Welcome everyone to our Mesa City Council Study Session for April 2nd.

Councilmember Adams will be participating by Zoom, otherwise, all other council members are here.

Before we get started, you may notice several of us wearing uh blue today.

Today is the World Autism Awareness Day.

We're proud that Mesa is the first ever autism certified city.

This reflects our community's commitment to accessibility awareness and support for individuals on the autism spectrum.

So we can continue that.

Let's continue celebrating differences and creating a community that promotes understanding and acceptance for individuals on the autism spectrum.

With that, item one is to review the agenda we have for Monday, uh April 6th council meeting.

So council, I know there's been some questions raised, uh, and we have all the experts in the room who'd like to go first.

Um I have a quick question.

I should have asked it the other day on 5E, and we might be covering it.

Um I had just looked at the project list and I saw one that says banner gateway improvements, and I was just wondering what that was.

Yeah.

Let's make sure that it's still 5e because sometimes the utility bonds.

Um and where is it on the council report?

It had a project list.

Uh oh, here it is on attachment A.

And it's under construction, so I I guess um it's good to go.

It's a natural gas improvement for a banner gateway.

Five is they have a presentation in here.

We have a present presentation.

I don't know, it's a project, it's just I should have asked the other day and all that for the we're probably providing uh gas infrastructure to the gateway, I'm assuming that's why we're doing the bond sale.

Yeah, mayor, council member Duff, um that is a that's uh Mark Halls from Assistant City Engineer.

That's a small gas uh improvement along gateway by banner gateway that was uh constructed with the Central Mesa reuse pipeline.

So it was paired up with that because it was in the same area, and so the work now is complete.

Okay, so that I just wanted to make sure that we weren't doing the improvements for private development.

Uh it was related to a service for that area, so as part of the typical um work that the city does with our gas system.

Okay.

Um so I think once the construction is done, we repay our sales with the bond uh sale of those bonds.

Is that correct?

Mayor, I would have to look into specifically this project.

I I have a list of projects here, but I don't have that one on my list.

Um what we'll typically it it depends on the situation, but we'll we'll do upgrades based off of what the revenue is gonna be from the gas customer so that we can meet their needs, but we're also looking to make sure that the utility is going to um make money off of those improvements that are being put in.

Um that's the typical process, but again, I with this specific project.

I I don't have the details on it.

Could we ask Mark?

Mark Mark, why don't you come up and explain that you're very thorough the other day?

Okay typically, and maybe I need to learn more, but typically private development pays for the installation of infrastructure that doesn't exist.

I'm sorry, um council member death, could you repeat that?

So go ahead.

Is my um assumption correct that on a private development?

If the infrastructure doesn't exist, they pay for the improvement.

That is correct typically.

So but there are like thresholds for um you know private use.

Uh but um this sounds like you know, and I'm not an expert in this specific project, but that it does sound like this is uh general public purpose.

So that is serving more than correct that area.

The intent is Yeah, mayor mayor and council member def.

We we do this all the time in the utilities guy.

I mean, think of it as we're not providing we're wear your utility owner hat in this regard.

We're getting infrastructure to meet a client who's then we're gonna make more then off of serving that client than it's gonna cost us to put in the infrastructure.

And so that that happens all the time.

Scott's team evaluates that every time there's a request uh to provide service that um we don't have an existing line um that they would evaluate that and determine whether it's good business sense um uh in order to provide that line extension in order to serve that customer.

Yeah.

And just to follow up on the mayor's comment.

So when we typically do issue or have these issuances, our goal is to provide funding for the calendar year.

Uh but since we don't receive those proceeds until midway through the calendar year, we often reimburse ourselves for the six months of expenditures and then the remaining uh funds um help support the project costs through the remainder of the year.

So can I make sure I understand that?

So we are funding it for the um for banner, right?

And then we're gonna basically pay ourselves back with the bond monies, is that right?

And then they're gonna profit us more than what we would have paid in order to build that infrastructure over the long term.

Or do I have that backwards?

Mayor Council Memory Taylor, so uh I'm not specifically familiar with this project.

Yeah, this is one, and I apologize.

I I have a list of projects here, but this is not one that I caught.

I can give you details associated with the specifics of the project.

I think I'm looking more for the flow of the money.

Like, you know, we pay for it up front, we pay ourselves back with a bond, but ultimately we're profiting off of the Yeah, we'll we'll issue the bond and put the infrastructure in um up front, but then we realize we've done the evaluation that we're gonna make more over time by serving that customer.

That's no different than SRP or or any other utility that would look at if a new neighborhood was coming online.

Are we going to provide power to that and they would put in the infrastructure on the front end?

That's essentially what we're doing here with this gas line.

We have a we have a willing customer that's wanting um to utilize it, so we put in the infrastructure, and then um we're gonna make more.

We're we're gonna make a lot more than the cost to put in the infrastructure over time by providing that gas service to that customer.

But we're paying for it up front with the bond money, or we're paying it with our general funds and then reimbursing ourselves with bond monies.

So they would pay for it first and then uh pay for the construction and then it would be uh repaid with the bond proceeds.

Okay.

But to be clear, it's not out of the general fund.

That's correct.

Sorry, utility fund, yeah.

Utility funds.

Okay, thanks.

That was the part that I was trying to catch in the process.

Okay.

If no, I should have brought it up in advance.

Is there a small question that I just made in a big question?

Um well, we have Scott up here.

So I know we spoke over email.

I just wanted to make sure that for the public to understand the 1.3 million on item 5 F for going out and doing the reverse auctioning for the additional power.

I I just wanted to make sure that we were super clear.

I read the council report on it after we emailed and discussed a little bit about it.

You're basically saying we still just didn't have quite enough energy to feed our customers in the nighttime, right?

That that power.

So we need those really weird ad hoc moments where people's air conditioning is just cranking up in the middle of the night where they're running it colder.

That's why we're going uh to market for this because the solar that we're buying is not starting until you said what 2027?

Is that right?

Correct.

Okay.

Yeah, so um Mayor, Councilmember Taylor, it we look at so there's seasonality to power usage.

Obviously, there's more in with the two utilities that I'm responsible for.

There's there's more gas use when it's cold.

Right.

There's more electric use when it's warm.

Um so this is summer purchases, it's off peak.

So this is the time, yes, when you know, folks are are sleeping, but you still hear that air conditioning kicking on because in Arizona it's it's hot uh all through the evening.

So that's one of the things that we're seeing is those nighttime temperatures aren't dropping like they used to, uh, they're staying elevated.

And so we consistently look at our portfolio of where um what the demand's going to be, what do our supplies, what supplies do we have contracts with and trying to make sure that we're getting those as close as we can so that we're not out buying market purchases, trying to prevent the volatility that can be associated with the market.

And then in this case, we're using the reverse auction process that we have used previously.

Which worked really well.

Right, which worked really well.

And that ninety dollar a megawatt hour limit that we set in the report is actually our cheapest contract right now for that summertime off peak.

So we're we're trying hard to we're pretty confident that we'll get below that.

The reason why we set it at that 90 is just because there is volatility within the markets, and we don't want to get to a point that if we could get $61 per megawatt energy, but council has approved us for 60, we wouldn't be able to complete the transaction.

We'd have to come back, and by that time, by the time we do this process again, and we go back into the market, it's you know, we're exposing ourselves possibly in our our ratepayers.

Yeah, thank you.

And just for the public to understand, this is not for all of Mesa, this is just for the five square miles that's just for the electric service area.

Yeah, the five and a half square miles.

Great.

Thank you.

I appreciate that.

Okay, we still have the agenda of any other questions.

I would like to have just an update on five B on the auction.

Yeah.

That was an exciting auction.

I was there.

Was it she?

They're 10 acres.

Again, uh Mayor, go forth, uh, Mark Halls from Assistant City Engineer.

I've got uh Lisa Davis with me.

She's our real estate manager, and she'll be running through the presentation on the auction and the results that we received yesterday.

Good morning, Mayor and Council.

Um, yes, today we're here uh seeking the authorization to sell 8130 East Redberry.

Um it's located just south of Thomas and west of Hawes Road, uh, and it's take 10 acres in size.

We purchased it back in 2003 for $630,000 with voter-approved bonds, and then in 2007, uh it was annexed into the city along with uh a larger portion of the city uh annexed in at the same time.

Um the auction was held yesterday morning, and it was pretty exciting to watch and be a part of.

Um the minimum bid was the $1,550,000, which was the appraised value.

We had a third-party appraiser, appraised the property, and that was the value of the site.

Uh minimum bid increments were $10,000.

Um, and overall, the um auction was 31 minutes long, uh, and there was a total of 56 bids.

Um the highest bidder uh was reserve 100, and the highest bid was 2 million ninety thousand and one dollar.

And the reason that we had the $1 is because uh when they started the auction, or actually before starting the auction, they could put in a bid, and there was one bidder that put in for one dollar more than the appraised value.

Um, as far as notification of the cell, uh we created a web page that included all of the information about the property as well as uh the online auction and how it works.

Um so they had all of that information as well as the required training, the the fact that they would need to bring in a bidder's affidavit, the check that they would have to bring in for $77,500 to be a part of uh the auction.

Um we had uh emails that went out.

There was over 2,900 emails that had signed up for interest in um any sodium property um that went on the market.

We had the required newspaper advertisement, the site was posted with signs, and also letters went out to property owners within a thousand feet.

150 feet is what's required for the policy, but we went ahead and did a thousand feet because that's what planning typically does.

Lisa, can I really quickly said there's a total of 56 bids?

How many bidders were there?

There were three.

There were three registered uh bidders that were part of the auction yesterday.

2900 that of people that had signed up to receive information.

So any city-owned property that would go on the market, these 2900 people that had signed up for emails would be notified.

Oh, okay.

Okay, yeah.

Um, development require requirements.

We had gone through these back in January when I came forward uh asking for the requirement of uh the online auction.

Um this um development requirements includes the half-street improvements for redberry drainage requirements, which is uh kind of a big deal in this area.

They have to comply with the 2050 general plan.

Um they can use septic system with a development agreement.

We have a development agreement that's um part of this cell, and then also they would have to comply with the desert uplands.

Uh, in this slide, we do have a potential layout that the city developed.

Uh we hired an engineering firm and they created this eight-lot layout of what it could potentially be.

We didn't include any like engineering or anything like that as just a layout.

Current zoning in the area.

Just wanted to show a lot of residential, of course.

Our site here is here, of course, in the red.

And um the area that you see around it in the gray is still in the county, so it hasn't been annexed into the city, so all the zoning that you see in the yellow is um in this in the city.

Um so again, we're here to uh obtain the authorization to sell the property and also for the city manager to sign any purchase agreements as well as a development agreement.

And if you have any questions, I'll be happy to answer them.

I have a quick question.

So if we, you know, authorizations done and a city manager can sign all the purchase agreements.

We are honoring that two million dollar bid, right?

We we would be going to that entity and saying, hey, you offered to purchase this.

Can they still back out of that?

Uh Mayor Freeman, council member uh Taylor.

Um they they're definitely very anxious to get this under contract.

They've been in contact with me, they're ready to sign the purchase agreement.

Um and uh we do have the original check that they've given us, which will also go into escrow immediately, plus they have to come up with the additional funds to uh create the minimum of two uh 10%, which is uh 209,000.

So they would have to add to that 77,000 dollar check to start escrow, but they're definitely very very eager to get this purchased.

So Lisa, you they're they're very interested there you don't think this would be a problem, but in the event that the top bidder um walked away, you would be able to go to the next highest bidder.

Is that the way that's correct?

We can definitely go to that second bidder if if we if for some reason that they decided they didn't want to buy the property.

So the property was purchased by bond money.

Will that money then go back to that bond uh money that was purchased with and you know, because I think that money has to go back into the bond?

Is that it all it was was it was purchased in order um back in 03, right?

Lisa for um eventual park space.

Uh now at the at the time I think that was just throwing a dart at a map and trying to maybe decide because that area was certainly very different in 2003 than it is now.

Um as parks determined that that wouldn't be an ideal location for that um that led to the sale, but I think the intent is to reinvest those funds back up into parks in northeast Mesa because just because it's not in that particular site, there are definitely we have other park sites adjacent to that, um north of the northeast of the 202 that would you know certainly benefit from those park funds being invested in that.

So we'll work with council member go forth and I've already suggested that the money should stay with it.

I mean, because you know, when you go out to Bond and you say there's gonna be a park in that area, the money should stay in that category in that area.

Correct, and and there's complete alignment on that velocity.

So we'll um work with parks and um determine which of those parks in the adjacent area would make the most sense and what type of improvements uh could we we could do for that amount of money.

Okay, just confirming that.

Yeah, absolutely.

The other part is the uh reserve 100 is Blandford Homes, so they're have good experience in building out in that area.

Yes, so I'm fully confident that they understand what they got into.

For sure.

I have one question.

So I understand we returning the 630,000 that we have expended for the property to parks in that area.

How about the 1.4 million and access?

Where does that those revenues go?

Mayor, council member Duff, I think what we would we do.

We work with parks and look at the parks master plan in that area.

Unfortunately, two million doesn't get you very far when you're talking about park improvements.

And so um I I think there's ample need in that area to that would utilize the full amount of funds, but but you're right.

At a minimum, we would of course reinvest the the 600,000 in that area, but I'm sure as we look at the needs and what the different options are on those adjacent um existing parks for improvements in there, it it's probably going to run close to that range.

Uh okay, so it would stay in the area in the city.

It would stay.

It would stay in the area in parks is the initial thinking.

All right.

Yeah.

Yeah, because I mean obviously the you know the cost it is in 2003 and now 2026.

You know, I think you more look at the project than the than the dollars.

But I so Lisa, remind me, is this was this our first online auction?

Second.

Second year for you, council member go for it.

Actually, our third.

We held uh two back in 2020, so it's been five and a half years since the last two that we held.

We had one for the Adobe Record property, was just which was just over two acres that sold for the appraised value.

And then the second one we did was the one at 202 on Thomas, which was 13 acres grow property.

And did that sell for the appraised value?

No, that sold above the appraised value.

I believe the appraised value on that one was 950,000 and sold for 1.7 million.

Oh that was 13 acres.

Okay.

Well, this seems like it was a success.

I'm glad to see that it approved over the appraised value.

So any other any any hiccups or would you say that this went pretty smoothly?

And I think it went very smoothly.

It was very uh using Easy Buy, they were great.

They definitely knew what they were doing.

We watched it from kind of the back side of it, not on the same side that the um online auction users were using it.

But um, I think it went really well.

Um you could definitely see a lull during that 15 minutes, and then all of a sudden somebody would bid, and then it would start going up again.

So it was interesting.

I thought it would, I thought it went really well.

Very easy, very uh simple to use, I think.

Um and it was nice to see the three bidders and all three took part in the auction, so it was it worked well.

Well, great.

Um again, I'm happy that it it uh that it sold for over-appraise value because it's it's a great area and a lot of potential and opportunities.

So me too.

Thank you.

You have some.

Yeah, uh the uh the bond question.

Uh do we have to you know any geobonds, parks or otherwise pre-2008 still outstanding, or have these bonds all been paid off?

Or refinance.

City treasure, I should have introduced myself before, but yes, we do still have some outstanding pre-2008.

Okay.

Um have we looked at refinancing some of those?

We we look at refinancing every year.

Um, the rate we have on those bonds still doesn't we still don't um can't get a better deal on some of those.

Mayor Vice Mayor, that is correct.

Okay, a very low rate on the especially particularly on the geo bonds we have.

Okay.

Yeah, I so I think what I would like to talk about, um Mayor, when we have an opportunity, I think there's a presentation on 5D, and there's some information in there I think we're gonna want to talk about.

So if we can get a presentation when questions are done on this, we'll have a follow-up question.

When Lisa and Lance were here last, you know, we encourage them to find additional parcels that we could sell, you know, that we get them back into the system.

You know, if we're if we don't need these parcels, let's get them back out in the private industry and have them developed, and then there's you know, a revenue stream not only for us but for them as well.

Have you found some, Lisa?

We're sure you're looking at you don't want to answer that question.

Mr.

Butler answer that question.

Um, amen, Mayor.

Uh that's all I need.

Yeah, if we'll all say amen and move on.

I mean, that this is a perfect example.

I mean, this this was you know, we I don't think anyone here can speak to the exact rationale back in 03 for this particular site.

I'm sure there was one at the time, but it that that moment passed and we didn't need it, and and this is uh uh a great area for residential development.

So being able to turn it back over to the private sector so they can develop that um makes a lot of sense, and certainly as we come across other um parcels like that, if if if they are um some sometimes it's been in our um, you know, we've wanted to um maintain control of a property just because of the unknown of whether we might need something down the road, but on something like this where clearly um the decision had been made that this was not the ideal site um for a park, we needed to get that back out into the system.

So all right, did you voice mayor you had any question on this item?

No, I think we're done.

Did you want 5D?

So Mark, you're back up, I think.

5D, Mark, Lisa, thank you.

