again uh on on Monday um I very much appreciate these um forward looking analyses that uh Mr.

It's always way out there in this case, what 28, 29, 2930, 31, where the number becomes positive.

And it would be helpful if at some point in time, and I'm not trying to suggest Mr.

Rich will burn the the midnight oil again.

This could be a conversation or another day.

I'd like to see over time how accurate we've been from projection to actuality.

That would be very helpful because uh and I'm not suggesting there's any reason not to rely on these numbers.

I think this is a very thorough analysis.

But I'd like to see how accurate we are.

And uh and with that, I'll I'll close my remarks um with a with a thank you again, Mr.

Ruchell.

Okay, thank you, Mr.

Adams.

One more quick question than for you.

It is just a curiosity.

The residential use is six K Galls a month.

The multi-unit development is also six kals a month.

How is that because residential might have pools and all that kind of thing?

How is it multi-unit development is the exact same as residential?

Well, the average for commercial is much higher.

Um the number if you're looking at median, so half the customers below, half half above.

Um the median's low, but commercial, once you get into usage, it's those topics.

Multi-unit development.

We're talking about multi-unit residential.

Multi-unit residential.

Yeah, it says six K gals.

So if I'm looking at slide seven, typical customer residential, six kegals a month.

Okay, I get that.

Multi-unit development apartments is six kals a month.

It's a little more nuanced, so yeah, Eric, can you come up and explain that?

Eric is our statmaster.

That's not his official job title.

That's what I call them.

Eric, you want to be called the stat master.

I don't mind.

Uh Mayor, Vice Mayor, Council.

Um we use six KLs a month um for multi-unit development because it provides a um equal comparison to our residential customers.

Now, multi-unit development, it can also include like um patio homes, um, so not just apartments and and whatnot.

Uh, but the real goal here is to create that parity uh between residential and multi-unit development.

Like a an apartment building, you know, that's mostly domestic usage.

So your typical apartment building might be uh four or five kigals, um, but your typical patio home, that's gonna be more along the lines of six K Gals.

Okay, so it's it's to provide at least some parity in in our conversations what that is, but we wouldn't expect somebody in a studio or one bedroom apartment to be using six thousand gallons a month, they're gonna be using Mayor Vice Mayor.

Uh yes, sir, you're correct.

Okay.

That makes sense.

Thank you.

Ms.

Go forward.

Along those lines, help me understand how do you know that?

I guess when there's one meter.

So for instance, uh Chris have that issue.

You know, there are also um 55 plus communities that are individual uh owners, but there's one meter going into it.

A three-inch meter or something.

If it's right, the the email that you and I were going back and forth with.

Sure.

Um, Mayor, uh council council member go forth.

So it's just a lot of it's those are industry standard numbers, and it's just decades and decades of uh data collection and analysis, and it comes down to number of fixtures.

If you have a small apartment, it's just the number of plumbing fixtures you have, and it's just averages over time in analysis that shows that uh a studio apartment or a one-bedroom apartment that has one occupant or two occupants, it's just those are the averages, very low water usage.

For if you get a 60-unit apartment building, most of the water is not gonna be used inside, it's actually gonna be used um watering the common areas, uh, the trees, the shrubs, the grass, stuff like that.

Okay.

Um, I'd just like to uh provide a couple comments as well.

I I appreciate you doing the additional calculations.

Um but I guess I you know, uh to Rich's comment about always uh assuming the the status quo, I I would hope not, and I don't think so, because um, you know, our we're adjusting it's very justified based on the increase in costs that we have.

Um why we got to why we have an adjustment and an increase.

Um this is this to me is not just an assumption.

I like that we do, I I agree with the philosophy of the smooth, predictable um lower, and it's you know, clearly the some of the surrounding municipalities are seeing the light, right?

Because that is um that's easier on our residents, it's easier on our business businesses.

I'm very sensitive as council member Heretti is to you know radically changing in one year of businesses um rates.

I but on the other hand, I think it's important that we get to that parity quickly, more quickly than was proposed originally.

I think we're on the right track.

It's it's getting quicker, and I and I think that that's definitely important, but I don't think that in one year we should radically change their rates 30%.

So I don't think we make, I don't think it's just assumed that rates happen every year.

I think they're very justified in in the cost that we have.

The part that I think is assumed is our transfer.

That part is just assumed because to me, what I've seen, that's not based on the increased cost that it covers in our general fund, unless I just haven't seen it.

That that transfer, we as we make an assumption it's 30% every year.

It goes towards our general fund, but those costs, it's not back-ended.

That's what I would like to see.

I would like to see it justified by the cost from the general fund as opposed to just a given.

It doesn't have to be the 30%, correct?

So, mayor, uh council member go forth to for your that question, yes, correct.

It is the ordinance has stated that it's no more than 30% of operating revenues are transferred to uh the general fund to support public safety for 25% and then 5% general governmental, but some of that general governmental does support public safety, so it's a little bit more than the 25.

So, yes, it is it's not assumed that it's gonna go over there.

It is written in the ordinance that 20 that up to 30 percent um of the operating revenues does get transferred.

That uh discussion I we can have during the budget process, and we can show you if we did not do a um budget transfer, what would what the effect of the general governmental fund would be, or if we even lowered it or froze it or anything like that.

Um I don't think nobody's suggestion we get rid of it, but I think it would it's important for us to see you know the the cost increase in justification for the amount that gets transferred, right?

That it's not just an assumption, it's just not assumed.

I have every faith and trust that that's what you do, but we we we don't get presented that it that way.

So, yes, Mayor, council member go forth into your other comment about not assuming um these rate adjustments every year.

The way we start this process back in June and July is we zero out the rate adjustments uh completely for the year, and then we go and see okay, what does the rate adjustment need to be to be able to continue our operations of the of the um utilities?

Yeah, that's good.

Mayor, I'd like to add one comment.

The biggest stressor on our costs for water is our need for water and the scarcity of water.

We have CAP doing huge increases, so that's just the product itself that we're buying.

But we're investing in our investments to preserve our water supplies and to make sure they're as affordable as possible, are very, very heavy right now because it's very, very necessary.

We don't we can't absorb the cuts and the water costs that are going on in the CAP.

So we have the central reuse pipeline.

We're digging walls, we're working with dams.

We're we have our expanding our water treatment plant so we can treat more water to exchange with Hila River Indian community to keep our rates low.

It's a huge amount of investment going on that we historically have not done in such a short amount of time in order to preserve our water and keep it at affordable.

So right now, yeah, it's a heavy load.

It's it's affecting what we're doing, but it's what we need to do for the sustainability of our city.

And this is will affect every municipality in the valley.

Um, and how they're going to adjust for the water.

So that's a huge pressure.

It's something that we need to do for our long-term sustainability as far as making sure we have the water supply at the best rates possible.

If we don't make these investments, it's going to astronomically affect our city.

So there's a lot of pressures, and we can see on our ending reserve that it keeps on going down and down and down.

And our um, you know, I just want to say it's just not the usual game of water just being uh a um static cost, and some chemicals are more expensive.

This is a bigger picture of our investments.

Thanks.

Okay, thank you.

Can I just confirm a couple things?