Mark, Mark, Lisa.

Okay.

Back to Mark.

And I'll just cue you up.

I think slide six is your highlight.

Okay.

Slide 10.

You want me to go ahead to there right now, Vice Mayor?

You could do a little lead-in and move fast that way.

Okay.

All right.

Well, good morning, Mayor and Council.

Once again, I'm Mark Hughes, City Treasurer, and I'm here to present the 2026 financing plan.

Um, and to help answer questions behind me, we also have the city's municipal advisor to know gold from Hilltop Securities.

And we have, and we have the city's bond and special counsel, Zach Shaykh is from Greenberg Talweg.

So I'll go quickly through these.

I'll start with some quick background information.

So the city's financing plan is the city's plan to obtain funding for projects by issuing bonds and obligations, and some of the key benefits to financing that we've identified over the years are listed below.

Uh first and foremost, the issuances we'll talk about today are tax exempt, which means the interest rates are lower.

Um secondly, financing helps accelerate project delivery, which aids in mitigating some of the inflationary pressures.

Um third, it also allows us to spread the costs over the useful life of the project so the residents are paying for the projects while they're benefiting from them.

And then lastly, financing assists in smooth rate adjustments because we are able to structure the repayment of the bonds and obligations to help create stable payments for the residents.

And I'll show some examples of this here in a few minutes.

All right.

So this is an overview of the financing process.

Um each year the city prepares the capital improvement program where it evaluates the needs of the residents, the uh prioritizes projects and determines the funding source for those projects.

The funding sources for the funding sources for those projects can be using existing operating cash through financing or a combination of the two.

If the projects are to be funded by general obligation bonds, the city would then uh hold the bond election or use remaining authorization to issue those general obligation bonds.

And then the last step would be we would access the financial markets to seek out those investors.

Okay, so these are some of the things we do to manage our long-term obligations.

So as I mentioned before, they are tax exempt issuances we're talking about today, and we do structure the repayment of those bonds and obligations.

Um they also have a max maturity of 25 years and a 10-year refinance call, which gives us the option to refinance them in 10 years.

Um this year we do have an opportunity to refinance older utility bonds, um, which I'll get to in a few minutes.

But first, um I wanted to highlight um some of the differences between the two issuances.

All right, so first we're look at general obligation bonds, which are voter approved for a specific purpose, and they are repaid with secondary property taxes.

And the second are the utility system revenue obligations, which are a contractual obligation and repaid with utility revenues.

Okay, so this is the first item we're proposing today, um, which is a refund which is to refinance uh previously issued utility bonds at a lower interest rate.

The top part of this slide does show the city's financial policy, which states that when we refinance the net present value of savings must exceed 3% of the debt service amount being replaced.

So at the bottom of the slide, you can see that we we are looking to refinance approximately 225 million of utility bonds that were previously issued between 2013 and 2016.

If we do do the refinancing, it would provide an estimated savings of uh $13.6 million dollars, which would be spread out over several fiscal years.

And the net present value savings would that we would achieve would be that 4.2 percent.

And the the last thing I did want to point out on this is when that whenever we do refinance, we do not extend the final maturity of those bonds.

So if there's 12 or 13 years left on the bonds or obligations, when we refinance, that remains the same.

So we're not extending the debt further out, if that makes sense.

Yeah.

Thanks for clarifying that because I think that's an important point.

We've saved 13.6 million dollars by refinancing.

That was my question earlier on the GO obligations.

Um we've also made sure that that debt has stayed intact with a number of years.

So we're not a we're not gonna pay it more in interest because we've kicked the can down the road.

This is a good one.

Thank you.

Mayor Vice Mayor, that's correct.

That's important to the city.

So okay, so the the second so that was the first item we're proposing.

The second item is uh in issuance of general obligation bonds, which includes funding for parks, public safety, and transportation with target proceeds of 61 million dollars.

It does include using bond authorizations from the past three bond elections we've held, so 2020, 2022, and 2024.

And after this issuance, there would still be remaining authorizations on each of those elections on each of those authorizations, and that information is included in the council reports of the breakout.

Mark, when you say there's remaining authorizations, you mean there's just remaining funds that were approved in those years bonds that we're not asking to use.

Is that correct?

Mayor, council member Taylor, that's correct.

So they would be used in future bond issuances.

That's fine.

Okay.

So here are just some examples of projects to be funded with the new proposed general obligation bonds.

There are, of course, a couple fire stations.

There's some renovations to the idea museum.

There's police headquarters, Signal Butte Park Phase Two, and various transportation projects, such as you know, the big ones to Broadway Road Improvements.

So these are just some examples, but there's also the project list that's attached.

So Mark, could you maybe talk just briefly and maybe Mike can help you?

Just about our our philosophy on bonding that we don't we go we don't want to bond every year or every two years for the same category that we that we like to spread it out.

Um we may bond every two years, but we're not bonding for the same project for the same sort of projects, maybe one year's public safety, the next year.

Can you just talk about that a little bit?

And we don't go out and get an extremely large amount that satisfies us for numerous years.

We like to do smaller increments more often.

Mayor and Councilmember GoFort, thank you.

Uh Mike Kennington, deputy city manager, CFO.

Um yes, we um typically when we go to the voters, we have a plan of four to five years, six years of bond projects that we want to do.

For example, in 2020 was the last time we went for a transportation bond package.

And we have these uh list long lists of projects that we've spent a lot of staff time putting together so that we can go to the voters and we can have this package for the next couple years.

And so every year we we do the projects that we can do and we finance them through Mark, you know, Mark and his team and Irma finance on a on a on a yearly basis, uh try to minimize the interest cost, because we don't want to issue that entire bond package right away, because then we'd incur interest while the bond projects haven't been done, right?

So he looks at what we spent in the last six months, uh, and then he looks forward to this next six months, what we're gonna spend, and that's how he determines how much we're gonna issue.

So we don't want to go to the bond, uh the electors, the voters, every year because that would cost a lot of staff time and money.

Uh that's why we typically try to go in those four or five years of uh bond elections for those type of bond projects.

Mayor and council member go forth.

I'd I'd say maybe the one exception uh to that is public safety.

We we do go more consistently on public safety just because it's uh more dynamic in some of the needs that we we see, so we want to stay a little bit more flexible.

Um, so you'll see a more consistent uh cadence as it relates to public safety bonds.

But as Mike said, when we look at parks bonds or transportation bonds, we we try to have a four to six year gap between that and and along with that philosophy too.

You see other communities that just have a different view on this.

They take really large bond packages maybe once every you know eight to ten years, uh, and then it's got a really large price tag, but then they say, okay, well, this is this is going to carry us out over several years, whereas we've tried we know obviously we we we see how flexible we need to be sometimes on these projects and things change, and so our philosophy has been go to the voters with smaller issuances um more often because then we can really be more precise on the projects because if you were giving me authorization today about a project that's needed 10 years from now, that would be really hard to the price tag and just also the need or the location.

So we might not be able to be as precise as we'd like to be.

Um I mean, we have flexibility um in these projects within the categories, but we try to be as you know upfront with the voters that this is what you're gonna get for this bond bond project, and that's harder in other communities when you do these really large multi, you know, decade-long uh issuances.

Yeah, and and I I tend I tend to support that.

I mean, we you know I I think smaller incremental, more flexibility is is the better is the better option, and it's served us well.

I I think it's important that that residents do understand when you issue it in 2020, that doesn't mean you build it in 2020.

That doesn't even mean I mean you authorize it in 2020, doesn't even mean you issue it in 2020.

Our our plan is five to six years long.

So I think that gets confusing because sometimes, you know, for example, in 2020, we said we you know, will you g authorize a bond for this project and they haven't seen the project for several years, but it's not and I know that during COVID it extended that period of time of being able to build out those those projects and use those bond proceeds.

Um we're we're more in a five to six instead of seven to eight time frame of getting things completed.

So um, but I think it's important that people understand it doesn't happen um right away, and that we ask for smaller amounts more often for that flexibility and and more precise on the price tag and things like that.

Yeah, and and you're right, uh Mayor and Councilmember, there's there's a lot of factors that go into uh a street project, for example.

I mean, we may need to time that up because there's gonna be construction uh happening on an adjacent arterial, and we don't want to have both under construction, but we know we need the authority to to do that.

So we'll uh seek the approval of that and then time it out to um to meet the needs of of that area.

And so the there's a lot of factors as you indicated about the timing of that.

I I know when it's something that's uh highly desirable if it's a park or something like that, you know, people won it yesterday.

The vice mayor dealt with that with the library, right?

With uh people wanting the library, you know, the next day to be constructed, but it does it it takes some time, and and you're right, that's one of the parts people are like, well, I voted for it.

Why why why aren't we turning dirt?

But we do try to do everything we can to keep that time frame as short as possible.

And this is something that's that has been the philosophy of the city under leadership of former uh city manager for some time, but I don't know how long because we have outliers like Redberry, like the Thomas and 202, where we did go out and bond, we purchased land and the project never got built.

Right.

That is an outlier.

That is not what we intend to do, um, and certainly not understanding.

Yeah, especially over such a long period of time.

And sometimes you know, there's different philosophies that the council may bring of a particular project might have been authorized by you know a previous council, and and then the needs have shifted within the community.

But we try to come back and have that discussion here to say, well, it's gonna remain in the same category, but maybe instead of this facility, it'll be these facilities in instead.

And so but we've certainly don't like it to be a 23 year uh gap between that period of time.

So thanks, Mike.

No, uh when you look at the project list, you might just say they're like actually I do have a question for Mike.

Um it's better to have them both there.

Yeah.

Well, the B the bike trail that's in the photo here, uh, I think was part of a 2018 bond funding, same with um well, the library, I think was also 2018, so it does take a number of years, but it also depends on where on the list it is.

The fire station 224 was just a recent bond, and it's the first one to go up.

Sorry, Rich, I got mine first.

Um, but it's just again, it's just where it ends up like would you just tell us a little bit about why what some projects we're gonna bond some of these projects versus paying cash?

Yeah, so I think um there's so we've always had the philosophy, and this kind of is the debt kind of philosophy where if it's uh uh an asset that the public uses, we want them to pay for, right?

And we want to match that usage of that asset with uh the payment of it.

And so oftentimes we have these large projects that we will we want to uh uh complete as a community, and so we put them on bond and and have the the users of that asset pay for those through the debt service payment.

And so that's kind of the philosophy we've had here at the city of Mesa.

Okay, so essentially if somebody has a house today and we paid cash, they paid through their taxes for that item.

If they move next year, then the person that moves in is the one that's gonna benefit from that system that's already paid for.

Correct.

Whereas by bonding it, right, then the debt moves to whoever is owning the house.

You could sell it four different times.

Whoever's using it is going to be the one paying for that for that asset.

All right, thank you.

Okay, anyone else?

Ms.

Taylor?

Did you please don't worry?

I only have a few questions.

Um is there an expiration date on bonds for monies that have been voter approved, but they've not been issued yet?

Uh mayor councilmember Taylor, no.

The authorization is remained.

They just stay open.

They say open, that's correct.

Okay.

Uh, do you know how many years back we have bonds that haven't been allocated to their intended projects?

Mayor council member Taylor, I believe there may be some from the 80s.

That haven't been is that correct, Mike?

I know of a 1994 authorization.

Okay, that's I'm not sure about that.

1994.

Just one.

Um it was uh I think it was a solid waste authorization.

Um so that's that's what I'm aware of.

Okay.

So we don't have a lot of projects that the voters have said, oh yeah, you said you were gonna do that, and now you're not doing it, but the money is just kind of like waiting to be issued.

Correct.

Okay.

So also just to clarify for the public, when the project has not started, the money hasn't been issued.

So the public is not paying for a project that was never even started.

Correct.

Mayor Councilmember Taylor, if the authorization is not used, there's no bonds being issued so there's no debt service being uh paid by the residents.

That's correct.

Um are we currently delayed on projects that we do know are gonna happen.

Uh we do have them prioritize, but they've they've just been pushed out quite a bit longer.

So do we have an idea of our as a city, our goal to execute on those projects?

Like we're looking at tightening timelines down.

Yeah, I think uh in that in that case, and it's more of a CIP discussion, I guess, but uh every project may have different variables and different reasons why they may be uh postponed or or whatnot.

And some we actually try to bring forward faster, maybe cost are uh uh cheaper.

I think the signal butte and market correct me if I'm wrong, is it?

That's a good key you know, brought forward was faster.

So would you say it's correct that sometimes we delay a project because it's actually cheaper, we can forecast that it might be less expensive to execute on that.

So the bond monies are we get a lower interest rate.

I guess I would I would have to answer that with there's a lot of factors in each project.

I guess it would be that would depend on the project.

Um I'll just I'll just add though to that um Mayor and Councilmember you're right though.

Our goal is to get these out the door as quickly as possible.

And then we run into it, Scott.

Uh the vice mayor alluded to this a moment ago about the fire station and um council member Adams district.

We ran into some unforeseen um challenges um dealing with um uh archaeological findings on the site that have led to um some delay in the timeline, and and so that was something that um if we would have the the vice mayor and councilmember Adams, I know we're fighting over who was gonna get to cut the ribbon um first of all their station.

And so uh so unfortunately something that should have been on the same time frame as uh station 224 is now delayed.

Um hopefully we'll we'll be uh moving forward very soon on that after we uh deal with some of the remediation on the site.

But those were some of the unforeseen things that we run into.

But the intent was to get that moving very quickly after the voters approved it.

And and all of our projects is is truly the intent, unless there's a lot of that the dog park, yeah.

From 2018.

Yeah.

People are still asking.

Right, for for uh something for country.

The countryside um for country, yeah, the countryside dog park.

We hear you.

Okay.

Well, council member, just in retrospect, 223, the fire station was supposed to be built when I was a council member.

So that's been a few years back.

And is your second level?

Uh the Central Mesa reuse pipeline is a good example of something being delayed because of circumstances out of our control, and consequently it cost us twice as much as what it was originally scheduled for.

So it we had initially I know back in the day was about ninety million, maybe a hundred.

I think we finished up over two hundred and something million dollars for that pipeline.

Yeah, there's pre-COVID and post-COVID pricing.

Yeah, unfortunately.

Timing is so critical on a lot of these projects.

And you lead to my next question though, that's really good.

When we're prioritizing, do we consider the cost to the general public if we move projects up?

So let's say we approve the projects on this list, but then we've got bonds that haven't been issued from the past, and we say, hey, it's time to shift this project up.

Now we're asking for those monies to be drawn down.

So are we considering stacking all of those costs and what that costs to the general public?

Do we look at those things very carefully?

Like, yeah, definitely.

We we look at costs all the time, and and if it's ad advantageous to move a project, we would look at that and consider that as well.

Okay.

Because I know people will say, hey, you approved these 10 projects, but now it looks like 20 are getting executed on, which you know, some people will be really excited about, but with that comes a new cost of the taxpayer.

Absolutely.

We're we're very conscious about as we look at structuring the debt about what that actual impact is on the ratepayer, and so we take that into consideration that for the example you gave that we wouldn't push so many through at one time that it would greatly accelerate burning.

For sure, yeah.

That's my since I've been on council, we have lowered the tax rate.

So to pay the levies and it's and held it steady, lowered it and then have held it steady.

So that's how we're yeah, so that so that's been the great thing.

As we've brought new debt online, we've retired debt so that we've been able to maintain or you know, or stay within a reasonable amount.

There's been you know some some fluctuations, but um you're you're right.

That's the the idea is to keep it stay as steady as possible for the taxpayer.

So we'll we'll look at what debt's being retired and then what we're gonna issue and and try to keep that as balanced as possible for the ratepayer.

For the 61 million that you're requesting, is this a combination of bonds and cash from our our our funds, or is this all just gonna be completely bonded?

Are we mixing money?

Mayor council member tailor, this would be new money, so this would be new bonds being issued.

So it would be excluding the cash.

Okay, so we're not using our revenue as a city to help pay for anything.

Is that right?

Any of these projects we could, right?

I mean, but the the proposal is just to use the yeah, Mayor, Councilmember Taylor.

We we are using cash, but in this case when he's asking for the financing of it, this it's just uh bonds for this uh ask.

But to pay for all the projects.

For all the projects we do have cash funds.

We're using both.

We're using cash funds and bonds.

Yeah, yes.

Okay, budget.

Thanks.

I know I have a lot of questions.

Do you want to move to uh slide nine, Mark?

You you want to share that graph with us?

Sure, that this is uh yes, Mayor.

So this is a good segue because this shows the stable payments that uh council was just talking about.

So um, so this slide is the chart of total geo payments.

Um it includes what's currently outstanding plus the additional proposal um and you can see annual payments would increase slightly next fiscal year, remain relatively flat, and then uh decline further out on the chart.

So that shows kind of the stable payments that we were just talking about a minute ago.

So can I just kind of mention on this graph?

It looks like oh, we're gonna be paying more, but not necessarily because our city has been growing so much with residential and um commercial that we're spreading the peanut butter a lot thinner.

So this is how we've been able to lower the rate, secondary property tax rate after years, it's through growth, and not in even though we're taking on more debt at the time, we have more growth.

And like fire stations and many other things, we have to provide these uh capital assets in order to service that growth.

Um so we have to take growth into the equation on how um the amounts are smoothed out.

Good point.

Thank you.

Continue, Mark.

Okay, so this is the third item we're proposing, which is an issuance of utility obligations.

Uh total proceeds would be 341 million dollars and would be split between funding providing funding for uh capacity fee related projects and non-capacity fee related projects.

So 179 million would be going towards non-capacity fee uh related projects, and 162 million would be going towards uh you know growth projects related to capacity fee revenue.

And the capacity fee is the item we passed just within about a month ago?

Mayor Vice Mayor, that's correct.

So 47 and a half percent of the bonds in this picture here are gonna be paid by that capacity fee, whereby had we not passed that, it would have been borne by all the utility ratepayers.

Mayor Vice Mayor, that's correct.

Thank you.

And these get paid back, the obligations get paid back through the utility revenues.

Right?

Not mayor vice mayor, you know.

Not the tax levy, not the tax secondary property.

Not the general obligation.

Mayor Council Member Go Ford, that's correct.

So this would not be through the secondary property tax levy, this would be through the utility revenues and the which includes the capacity fee revenues.

And can you just give us a couple of examples of the projects?

I know they're they're they're buried here in the report.

So not intentionally, but there's a lot of documents.

But if you could just kind of highlight a couple.

So the you know, the smart metering or AMI, that's a non-capacity fee-related project, but the big capacity fee-related project that's being funded would be the signal view water treatment plan expansion.

Um the central maser reuse pipeline, it is complete, but as we discussed earlier, when we when we look to issue the bonds, we do reimburse ourselves for six months of um expenses that we've incurred uh earlier in the year.

So we would be using some of the proceeds for the central massive reuse pipeline.

And then there are some natural gas improvements, uh, natural gas system improvements, such as Gensell Road, which is an example of a project being funded with the utility obligations.

I just want to recognize Mr.

Adams had uh drop off uh from the call.

He'll he'll be back if if he can.

Thank you.

Continue, Mark.

Is that it?

It's getting close, Mayor.

All right.

Um similar to the GEO financing payments.

This chart shows the total utility financing payments, which would be paid for by the ratepayers and the new capacity fee revenue.

Um it includes all outstanding payments plus what's being proposed.

Uh once again, you can see total payments would increase uh next fiscal year, remain relatively flat and then decrease further out on that.

So lastly, this is the timeline we're looking at.

So that this would go to council on Monday.

Um then subject to market conditions, we would look to sell and receive the proceeds on those um those time frames listed below.

Um there are some date ranges listed on this slide, and that's because we have to allow uh for IRS tax purposes, we have to um separate them by 15 days.

That's and we are we do have three issuances.

Um and then also the window provides us an opportunity to look for some favorable pricing in the market.

So with that we'll be happy to answer any other questions.

So, mayor, just just to summarize again, um some of you are very familiar with this, but that we come every year with this uh so that we can time the issuance of issuing the debt uh to coincide when the projects are actually ready to be constructed, and then um coinciding with that, we always look for the restructuring opportunities.

And so uh this time we'll save 13 million, uh say the taxpayers 13 million dollars by restructuring uh this debt, and every year we'll continue to look at that to see if we can come back with better rates uh for council to consider.

So thank you, Mayor.

Thank you, Mike.

I have a really big basic question, like just general public question.

Hey, it's Mesa, we make a lot of revenue as a city, right?

So and it's great because people pay taxes, and now they don't pay food tax, et cetera, and they pay their utilities, and we have various ways that we fund the city, but we're growing.

Do we make enough money as a city to fund some of these projects to do the cash payments where we wouldn't have to take out bonds in the future?

And what what would that look like?

Would we be cutting our project list in half two-thirds?

Just I want people from the public who have asked me these questions.

Don't we make enough money to fund these projects?

Why do we have to go out and take out bonds?

Mayor, councilmember Taylor.

Um, I guess I would say some of these projects that are very important are very costly.

I think the mayor uh mentioned uh reuse pipeline that over 200 million dollars, right?

And so that would be a large project to have to save over time is uh as Vice Mayor Summers said I would we would take several years to put that cash away and pay for it up front with cash, uh and then the users that may not have paid for it uh would get to enjoy it, right?

So there's a it depends on the project.

If it's a smaller project, then there's uh obviously opp opportunity, but the large important projects typically are expensive enough that we would bond for them.

And and Mayor uh Councilmember Taylor, if I could expand on that too.

We there are if you look through the CIP, we pay cash for a lot of uh a lot of infrastructure projects.

We we do try to look at these projects that are um generational type projects that with a lifespan of you know a couple of decades or more, and and then that goes to the vice mayor's comment about the philosophy has been then just not borne by whoever happens to own that home or business that day.

It would be the user of that uh infrastructure over the lifespan of that infrastructure, and that's been the philosophy of of why we uh bond it out.

You know, it might be helpful for, and you don't have to provide this right now, but maybe for the meeting on Monday.

Um having an idea so I can share with people.

This is about how much money our city makes, like profit, but it costs a lot of money to run a city the size of Mesa.

It's very expensive, and there is there is not necessarily always as much left over as what people might think there is.

So, in order for us to do some of the larger infrastructure prob projects, this is how we tackle some of those and advance and as Jen says, as we grow, we spread it thinner.

Um, you know, I know some people will agree and disagree with the philosophy of giving that that use paying it forward to the next user instead of having the current users upset things pay the lump sum of it.

But I think it would just be helpful for the public to see like this is about how much we make, but this is how much we spend on our projects to keep it moving and flowing and growing.

Me too.

I mean, just as a resident.

Sure.

And and mayor council member Taylor, I think you've uh that that'll be a good lead in to when we talk about the budget here and um after the we finish the agenda review because if there's any perceptions that we make profit um into the general fund, I'd I'd love to dispel that notion.

Um the the utilities in intentionally as a utility we we see profits in in that, but not in our general fund and general um spending.

You know, we only raise revenue enough to cover our our expenses, and um and and so we'll we'll talk about that as Brian gives his his presentation.

But yeah, I would love to dispel the notion that we're just uh raising uh profit uh on the side and sitting and sitting on that because that's certainly not the case.

Yeah.

I think I think that is a common belief amongst the general public, and it's because there's just it's a complicated budget.

Sure, it is, it is.

It's so to have them have a better understanding of that would be helpful, and just to keep that kind of in the forefront of our minds.

Absolutely.

I think I would use the word revenue that we receive instead of profit.

I mean, we're not in it for profit.

The revenues that we receive, we're very financially conservative because we take those monies and we invest them.

Mark, that's your job to invest monies that the city has, the interest that we receive, all that money's earmarked for projects in our community from public safety all the way through all our different departments.

So yes, uh you might pay a little bit more of this than that, but it covers our utility revenue bonds or general obligation bonds or secondary property taxes.

We try to keep everything low.

So you know, the perception is we're not in it for money.

That's why Mesa is a great place to live.

In fact, we're the best run city in Arizona, in fact, and uh and nationally too.

So from the financial part of it.

So with that, anything else you want to finish that Miss?

Yeah, why don't we let Mark and Mike finish the he's so close.

I'm I'm so close, I am done.

Yeah, that's what you think.

Yeah.

All right, thank you, Mark and Mike.

Can I ask a couple of questions?

Yeah.

Oh, okay.

All right.

Or in general.

Well, I do have one for them.

Yeah.

So um wait, Ms.

Dubb, go back to that slide.

That's one that's very, very important.

Will you explain that?

Because we have a constitutional spending limit set by the state best on based on our assets, and we're at 18% used.

Sure, sure.

And where do we rank in that?

So, Mayor, just to give some background information, each year the state puts out a report of indebtedness, and which includes the as you mentioned, the the debt subject to the constitutional limit and how much capacity is being used by each city and town.

Um so as you can see, it does say pending for fiscal year 25 because they haven't put out that report yet.

Uh, but we did calculate the fiscal year 25 amount internally using the consistent methodology that the state used in 24.

And we, as you can see, we are using 18 percent.

Um so we don't know how we compare to other cities and towns because that report for fiscal year 25 is not made public yet.

Uh but I can't say for fiscal year 24, the capacity that is public, and we were I think we were about 10th.

Yeah.

We were about 10th for uh city, we're right in the middle of cities and towns in Arizona.

So is that both percentages, 20 percent and the other one?

Mayor Vice Mayor is it's 20 percent, six percent.

So you are correct.

So we do combine it, which is which is um you know consistent with the report.

And for the public, what is uh what is the uh six and twenty percent difference?

What are they used for?

Because they're used for different things.

Mayor Vice Mayor, so the six percent is just for like general government, um, which we would norm typically include like the library geo debt in, and then the 20 percent kind of for everything else, so public safety, utilities, um geo debt and stuff.

So and so I'm I'm looking at this right.

So in 2024 it was 13 percent.

Okay, and now we're we're going up to 18 percent.

Mayor Council may go for it, that's correct.

The last year we did have a larger uh geo issuance, particularly because of public safety.

So okay.

So what's the forecast?

Where do we want to be?

We are we we trying to bring that down maybe after.

I mean, I know it's gonna go up and down, right?

Because if you have a big project, that's gonna go up, and then you're gonna extinguish some debt, it's gonna go down.

So, but is there a point that we try to sort of sit at that we don't want to go in?

Mayor and council member and and Mike, please um jump in on this.

I really this is to show you to represent the fact that we're nowhere near our capacity on this.

And you and you're right, you you call it that's gonna fluctuate a lot depending on the issuance.

So it goes back again to our North Star about trying to keep those rates more consistent to um the taxpayer, and so it'll all go back to what we issue and how we issue it more than that percentage.

But we just want to show you this is we're nowhere near what you know what we're statutorily authorized to be able to issue.

So we are still very low on our capacity, but um, we know to the taxpayer it's gonna be what do they get from their bill.

They they don't care.

We care what that number is, and that's a great number to show, but at the end of the day, it's what's on your tax bill, and that's what we try to make sure that we're being more consistent on and keep it.

True, and let's clarify the 20% and the six percent.

This is not 18% of 26%.

No.

So this is 18% of the capacity that we can reach the max.

Out of 100.

Yeah.

And let me uh add on to what city manager Butler said.

Um, you know, the denominator in this ratio is the assessed value, right?

And so to council member Dove's point, as we grow as a city and we continue to add assessed value in the city, obviously that number, the ratio will go down because the denominator will go up.

So it's a combination of the debt we have and the projects that we have, but also the assessed value in the denominator.

Yeah.

But I think just looking long term, my own we we don't want to see that per capita debt, you know, because sometimes that that gets calculated, continue to trend upwards, right?

I mean, we do have projects we have to do, but um the goal is to is to, and I know it affects you know it affects the pocketbook, but we also on a macro scale don't want to see that per capita debt continue to rise.

And this is another variable that Brian and his team look at when they look at the average homeowner, right?

The the secondary property tax and that impact today, the citizen.

You're saying in light of the total amount like just because the assessment is going up, doesn't mean the per capita debt right.

Okay, may I ask a question?

Jen, the floor is yours.

Okay.

You may.

Okay.

So um we have as we were talking about there's um unissued bonds that were uh approved that we didn't haven't utilized.

So are those factored into our finances?

Does it show on a uh what do you call it?

Position statement, or what I would call as a business owner a balance sheet.

Um, does it affect our bond rating?

How how does or does it play in?

Because it's not gonna really go into our finances until it's exercised, but I don't know.

Mayor, council member Duff, it's uh definitely a uh factor of in a piece of information that the rating agency asks for and that they look at it's included in our offering statements as well.

And for them, I would imagine they want to see you know how much more financing we we could do without going to the voters.

Um, and so that's that's a factor, a piece of information they have that they use.

Okay.

All right.

And then I'll just make one quick comment about we run a balanced budget.

Every dollar that we have is obligated, uh, assigned to some use, and we estimate our budget.

So I don't know if people think we have some kind of profit.

We might have something, you know, a better year than we estimated, and we can use those funds and going forward.

That's how we get our reserve funds.

Um, but we don't make a profit as a city.

We don't are not designed to do that.

And as far as um paying cash for the capital improvement projects we have is one thing is we have a long list of improvements that we need to make, and we never get to, and it gets to the point we're kind of strained, especially right now, on things that we need to do, and we keep on delaying, and the infrastructure is aging, or we need additional infrastructure.

So we're running, we run that tension and never being able to really hide, especially when it gets to uh um utilities and such, there's a tension or public safety of accommodating our city and having these projects constantly on the back burner.

So if we use a bunch of cash up front, we're really doing some detriment to what all the other things that we need to do.

And I Gilbert is a great example where they didn't do anything for a long time, and then they decided to pay cash for a majority of their utility infrastructure that they needed, and their rates have gone up huge.

I I'm I'm glad I'm not a resident of Gilbert because for your utility infrastructure, your water costs to go up 60% over two years or whatever it is.

Um that's hard.

Families can't deal deal with that.

It's hard enough, you know, just getting through life, let alone having those kinds of increases is very um dangerous to you know, just delay delay and then try to cash it out and then have double digit increases um in excess of 50 percent.

So it's something I I really don't believe in.

We need that steady streamlined predictable rates and how we use our money, things.

Thank you.

I'll just add the very billing we're sitting in today was paid for by cash.

Right.

There's no indebtedness to this building here.

So that's one thing Mr.

Brady on all back when we decided to do this building was funded that way.

Gentlemen, you're done.

Maybe I would just like uh 5A.

I know Miss Taylor, you asked me about 5A, that's the Mesa Town Center Improvement District.

Do you have a question?

We have DMA DMA here.

We have uh on the improvement district, why the we pay uh our assessments for that.

Maybe Jeff and Jimmy, why don't you come up and just give us a high level overview of why we participate in our Mesa Town Center Improvement District.

Thank you.

I was reading over, you know, the council document.

Okay, okay, that makes sense.

We so we are we an assessor almost like a county assessor, but at the city level, and we assess your property and say this is how much we value it at.

Okay.

Also, just for the public, I was thinking, how do I explain this in a way it makes sense?

Thank you, Zach.

Sure.

Your team.

Your vacuum.

Mayor, councilmember Taylor.

Uh I'll try to give a really quick overview.

Um this goes back to 1985 when uh the property owners of downtown Mesa chose themselves to self-assess to create an enhanced municipal services district.

So essentially that assessed value, the assessments that they pro provide are assessed by the city.

The city council votes on it annually, and then we transmit that additional tax assessment to the county.

The county applies it to the tax bill, provides it to the city, and then the city acts as a pass through through our contract with DMA to provide that assessed funds to DMA for the purposes of that enhanced municipal services.

So what those pay for, and Jimmy will do a better job of describing the actual um efforts that they do, but it's really for the clean and safe team.

So enhanced cleaning, enhanced um the pedestrian um experience or uh or public experience, it's marketing, it's event production.

So it's the things that help make downtown a more active and then vibrant place.

And Jimmy, maybe if you could just kind of jump in and so Jimmy, as before you do that, though, I just want to stress that again, this is a special taxing district authorized under state statute that the actual property owners themselves voted to form.

So that just wanted to stress that part of how and downtown Mesa is its own entity, it's not a city entity.

This is in like an HOA and lack of a better explanation.

So it is not a city structure, is it a separate business?

Yeah, so DMA, we're a 501c6 nonprofit.

Um we also have a C3 arm to help us with the events so we can get sponsorship for that.

Um, but yeah, the assessment money specifically goes mainly to the clean and safe program, um, making sure that you know they're cleaning out uh whether it's a homeless encampment, uh cleaning up the trash cans on the street, emptying out all the trash, um, walk around, make sure leaves are collected, um, and then the remainder of that goes to all the program we do to try to drive more activity to downtown, whether that's new businesses, uh the public spent coming down for events or just on a daily basis.

Um that's the bit the basis of what we do.

So yeah.

And mayor, council member Taylor, uh we will be prepared at the public hearing on May 18th to actually provide a kind of an annual overview of DMA and their activities.

Might come just to learn.

It's kind of cool.

Um, you will be conducting our public hearing for us, so it might just be an actual.

So I hope you're able to attend.

Um I think there's a couple I'm invited.

Yeah.

A couple of important things to note is that the city is the largest landowner in downtown Mesa.

Okay.

And as a as a municipality, we are not subject to this property assessment.

So this con this does include a a voluntary assessment by the city on a cost per square foot of the land owned by the city that gives because we own so much land and we own so much public rum, we get the same services from DMA as the property owners that are that are assessing themselves.

So just to be a essentially a team player with the property owners in downtown.

We we have a self self-assessment.

It's significantly lower, it doesn't follow the same formula.

It's I think of uh 1.5 cents or 1.75 cents per square foot.

Um the the methodology and how we calculate the assessments for property owners is considered by the council every five years as part of the renewal and renewal of of DMA as an organization.