So from last year to this year, the largest increase in costs were our operating expenditures and our debt service transfer.

Is that correct?

Yes, that is correct, Mayor.

Councilmember GoFort, that is correct.

Uh a lot of the operating costs that we do is water purchases, that is within our operating costs.

But then, yes, the debt service is going up.

That is due to us issuing bonds, our first and second bonds for the um the three major uh projects that we're doing the Central Macy reuse pipeline, signal butte expansion, and also the AMI.

We just issued uh bonds for that, so that debt service will be will be coming on, and so that is this the um the significant portion of the increase for debt service.

And presuming we pass the capacity fee, that will start to to decrease.

Yes, mayor, council member go forth.

That is that is part of the 400 million dollars we're able to go back so far to recapture some of those expenses with the uh capacity fee, but with what uh um Chris presented with the capacity fee a few about a month or two ago, that 400 million of those uh costs of other projects also expansion projects uh is taken out of this forecast and would be um paid for by the um by the um capacity fee.

And yes, the debt service, as you will see in the um in the forecast, the debt service transfer does uh lower.

I think those are important great points, and Jen makes a good point.

I mean, the operating expenditures are not coming down, I mean they're not going the other direction.

Thing water's getting more expensive and more scarce, and but I think the the capacity fee is going to be a good reliever for um that debt service transfer.

Mr.

Adams.

Yeah, thank you, Mayor.

You know, I'm I'm glad council member go forth brought up the point that she did on the what I'll call the 30 percent transfer, which uh on its face I'm I'm supportive of because most, if not all of it, to my understanding is supportive of public safety.

However, in this process, what I've noticed is um in my experience in business, 40 some years, I've done a lot of budgets, uh, including one in including uh uh a bank and various businesses, and I'm it it is it it's troubling in a way that we consider such an important issue as these utility rates separate of the overall budget picture.

And I was reminded of this when council member go forth raised the issue of of the funds transfer.

It's almost like um trying to hit the bullseye in the dark for me, speaking for myself alone, making decisions based on the utility rates when we haven't quite gotten to the overall general budget.

And I'm sure there's a good reason why we do these things separately.

Um maybe something that we've done for many years, I would assume, but again, challenging the status quo, maybe this is a discussion for another day.

Um I don't know how we can speak much to that 30 percent, maybe it should be 25, maybe it should be 28.3.

I don't know because we're not talking about the overall budget and looking at the impact of those funds on the general city budget.

So uh I don't want to open up another Pandora's box here, but for me, for my edification, it would make more sense if we consider these things together.

Uh this would be like me uh trying to work my my firm's budget while leaving um payroll or some other major expense off to the side to be dealt with later.

Um just just some observations there for what they're worth.

Thank you, Mayor.

Councilmember Adams, and I'm sorry, I'm a little tired today, but I want to stress that we know last year's budget was stretched, and everybody was making cuts.

And being static, we will continue to make cuts this year.

We are not, we do not have enough revenue in our budget for the status quo of how we're running our city right now.

We're using some reserves and we're making cuts every year because we lost revenue on the rental sales tax.

That's over 20 million, and there's some other losses.

So we are suffering cuts on our general fund.

We know we didn't make the cuts last year because we had to take cuts in all our departments or planning on cuts this year.

We will plan on cuts every single year until we figure out a revenue source to replace what we lost, and we're we're we have we have a long list of infrastructure maintenance things.

I don't know what level we keep on running our our city without making investments and keep on just feeding a budget that's not working because we're cutting and cutting and cutting um because of the loss of revenues.

And now we if we want to consider cutting this a business model that we created, so we didn't have to have a primary property tax.

We use our utilities as a business model.

If we eradicated it and paid SRP, we would be paying the same rates we are now, but we wouldn't have any revenue, so we would definitely have a primary property tax.

So this is a business model, and we're using the revenues from the business model to fund our budget.

Well, thank you, Councilmember Duff.

I appreciate that perspective.

But that's the same.

Up to 30 percent was created what four years ago, three years ago.

Yes, Mayor, Councilmember Duff, it was created in March of 2020.

Was that ordinance that came towards count to council uh for that?

And to um council member Adams' comment about why we do this separately.

This was um a decision the city and council made, I believe six or seven years ago, that we moved the rate uh process.

It used to be during the budget process.

However, when the rates went to into effect, it was July 1, which is the heat of the summer.

And in the heat of the summer, uh a majority of customers' bills are water, a significant amount.

And so with the rate increases along with the heat and the air conditioning, the electric, things like that, what we decided to do was uh move the rate adjustment process to the fall so when the rate adjustments go into effect, that it would be during the winter time where there's less usage of electric, yes, less usage of water and other commodities, so where there the impact of the increases was not as significant as uh a summertime increase.

Well, thank you, Mr.

Richel.

I understand that, and um I think those are those are all good reasons.

Um I don't know that it necessarily forces us to consider the matters separately because we could always set a different date for the rates to go into effect.

Um just just a quick response.

I'm not suggesting we do anything that would incur us uh to have to consider a primary property tax, which I would always be absolutely opposed to.

I'm simply asking what's wrong with looking at addressing these things in a different way.

I understand that we're looking at some uh very tight revenue situations.

All I'm doing is suggesting maybe there are other ways to look at this, and maybe there are other ways to consider the data.

I would I would agree, I would add, Jen, this is about process, not necessarily the number numbers.

Everything you said is correct, but this is just about process and and assumptions.

And then again, four years ago, so we can change again.

I can change again.

This isn't historically forever.

It was and this is and I didn't necessarily say we should change and do this review.

It was in a conjunction with the budget.

And we changed it what two years ago, you just said it.

Anyway, I'm sorry.

And then as far as the percentage of transfer, that was five years ago.

So we can continue to change it, change when we do our rates, change our percentages again.

It's about it's about it, it's about us knowing the justification and not making assumptions.

That's it.

If if we need 147 million for public safety in the general fund, then that should be that should be presented to us and justified.

That's that's all I'm saying.

It shouldn't be in a it shouldn't be an automatic.

All right, thank you, council.

I have one question, Brian.

When we draw down the reserve fund, how much how many dollars are we taking out a reserve fund to supplement our water this time around?

Yeah, I know it's in the mayor.

Yeah, I would have to look to see the details.

I don't have the details with me, but I'd have to look to see um what our total water purchases are.

Um I can work with water resources and getting that that number for you.

Well, just for the record, we draw down our reserve fund to supplement what we're doing today.

And and Chris, to your point, uh water increases are cap water purchases.

Are they increasing now?

Do you have any forecast?

I know we're about $350 an acre foot.

And do you contractually, how far does that go out?

Then we're gonna bring on the cap and I mean the central mesa reuse pipeline.

I don't want to get into the weeze, but I mean overall, we know our water is gonna be increasing.

But the first question.

So uh we work with CAP pretty closely.

They project out, just like we project out all of our budgets, they project out where the cost of the cap water is gonna go for the different classifications, and for municipal and industrial, it is a little bit north of $350 an acre foot.

Um with the exchange we do with the Heela River Indian community, so this is tying back to the pipeline system with the effluent, giving them the effluent and then getting an exchange uh their Colorado River water.

Well, we don't talk about probably enough is that cost.