So this what we're bringing forward this coming month is just the approval of the assessments.

I think in June or July, we're gonna come back with October.

I'm sorry, we're gonna come back with the actual uh reconsideration of the five-year renewal of the DMA as an organization.

And the methodology is is a combination of uh linear frontage on the public right-of-way, square footage of the use of the building, and if it's an apartment or hotel, the number of units or number of rooms that kind of um creates how we to calculate the formula for how people are assessed.

And that really is supposed to be real really helps relate to what how much work is a DMA actually gonna have to do.

The linear frontage of a property really determines how much clean how much time they have to spend cleaning that area.

And and Mayor and Council Councilmember, I would like to add that it is just on commercial properties.

Um single family residential properties do not pay in.

Since apartments are considered commercial, they do pay in for that.

Yeah, single family property owners do not pay in on this.

Got it.

Okay, I figured it was just the businesses or entities that are busy.

Thank you.

I appreciate you breaking that down a little bit for me.

Now I can process more.

Thank you.

You're welcome.

Council, anything on the council agenda you want to ask questions on anything.

I had one really easy question for the item.

It is sorry, give me two seconds.

6A.

That one's a little more loaded.

We're doing a presentation.

We're getting a presentation on that.

4D.

I was just curious to know if our Pine Park and Whitman Park are is the whole project being covered by CBDG funds.

Hi.

Good morning.

Good morning.

Good morning, Mayor and Council.

Andrea Alakot, Interome Parks and Rec Director.

Uh Councilmember Taylor, um, to answer your question.

So the uh CDPG funds is going for the construction of the project, which is part of the eligibility requirements to expend those funds.

Um specifically for Whitman Park, there were um capital improvement.

You know, we were just speaking of those funds, infrastructure funds allocated in 2022.

That 125,000 that were to cover the uh design services.

So we do um as part of our life cycle uh plans for parks, it goes from our master plan identified projects, and then also with the use and wear and tear of the parks.

We have a long list of parks in need, and so um part of what city staff does is in order to prepare those projects so that they can, as previously discussed, become shovel ready when funding is available.

Um staff does go in uh attribute then those design features so that way we're having those models and renderings in place.

Um so those funds for Whitman again was in 2022, so there was 125,000 there, and then for Arpine Park, um, which was a basin that is um had no park amenities or features that will become now a park.

Um those funds were allocated in 2023, and that was about uh just over 88,000.

And again, that's that's for the design, so that way then we can have these shovel ready projects when there's other funding streams to support that.

So then we take the C B D G and we that's what it covers the construction side of it.

Correct, yeah.

That makes sense.

All right.

Well, I'm excited for these parks to get a little bit of a facelift.

Yes.

Okay, council, any other questions?

Um, are we are we getting the presentation on six?

Only if you'd like it.

Uh well, I hate to hang everybody up, but I I went on quite a tirade about it, so I think it would be good for the public to know because I brought it up to them too, and I wanted to know what was going on.

You want to fill in and the reason this was so important to me is because I looked at this space and I noticed when I was at the games, a lot of people make a right-hand turn when they leave.

And I'm thinking everyone's turning right, they're gonna go to Tempe Marketplace to spend their money, go eat food, go hang out.

And so I saw this and thought this is a great opportunity for which I built some renderings to put in shopping and dining.

But then I talked to Mark and he walked me through.

And he said that if you wanted to buy the property to the developer, you're welcome to do that.

I actually told my husband this is a great opportunity.

He said we don't have the budget for that.

Um Mayor, uh Councilmember Taylor, just to kind of recap our present our conversation yesterday.

Um that 3.1 acres is kind of tucked up against the on-ramp to the 101.

Right the old animal along the curb to the 202, and is the old uh Maricopa County animal um animal control shelter.

Um the county demoed the site, it sat vacant for a while as they looked for buyers of where to go uh and who to work with.

Uh one of the things that the Cubs through their outreach connected with uh this developer in particular, uh, because there's been changes with between major league baseball and how they house minor league players, and the teams are required to provide specific housing for their minor league players whenever they're wherever they're located uh within the team's uh system.

This developer has done similar projects like this in the West Valley for a number of teams, and uh it is now working with the Cubs to provide uh um a similar project on this location.

So the multifamily piece as it's listed on there that you see is a contracted piece specifically for the Cubs uh the that will be house their minor league operation, uh minor league players, staff that come in and go, and then the hotel located behind that uh will serve the general public, but also overflow for team functions and team operations.

Uh the concepts that you talked about of bringing dining opportunities and uh restaurant retail, et cetera.

Uh we don't disagree with you that we think this is a great site as well uh to do that.

However, the distance between where people would are able to park at this location and to get to this site is a long ways away.

Uh and so currently uh even the closest um parking, while there's some parking, uh minimal parking located behind the site on game days and activities, it's restricted access only to um cub staff, city personnel trying to get to the treatment plant and deliveries.

Which means they'd have to walk across the green space.

So the closest parking is about a half a mile away.

So there would be no foot traffic driven to this location for those type of opportunities.

Um pre-COVID.

Uh the city worked had did an RFP for this location uh to work with a developer.

Uh that is where the union office building and parking garage currently sits as after COVID as the office world and need has changed.

Uh we've worked with uh asked that developer to um they proposed some other ideas.

We asked them to engage with the the Cubs and have that conversation of seeing what could be possible there.

Um we had some good conversations, nothing really generated out of what really attracted what we believe, like you would that could draw the great retail and dining oper and and entertainment options.

So uh those options for that developer have expired.

We've let them know uh that that those are have expired and the city intends to uh do provide another RFP to the development community to see what opportunities there could be to look at developing and the multifamily is just the baseball players.

Correct.

Right.

And that's all year contracted specifically for the Cubs all year.

Okay.

And then the hotel would be to house it.

It would be the general public, but the uh then overflow for the Cubs because even what's would we have that with the Sheraton and the court courtyard by Marriott.

We have enough that this would receive that much overflow during spring training season.

Based on the the uh developers market analysis, they believe it it it's a um viable viable option for them, correct.

Okay.

Yeah.

Mayor council members as um Mark alluded to though, I and we worked with council member Heredia a lot on this.

That um Riverview, there's definitely tremendous opportunity for continued development at Riverview.

That was always the intention back when that site was ultimately selected as the site for um the stadium was the mixed use opportunities that could come along with that.

Part of that was the hotel, and we're glad that the Sheraton is is there and operating.

Part of that was office, and as Mark alluded to, the union was approved at a very different time for Class A office space where it was flying off the shelves uh basically with everything that you saw along Rio Salado and then COVID came along and changed those dynamics uh tremendously.

But um there it's still one of the best sites.

You're right at the 101-202, you're just minutes away from ASU um from Sky Harbor, Riverview is still a tremendous opportunity for for development as planned.

And so we're um definitely gonna go back out to the market and look for development partners that can help us uh activate that area, bring the type of dining and retail um with a multi um multifaceted uh um, you know, you think of housing on top and and the apartments below around the lake and other things like that that we've talked about ever since that area was envisioned, but the economy didn't help us in that.

But um certainly the location has not changed as being one of the best spots in the valley for uh for a development like that.

So um we we hope to see more activity in that uh in that regard in the coming years.

So um we we hope to see more activity in that uh in that regard in the coming years, but this particular site definitely had some challenges to it uh from a development standpoint because of access because of view lines off the freeway or where it's situated adjacent to the freeway, and that's one of the reasons why the county um looked to dispose of that property as well.

And and now we see a good use that helps strengthen our relationship, of course, with the Cubs, but um provides an opportunity where this developer um uh at his risk um will be he believes that the market is there for the hotel and and um to you to answer your question about that, and and so we we think that this is an appropriate use.

Okay, Mr.

Reddy, you want to do that?

Yeah, that's right.

I think to just add I um you know, we the more food traffic that we can get at Riverview, the best.

Uh I think that's gonna be an important aspect to how do we uh change that dynamics of in and around that area.

And then on this site, I think Mark alluded to kind of the uses that we were getting right after the sell was kind of you know, you your storage, your your our parking kind of uses as far as commercial.

So I we didn't we didn't want to go that route because you know uh how many storage units can you build in the city, right?

So um but it's that that's kind of the the piece that uh uh I would add there.

Uh you know, it's a it's an entry scene site, it's it's small economy.

In uh that corner.

Um, and so I think this is probably the best use that we that we can uh get with the connection with the Cubs and trying to figure out like how do we add more people into that area all year round, not just in spring training, right?

And so that's that's gonna uh that's I think for us how we saw that potential.

More work has to be done in that area, of course, right?

But I think that the uniqueness and uniqueness uh of that site, the size, and just the uses that we're getting, you know, it wasn't I I feel like it wasn't compatible to what we want to keep on building in in that area, so yeah, yeah, yeah.

Make a comment.

Come on, Mayor.

Okay, I guess I think I I would totally agree with you, Councilmember Harding, that this seems like a great use.

It's just too bad that because it sounded like, and I I did zone out a little bit on you, I must admit.

But I think at first you said the major issue is parking.

You have disappointed them.

Actually, I think Summer's was talking to me.

I was trying to pay attention to the case.

But um, the retail was the parking issue.

It's in the back they can't use that parking back there during all this.

But why, you know, you see just down the street, you know, and Tippi, i there's underground parking, there's parking garages.

To me, that's and this is such a great site.

I can't imagine that the land value here isn't maybe doesn't warrant that cost.

I don't know.

So talk to me about that.

Why why do why are we opposed to underground parking and parking garages in the city of Mesa?

Uh and I know it's not us.

Why are developers opposed to it?

So um Mayor, council member, can you repeat the question?

I saw we're certainly not opposed to the parking garages.

It's expensive.

They are expensive.

Um they are as we price them out and and look at at different options for other projects, they're about $30,000 a parking spot.

Um, and doing parking in a sports-centric development is different than parking for offices or uh retail, in that the volumes that you have to get in and out at the same times as a start of a game and an end of a game is a little bit different.

So you have to to work in those dynamics too.

Um we don't disagree that whatever we do, we still have parking requirements that in a facility use agreement with the Cubs.

So parking is always going to be a hurdle here that we need to work with the developer to overcome.

And so, but in this particular 3.1 acre site, I the way it's situated up against the highway, the restricted access to get in and out of there because you have a signal right there for the on-ramps.

It you you're limited to a right turn, you can't put another signal in at Cubsway and Rio Salado.

It we don't let anybody through there on game days or event days.

So it's just this particular site is a tough spot to do it.

Down by the lakes, down in front of the other hotels, uh further back by the union where we have a paved parking lot that accesses the trail system.

All of those are viable options and have been identified as sites where additional parking garages are needed.

And even when we have we only had to use it once this year, but we use the union's parking garage now on overflow days.

We only had to use it once this season, but yeah, I understand.

I mean, it sounds like a lot of constraints with this particular site.

It just seems like an area of uh increased density and activity going on that that a garage or underground would be ideal.

Mayor and council member 100%.

I as Mark alluded to, as we talk about the redevelopment of Riverview.

That that will be that will be the number one issue that we'll probably have to solve along with the development partner is how do we provide the parking for the facility, and then obviously the users of what kind of mixed use development uh eventually goes there.

I think Mark's right on this site 3.1 acres is not a lot of scale in order to uh get the cost benefit for a developer for those is the the expense that goes into underground parking.

You've you've really um you know, you see that on kind of larger scale sites or very very urban sites um where it can just pencil out and this is this is neither, and and I think that's why from the development side that you just you haven't no one has brought anything through the door, and if they could make money doing that, they would, right?

And and we just haven't seen anything like that.

So just to be short and clear, this is the best development option we have received for this particular plot of land since it's been leveled by the county.

Mayor County has limited Mayor Councilmember Taylor, you'd be correct with that statement.

Okay, well, and I think uh Mark did mention earlier in his statement that it's a half-mile walk to the park.

So that's that's that's quite a bit.

That's quite a bit.

I was thinking some people might not know they're walking half a mile because they've had so many beers in the game, like just get me to the next destination.

But you know, that's probably just a few.

Yeah, okay.

Well, anything else?

All right, gentlemen, thank you.

I think we've covered all of our council meeting agenda items.

Let's take a little break here.

Will we get set up for uh item two a presentation on the fiscal year 2026-7 okay everyone?

Let's uh get back going.

Okay, thank you, everyone.

Uh item two A is a presentation on the fiscal year 2026-27 summary of the proposed budget.

Brian, you have five minutes.

Thank you, Mayor.

Any questions?

Or all the time you need.

Thank you, Mayor Council.

Um, yes, this is a overview summary of the proposed budget for uh the fiscal year 26-27 that the uh um city manager is proposing.

So, and as the mayor, you mentioned this is a summary.

Um, as we go through, um, it'll be more of an overview.

We do have throughout um April, we do have departments coming and presenting their um budgets in detail, so we can ask more detailed questions then, but we're more than happy to answer some of the questions now.

So, with me also is um Sam Schultz, he is the assistant director for the Office of Management and Budget.

So, just a reminder of um the process that the city goes through each year.

Um, we are required uh um by law uh appropriate annual expenditure budget and secondary property tax associated with that rate.

And I know we just had a a bond discussion about the secondary property tax and what that pays for.

Uh annual budget sets the maximum expenditure limit.

So once that budget is uh adopted, tentatively adopted, it sets that limit to where we cannot expend above that.

And then also a balanced budget means that total resources available to the city must be sufficient to cover the budgeted expenditures.

And I've mentioned that before to where resources includes both revenues that the city receives, but then also the fund balance, any reserves that it has.

So that equals the resources, and by state law, the city um does balance uh adopt a balanced budget each year, and this year, the city manager's proposed budget for fiscal year 26-27 is balanced.

So, with that, we wanted to go through the proposed budget.

Um, we always have a theme, and this theme is to elevate Mesa.

And so with that budget.

Um we'll start off with the general governmental funds.

And just to remind council and the viewers that we have uh two um guidelines that we follow with the city.

One is our policies that have been council adopted, and one is the principles that city manager practice the city management practices.

And so by policy, we do an adopt budget um management.

Uh we want to do a positive balance net sources uh and uses.

Our policy states eight to ten percent reserve, but we like to shoot a little bit higher than that and go from ten to fifteen percent over the five-year forecast period, and then also uh we forecast uh multiple uh years, and what that does is it helps sustain uh the sustainability of any programs and services that the city implements.

Also with fees and charges reviewed annually, this helps with keeping wages and benefits competitive and to retain and recruit quality staff.

And then a big one, what we just had the present presentation on too is the adopted five-year capital improvement program.

What this helps is with uh new projects, but also it invests in the lifecycle and replacement and OM projects.

So some of the budget pressures that we are seeing.

Um we've presented most of these at the uh when we presented the forecast back in in February, but wanted to go over those again because they are significant, especially the loss of ongoing revenue due to state legislation.

Um market-driven compensation and competitive benefits is a pressure, um, fleet maintenance increases, software licensing increases, and then also building maintenance and utilities.

We see increases in those, and then also the the continuation of ARPA initiatives with ongoing general fund support.

So those are some of the budget pressures that um we are seeing for 26-27.

And so, with that, with those pressures uh with the impact, uh the city is striving towards a structural balanced budget in fiscal year 2930 by reducing ongoing uh the base budget, and what the city manager has asked is the departments to review their base budgets and submit uh a net two percent reduction on their ongoing um budgets.

And with going through that exercise, this is the forecast that was presented uh to council in February of 26.

This does include uh that two percent.

However, going through the budget meetings in March with the departments and some other budget updates that we go through.

Um, you see that the 2930 forecast, we are meeting that goal of a positive net sources and uses of 2.3 percent or sorry, 2.3 million net sources and uses.

And just to highlight the ending reserve balance, uh, we do not drop below 21 uh.4 percent.

And so with that, as I mentioned, our principal is 10 to 15 percent.

However, with this, um, with the stability of the the revenues coming in, but also the stewardship of the departments and going through three years of two percent cuts instead of doing it all in one year, we are able to kind of forecast out and and take this in little um uh chunks and bite sizes to where now we our goal um from last year was um net positive net sources and uses outside of the forecast.

Now we are two years ahead of schedule with that.

So again, thank you, Mr.

Have to stress it, two years ahead of where we were last year on getting back um into the black.

So um that's thank you for your diligence on that.

Well, we heard you and every everyone as part of this team sitting out here worked worked very hard to make that happen.

We we knew council wanted to see some movement on that, and so we're really proud to see that get moved up by two years.

Yeah, great.

So, as I mentioned, with that with those three years, um the last two fiscal years, and then coming up this fiscal year for 26-27, the ongoing reductions have uh is about 55.7 million dollars.

So over those three years, we have cut 55.7 million dollars of ongoing expenditures out of the uh budget and the forecast.

So with some of those so that again, that's a that's a big number.

I think it that's our entire parks and rec budget is is uh roughly that same amount that shows how much efficiency, how much savings uh that our departments have done over that that three fiscal years.

That's a lot of money, and that is what we've been able to save by tightening our belts, by finding efficiencies, by reevaluating uh positions, doing all the things that Brian's gonna talk about that we've continued to do this year.

Um, but that is that is a lot of money that we've been able uh to identify and to reduce um so that we're being as responsible as we can to the taxpayers.

And with the with that exercise, uh so focus on this slide of uh the public safety um police and fire.

So police was asked to uh reduce by 4.4 million dollars in fire and medical by 1.4 million dollars, and this is over the next two fiscal years because of the impact uh that this amount does have.

So this year uh PD would re is reducing their budget by 1.7 and uh converting three vacant sworn positions to uh civilians uh and then reducing nine full-time and one part-time vacant positions, and then um reducing or doing away with the uh recruit signing bonus pay.

So fire and medical reductions for 2627 amount to about 830,000.

They're going to uh eliminate a market communications uh specialist two position, and then also reallocating for firefighter positions from the general fund over to the public safety sales tax fund.

So that helps relieve the general fund of that those expenses.

Brian, a couple of questions.

Um Vice Mayor, you want to ask the question?

Was the recruit signing bonus out of the general fund, the locally generated general fund, or did that come out of a federal grant?

No, uh mayor, vice mayor, that came out of the general fund.

So it was okay.

Um just a couple of quick questions.

The projected for 2526 uh net sources of use is down, we're underwater 36.3.

This projection, how did it what was our forecast for that this past year?

Do we remember?

Is it on track with our forecast?

So mayor vice mayor, are you talking about the well our forecast for last year for this year for this fiscal year?

So our last year we want to talk about it.

Are you on a specific slide?

Yeah.

Sorry.

You're on eight, eight.

Okay.

So yes, the Oh, I'm ahead of you, I'm sorry.

Go ahead.

My bad.

Are you back or I was zoning ahead of you?

Oh, yeah.

So since I'm zoning ahead of you, if you would talk about it.

I want to go just a slightly zoning.

Yeah.

We can go to slide 14 and just skip to the thing if you want.

We go to slide 24.

I think we should probably do this.

I might take you up on that, Brian.

So we so we are.

So if we go back to slide eight, the projected 25-26, we I believe we were forecasting about $55 million in negative net sources and uses.

However, we have seen um some uh retail sales tax and some sales tax increases uh that we weren't anticipating um because it it has been um better than what we were estimating.

And then also we had some reduction in some uh expenditures.

So we have um gotten some savings.

So we were projecting 55 negative 50, about 50 million dollars, and now we're looking at 36.3 million dollars for our projected in 2526.

Can I have a ask a follow-up question?

Are you done?

Yeah, um I have to flip between the two.

They're kind of far apart.

Okay.

There's a button on the bottom of things.

Yeah, I know.

I'm too old for that.

You can't change my ways.

But can I ask, and you may not not have this right handy, but what was the four was the projected or the forecast, I guess it would have been at the time that we adopted the 2425 budget.

Because the actuals ended up 25.

Project 16.

Um what was the the projected or forecast at it?

Yeah, but Mayor Because I'm sure it was Councilmember go forth.

Yeah, I would have to go back and look to see what we budgeted for 2425.

It was I am sure it was uh negative net sources and uses.

However, with um the uh, and I believe we got some one-time payments.

I'd have to look at the graph that our revenues came in much higher than what we were anticipating, especially with uh some of the sales tax and construction tax, and then we were able to um reduce some of those expenditures.

And I know with the total uses, what happens with that too is we have carryover where we think we're gonna spend it in 2425, but then it moves over to 2526, so that reduces that actual total uses.

So some of those move over also.

So I would have to say that it was we were most likely budgeting in the negative, but then we came out positive.

Yeah, I think that's important because there's been a lot of discussion on this, and that's what we've done seven of the last 10 years.

Right because of conservative conservative budgeting.

It's not like we're just saying, oh goodness, we just don't have enough.

I mean, it's it's very intentional, and it also is um it super conservative.

And as we look and reevaluate throughout the year, as projects come online, get paid for, don't happen, vacancies fill or don't fill, that fluctuates constantly throughout the year.

Yeah, so mayor, um council member go forth.

I did find my backup sheet.

So we were budgeting for 2425, negative 23.5 million dollars, and we came in at positive 16.8, and a big portion of that was uh building permits.

We had a lot of building permits come in, so we weren't anticipating, so the building permit revenues increased uh higher than what we were anticipating.

But then, yes, we also had some um personal service savings in some of the um bigger departments to where they weren't able to fill those vacancies, so those actual expenditures did not hit.

Right, and so to have and and to have this five-year forecast, um is important, but it's also important to recognize you know, we don't know every variable, right?

We forecast and we we try to be prepared for it.

So I I think that's why it's important when we do vote on the budget, it is for this year only, and it is not for a five-year forecast, because it is too variable to guarantee that that forecast will not change at all.

So, as you adopt the budget, you do it for that single year.

I think that's important to know.

Mayor and council member, you're exactly right.

It's sometimes you get beat up, sometimes we get beat up for being uber conservative in our budgeting, and doing this five-year forecast really just gives the the quick point in time look ahead to what's going to happen.

There's so many different economic factors that come into play, good and bad, that influence year five, year four, year two, even of that.

And so we have to we have to look at the budget that we have today, and that's the most important thing.

Like you said, that's all you're adopting is the budget for this upcoming fiscal year.

But we do this five-year look ahead so that we're all prepared.

We're all not flat footed because you know, we we can see those trends and try to adjust.

But we have a have a slide.

I know Brian probably doesn't have it today, but we we talk about it with you all, we talked about with our rating agencies.

Every year we overperform our estimates every single year, and that is only because we budget so conservatively, and so we manage our expenses and we downplay our revenue.

And so if we keep those expenses in check, and then revenue comes in higher than projected, then that has led to our um to our positive growth that we see over what our projections were.

And and because that's not a precise calculation.

I mean, I would much rather be on that end than the other.

Correct.

I mean, if it was a precise cash calculation to be spot on would be the goal, but it will never be that.

So we we can control our side, we can control the expenses, right?

And that is that is why we we load everything up, we we we budget with the expectation that every position is gonna be filled for for the entire year.

We do all of these things because that's what we can can control, and then on the revenue side, since those are factors largely out of our control by macro economic conditions by and large, then we just want to make sure that we're conservative in the picking kind of the lowest reasonable number that we think we're gonna receive.

And then as revenue exceeds that, I mean, this economy's been really resilient, right?

And there's been war, there's been um tariffs, there's been all kinds of shocks to the system, yet people have continued to spend.

People continue to eat out, people continue to buy cars, thank goodness.

And you know, this is all um reflected then in our better bottom line, but we budget with the unknowns in there and the idea that yeah, there's gonna be disruptions to the economy based on these other conditions, and when that doesn't happen and when spending stays resilient like it has, then we're coming in for the better because of that.

So just to bounce off that, if I may because I think that answers the question I asked so poorly before, and I apologize for that.

But what I was getting to is the difference between 14 and 18 or 8.

8 and 14.

So it sounds like 14 is the update uh for the best information you have to date over between the last eight months when the when the February went for last eight weeks.

So I'm doing yeah, so mayor, vice mayor.

Yeah, so mayor, vice mayor, that's a good that's a good uh observation on that to where slide eight, this is what we presented to council uh as part of the forecast.

Now that we've gone through some of the budget stuff, slides nine through 13 are those adjustments that we made, and then slide 14 is what we are looking at as of today for the forecast for council to I wish I could have articulated that a little bit better, but this is what causes I think a lot of confusion when people look at these numbers because they they change so frequently based on economic conditions and so many other factors that come in.

Um that yeah, so this is the target we're looking at right now in setting our 14 is our target for what we're looking at for the budget.

Yes, that's right.

That that's the recommended position.

So we wanted to show again, this is as Brian reflected in February, he came to you and said if nothing else changes, this is what our projections look like based off of last year's um budget direction from the council.

Then what slide 14 represents is the culmination of my recommendation um budget to you that incorporates the other um budget adjustments and enhancements that that Brian and Sam have alluded to in those interim slides.

So between February's numbers and this number, this reflects all the individual meetings that um OMB and I had with the departments, those cuts that we accepted, um, those enhancements that we accepted, and then slide 14 shows essentially what we're asking council to consider um in it as part of this year's budget.

Okay, yeah.

In addition to better data on economics income and expenses.

Okay, yes, because as each month um passes, they're able to refine those numbers more you know more succinctly as well.

Correct.

Mayor and council or mayor and vice mayor, with us with our process, we do quarterly estimates, and within those quarterly estimates, departments are able to adjust during those times if new information comes comes up.

So between the forecast proposed budget of 2025, 2526 to the updated forecast that we have now, there's two large changes in our projected numbers for 2526.

The first was development services, their permit revenue was up, so we readjusted for that once those numbers came in, as well as we were given additional funding from Prop 400 for transit to help offset some of the costs that are being paid by the general fund today.

So, with that information, we adjusted that forecast accordingly.

And that's where we can be nimble.

If for example, if if March revenue forecast came in lower, we always joke about March being our second Christmas or our first Christmas in in some regards.

Um, we could make adjustments to that before we get to the point of actually um adopting the budget as we go through this process.

So that's why we stay nimble and flexible as soon as they get updated budget numbers um on a quarterly or monthly basis.

And and uh mayor and council, just so you know, we sit down monthly.

Uh O and B and I do, we review all these numbers, we review the trends coming out.

We use the University of Arizona economic forecasting um unit to do that.

So that we are constantly monitoring and making adjustments.

So if we saw something happen, which is essentially what Mr.

Brady and these folks went through when COVID happened and saw such a major shift, they were able to pivot immediately.

So it's not like we wait 12 months to do this.

This is something that we are working on monthly and looking at those trends that are happening in the economy monthly as we as we uh try to balance that budget throughout the year.

So can I assume on like a very happy note that it's possible that net sources and uses that's negative 29 million might actually change at the end of next year to look quite different for us and possibly not be in the negative?

Yes, Mayor, Councilmember Taylor, that is a good assumption.

Um we have as I think uh council member go forth has alluded to in the since the past five years uh that I have here, we have um budgeted of uh negative net sources and uses because we like to put in all the expenses that we may think that are gonna happen for that fiscal year.

But then as the fiscal year goes through, we either get additional revenues or the expenses don't happen.

So out of the four of the last five years, we have ended with a positive net sources and uses.

And the the one where we were negative was because we had significant amount of one-time revenues coming in, and so what we did is we set those aside to help with city infrastructure and city repairs and maintenance of all of our buildings and things like that.

So that's the only reason we have a negative is because we decided to set some of those revenues aside to help out with our facilities.

Thank you.

Brian, before you get going, going back to one of your first ones about public safety.

Slide nine.

However, as long as this does not affect our policing or fire department response for sworn personnel, I want to make sure that doesn't happen if there's switched over to civilian personnel.

I'm okay with that, but as long as we keep the sworn personnel out there as well as the professional staff, I mean it's it's uh a two prong attacked.

I want to just make sure that we have what we need to uh police our city and provide fire medical services.

Yes, mayor, counsel.

When looking at these reductions, um we work with uh police and fire uh medical and this is so for instance the the police department one of the um there's three of the positions that one of their processes they have three sworn um positions detectives as part of this process.

However, with this with the process, they see that um the current process that's working now is they distribute the duties across the department.

Well, what they're gonna do is they eliminate those three positions, but those people will then move into vacant police officer positions.

So we are not we're not reducing our sworn, we're not um eliminating any sworn.

What we're doing is they have uh amount of a decent amount of vacancies that they can move those three in and now be better utilized throughout the department.

And so that and what they plan on doing, and they'll speak more about this uh next Thursday when they come back is that with that process, once that happens, they'll now hire professional staff, non-sworn staff to fill some of those positions back.

Are we redeploying staff or are we hiring new staff?

I guess that is.

Yeah, I I mean I think that's for the future.

Yeah, absolutely.

And we can dive into that.

Uh the answer is a little bit of both.

I mean, they're continuing to fill um those vacancies, but they've identified some positions, some that they can civilianize, some that some that they did not um need and and wanting to reprioritize, and the chiefs um can both um talk about that next Thursday when when their departments are here to present.

But just on the civilianization side, um we're I mean, kudos to Chief Butler and the whole team at Mesa PD because I think we lead the nation in trying to find positions within the department that um don't need to have a sworn presence, that a civilian a highly trained civilian can can fill that role.

Um, and that is a it's more cost effective for the department, and it just realigns their resources better because if you can have a sworn person filling a position where sworn is needed and a civilian filling um some investigative role or something that it's not or support role that you did not need a highly trained sworn uh police officer, it's just uh a win-win for the department and saves the taxpayers' money.

So I appreciate the chief, and they'll talk about that next week.

But our department, I I would argue leads the nation and trying to find that when you look at other departments.

There's a lot of sworn positions doing work that you don't need to be a trained peace officer in order to do.

And so, yeah, so appreciate that.

Okay.

Go ahead, Brian, Sam.

So on the net on the next slide, um, wanted to go over just some highlights of the reductions from other city departments.

So we had 25 vacant positions across the city that we reduced out of the budget.

Um, we're able to uh with some of the subscription costs uh uh discontinuing some of those that are rarely used.

So we the departments went through and to see, okay, what what are we using, what are we not using?

And so they were able to eliminate some of those subscription costs.

Same with uh contract costs through renegotiations.

One of the uh examples of this is our Verizon bill.

Um, do it went through a renegotiation of our Verizon bill to lower that to help out with the costs.

Uh, even with equipment costs that meet staff needs.

Um, what we review all the time too is uh laptops or any computer or any other equipment.

Do they do they need the best of the best, or does do they need something that just fits their need, which is a little cheaper, and we do that also same with the insurance premiums and aligning with the the city needs.

I know the sit the city attorney's office did this with um with some of our insurance and and was able to save the the the city some money by uh looking at our insurance premiums and and maybe lowering our our um our thresholds that that fit our need and taking a review of that, and then also some of the other ARPA funding that uh that has lapsed that now will uh be general fund um supported.

So some of the resources that we uh were able to put into the forecast, also is um we're seeing about a two million dollar a year um credit card purchase and cooperative contract rebates that the city is getting um through our our purchasing uh department business services has done a great job with with doing that, and then also increasing um projected revenues with building permits.

We increased that slightly.

We're we're seeing uh a little uptick in in some of our permits that we're receiving.

So we're able to adjust our revenues on that side.

So some of the enhancement requests, so departments submitted about a six point six million dollar one-time and ongoing requests.

Uh 4.8 requests were approved, and some of those uh, as you may be aware of is the the three million dollar for the redevelopment toolkit pilot.

Um that is for the the three-year pilot, and then also um some of the positions.

We have a assistant city prosecutor, a senior internal auditor.

Uh I'm not sure the last time the audit uh department had an increase, but this position is gonna be uh dedicated um more towards the IT side of it.

So that's one of the positions that they're looking to fill is they've got the other ones doing all the other audits, but it would be good to have kind of an IT specialization in there.

Uh also the HVAC control technicians.

This is one where facility maintenance um really looked at to see is it is it more cost effective to contract out or more cost effective to come internal.

And it was more cost effective to come internal with all the HVAC um controls that we are getting.

Uh it is good, it was more efficient and cost effective to bring someone on board to be able to oversee that.

And then we also have some third-party um process server for code.

Um, we included that.

Um, what this does is frees up the code officers to do more um community-based um observations and not have to go and do the serving.

We have a third party now serving those violations, so that frees up the the code officers uh in their time for that.

And the other the other position we wanted to highlight is the IT tech uh technician three, and that's to help support the uh the Wi-Fi that the city put in.

And what this is is to maintain that city Wi-Fi that are that is at city-owned facilities.

So we do plan on continuing the uh free Wi-Fi at the city-owned facilities.

So, mayor and council, um, to that point, some of the the items that Brian just highlighted really reflect the feedback that we heard from you all.

Um, and I know um council member Taylor was just having this conversation with staff the other day about how we evaluate in-house versus contract work, and and so we're constantly doing that.

And and Brian highlighted two positions where we've been paying contractors to do it, but we realize the workload is there that we can save um money in the long run by bringing those positions in-house and in and doing that ourselves instead of relying on contract service.

It can, it's more cost effective and more timely uh to do those.

Then on the um process servers, we know uh we've we've heard you loud and clear about the emphasis on code compliance.

Uh a few years ago, as a budget saving measure, we started having our code officers actually serve um the uh citations, and all that does is take them out of the field where they're as to spending time working on code compliance issues, they're trying to also serve citations.

And so we're going back to using we we saw that was non-effective use of their time.

So we're going back to suggesting going back to use um a process server in order uh to do that, which frees up the time for co-compliance to to spend on the things that you all have talked about.

And then um the auditor, that's that's something we're all talking about efficiency and accountability.

Uh Joe has not had a new position, as Brian said, in a very long time.

I I don't know if any of us remember exactly when we've added to the city auditor's office.