The cost per acre foot for the water we get from the community is only $85 an acre foot versus $365 an acre foot.

So right now with the with the plants that are already delivering effluent to the community, it's about 14% of our cap water.

And when the new pipeline goes into operation early next year, it'll essentially double that.

So about 28% of the cap water that we're gonna order in the future is only gonna be down at that $85 an acre foot, right?

So the rest is gonna be $365.

So you can see how fast that pipeline is gonna pay for itself because the water is just a fraction of the cost.

The actual waters is so is so cheap.

But every year we're gonna be at for municipal and industrial, we're gonna be at $400 an acre foot very quickly.

And a lot of that has to do with the federal government coming in.

Yesterday was the deadline for all seven states to come to some agreement on what the next 20-year playbook is gonna look like to operate the Colorado River water.

The deadline came and went.

No agreement.

They're giving us a little bit more time.

They're gonna force our hand pretty soon.

And when they when they cut how much water Arizona gets, there's still fixed cost in that rate that needs to be paid.

So you're spreading that fixed cost over a smaller pie, right, of water.

So that's driving up the unit cost.

So we'll be at 400 an acre foot, probably by the end of this this five-year period.

Um the water we get from the exchange, though, you're only paying the energy.

Why it's so cheap is we only have to pay the energy component, so that 85 might only be 95 at the end of five years, which makes the pipeline and the exchange even more attractive.

So those are the things we're doing to try to suppress cost escalation, but there's things that are out of our control because the still we're gonna be at at um 75% of the water we get is gonna be this MI, municipal and industrial water, and we can't control the costs, and nobody in Arizona can control that.

Um but that's just one input input cost.

It's we pay about 20 million dollars this year for water.

Most of it's CAP water.

Our budget, to put it into context, our operating budget this year for water resources is about 132 million dollars.

So 20 million is just buying the raw water, not even treating it and distributing it to customers.

And about one quarter, just to add on to that, but one quarter of the budget is our salaries is um is staff.

So most of it is commodities, electricity, chemicals, um, our obligations with the ownership and the plants we have with the city of Phoenix.

So it's just kind of a high level overview of how it breaks down and where costs are going.

Just to be clear, we are treating it before we're setting it to customers, though.

We try to.

Yeah, okay.

There's a little sentence in there that got me laughing.

Thank you, Chris.

Um I I asked staff to do a two and a half percent uh analysis, you know.

We have the three and a half, we have the two and a half, and and one of the things I I thought is uh about parity and bringing kind of a closure, whether we're at three and a half or two and a half, and that parity does happen at the two and a half level as well as the three and a half level.

But I I've in my personal opinion, I know that we have more residential water users than uh what do we have?

You said 88,000 or 93 percent is the same.

93 percent of the 154.

It's quite a few.

Yeah.

But you know, holding rates down to a minimum is is was my thought process, and and council, we need some consensus on which direction to go on Monday.

And and personally, I I want to move with the two and a half percent uh parity based on the analysis, and that that allows us to move forward in 27-28, getting a little closer to instead of a three-year mark.

And eventually, you know, the commercial and industrial users are gonna be paying a hard higher rate regardless, and we're just moving it up by one year.

So council, I need a consensus on where you want to be two and a half to three and a half so staff can make the presentation on Monday and for the ordinance change.

So I've heard Ms.

Stuff at three and a half, is that correct?

Is it three and a half?

Is that the original?

The original.

So just so I'm reading this right.

So you're you're saying two and a half percent, Mayor, because that that gets us more to the bat to the balance of on the parity that that you brought up in audit and finance, actually.

But it it gets us the same, I mean, we get to parity at the same time, but it actually gets closer to actual use, percentage uses um faster.

Correct.

Is am I reading that right, Brian?

I mean, yes, mayor, council member go forth, yes.

So if we did the two and a half percent, yes.

It right now it calculates to about 49 percent residential, non-residential 51.

And if we did the recommended, it's at a 50-50.

The uh consumption for residential is at 48.

What we're calculating now in non-residential is 52.

So yeah.

It's it's roughly the same, just one percentage off.

That the commercial will go from 13 percent to 20 percent, is that correct?

Yes.

Okay.

So commercial general, if the three and a half percent would be a combined rate of 7.4 percent, and then that two and a half would be 11.8 percent of a combined for um for service charge and usage charge.

So what that would yes, what that would look like is for the two and a half percent um commercial usage.

The uh commercial service charge would go from four and a half percent to seven and a half percent, and then commercial usage, I believe if I remember correctly, was thirteen percent in the original, now it'd go up to twenty percent.

Commercial uh went is commercial landscape would go from twenty percent to twenty-five percent, and then the large commercial will go up to twenty-five percent also if we did the two and a half from the original three and a half.

So, Mr.

Adams, I'll start with you first.

You're the furthest away.

Well, thank you, Mayor.

You know, um I think that uh, you know, my my again, my intention on uh being being one of the catalysts to this discussion and this this this re-look at the uh at the proposal that initially came to us was to reduce the burden primarily on residential ratepayers.

Um I don't think anything, you know, we've uh you know incremental steps has been a theme this morning, and I think that uh it would be uh a logical incremental step.

We can't we can't change uh the direction immediately without a good deal of further study, but I think it's a good first step to say we've considered an alternative which reduces the original proposal for the residential payer.

I've had some conversations with uh the business community, and the ones I've had, you know, I don't by any means suggest I I represent anyone or have uh the best uh uh finger on the pulse, but folks I have talked to seem to understand the issue of parity, and uh given the choices between uh the presentation that we saw last week, the two per the two and a half percent, with uh some of the burden being pushed down to commercial and zero.

Uh I think that there is uh again, the folks I've spoken to, there's an understanding that 2.5 might be a good com might be a good compromise.

Um so at this point I uh I would lean in that direction.

Um this is Thursday, it's not Monday, but I've always got my ears open and willing to talk to people and take additional information.

Thank you.

So, Mayor, I I did just want to clarify that council member Adams' final point right there.

Um we we do need to um understand direction from council today on which option they would like to appear on the agenda on Monday so that that so that the documents uh for Monday reflect which direction they they would want to go.

So um so council member Mr.

Adamson, you're you're at you're okay with two and a half for now.

Well, isn't that akin to taking a vote today?

We're not taking up boat vote today.

We want a consensus just direction for staff to place it on the agenda.

No, I can live with two and a half okay.

Um also like to um make sure that council saw the letter from the Mesa Chamber of Commerce and take that into consideration since it's representing a large um division, you know, a large amount of our businesses.

Uh who wants to go next, who's a volunteer.

I'll go.

Um I I have not talked to some of the the business owners, so I I take uh comfort that council member Adams that you have and that um uh between the two and a half percent is a good compromise because again, I you know we we don't want to radically impact and neck in a negative way our our businesses.

I'm I'm very sensitive to that fact, but I think I think the two and a half percent um is a is clearly less burdensome when looked at and compared to the zero percent.

So I think that that's a a good compromise that I can I can live with as well.

Okay, thank you.

Mr.

Aretti or Mr.

Summers, yeah.

You know, my preference is to keep it at three and a half, you know, it states, you know, we get to parity at the same um time with the commercial, um, and it's less burdensome on commercial, still a higher rate that we're adding uh at 13%, right?

Um I think that makes it uh again uh an incremental piece, but uh as if we do two and a half, I think you see the balloon into 20 percent and an additional with the usage charge, right?

Uh okay.

Um so my preference is three and a half.

Um, you know, it's you know base rate on inflation, right?

As far as we're looking at costs, eggs cost more, you know, milk, you know, gas is more.

And so it's it's uh it's part of the I I think what we as good stewards, we have to look at making sure that we are looking at uh how we pay for this work, and then uh with the lookout at all, including residents and and business owners uh that uh are in in the city of Mesa.

But so that that would be my preference is uh three and a half, keeping it there with still a uh considerable use, uh you know, uh charge on on commercial that that 13 percent, but that's that's my uh opinion right there.

Thank you, Mr.

Redia.

Uh Mr.

Adams, uh go to you next, and then we'll go to the swing vote here to my right.

Thank you, Mayor.

I the the Chamber of Commerce's letter uh was referenced a few minutes ago, and I'd like to point something out there.

Maybe four or five paragraphs down the the letter states accordingly, the Mesa Chamber of Commerce respectfully urges the rejection of any proposals that would concentrate the entire rate adjustment burden on the Mesa business sector.

It doesn't say any, it says the entire and you can read what you want into that, but I read the letter very carefully when I received it, and I don't see it as being a a fist on the table saying nothing would be warranted.

It says the entire rate adjustment, and that would be what the zero residential was.

The two percent, the two point five, rather, is a compromise between the two.

Thank you.

No one's really advocated for for the zero.

And you know, with all that's going on with all other communities, I think our the smart approach that this city has taken to ensuring that we have investment in our infrastructure that that we are securing our water rights is as inexpensively as possible in a in an environment that makes it very difficult when you see the investment going on on in other communities and how much they've had to increase it to celebrate that to allow our our residential ratepayers who buy the milk, who buy the groceries, the meat that's going up, freaking pasta is going up now.

Freaking pastas going up now.

To be able to give them a zero, I think would be pardoned upon a big splash.

My concern is moving forward again.

Some of those costs get passed on.

And I don't want to make a big splash if these numbers don't add up for whatever reason in the future, and we find ourselves, I do not want a 25% increase in the future because we didn't smartly take this on.

I I feel comfortable that at least a two and a half percent will keep us in that ballpark so that we don't see those big increases.

And it is a balance because we're we are trying to attract more quality retail.

I don't, you know, so what's the correct balance for there?

Because how are you gonna get those small mom and pop shops if we overburden them?

Uh we have a lot of industrial nine million square feet of spec industrial still sets bacon.

I don't want to knock that off too fast either.

And but I do feel that the balance having shifted to the commercial industrial user.

I I think our residents deserve to have a piece of that, and a two and a half is a pretty decent compromise to just to have a just a small two and a half percent increase when other cities are seeing double digits.

I think that's a pretty big win, especially considering your original proposal.

I think was what, six?

Five and a half percent by five or so it's I think it's we'll take a win and and uh not go too far.

Is that four?

Yeah, very good.

You have your direction.

Thank you.

Thank you for all those comments.

So, mayor, real quick, um, one last slide.

Um, now after all that, after all that but what I wanted to do, so since we are doing that, um the commercial now the recommended.

So, what we'll do is adopt for commercial the notice of intent, because we can't go above what we noticed in the intent to adjust rates.

So, what we would do is the city would take action on the notice of intent for the remaining non-residential, so anything above what we presented in the notice of intent, we would then introduce and then come back in January for the introduction of those rest of the percentages, and then in February, council would take action on that, and then April is when the additional increase over what was previously noticed, that's when those would take into effect.

So the original what we're doing on on Monday is introducing uh a lower residential but up to for commercial, and then council would take action on December 1 for those rates, and then coming back, we would notice the rest of the percentage increase on December 8th, and then council would vote uh later next year for the um for that additional to go into effect.

So it will be two effective dates.

So Mondays and December 1st's effective date will be January for the residential and part of the commercial, and then the effective date for the rest of the non-residential would be April 1st.

Any questions?

All right, thank you.

That was a fluid discussion, I guess.

You want to plow through and take a five-minute break.

Why don't we take a break while we get geared up for the uh thank you?

Battery energy storage systems.

Yeah, because what could possibly go wrong now?

Maybe a fire.

Okay, well, this uh we have everybody back, yeah.

One, two, three, four, five.

Mr.

Adams, you're still with us.

We'll find him.

Uh Tubi is a presentation on the I'm here.

Couldn't find a mute.

Thank you, voice.

Uh presentation on the regulation of battery energy storage systems, including potential amendments to the building fire and zoning regulations of the City of Mesa Code.

Rachel, it's just you.

Just me.

I have lots of backup though.

So the questions start.

So they're in staging, right?

That's what we call on the fire stage.

Yeah, they're staging.

Okay.

Um, well, good morning, Mayor, Council members.

Um, we've been continuing to work on the battery energy storage system or the best um tax amendments, and so we just wanted to give you a brief update on those.

Um, so just as a reminder, um, both planning division, building division, and our um fire department has been working on amendments to both our zoning ordinance and to our fire code related to BES.

Um we've had two public um open houses in October, and we recently went to the Planning and Zoning Board on October 22nd to get their recommendation.

Um what we've been hearing throughout the whole engagement process and through the public hearings have been um kind of questions regarding the separation that we've been proposing, the definition of the accessory use of BESS versus the primary use, questions and comments about the screening and the design of the facilities, questions about the required sound studies and what the minimum decibel levels of that can be, and then comments about um safety, including um requirements of the fire code, and then finally just how this applies to certain communities such as Eastmark.

So when we uh we did come through city council for a study session on October um 6 and presented the proposed amendments, and we went to the planning and zoning board on the 22nd, and we did receive a recommendation um to city council for adoption, but they had two um suggested changes to the ordinance, and uh those were a change to the separation requirements that was proposed.

So the ordinance that staff brought forward um proposed a thousand foot separation from the nearest residential use or zoning district, and uh PNZ's recommendation was to reduce that to 400 feet, and the other recommended change that the board made was to the nameplate capacity for what qualifies as an accessory use for BESS staff's um proposed ordinance um suggested that that be um one megawatts for an accessory use, and the planning and zoning board um recommended that we change that and increase it to five megawatts.

And so, what is um what we're gonna be bringing forward on uh December 1st is two different ordinances for your consideration.

So for introduction on the first, one of those being the recommendations from the planning and zoning board.

So one for the increase of the separation from residential uses and zoning from a thousand feet down to four hundred feet.

Um and then the second being their increase in the accessory use name plate capacity from one megawatt to um five megawatts.

But then um we are also bringing forward a second option for city council to consider, and that would be um staff's recommendation, and the difference in these two ordinances would be the separation requirement from residential uses, which um staff recommends remain at 1,000 feet.

Um but we um are making a change or an update to that ordinance to the accessory use nameplate capacity, so that would increase to the five megawatts as well.

Mayor, yes.

Were you done?

Were you done, Rachel?

With that, yes, it's pretty it's pretty brief.