So adding a position um will um allow them more throughput, more ability to work with the departments, ensuring compliance and and proper efficiencies, and so um we and then on the prosecutor's office, uh Paul Hawkins and his team are doing a great job, but they're they're overwhelmed, and so we needed to get provide some relief for them so that we can continue to ensure a timely um justice is served uh through through that effort.

So that's why we're recommending another uh city prosecutor.

So even though we're very lean uh and intentionally, we we knew that there are some needs out in the departments and uh priorities that the council had that we needed to reflect some additional spending to reflect that.

Thank you, Brian.

So on the next slide, I want to highlight some city infrastructure um costs that are also included in the the proposed budget is we have six million dollars for facility maintenance and improvements throughout the city, uh three million dollars for park maintenance and improvements, um also the uh main library swallow room updates we have uh budgeted in there, and then also at the Red Mountain Library, there's two areas that they wanted to focus on of um improvements is one is the children's room renovation for 500,000, but then also the uh program room updates for 230.

So again, um the emphasis on catching up on our deferred maintenance and making sure that we're maintaining um the things that we need to be.

So that nine million that you see between facilities and parks, that's gonna make sure that you know we're continuing to make make sure we don't fall behind and doing everything we can to catch up, and then um as Brian mentioned on the Red Mountain Library.

I think several of you were there and commented too about you know that there's definitely some TLC that we need to have for um some of our facilities, and um we've identified the funding to be able to assist in some of the enhancements there as we've continued to invest in our public spaces in the libraries.

Okay.

So with those adjustments, we come back to slide 14.

So this is this includes all of the adjustments uh that were just now pre previously discussed.

And so with that, what we are looking at, so we were previously in the uh forecast uh on fiscal year 2930, we were at 1.8 uh sorry, 2.3 million now with some of those adjustments.

We did have some enhancements.

Um we had some other uh adjustments on expenses, um, but we were able to now uh we're at 1.8.

So going from 2.3 to 1.8 um is is uh testament to the staff of um doing their reductions and holding it to it and being able to find some efficiencies and some of those expenditures, um, but also taking a look at some of those revenue sources that we may be able to uh capitalize on.

So now with the uh projected for 2526, I believe we're at 33 million, but now we're looking at 29 million.

The budget um for 2627.

We're looking at a uh uh 31.1 negative, however, um depending on how the expenses are and how revenues come in.

Um, as mentioned, that could be positive.

Uh but what this does include is all the um positions being funded and also some one-time um as we mentioned like we kind of talked about some one-time, and we have some one-time expenses in here.

Uh specifically for 26, 27, one of the big one-time costs uh is uh the PD radios.

So that is about 9 million, 8 million dollars, 8.5 million dollars.

That's in that for one time.

So we do throughout the forecast, that's the same with the forecasted for uh 27-28.

We have some one time for some fire radios.

Uh and so with that, those one times we when we start getting closer to 28, 29, 29, 30, we may start including some of those depending on how the life cycle is uh on that.

And this is where we get to um the previous discussion of what do we cash fund and what do we bond fund?

And this is a lot of cash-funded life cycle, and some of the projects like we had on the the previous slide of the the children's room and some of the renovations we cash fund those because that's what um we know that we can we can fit that in with the budget to where we are very uh strategic on what do we want a bond fund, how long is it gonna last, how big is it in that.

So with this, um we do have a negative net sources and uses for 2627.

But however, um we are in increasing our net sources and uses, and the goal was uh two years um getting that to two years uh from outside of the forecast, and right there we're meeting the goal, and with the ending net sources and uses, uh we don't drop below 18 percent.

Yeah, we were just above 20, 21 percent, but with 18 percent, we are still above our principal of 10 to 15 percent, and that is still uh looking good as you see it we grow out of that and uh throughout the five-year forecast.

And and again, going back to the the point that council member go forth made earlier, that this is a snapshot in time for those for those out years, but we're still maintaining um it's the trajectory, right?

Some of these numbers will change, revenue will change, uses will change, but it's that trajectory of how we're we're growing out of this by being fiscally responsible and then letting that natural growth happen.

So we've been able to make those adjustments that that were needed.

Um but the trajectory is still stronger than we saw last year at this time as we um presented the budget.

Yes, um, if you go back to where you talk about the departments submitted six million in one time um requests, but four four point eight million were approved, and then there's some examples, and then the next slide says six million it talks about so these are separate.

Yes, Mayor, um council member go forth, these are separate.

These are uh other life cycle type projects, cash funded projects that are more infrastructure related.

The previous slide was their ongoing, so this is one-time funds that we're using for these.

Um time so the the previous one is reducing their base budget of um of their ongoing base budget to to meet that two percent.

This is what we were looking to fund out of the um for these departments.

They didn't cut these.

This is what we're looking to fund.

So these are I wouldn't say they're enhancements, but they're things that we uh continuing to look at on one-time um funds to be able to.

So did every department do a net two percent reduction, or did we or were we more um surgical?

Surgical.

Yeah, they all did.

Then we went through um they they sat with me.

Not all of the cuts from every department did I accept some some of them um would not have made sense in the long run to do it.

And so that's why we we asked each department to do that.

They had to they had to submit that net two percent, but then um, you know, we went through each and every department, each and every line item to determine whether um that was a cut that made sense or a cut that um it might get us one year savings, but it's cutting off your nose to spite your face in in some regard, and and some of those we rejected and and said no, you need to keep maintaining it at that level.

So our budget is basically flat for the um the next year, the 2627 are our sorry six our uses are basically flat.

Our expenses were okay.

Yes, Mayor, council member go forth.

Yes, between projected 2526 and what we're looking to budget for, um the general governmental fund for 2627, the uses are are pretty flat with that.

Doesn't mean our our some of our costs didn't go up, but we've reduced in other areas that we have flattened that line.

That's exactly it.

Yeah, I mean we we continue to see the pressures on um you know commodities continue, uh all those things Brian listed at the very start.

We continue to see you know wages, other things um increase that um that's reflected in this, but that's where tightening our our savings and council member Taylor and I were just talking about this in a minute ago.

So if you go to that um to total um uses in FY27, if you just added 56 million dollars to that, that would essentially be where we were had we not made these two percent adjustments over the last the last few fiscal years.

So that um 732 number quickly becomes um seven eighty.

Yeah, 787 um, give or take, if we had not made those those adjustments.

And those have happened over the past three years.

Correct.

Starting in 2024, 24-25.

Yes, mayor, council member go forth.

Yes, uh, when uh Mr.

Brady was here as city manager, we started in um 2425 with the two percent cuts, and then we also did 2526 for this current fiscal year we're in, and now we're doing it for 2627.

So over those three fiscal years, we are looking to um reduce our ongoing budget by 55.7 million dollars.

Okay, that's the so that's the total amount of the reductions over those three fiscal years that are ongoing.

And I wanted to go back to the previous slide also.

Um the library uh updates is one time.

The actual the facility maintenance, I wanted to highlight facility maintenance and park maintenance, though that is ongoing.

We allocate that every year.

Uh and we work with the um parks and rec and also with um uh facility management on uh allocating those funds every year to them so they can prioritize the uh um any improvements that they need.

I'm just curious about this slide.

So this can't be the only like why did you include these?

I just wanted to highlight I just wanted to highlight some of these uh major ones that are kind of ongoing that we look at.

What we'll come back is the um I think it's April 16th.

What we'll come back is the um I think it's April 16th, I'll come back with a full uh city CIP and we'll go through that, which will include all of the bigger life cycle, any of the and all of the uh capital projects that the city is looking to do for um budgeting for next fiscal year, but then also the five-year plan.

Because because sometimes I think um council when we focus on some of the bright shiny fund projects, fire stations and other things like that, it takes away from the fact of um going back to the discussion earlier.

There's a lot of one-time uh spending that we do for facilities and other things like that that we pay out of the general out of the general fund that we pay cash for.

We we find one-time revenue uh and we can say, okay, we need to reinvest that because we know we we have some building maintenance or facility upgrades that that we need to do, and they don't get all the attention that maybe a new building or a new facility gets and all the ribbon cuttings that go with it, but it's essential, you know, both for as we saw on fire stations.

We we we spent um money on bathroom upgrades um in order to uh because these are 24 hour living facilities for our um for our employees and and we're looking at that throughout the city.

What where are facilities that we need to do better by our employees or by the customers by the residents who may come in and and utilize um those spaces and and how are we keeping on on track of that?

And that's what facilities maintenance has been really focused on.

So we just wanted to highlight some of these because as Brian said, they they don't get all the attention when we talk about big road projects and and and stations and other things like that, but these are essential to maintaining our our own infrastructure, our city infrastructure in these buildings.

So that would have been the last study session.

The gentleman that came up and he talked about all of the air conditioning units and all of the nuanced details that cost around all of our 317 buildings.

I think it's even more than 500 and something you know, buildings.

That's part of the that's right, exactly.

And they have an ongoing cycle that they look at every year to try to prioritize projects within within that.

Um I have one quick question.

Oh, I'm sorry, are you done?

I'm done.

Okay.

The prior slide that has the 6.6 million in one time and ongoing requests.

This is something that we still have yet to vote our approval on, though, correct?

That's what's I was actually looking at the redevelopment toolkit.

Like because we were we landed on like, yes, we like it, we're still moving forward, but some of us may have some other suggestions that we still want to implement.

Sure.

Um, mayor and council, what that represents, the 4.8 million in approved requests are embedded in my proposed budget.

Um, and and so certainly any of those we can talk about.

We went in we wanted to go ahead and put the full um amount of the ask on the redevelopment um toolkit.

We were able to find um, we had some money um in the general fund that had been programmed um for an ongoing expense starting this year that we're going to look for non-general fund money um based on council direction on on that, but that'll be another discussion, but that freed up 2.5 of the three million dollars um that we could then rededicate towards um the redevelopment program.

So it was already in our forecast uh for two and a half of that three million.

So that really softened the blow of adding the additional money for the redevelopment program into that.

So I'd also like to point out that I think you I'm very impressed with the fact that you kind of had a carte blanche request to do two percent across all departments, but you are still strategically surgical in that we could add some necessary employees to our city that would offset a more expensive cost, because I know how much contractors and subcontractors cost, and they often are quite a bit pricier than if we have the workload to just go hire someone and have them work for the city full-time.

Yeah, absolutely, mayor and council members.

Sometimes it's it's an easy talking point to be able to say, well, we privatize this or we outsource this, but if we end up spending more, we have it done right by the taxpayer.

And so this is where we're approved of that because I went to a few meetings, HOA meetings, LD meetings, and I said, here's the situation.

You know, we we can do budget cuts and we can we can take people out, but that doesn't mean that you're gonna feel a positive benefit from that because there are certain departments that our city has where these employees are fighting for you every single day.

And there are very positive consequences to us having more of them on board, not less of them.

Right.

Yeah.

Mayor, council member Taylor, just to add on to the three million dollar discussion.

Um, as Brian had mentioned, the budget itself.

What we what you all adopt creates the maximum spending limit.

So with the proposed budget, the three million, what that does is creates the capacity.

If you guys decide to go a different direction, we can pivot on that capacity, but this allows you to spend up to that three million dollars depending upon what is decide by council.

So we use it as a planning mechanism.

So each individual program that um Jaff and others described in the redevelopment toolkit is something that you're not voting on that by approving this budget.

This is just setting the upper limit because that was the top of their ask.

And then uh council, if there were any programs within that three million that they weren't comfortable with, or they wanted to bring the amount down to a different number, you could do this, but this gives you the flexibility to make ultimately that decision of uh investing the whole three million that was discussed.

That's how funny.

Go ahead, Brian.

So moving on to the utility fund.

Um in this fund, and we'll get to it in a little bit, is as you all aware, is a little different than the general governmental fund of um because now this is an enterprise fund.

The utility fund has uh similar financial policies and principles.

Um highlight a few little different ones uh than the general governmental fund is with the financial principles of the utility fund.

We like to try to keep a higher um reserve fund balance percentage, uh, anything higher than 20 percent.

Um then also what we look at is I think it was discussed previously in the previous uh presentation was smooth rate adjustments throughout the forecast.

Um this helps with the forecast of any debt service payments, any capital uh payments, things like that.

Also, uh equity between residential uh and non-residential water rates, and then also keeping the utilities affordable.

So some of the pressures we've highlighted before, I just want to remind market-driven compensation and competitive benefits, fleet maintenance is another one.

Um also we've got uh water commodity costs, um, 91st Avenue and Valvista water treatment plant.

We uh we are part owners with that, we don't run them, but the cost increase with those are becoming significant.

So we have those cost pressures on those repairs and maintenance for those two facilities.

Yeah, I just want to interject there.

That's why some legislation, some bills out there are not very conducive to uh cities funding and uh just the pressures on our budget overall.

Uh I had a conversation with one of our state president, uh President Peterson about this recently.

So he understands hopefully uh some bills don't go very far, let's put it that way.

Thank you.

So, yes, Mayor and Council.

So, some with the strategic some of the impacts, um the city manager asked even the utility departments uh to uh come up with a a two percent reduction plan also, and so they submitted that plan and with the forecast that we presented in February, this also includes that plan.

I won't go over too much of this because we've already uh talked about this a decent amount of where this includes this includes a a capacity fee um where all of those projects are moved out, and we've been able to move some of those in and has significantly helped the uh the forecast for the utility fund.

And as you see with the uh we're uh uh previously when we did not have um the capacity fee, uh the negative the net sources and uses was negative throughout the forecast.

Now being able to move those projects out and not have the rate payer rate payers bear the uh the capital costs.

Uh we are now positive net sources and uses in 2829.

So even though um with the reductions, they they came up with 3.8 ongoing reductions.

Uh the city the city manager reviewed them, and we he did uh 1.7 million in ongoing expensive, and a majority of that was just an overtime and uh temporary staff due to uh fiber to premise.

So that project is slowing down, so we're able to reduce that overtime and temporary staff.

Some of the other things that were in there is just normal um operational uh savings that they were looking at uh for um any contractual services and and things like that.

So they're only 1.7.

So as I mentioned, um, and this is significant because as you saw the forecast previously, so the city with resources, the capacity fee is gonna bring in an estimated 24 million dollars annually.

This is significant because it is growth pace for growth, it is the contractors um paying for the growth that is gonna uh impact the um utility systems, and also um this capacity fee will be reviewed uh with the utility general plan, which is every usually about four to five years.

So, with that, this is when that fee um will be um reviewed also with with those so when is that what what um fiscal year is this reflected in the 24?

So this is reflected in this coming up fiscal year 2627.

So there um that would be a full fiscal year of the capacity fee.

So it would be in 2627.

But you won't see it in what we did is you're not gonna see this revenue in this forecast, because this is the utility fund.

We deposit these funds in a separate restricted fund to be able to pay for those projects.

So this is not reflected what's reflected in this the reduction in capital cost of the debt service, really, yeah, of those that 400 million that we were able to move out of this fund.

We were able to move out that debt service that the utility fund would have been paying.

And so with moving that out, it helped the forecast for the utility fund uh for that.

And and the full 24 in because I thought there was a discounted there is mayor, council member go for it.

There's a discount that was started in January one that goes through June 30th of this calendar year.

Okay, and then next fiscal, so July 1 is when the full fee will be in place.

Okay, great, thank you.

So some of the enhancement requests um they submitted uh 2.1 enhancement requests, and some of those requests is uh about 250,000 for the lead and copper, the L CR, but then also the PFAS analytical services continuing with with those services.

Also is the Bartlett Dam feasibility study and the the SCIF um technical review.

Um we'll be able to go into more of those when the utility departments uh when water resources comes in uh and does their presentation on the 16th of April.

And then also what we're able to do with this is add a third shift at the East Mesa Service Center for fleet services.

What this shift primarily focuses on is the solid waste trucks being able to maintain the solid waste trucks um not just at the West Mesa Service Center, but it'll now be at the East Mesa Service Center also.

So this will help with those trucks and keeping them keeping them maintained so they can go out on a daily basis on the six days and be able to pick up the trash.

So this will significantly help um solid waste on maintaining their trucks.

Mayor and council, I can't stress enough the importance of this third shift that we're adding.

Um this will help our reliability across across our fleet, but specifically solid waste to make sure that we have the trucks out rolling the next morning to um meet the needs of picking up our trash and recycling each day.

The problem is, and we'll talk about this um about future investments that we're gonna need.

Um we just have as you're all probably aware, very antiquated um fleet uh services centers that uh we can't even fit some of our trucks inside because these were facilities that were built decades ago that just aren't meeting the needs of our current fleet, and so we've got to one do better for our employees so that they have the ability to utilize these, but the the throughput and the capacity that we have is so limited that our only option right now, because we don't have additional bays, we don't have additional space, that'll take time.

Again, we're gonna come back and talk to you about the needs to how to address that.

But in the short term, we can stand up a third shift immediately and be able to um increase that efficiency of getting those trucks out um on the street.

So that this is uh a vital enhancement, I think, for our reliability, especially on the solid waste side.

Mr.

Reddy.

I think Mr.