We just wanted to give you an update on what you'll be seeing moving forward and what the impetus behind that was.

She was out of slides.

Well, she didn't get to the questions one.

Yeah, yes, so I'm happy to take any questions.

So let me ask this.

We we were we just gave staff direction on what to do with utility rights to have that introduced.

Why are we introducing two separate ordinances instead of just getting direction on which way we want ahead?

And we could um mayor vice mayor, the the distinction was that we're not taking any action on this till December 1st.

We didn't want to preclude any other discussion that council may want to have, unlike the utility rate introduction, which would happen on Monday, and that we needed to publish all that around it.

So we could we would love it if you if if there is a consensus of the council today to move forward with one, um glad to do that, but um that was in order just uh normally we would do this a little bit later in the process, but with Thanksgiving and with National League of Cities and not being able to meet for the next couple of weeks.

Um the idea was to give both options to council and then allow that extra time for for discussion, and and then on December 1st, there would be a motion with four or more votes for one of the two options, and that would be the one to move forward.

So, Vice Mayor, that that was the rationale behind that.

I won't say that it's unprecedented.

I think we've done this before, but I do find it a little unusual.

Um I'll tell you this impacts my district and pretty much my district alone at this point, given given the proposals that are before us.

And I've been I haven't fought a best fire, but I have fought battery fires.

Yeah, and I understand the difference in chemistries, but I think our public safety absolutely has to come first.

But I think our public safety absolutely has to come first.

And my I will strongly advocate that a thousand feet is not an unreasonable ask to ensure the public safety, and particularly when a home is somebody's number one large investment, and the idea of the smoke and the particles and the hydrogen fluoride that flows out of these things when they catch fire can contaminate that thousand feet can make a huge difference in the health and safety of welfare of our public.

It is not unprecedented.

I understand that you know that jurisdictions can set whatever standards they want.

The NFPA is a minimum standard for safety, right?

Uh and UA does a great job.

There's still a lot of unknowns.

This is a new technology.

Um Rancho Cucamonga has done a thousand feet.

A California bill that was introduced wanted to do 3200 feet, but that was for 200 megawatts or more.

I don't think we have anything that large.

Do we?

Actually, we do.

So I take that back.

200 megawatts or more, 3200 feet.

Bill in California, and some of our some of these are even larger.

Uh 5,000 feet in Alameda County.

Uh, you know, the standards, I don't think a thousand feet is an unreasonable standard given what a lot of these other communities are doing.

I I don't if it's if it's the decision of council that they want to at least have the option, because I will admit we don't have a lot of the background included in this.

You uh the the entire ordinance and background material is not in this, but a thousand feet is a reasonable number given what some other communities are doing, and just airing on the side of caution.

So with that, I just interested in council's conversation.

Mayor, I I'd like to know where where did they get the 400 feet?

What was that based on?

Um, Mayor, Councilmember go for so 400 feet was um was an early recommendation that staff had, and that was based on the data center ordinance and the minimum separation that we have for data centers.

We thought that that was a the reasonable distance considering the the impacts of data centers, not including the safety issues such as BSS.

So they're basing it on the data centers.

You're saying telling me that the basing it on the an earlier version of the ordinance that they wanted us to revert back to that recommendation, not based on public safety concerns, correct.

Interesting.

Okay.

So how did we get from 400 to 1,000?

What was the change?

Why did staff start with 400?

I understand you just explained that.

But then the recommendation was a thousand.

Um you changed it.

Mayor, council member, we were we were asked to look at a greater distance to to really consider the safety impacts of that.

And as council member Summers was kind of alluding to when he was quoting some of those distances from other uh municipalities, there really is no set standard for BESS and separation because it is a newer technology, and those distances that we've seen in ordinances from across the country are anywhere from 100 feet up to you know 5,000 feet.

So we felt like that was a good middle ground, reasonable thousand feet from from residential that we would bring forward.

So you went to a thousand feet because council felt that that was a good number, basically.

I I believe Mary.

Yeah, so Mayor Councilmember Duff.

What we did was again, because there is no standard except for the NFPA, which is it's small, it's like a hundred or a hundred and fifty feet, and we knew we wanted to go further than that.

What we heard from some residents, what we heard through some of our outreach, what we heard in our our workshop with the our study session here with council was that maybe we wanted to consider a uh greater distance, and that's why we went from the 400 to the 1,000.

So it was a C it was a series of of comments that we were hearing about that separation that 400.

Soft the expert people who are experts in this because it's an evolving technology that is changing quickly as far as the safety, whatever.

Have we talked to any experts in this field as far as what you know the recommendations would be?

So Mayor Councilmember Duff, I'm gonna ask maybe if um our fire marshal Sean Alexander and and our building official John Shefferell come up.

We have done a lot of outreach on this, and as I said, the standard really is the NFPA, which is the the hundred feet, which we as staff thought we should go at least a minimum of the 400 feet because that's what we had for data centers, because it's more than just the safety, there's the noise impacts and the visual impacts and all of those things.

Because it's more than just the safety, there's the noise impacts and the visual impacts and all of those things.

So with the thousand feet, um we're taking that that precaution for those safety potential safety impacts.

But I can let Sean and John speak to some of the people that we've done outreach to because we have done a lot of outreach to the experts on this on this uh topic.

Good morning, Mayor and Council.

Um so we have spoken to quite a few um experts in this industry, and to the comments that have already been made, there is no set standard.

The um we have uh taken our proposed draft language and um run it by some independent um subject matter experts that we trusted uh agencies like uh underwriters laboratories and uh FSRI, the fire fire service research institute to um get their input and the best we could get from them was that um our zoning ordinance was in the bright ballpark.

They they were unwilling to give us exact numbers because it is dependent on the needs of each jurisdiction.

The as Mary pointed out, the NFPA and the fire code standards uh have a minimum setback requirement of 100 feet.

So for us to we're not able under the fire code to um unless we added more amendments to uh increase that distance that this was a zoning consideration.

Um we got to this point based on feedback that we got through the public outreach process.

Okay, great discussion.

I knew you'd call in the staging crew here, you know, those um Mr.

Butler, did Maricopa County just set a distance for their best systems for the county?

Do we do they did?

Sean do you want they did?

I don't recall the number off the top of my head.

Um it it was I believe it was a hundred.

It was a hundred feet that Maricopa County just approved in the last week or so, is that yes or correct?

Okay.

It was very recent.

But I think to Sean's point, I mean, that that's the struggle, right?

And and it's uh one of the disadvantages, I guess, of being an early adopter on this, that we're actually ahead of most communities and trying to trying to bring some regulatory framework to this or a zoning framework to this is um the fact that folks the folks that have made decisions have been all over the board and council member def's right.

I mean, it's certainly an evolving technology.

I wouldn't want to say whatever council decides would will be the final say on this, right?

This this may be an issue that comes back in a in a couple of years, uh depending on which way the industry and technology has has gone on this, right?

So um so it we know that puts you all in a tough situation because there's not that industry best practice that we can just point to and and and others.

So that that is why it is truly, you know, um people trying to do their best with this, and I know that's what Rachel and John and Sean and everyone who's had these conversations with industry and and yeah, we've you know, several of us I know have heard from different elements of industry, and it all depends on who you're talking to, right?