Butler, just a quick question on that end.

Um any analysis or maybe it once fleet or the department uh presents around like lost time, lost amount of resources that we have because of antiquated equipment to just to have as far as backup to see why this investment is needed, right?

As far as how much money do we either lose or time because that time is also money, right?

Yeah, absolutely.

So uh just just uh reference there.

So yeah, mayor and council member Heredia, we'll we'll definitely come back to you.

We're we're working on this right now because it's it's not just our um west side facility just up the street, but it's also our east side yard where um we have some major infrastructure needs that support public safety in our utilities, and it's all about the ability to get these vehicles um maintained and then back out onto the street.

And it's it's it's a major lift that the city needs to tackle.

We've frankly we put it off for too long because this didn't happen overnight, and some of these facilities um they didn't become antiquated overnight, and and so it's it's maybe not the most glamorous side of what we do, um, but it's essential for keeping our um our police vehicles and our solid waste trucks out running on the streets.

And so it's it's maybe not the most glamorous side of what we do, um, but it's essential for keeping our um our police vehicles and our solid waste trucks out running on the streets.

Um and so we'll we'll come back, Councilmember Heredia, and have a more robust discussion about that because it's a it's a more complicated answer that involves many different um pieces that we're working on, including some land transactions on by our east side facility and and space in our west side facility where we have to relocate um some storage um yards that we have there in order to free up the space for expansion of our fleet facility.

So it's uh it's a it's a real game of uh you have to do one thing before you can do the other and and uh acquire land before you can do the investments on on the other side, but um this is a short-term band aid towards a much bigger problem that we have.

I just want to say, Scott, thanks for bringing up police because that's our number one concern is the ability to get their uh police the cars out in the road.

So thank you.

Yeah, and absolutely.

I have one quick question about the feasibility study for Bartlett Dam, and forgive me.

I is how is Mesa participating in that as an oh I thought it was just SRP that was doing it.

So okay.

So, yeah, mayor council member Taylor, yes, that's what this um allocation will go to is that feasibility study.

We are part of that, and so we're helping pay for that.

The total cost of the feasibility study is more than that.

I would assume it's quite a bit more than that.

Yes, okay.

Yes, this is so this is our portion of that feasibility.

We're throwing it in.

Okay, got it.

Thanks.

And that allows us, it's the same method essentially that we did when uh Roosevelt Dam was um raised uh years ago, where we were one of the entities that went through the feasibility study, then ultimately um supplied funding for that, but that assured us a portion of that allocation.

That's the same analysis that we're doing right now on Bartlett.

Um, us and other cities that are interested are going through this, and then um at the end of the day, if if it all pencils out and the decision was made to move forward with that, um we would we would have a guaranteed allotment of whatever is stored behind uh because we're putting it.

Because we're putting in.

So we're paying to play.

It's pay to play.

Uh-huh.

Yeah, you gotta have skin in the game because every every city or entity would love a portion of that water, but you've got to, you got to put your money where your mouth is.

We can say we pay to play too.

We we do.

Yeah, absolutely.

Brian, I just want to add uh, you know, all of our departments who provide service to our city, our utilities, our solid waste.

You know, I just applaud our employees and the directors who work so hard every day because that's one of the I use the word full service city that we are.

We provide all these services, and it's important to keep everything that we have going.

And more importantly, we have the service centers.

You know, I know that the West May, someone to the north of us is an older one.

I can't remember how old, but it's way old and needs to be updated.

But getting those trucks, everything out there, adding the third shift uh helps facilitate that, and you know, it it will cost some money, but at the end of the day, we'll be more efficient uh with our resources that we have.

And as far as the water part on Bartlett, yes, uh, a bunch of municipalities are participating in that for accrual of water, having another bucket of water available for us in the future, and hopefully that dam can start building in about eight years.

So we have eight years more payment, Ms.

Taylor, of this, and then we'll pay for some additional water as well.

Well, and and then we'll get to some real money.

This is the feasibility study, and this is uh, you know, pocket change compared to what we'll be talking about.

If the federal government steps in and just pays for it all.

Well, that would that would be great.

I you know, I hope you all lobby for that.

So all right, sorry, Brian.

Go ahead.

That's good, Mayor.

Yeah, so the next slide just shows the the forecast uh of the utility fund, as I mentioned.

Um this is um a positive forecast for the utility fund, and it is especially positive due to council passing and adopting the capacity fee.

So we're able to focus on um repairs and maintenance and other um um operational um priorities for the utility fund.

Yes, Ms.

Duff.

Um on this, Brian Um our financial principles is 20 percent for our reserve fund, and um this year's projected at 16.6 percent.

Are you concerned?

And will it affect our bond rating?

So um Mayor, Councilmember Duff.

The 16 percent I'm I'm not too concerned about.

We are still meeting our um policy of eight to ten percent.

That principle uh we like to shoot for throughout the forecast, uh, is at 16.6.

However, if it um just similar to the um general governmental fund, we like to budget everything that we can for in the utility fund.

And as you you see in the previous year, the actuals came in at uh 2.4 million positive, so at 21.7%.

So we'll see how the the um the utilities go with how the weather is.

Um with this being a warm um being a warm summer already, uh, I think we went from winter to summer.

And so the water used to be.

Yeah.

That's true.

We went from spring.

So I am not too too concerned with this uh as it is.

It's a planning document to where um we just had the ratings calls and presented uh this for uh the forecast with them, and they seemed pretty pleased with the with the forecast.

So we'll uh we'll monitor this as it as I mentioned it's a planning document for the next five years, but we review this on a monthly and quarterly basis with the utilities, and as part of um what Sam said on the quarterly basis, we go through with every department of the uh their expenses and revenues and see what their estimates are gonna be for the rest of the fiscal year, and this will get updated.

Um so we'll see how uh the 2526 ends, but then also the uh 2627, as you see it it improves to 11.6, but then also then the following year it's pretty flat, and then in 2829, uh we have positive.

So I am uh positive with this forecast.

Yeah, we'll have to see how things negotiations work out um on our water agreement.

I'm it is evident from anybody you talk to, we are going to get a huge cut, is what that number is, but everybody says expect a huge cut and water prices are gonna are gonna skyrocket.

So given that, and we like to keep our rates fairly stable and not do huge increases.

I'm sensitive to making sure that we have enough reserves so that we don't have to do spiked increases as we experience cuts and and water cost increases.

So I don't know.

It's just something we have to really watch.

I know we've already passed our rates and such.

We'll have to watch and see how the agreement pans out.

But um even best case scenario, we're still gonna see huge water increases, rate increases from the CAP.

So um well, we'll have to see how we do and make sure that we have some reserves to weather it the best we can so we don't have to have um pass along huge increases as well.

Thanks.

Jen, thank you for pointing that out.

You make me think of a question that I don't know, it might be for both of you.

Is it possible to help offset some of those very likely increases with the the funds that we're gonna receive from the capacity fees for our for our residents and our commercial businesses?

So mayor loaded.

Council member Taylor, yeah.

That that's more of a legal thing for uh what I would I understand with the capacity fee.

It's it the capacity fee is for projects, growth projects only.

It can't be used for operational maintenance that would this would go for like purchasing water and and helping offset that.

So that's where the capacity fee comes in, is where we were able to move those growth projects out.

First, for instance, like the signal butte expansion and some of the wells, the capacity fee would pay for that one-time project cost, but then the operational maintenance then goes bears on the utility fund itself.

Okay, thanks.

All right, gentlemen, thank you so much.

So, Mayor, that um that's the overview.

And now we'll get into the funds starting with your next item.

Through the entire month of April, and then um we'll come back to you uh in early May, right?

Or is it the very end of April with the April 30th, yeah?

April 30th.

We take a quick break for uh the mayor's state of the city address, and then uh then we'll be back for it.

Yes.

And then we will come back with a uh a tentative uh budget update on the April 30th.

When do you have the actuals for 2526 when we talk about you know projected?

When do the actuals come in, you know, Ms.

Duff's comment, you know, when we see the real numbers out there.

So 2526, we work with finance, they go through their year-end process, and so we would not see actuals pro um it would be an estimated actuals is usually around September, October.

When the audit fine gets finalized in the opinion, then that's when we update our actuals, because then we know that's when it closes and there's no adjustments from the auditors.

So June 30th is that cut off and then the June 30th is the cutoff, however, the actuals.

Three or four months later.

Yes, because then there's also accrual like the accruals and any revenues coming in, any expenses, especially with on the project side of that type of stuff to where we're we're still having some um expenditures in July and August when they invoiced us for um services in June and in May, things like that.

So Mayor, even though we won't have a reconciled um actuals at that point, once we see the way that sales tax performs though through the rest of the fiscal year, that gives us a good clue about you know overall kind of where we are relative, like we said, that they've been strong.

We're we are estimating that we'll continue to see um strong revenue from from sales tax.

But once we get those actuals in, which come in on a monthly basis, we'll be able to at least have an idea of how close uh we were to some of those estimates.

That's one of the bigger fluctuating factors, potentially fluctuating factors.

Very good.

All right, thank you.

Thank you.

Uh next is item to be a presentation to provide direction on the parks, rec and community facilities department budget.

Andrea, are you by yourself?

Of course not.

She's got a team, but since she's uh, you know, been gracious enough to step into this role on an interim basis.

We thought we'd let her off the hook and let her get this over and done with first.

So she didn't have to sweat it out into later April.

So appreciate her uh and and her leadership right now.

All right.

All right, thank you, Mayor and Council.

And I know it's been a long morning already, but I do have the honor of being able to help uh share the story of the parks and rec's uh and community facilities budget proposal, and uh, I do want to recognize the team that's here with me.

So next to me is our senior fiscal analyst Alison Walker.

She is the one that works all of the magic with the numbers behind the scenes.

Um, and then in our audience as well, we have our deputy directors, Brandon Erno, Roger Singleton enacting in the interim position as well, Haley Smith.

Um, these truly are an amazing executive team for the department of experts of those that have a uh tremendous leadership skills that lead the department with a lot of care and compassion and have certainly helped to support what we're gonna bring to you today.

So, being the first department that gets to present to you, I also will be able to share a little bit of context on these public purpose statements that you'll be seeing from the various departments that we'll be presenting.

You heard earlier this year from the Office of Innovation and Efficiency on their game plan to help support the city manager's vision in unifying the different departments with public purpose statements and direction on how we are going to be moving from an output to outcomes-based KPI model.

And so with the parks and recreation and community facilities, our new public purpose statement.

Um, we're still supported by our missions and values, um, but these public purpose statements are our newly updated.

So, as you will see, our department exists for the care for to operate and activate vibrant public spaces and resources.

Uh to us in the department, this is really pointing to a lot of those that you see on you don't see on the back end.

That is our finance department, our internal IT department, um, our internal um support staff that again are not in the public-facing side through fostering safe and welcoming environments.

This is really pointing to our our parks maintenance crew, impactful events.

This is what we're gonna learn more from our uh convention center, the post, uh special events team, and then dynamic experiences, and this is all of our recreation activities.

So those that are you see there in yellow are uh we'll have a a further discussion on how we are gonna be envisioning new KPIs based off of those three areas, and then to uphold Mesa's commitment to cultivating a thriving community.

This is really then pointing again towards uh the city managers, your council goals, um, and some of those departments that also um adhere under this thriving community bucket are are those counterparts with the libraries, um, arts and culture, um, community services, a lot of those uh human service-facing departments.

So before we get started um in in some of the media elements, we also wanted to touch on some accomplishments and highlights for the department.

Um you all know that our aquatics facilities are truly top of the line.

We have Olympic qualifying pools, they hold national competitions.

But to point to council's uh strategic priorities of of safety and public safety, I wanted to recognize that they recently had acquired some awards last year specific for aquatic safety and drowning prevention.

And so again, this shows our continued commitment to those public safety investments in our community.

Additionally, I know we all feel that our Mary Main Street is the best way to celebrate the holidays each year, but so does uh the state recognition.

So this was another wonderful tribute to our special events team and the quality events that we truly bring to our community and and in particular for Mary Main Street.

Some other notable highlights.

Thank you, Mayor, for acknowledging at the top of the meeting why we are all in blue for autism awareness.

Certainly, our department is a really big partner in that partnership with Visit Mesa to make sure that we are an autism certified city.

You can see that last year, over 80% of our community facing staff did renew their training.

Some of the other departments that do participate in that as well is our police department, our libraries department, arts and culture.

But we have the most employees through our parks and rec department, particularly because our adaptive arm is such a significant facilitator of those activities in the city.

We have a lot of construction happening, particularly in Vice Mayor Summers area, neck of the woods.

We um with our capital driven projects, as you'll hear more about in April 16th in that presentation.

But what I wanted to note is just the department's continual innovation and the way that they look at the landscape of different amenities across all of the various parks, and how as we continue to plan these new projects, we are also wanting to hear from the community what their interests and needs are, um, their evolving recreation interests.

And so we will be by the end of this year adding then the new elements of a BMX bike park and an RC car track.

And so we certainly look forward to more in the future.

Um additionally, uh last year was the launch of the Moore Vehicle, the mobile outdoor recreation experience.

Um this was really in partnership with the the Fun and Fitness Van.

You know that is the mobile uh tool that goes to some of our parks to help activate those spaces and ensure that we are having the the type of recreation that our community wants to see occurring in those different parks.

The more is just an extension of that, giving us the ability to touch more of those parks.

And then lastly, what I think is truly the gem of the department is really our day-to-day operations.

We are the stewards of more than five rec centers, four fishing lakes, nine aquatic facilities, three dog parks, convention center, amphitheater post, um, tennis and pickleball center, golf course, the list can go on, a cemetery.

Um, but you see there, we're nice one to add.

It is very important.

So we have such an amazing crew there.

Um, and then you can see over 209 city parks and basins that we maintain, over 2,000 acres of parkland across the city.

This is no small feat, and I certainly just want to acknowledge the department at large and um the countless employees that have to touch all of these different facilities to maintain the quality that we are very proud of to see across our city.

So moving on, just um circling back to the discussion of the KPIs.

Again, um, many departments, uh, kudos to our Office of Innovation and Efficiency once again.

Um they were recently developed, not even a year ago.

It's been about nine months, and the work that they've really done to support the departments in ensuring that those metrics are shaped in a way that is meaningful for council.

We've we've definitely heard that direction from you all in terms of how you would like to be able to see metrics and and in a more outcome-based measure.

Um, our department is still going through the process of reworking these metrics.

Um, so I look forward, and maybe a new director in the seat will look forward to being able to share those a little bit more in detail of how we're going to be building these out.

But we are moving to an index model for all three of these outcome areas.

So, again, for the safe and welcoming environments, that will be more from our maintenance side, looking at those KPIs that will include features such as water usage, um, our our speed in which we are responding to different service requests, our um meeting of those um criteria, those national standards for maintenance and et cetera.

For our impactful events, this is really going to be once again from our commercial side, from our convention center, the post, uh, the the golf course.

How are we making sure that if we have contracts in those areas, are we fulfilling the desired goal from the city?

And then for those that we control, are we meeting things like cost recovery goals, making sure that we're filling the spaces?

It also includes special events.

So these are also going to include things like attendance rates at our events.

And then lastly, dynamic experiences is what we see under our recreation arm.

That is going to be our adaptive programs, our youth and adult sports programs, our recreation centers, and so it's going to incorporate an index of different meaningful touch points to make sure those programs are successful.

And so then what I do want to touch on just some commitments from the department at large.

These have been tried and true in terms of we're here to exist to provide the community with safe places to gather and to recreate.

And so we will continue with that philosophy.

We, of course, will be fiscally transparent and responsible as council has certainly identified for all departments ahead.

And then we will continue to provide that high-quality programs for those that are here to spend time in Mesa.

So what I did want to take a moment to be able to outline as is our cost is the department's cost recovery and subsidy plan.

This is really how we look at when we're making any sort of financial decisions, whether it's within our fees and charges, setting different rates, or whether it's in setting how we are looking at our expenses across the department.

This is really the baseline plan that all of those different features are heading towards.

So to break it down to you, everything that we do in our department can be bucketed in one of these one through five service levels.

Level one is what we consider our baseline service.

This is what we feel what council has helped provide direction for in the past as the things that we want to at minimum provide and make accessible to all across our city.

And for that, these are city-funded efforts that we are not expecting or setting a cost recovery goal.

This is things like making sure that our parks, our open spaces are available for anyone to attend, we're maintaining them, we're cutting the grass, we're watering the grass, we are making sure that the trails and the trash is picked up and cleared.

We are making volunteer abilities available.

We are making our accessibility of those facilities available.

And so all of those type of baseline elements to make sure that we can open doors and make sure that those recreation spaces are available.

As we move further along, level two is what we then consider those that are more of a benefit to our community.

However, we want to also have a nominal cost recovery goal within that 20 to 30 percent.

So you can see that that is where we're starting to provide things like our open gym at Eagles Recreation Center, public swim availability at our pools, drop-in court access at our parks, things that again are really intended for the mass of the public to be able to have access to.