On on this, so that makes it a very challenging um component.

You know, I think one of one of the themes moving forward on this is where this land use would be allowed, and I think part of trying to get in in front of the light industrial component of this, um, because we do have the three sites that uh have been the the catalyst, you know, for this discussion.

You know, and in the future, certainly there are places um in heavy industrial and and maybe general industrial where um best systems I think would be more compatible with the uses that we would like to see from a manufacturing standpoint and heavy industrial standpoint.

I don't think anyone questions that these type of energy systems are essential to trying to solidify the grid.

Um traditional generation is just very complicated, right?

And takes decades or more for energy companies to um power companies to to um to generate, and these are um a much shorter lead time in order to bring that on.

And and and we've heard from the highest you know, echelons of SRP, the challenges that they see down the road um as far as just meeting the energy demands in this valley and particularly in Southeast Mesa.

We're we're a victim of our own success, right?

Which is great because um, as alluded to in the rates, we're now I mean, that that shift that we're seeing um that balance that more uh economic growth that we've experienced in the booming economy in Southeast Mesa also has the side effect too, right?

Of the high energy demand, and exactly the types of people that we're making Jay go out and uh recruit day in and day out, advanced manufacturers, others, guess what?

They use a lot of energy.

So there's no easy answer to this.

And and I know you're being faced with the dis dilemma of balancing the public safety aspect of this along with the legitimate energy demands that our utilities need in order to go forward, and it's an evolving industry which makes it even even harder.

So um that that is the policy dilemma that the city's faced with right now in this record.

Exactly.

So I can't wait for that first zoning code that comes through in Maricopa County, and they want to put a best system a hundred feet away from homes.

That's gonna be an interesting one to watch.

I just watched the whole one with uh BNSF.

That's not a best system, that's a trade system, it's different, I understand.

But we've talked repeatedly on this council about the conflict with between industrial uses and residential uses, and we want to make sure that we have good transitions that go between those very different sides of our spectrum.

I want industry, I agree with you.

I think the best systems are at least uh a bridge right now between uh uh the lack of increasing generation capacity that we need in this state, and the fact that we want to bring in advanced manufacturing jobs and we need that energy.

But there has to be a compromise here.

And I think a hundred feet from somebody's home is absolutely insane.

I those firefighters got blown back.

If it would have been a hundred feet if it weren't for that dang chain link fence.

That is correct.

So to put that kind of a an explosive potential, and I know there are new safety systems that are built into these, but they're active and they can fail.

And to put that type of hazards so close to someone's house, I think there's a dereliction of duty.

I'm just gonna say it.

I don't think I think a thousand feet is reasonable given what a lot of other folks are doing.

And again, I will stand up for my residence on this.

I'm I'm completely in agreement to I'm willing to house these systems uh with some reasonable accommodation for the safety and welfare of my constituents, period, uh knowing that we we need the system, but I I won't I can't compromise uh on people's safety uh for that.

We're gonna have to figure something out.

But there are six other council members and we need four of them to to make a decision on which way to go forward.

So I guess the question is do you want to continue moving forward with the two, or do we want to try to can get consensus today so that I can rest easy knowing what my vote will be in December if this ordinance of a thousand feet was employed to the best systems that we have in process right now?

Or is it three?

Is it three of it?

If this a thousand feet was uh applied to those three.

What would that look like?

Would they be able to have a system there?

Would it be prohibit them?

What what are the complications with that a thousand feet based on the three projects we have?

Yeah, Mayor, Councilmember Duff.

So it would just be the the two projects that have not been constructed because the one is under construction already.

Um so they would have to modify the site plans that they presented to staff previously, but it's my understanding that they would be able to make modifications to to meet those requirements.

Well, but I think the capacity in one would be reduced based on the thousand feet.

Um Mayor, I'm not sure if I can speak to that, Mary Gina, if that's Mayor uh council's um, the energy stories are yes, though.

We're not 100% sure yet because we don't know specifically how they would configure that layout.

So I know we've been having some meetings with both of the applicants.

If it does go up to a thousand and how that impacts their site, but I don't have a specific answer for you on that right now.

But you will get one.

Mayor, we can get one.

Oh non is coming with us.

None may have one.

Well, that's way for assistant chief forget to come up.

Hi, Mayor Council Member Duff.

Um Freeman and I are Charlie made with one of the companies doing two of the sides.

And do confem die if we go with a tall and feed diable to meet that requirement.

We haven't talked to the Ted one yet.

And I think we have a meeting to know with a Ted one.

So we'll know today.

And I think the third one would either have to reduce capacity or there's the problem with that one is there is a proposed apartment development that would be 400 feet away from this thing.

So we're putting residents in harm's way.

And just uh end on a positive note.

Um Tesla is a supplier of a lot of these best systems.

They've just recalled uh battery systems for their power wall due to a fire hazard risk.

So don't put one in your garage.

Put one in your garage.

That's what it's telling you.

They're the same batteries or very similar.

Well, I miss go for it.

I'm gonna let you guys do this out, but before that, I'll just add one comment.

Um, just a far bit thing.

I don't I'm certainly not one to support anything uh overly burdensome rules and regulations, but um I have to agree with Scott on this.

That when it comes to people's homes and their safety, this is an unknown area, as we've we've said.

I'd rather get it wrong and have it too far than get it wrong and not have it far enough.

So that's where I am.

Okay.

Mr.

Adams, did you want to weigh in?

Or wait till the next next time.

No, no, this is this is fine.

Um I do have a few questions and a couple of comments.

Um I'll start with well, I'll start by just saying I am not a professional firefighter, and we have the benefit of having two of those on our council, and one uh sitting at the uh opposite side of the table, among others.

So um I'm gonna strongly defer to what our professional firefighters experience tells us.

So with that said, uh um Ms.

Phillips, um, isn't it isn't it true that when you say a thousand or four hundred, there isn't actually an additional one hundred feet because isn't that measured from the fence line, and then the the actual batteries have to be a hundred feet back from the fence line.

Is that true?

Um mayor, council member Adams, so you're correct.

So what we're talking about right now is a separation, and that is different from the setback that's being proposed in in the fire code.

So in the fire code, that setback is from the property line to the BSS equipment.

And I want to see if actually I have a backup slide here with the diagram if it's in here.

It's not in this one, but I I will have it for for council that kind of shows the difference between the two.

So the setback for the fire code is from the the property line to that BSS equipment for the separation um within the zoning ordinance.

That's gonna be a separation from the site screening wall of the BSS facility to either the the use or a building in in context of industrial uses, but that is that's different.

So that's going outwards from the site, whereas the setback is going into the site and kind of most simple terms.

Okay, thank you.

That that's what I thought.

I just wanted to confirm that.

Um at some point in the in the recent past when discussing this issue, we had talked about requiring a I'll call it a demolition bond.

Um so let's say we stand up or one of these these companies stands up a best facility, and 20 years from now, it's either obsolete or no longer uh required or otherwise no longer viable.

Uh yet the company that built it is long gone.

Are we requiring some type of a bond to be placed that will take care of uh the remaining batteries or other stand-down type of activities that might occur in that case?

So Mayor, Councilmember Adams.

Aside from the zoning amendments, we're also looking at adopting the 2024 fire code.

That code has provisions for decommissioning and requires a decommissioning plan be sent to the city for approval.

And the fire code official has the ability to ask for some kind of financial assurance.

You know, what's their plan in in their decommissioning plan?

How are they intending to pay?

We could insist on a bond.

We could also add other language to the code later if we feel that's necessary.

Okay, thank you.

I I think that might be something we would strongly want to consider.

Um Ms.

Phillips, uh, this went to P and Z.

Uh how many PNZ members were present on the dias when this was decided?

Do you know?

Mayor, Councilmember Adams, there were four P and Z members present, so that was uh a four-zero vote with these recommended changes.

Oh, three-one, I apologize.

I'm sorry?

Um Mary corrected me.

She said it was a three-one vote.

So as we've seen I'm sorry, please go ahead.

No, I was just trying to confirm.

So it was four members that were present.

Okay, so as in as in past situations, we were not we didn't enjoy the benefit of three other PNZ members' opinions.

Um what things did PNZ consider if you could summarize that caused them to feel that the 400 um recommendation was more appropriate than the thousand.

Can you summarize that?

I realize I could go back and read the minutes.

That's on me.

I'm sorry I didn't do that, but maybe just a quick summary.

Um Mayor, Councilmember Adams, I think a lot of that had to do with the public comment that we received at the hearing um through just the public outreach process and comments from the industry saying that the city should be following the NFPA and that they felt that that thousand feet was excessive.

Um largely it was based on on those comments.

Okay, thank you.

Um the other thing I would would ask here for our deliberation, is there a place here for a compromise?

We're talking 400, we're talking a thousand.

Is there somewhere in the middle, considering that extra hundred feet as well?

Is there somewhere in the middle that would be a reasonable compromise that this council would want to consider?

Um I am I am all in with the vice mayor's comments about public safety.

I don't want to compromise that in any way, but I'm wondering, since this is such uncharted ground, is there is there some compromise on distance here that we would feel comfortable with from both the public safety standpoint and uh doing our best to be accommodating to industry.

I just throw that out.

And I, you know, my number is probably different than anybody else's, but is that if that's worthy of a conversation, I I just throw that out there for discussion.

Mr.

Addis, why don't we do this?

I think Mary and Nana, you're meeting with the third or the other second uh battery system people today, and you can get some information from them and come back to us and see what the perhaps their distance would be.

And uh we can go from there.

But does that help you, Mr.

Adams?

Yeah, fair enough.

I just uh you know, if I if I had to indicate my preference today, I would uh I would be uh alongside the vice mayor.

I think uh I think the safety aspects should trump all other issues here, but I'd I'd be happy to hear additional data.

I think this the struggle I have here is I like to make data-based decisions, and this sounds like the data is all over the place, which makes it doubly difficult.

But thank you, Mayor.

Yeah, I I get it, and the problem is it's an emerging technology.

That and that that's what makes it so difficult, and that's why these numbers are all over the place too.

There's 100 feet from the county.

And 5,000 feet in another county, and I think the the 1,000 feet to me makes the most sense.

And I think there's some land use choices that could be made on the second property or third, depending on how you look at it, that might make that a more viable decision with better uses.

So that's my signal.

Well, I'll I'll just add some comments that um you know we could never plan for an incident, you know, if a battery storage catches fire.

Uh I know our public safety personnel will handle it appropriately.

Uh, regardless of the distance, right?

I mean, Chief and Chief Brigad.

I mean uh we're we're prepared to to do that.

Uh even in the emergency response guide that we get for fire personnel, it's a minimum of 330 feet evacuation from any incident.

So that's what we do is we'd evacuate 330 feet at a minimum and then expand it from there if we need it.

And then we have all the technology to determine, you know, smoke plumes, uh, runner uh water runoff, contamination issues.

But uh, you know, we're dealing with uh three sites and two contractors to build battery energy storage systems, and I would like to see some type of compromise.

I understand the thousand feet, but probably some of our highest levels of toxicity can come from a house structure fire, what's in a in a house, and and usually these containers will burn uh what I understand inside and stay inside with a minimum amount of smoke.

I don't marshal, do you want to add to that?

I mean, is how how has it been burning uh those structure containers?

If it does breach the storage container, then you're gonna have a large exterior outside fire.

Um we've seen some pictures from best fires across the country where they put out a significant amount of smoke once they breach that container.

Um as we've discussed in previous discussions, the our our tactics for fighting a best fire are to actually let the container that is involved burn itself out and protect the fire from spreading to the surrounding containers around that.

Um it's not part of this discussion with the with the zoning code setback distances, but I I would like to remind council that one of the amendments have we made to the fire code to address the risk on these sites is to break up these um properties into a rays no greater than 300 by 300 feet, so that if there were to be a container fire that were to spread from one to the other, um that it would be contained to a smaller group rather than run through the entire premise.

So we have put in some additional requirements in the fire code amendments to try and address the risk and the operational response to a best fire.

Okay.

So I'm really hearing consensus that we continue this, you know, until unless the council wants to miss any any thoughts.

Uh I'm hearing Mr.

Adams, myself, um two four, maybe two or three this way.

So, mayor, why why don't we um do this?

We'll we don't have Miss Taylor it's out here.

Yeah, so we'll you know certainly um with with the discussion that'll happen with site three that might shed some some light on it.

We'll we'll keep both options on the table, not to complicate things.

Maybe there is a third option after speaking with uh the applicant um to council member Adams' point.

Why don't we get some clarity on that?

Not saying there would be, but we could bring forward a third option if if need be um in the future based off of that conversation as well.

We've got two and a half weeks before this is you know it will be uh coming to council, so that could give us some time to to try to understand a little bit more about those dynamics, and since there's I don't think clear clear direction today on on which way to go, and and then uh council member Taylor can can uh add her voice to this as well.

So very good.

Thank you, Mr.

Adams.

You okay with that?

Yes, that sounds fine, Mayor.

And uh while I while I have the the mic here, I am going to have to bow out here at 10 o'clock for another uh uh meeting commitment that I have.

Copy that, thank you.

Uh then if it's okay, council will move over to item three is the knowledge of the receipts.

Um is there a motion for that?

Thank you, Ms.

Duff.

Vice Mayor, all in favor say aye.

Aye.

Okay.

Aye.

Okay.

Motion passes.

Next is uh current events and conferences attended.

Council members, do you have anything you wish to share?

Uh okay.

I'll I'll share, I'll share one.

I uh this is first of all, this has been uh a week for for veterans for all that my uh federal fellow veterans who serve.

Thank you for your service.

Uh I don't know if you know this, but of a living Americans today, only uh roughly 6.1 million Americans 6.1% of Americans have served in the military.

2.1 million women have served.

My wife is proud to be one of those who served.

So we had the opportunity to attend a number of events.

Uh I spoke at one of our uh Mesa Public Schools about service and the legacy of service in the military, not just the military, but being engaged in your community.

Uh the veterans medical leadership uh association, who does a lot of outreach to veterans in need dealing with post-traumatic stress disorder, homeless.

They try to get in front of it.

They had a gala and fundraiser uh that I was able to attend, uh, which was outstanding.

It turns out my wife and I were both there, and this uh older gentleman was sitting next to us, and we just broke into a conversation and we're like, so who are you?

Colonel Young was his name, Colonel Young turned out to be our last base commander when we were at Luke Air Force Base, and we just reminisced about all the incidents and and the stuff that went on when we were we were at the base.

It was uh it was a great conversation that we had.

So uh and uh I I got to drive the captain over here uh on our antique fire truck and uh uh for Veterans Day.

It was a great parade.

And sorry for the lurching, but it is a old gas rig, so thank you.

Ms.

Duff.

I have quite a bit.

It's been a busy week.

Um last Thursday I attended a ribbon cutting and open house for energy solutions.

They're right down here on Broadway near extension or so, and they um distribute high quality solar energy solutions.

I'm glad to have them here in uh district four along Broadway.

Um that night I also attended the Shade for All workshop at Sherwood Park, um looking at trees and shade structures, engaging the neighborhood and how they can implement some of these things at their homes.

It was held at the park, and of course they've added a lot of trees there.

Thank you to the urban nature program, Stephen Addison and our sustainability department for putting that together.

It was well attended.

Um on Friday night, uh the mayor and Summers and Adams and I think Miss Taylor was at the PD Academy class number 61 graduation.

Um their motto, earn not given as a great class.

I think we got like three new women um officers from Mesa.

So yay.

And that night I went to the Salvation Army red kettle kickoff.

Uh there was actually I didn't realize this until I kind of got there.

There's a competition between City Council, Iowa's city council, all right, and fire.

There was a table of them and PD, I think they had two tables about who could run around the room as fast as possible and gain donations from each other, but given half the room is already competing, but I gave it my best.

Uh PD won, but they did get a 10,000 um check from a step-up schools.

They have dissolved and they use their their nonprofit and they gave their money to the Salvation Army and their needs.

So I was very happy for that.

And next year, watch out, I'll be prepared.

Um Saturday was the barbecue classic.

I was a judge at the cut the kids' queue, and the mayor was also there for quite a bit of it.

He was also a judge at the kids' queue.

There were award Mr.

Radio, too.

Oh, yeah.

We were.

We were well represented.

And the reward category for best barbecue.

I know she's looking like you guys don't know barbecue because I'm from Kansas City.

Councilmember GoForth.

Um, but there were also award categories for appetizers, desserts, and their the kid concoctions, which are actually very, very good.

Sunday um the mayor was there.

I think that was just you and me for the Remembrance Day, the uh Royal Air Force Remembrance Day for the cadets killed during uh training at Falconfield during World War II.

Um and that evening there was a dinner um in conjunction with uh UK group that came over, descendants of the pilots that trained at Falcon Field.

They're called Falconfield the New Generation, and um about a dozen of them had flown over for a week of activities.

Um they were also in the Veterans Day Parade.

And so I went with the city and the Veterans Day, then I ran back, and then I jumped on to theirs, and then I went through it.

And by the way, the Veterans Day Parade was always always very good and amazing.

Um Monday night we had the gratitude gathering, the mayor was there and I um hosted by Together in Service.

Our nonprofits and faith-based organizations come together to celebrate um what they do, and the theme was the power of youth and service in our community.

Remarkable, remarkable um presentations from our youth, very moving and inspiring.

Um special thanks to uh I always mess up our friend, Deline.

Dilling Delin.

Delyn.

Dudley.

Dallin.

I've got to know her very well, but to the point I don't say her name anymore, and now I screw it up, and when I say Miss Baudine.

Miss Bodine.

I can say Bodine.

Um thank you to her for putting it together.

She does a great job.

And um, and then yesterday, um City Manager uh Scott Butler and I were at the Prudential Clean Room Services, ribbon cutting in District Four, um, near Country Club and the US 60.

They expanded their building to accommodate the growing technology of all the wear that you need for technology and health care, all the clean room wear, they clean it, and uh they've been in business for a long time, and they're um planning to expand even further.

Great jobs, really and impressive benefits, and I'm glad to have them here in District 4.

Thanks.

Wow, okay.

You were busy.

Yeah, yeah, yeah.

Uh Miss Goforth.

Well, I was out of town last weekend, so I missed a lot of events.

I was really bummed to miss the barbecue since I'm really the only one on the council that knows barbecue.

They need judges every year.

But I did enjoy participating in the Veterans Day Parade.

I have a lot of veterans in my family.

My father being one who served in the Air Force for 28 years.

So I I enjoyed being in that.

So anyway.

Great.

Thank you.

Mr.

Reddy, thank you.

Um a lot of them were checked here, but uh we had our Lehigh annual meeting that uh council member Adams and I both attended last Thursday.

Uh there was a delegation for autonomous vehicles uh from out of state senators and representatives from Washington State, Illinois, Virginia, and actually Montana, and Ian Linson was my uh co-host on that.

So Ian did an awesome job about uh talking about autonomy vehicles, and we have Waymo here, and so they actually rode in Waymo a couple times, they were impressed, but then I learned Montana probably couldn't accept autonomous vehicles, but uh they they were here.

Uh went to the Mesa Country Club, they had a grand reopening over there, and then the arts and service preview was also Sunday as well.

So with that, all of us have had a busy schedule.

What did you miss?

Well, I didn't necessarily miss one, but in the spirit of items uh uh future meetings and conferences attended.

I want to bring up so the Gateway Library in Southeast Mesa will be opening December 6th, but in the next three weeks, every weekend, they're gonna do a special event on the grounds.

It won't be indoors, but it'll be on the grounds.

So on this Saturday, November 15th from 9 to noon, the Arizona Museum of Natural History's Mobile Education and Discovery will be on site.

Uh it'll be science and technology, and if there isn't a dinosaur there, I'd be very disappointed.

And they will also be uh uh signing you up for library cards.

So that is the first event in the slow rollout of the grand opening of our first library in 30 years, 30 years.

And I believe that mobile van's new when it just started up.

All right, with that, can you schedule for uh future meetings here, Mr.

Butler?

Well, I appreciate the help of the vice mayor so I don't have to speak to the count down the gateway.

I know he's very excited about that along with his neighbors.

So uh looking forward to that on Saturday.

But uh Mayor and Council will be back here on Monday.

We'll we'll start at 4 30 p.m.

We'll convene in the upper chambers for the special count council meeting and swearing in of council member elect taylor.

So um, we're looking forward to that at 4 30 p.m.

on Monday.

Following that, we'll come back downstairs for the study session at 5 p.m.

and then back upstairs.

Where you're getting your steps in.

Uh so uh make sure Apple Watch uh gets it.

But um we'll be back at 5 45 for our regular council meeting on uh on Monday evening.

And then Mayor, just a reminder uh no study session on the 20th or the 27th, and enjoy Thanksgiving with your family on that day.

And so we'll be back um following Monday.

We'll be back on on uh Monday, December 1st for the first of two uh council meetings in December.

So okay, thank you.

All right, item six is to convey to an executive session for our annual review of council appointed positions or a motion to go to all right, thank you, Mr.

Redia.

All in favor say aye.

All right.

We'll take a few minutes and we'll go behind us.