However, are things that do require more hands-on touch point for staff to maintain.

And so therefore we're we're trying to start to instill some of those cost recovery items so that way we can modify some of those staffing costs.

As we move into level three and four, this is where we're really starting to get into a lot more of our courses that either we directly offer, those are primarily of what you'll start seeing in level three.

Um, level four is where we're gonna have those partnerships with those nonprofit or for-profit groups.

So level three, um, you can uh itemize as our adaptive program services, our youth sports that are run by the city, um, swim lessons.

We want to ensure that we do make it available at a lower cost for the public to learn how to swim, um, after school programs, summer camps.

So you can see again that 30 to 50% cost recovery is where we're looking and setting the price of those programs.

As staffing costs increases, as different maybe program costs increases, that's where then it will have that impact into how we're raising rates within those fees and charges that you had already approved previous months or previous meetings ago, but this is again the philosophy in which we're looking at.

But this is again the philosophy in which we're looking at level four is um again noted with those interest groups are affiliated partnerships.

Um but again, mostly these are then going to be those for-profit sports teams or recreation teams that are coming now and renting our facilities to be able to host their events.

Um so I know that this is an area where council may hear a lot from the public in terms of when we do raise our rates in those partnerships.

Um but you can see there that typically our cost recovery goals.

Now, this chart does indicate 50 to 100 percent.

I would want to notate for council's interest that we are really truly hovering closer to that 50 percent on the cost recovery of those items.

Um it is within our adult sports programs that the city hosts that we are looking for that hundred percent cost recovery because that is the staff time that goes into hosting these events.

Um of all of these uh cost recovery goals, this is not covering the maintenance or utilities.

This is truly again the OM that goes into maintaining um the the hosting of the uh site through staffing and the different resources needed to that.

Level five is the last category.

This is where there's only an individual benefit.

This is where our convention center, those ticketed priced events, um, this is where we're having Ramada rentals and uh those things that are our private in use where can you tell me where we the cost recovery goal percentages were obtained?

Who when did we have that discussion?

Or was that parks and rec or is that standard?

Um thank you, Mayor, Vice Mayor, for that question.

Um, and so this particular chart has been um part of the parks master plan process, and I know that this has been in effect for several master plan processes.

I believe Mr.

Hirschberg is also one of the original authors of bringing this model to the city.

Um to the best of my denied right now.

He's saying I had done that.

To the best of my knowledge, this has been part of council um past budget discussions year after year.

So certainly this is an opportunity.

Um the parks master plan continues to 2027.

Um so we do anticipate that beginning next year.

Um the new director in place is really gonna have to take on the task of deep diving into a new parks master planning process, in which this certainly can be a continued conversation with council.

Yeah, it'd probably be good to review this, even if we decide that this is the level we want to maintain.

Also, I would put it through the parks board and let them chew on that as that as that process goes on.

Absolutely, and thank you, Mayor, Vice Mayor Summers.

Um, I I will make note now because I I don't want to forget it at the end.

This is certainly something this presentation at large, we did um go through with the parks advisory board just several weeks ago, so they were given this same presentation.

However, this chart in particular was reviewed with them in addition in the fall time when they had extensively gone through the fees and charges process.

Good.

I I like that we're using the our boards like that.

Absolutely.

Thank you.

We did hear that feedback from council to make sure we were making those touch points.

And we know, oh, I'm sorry, go ahead.

Well, Mr.

Ruddy and then thank you.

Um Mayor, I just add to that.

We we do try to use um we we know that this is when you hear from residents.

Um sometimes if rentals go up, um we get it uh when club sports or other sports teams are renting our fields and taking advantage of that.

This is this has been the guiding principle that staff has utilized when we look at the cost recovery about that.

So um you're right, Vice Mayor.

It's always it's a it's a living document.

It's it's certainly up to your uh discretion as council, but um, we just wanted to give you the perspective of the this is how staff looks each year, and certainly as costs rise to maintain those fields to uh provide those services, um, then we have to pass those costs on um in conformance with this philosophy.

And sometimes that's not easy.

I had two kids in club sports, I know what it costs and to uh to do that, and and but we also have to be fair to all users of our facilities, and so uh you're you're right.

This is a good thing to to reevaluate to send through our parks board to um look at, of course, as we always do as we update the parks master plan uh of looking at this, but just want to give council that um perspective of that's this is the lens by which staff when they make those recommendations each year they're they're using this model.

They can make changes to it based on the market, they could leave it the same based on the market.

That's fine.

But but the parks board would have an opportunity to to do a deeper dive on this, where you know I I just need to know what the justification is for for saying it so it's of good use.

I think just a quick question on this slide does uh the service level kind of trend into the amount of resources we spend uh via those service levels, so for instance, like uh service level one, I think maybe that's the most cost that we have uh uh the parks side.

So just thinking of like another column in my head as far as the amount of budgetary piece that it costs to have these service levels or the amount the resources that it takes to kind of work on these service levels types.

That makes sense.

Yes, no, thank you, Mayor, Councilmember Heredia, thank you for that input.

I think that's certainly something that we can look at with a future lens.

Um, but certainly why I wanted to bring this at the top of the discussion because once we go into the department's budget breakdown, I think what you're alluding to is is true in that um the highest cost for the department, our parks maintenance budget is really in that level one category, um, which is where as that continues to increase our availability to do then the remaining um is certainly where we're making impacts when we're having to do things like reduction cuts.

Yes, Taylor.

And you can delay this for a later part of the presentation, but if you would not mind when you're going through it, do you remember I think it's Brim Hall that's closing, is that right?

Correct.

Fremont Fremont, Fremont, thank you.

I don't want to say the wrong one because I might get a lot of emails after that.

Um Fremont.

Will you do you mind explaining for the general public to hear why we're not just taking the the costs that we would have allocated towards Fremont, and that's covering all the cost of the increased fees?

Because I know we talked about that when we met, and you did a great job at breaking it down and saying like it doesn't really flow in because we have two new, I think aquatic centers that were also opening, so it's like it gets absorbed super quickly.

Am I explaining this in a way that makes sense?

I will certainly do my best.

Yeah, yes.

You know, when we were discussing it, you were like, well, it doesn't just immediately cover the cost of all the fees, and here's why.

I know that we also talked about some of these being we're just passing along the cost that's incurred to us from the you know the the people that we have to have work at our aquatic centers while we have all of these third-party operators coming in and using them.

So correct.

I've received a lot of emails.

Thank you, Mayor, Councilmember Taylor.

I do recall now the portion of the conversation.

And yes, I have a lot of them.

I'm sorry.

Um we will be coming in uh in a couple of slides and speaking about Fremont, and I'll make sure to add that in.

Thank you.

Thank you.

All right, Mayor.

Um, so I will wanted to again just in part of being doing our due diligence, and so certainly as we're not having those robust index outcome-based KPIs available for you today, just wanted to show a couple of touch point metrics.

Um, that really what I viewpoint as you know, showing some of the um great impact that we have in our community.

Um so within our attendance and rentals, this is excluding those within our pools, but this is looking at our park fields, our sport complex, the um tennis and pickleball court, open spaces, remadas, those types of services.

Um you can see that there was a uh a decline in the actual rentals that occurred between 2024 and 25.

Um that was really because a lot of our outside rental facilities are in the outdoor space, and we did actually have more rain days last year than we did in 2024 that impacted just the the need to make those reservations.

However, you can see that we still had a great attendance rate across those, and I can um also confidently say that we had made the same in revenues of those.

So um rentals do not necessarily equate, you know, revenue and nor attendance.

And so that's kind of the dynamic of what we hope to be able to further paint a picture of in a more dynamic KPI moving forward.

Um you see the big jump between 22 and 23.

That was still um in 2022, our recreation partners, those affiliate groups were really still coming out of those post-COVID um business, you know, ramping up their businesses a lot more, and so that's where you can start to see our trending within 2023 start to stabilize of how many participants we really have coming across our our facilities.

Moving along within our program participants, so a lot of what we host as a city are going to be within our Tri-Centers, which is Webster, Eagles, and Jefferson Recreation Centers.

This is going to be the youth programs that we offer, and then our adaptive teams.

But we do not anticipate an impact, a negative impact to these program participant numbers.

We do see a flatlining, I think, as you know, council is looking to expect across all of our budget capacities.

But we're very encouraged by the numbering trends that we've been able to see.

And then the last chart that I wanted to put before you is our citywide direct cost recovery for facilities.

When we add in the citywide input, and that's really gonna be then now that the facilities maintenance team is separate, and then some of those additional contracts that we we use to pay for the maintenance of those.

It does decrease the cost recovery of the facility at large slightly.

However, it is still in keeping with the essence of that cost recovery model that I had showed you.

So Webster, Eagles, the Post, Jefferson, those are all those base two service level two where we're looking for that 20 to 30% cost recovery.

As the tennis and pickleball, so that's where we're looking for that 50% marker.

And then the convention center and amphitheater and cemetery are those individual benefit service five line item where we were looking for that 100% cost recovery.

So now we're gonna go ahead and jump into our department's financial summary.

So uh council member Heredia, you know, speaking to what your recommendation was in that chart before, um, this will help hopefully shape and bring this all together with that cost recovery model.

For the line items, um, you will see the commercial line item.

This is our convention center, the uh amphitheater, and the cemetery.

So these are our 100% cost recovery line item models.

Um you can see um based on the varying years when you're looking at um the expenditures versus the revenues, whether it was in the year-end actuals from 24 to 25, um, or where we estimate our year end today.

The the difference of this amount really comes down to our convention center not operating on a traditional fiscal year model.

Um, when they book out shows, the way that they book out shows and then have to make the payments back, um, or vice versa, whether we're making deposits of those, those extend across fiscal year lines.

Um, however, again, the the program itself, our department has been relatively able to meet from the booking end, the 100% cost recovery model.

As you saw on that later slide, it's the facility cost where the city is seeing the pressures in which we are currently in you know in search of for a private public partnership through the RFP process.

It is the enhancements, it's the cost of the facility and the future costs of the facility that are really driving it.

But I want to give kudos to the Mesa Convention Center and Amphitheater team that they have really been able to keep that 100% cost recovery goals within their booking and their ability to activate those centers.

And then again, our cemetery team does not get enough credit as well.

So they they certainly extend above and beyond.

Um, as we move further along into the lines, the recreation line item.

So when you know the city manager is coming to the department asking us to make those 2% budget reductions, this is why it goes into those areas where it hurts the most, where the public is maybe able to see that impact the most because it's through that recreation line item that we are general funded.

And so it's a much um slimmer budget then to make that wiggle room impact, um, which again we will we will discuss then in those subsequent slides, and why again it has that bigger feel.

Um what we can note here again uh with the 25, 26 year in estimate, um, we do anticipate coming in at that about that 35% cost recovery mark.

So again, keeping in line with our cost recovery models at large, it puts us in that middle tier.

Um, our 24-25 year-end actuals and revenues put us at a 42% cost recovery, and that's also what we're anticipating with our proposed budget for next year.

So we are certainly doing our best in terms of continually pulling all the different levers with our fees and charges, looking at our offerings, um, and ensuring that we are again attributing that back to a philosophy that the department has laid out from previous years prior.

And then lastly, resource management.

Um, this is the highest line item of our budget, and this is our park maintenance costs.

And so to council member Heredia's point earlier, this is that tier one, base one line item where this is where we're gonna have continual increases to our budget within utility costs, um, watering, mowing the lawn, and having those extended pressures.

However, these are the baseline items to keep those facilities and those amenities and and are quite frankly, city investment um available to all.

You will see that there are some revenues attributed to that, and that is really from the the due diligence and kudos to this department to explore then those opportunities, whether it's for grants, such as you know, getting those CDBG funded parks or other sort of grant-funded opportunities.

It also can be in property damage reimbursements.

So when we do have significant storms, when it does take out and have impacts like damaging and the removal of trees are needed, things like that.

Um, we are then also able to get some property damage reim insurance reimbursement.

Um, we also have some nominal sponsorship opportunities across our department, and so that's where you're seeing that we are even making it an effort where we have no cost recovery goals to still try and bring that benefit to the city.

Um, lastly, what I wanted to note it is is just kind of the remarks that Mr.

Butler had made earlier on on the citywide um uh you know ability to have that $55 million cost savings across those three years.

You can see our total expenditures, our proposed budget for 2020 26-27 is 55 million.

This is truly the impact of that savings is the entire capabilities and operations of our parks and rec department budget.

Question So you said resource management is primarily our facilities, our parks maintenance.

I apologize, parks maintenance are our department's OM.

Oh, okay, yes.

I was gonna say, like, where's personnel in there?

That's okay.

Yeah, that's all I so you might have said this, but so talk to me about so recreation is going down a little bit.

We're we're decreasing some programming, right?

And services.

But yeah.

Oh, okay.

We haven't gotten into that.

Sorry.

Okay, maybe I'll wait for my question because I'm I'm kind of thinking, well, if we were decreasing that, why is resource management not decreasing?

If you could just address that.

Yes, thank you.

Thank you, Mayor.

Councilmember go for it.

So um to state it, and and I know I'm trying to also breeze through it a little more quickly.

Just so say it once again, um resource management is where we're not having the ability or where we're making the decision as the department, and certainly the city manager agrees, those would have those very apparent impacts.

If if we pull back from park maintenance staff or the resources allocated to there, you are quickly going to see um the yellowing of grass.

You're going to see unsafe uh parks equipment or the closing off of parks equipment.

Those those impacts that would truly affect the greater population, and which we feel was that tier one level of service.

The reason that we're having to make the significant cuts within the recreation area is because that is our what we consider general funded arm of the services, in which then are gonna be falling into those tier two or tier three, which are not open to we try and make them available to the public, but not all of the public touches those particular activities.

And so it is a pulling of levers.

No, they were in resource management.

They were in resource management.

Okay, I apologize.

This is why I have that financial expert.

Um we did have the removal from the parks rangers and um the Fremont um operations that were removed out of the 2526 to 2627 ongoing budgets.

So we'll we'll break that a little bit further down as we get into the next slide.

Yeah, because the services and the programming wasn't necessarily cut, because it was just transferred to other facilities, right?

Correct.

But the OM, the maintenance, the the ability to the chemical costs, the costs for maintaining the facility, that was already removed from the budget per council's direction last uh budget discussion.

And I understand you you still you still have to maintain and you know you don't want the just because you may maybe um either decrease service or somehow I don't want to say decrease necessarily, but emphasize more cost recovery um programming, you still have to maintain um the facilities.

My only issue is if we're gonna be doing cost savings by reducing services service programming for our residents.

I I would like to see the savings also internally, the internal expense with that.

I guess what I'm saying is I don't want us to prioritize keeping staff over providing programming to our residents.

And I and I understand that's a bit delicate and sense of, but that I mean Oh, no, and and I think you'll you'll see what they have prioritized is right sizing staff to meet the demands on the recreation side.

The one philosophical uh thing, as you mentioned on resource management, again, that is the upkeep of our parks citywide, which has been a priority, right?

That's sometimes programming we can adjust year to year, we can make those different decisions, not to say that doesn't have impact, but we can pull those levers.

What we wanted to have is a you know well kept, well-maintained park system that benefits all of our residents throughout the city, and so that's why you you haven't seen that at the expense of the resource management side, even though you obvious obviously see increases in that.

It costs more to have someone to maintain a park.

Uh that person costs more to do it.

But we need the grass to be mowed, we need the swing set to be functional.

Um, we need that so that people have that open space to recreate and and and have a well-maintained park where they feel safe and that they want to want to frequent.

And and that's that's why that has always been uh the prioritization to make sure that those are well maintained, and then we've we've obviously had to expand and retract some of our recreational programming as resources a lot.

I think that's the right approach for sure.

Yeah, thank you.

Now, thank you, and uh mayor, council member go forth.

Uh, and thank you, Mr.

City Manager, for providing the appropriate response, but I think this is actually going to be a perfect segue into what we're gonna get into right now with our proposed um budget reductions.

So the the reductions, um the two percent reductions for our department equates to just over um 942,000.

And so again, as you had seen with those different line items, we are proposing those from the general fund line items.

It doesn't necessarily make sense to make those within the commercial line items when we have 100% cost recovery goals or as mentioned within the park maintenance.

Um, where we will begin with our reductions are going to be within three currently vacant full-time positions.

We have a recreation specialist within our athletics unit.

We have a recreation programmer within our uh recreation unit, and then within parks maintenance, we do have a trades worker one position.

All three of those positions have been currently left vacant.

And so in the interim, the staff and the units have been able to absorb those positions, the duties of those positions across their teams in which they feel confident in being able to continue that without having any significant impact again, whether it's from the public facing side or an internal burden.

Certainly, the the department we have a lot of revolving positions.

So this is only, and in which we're doing that internal assessment where we're evaluating each position.

So these these three positions were definitely assessed in terms of that need to continue.

How many full-time employees does the parks department have?

Oh, you're gonna 240, I think.

Okay, so I know our full number.

Yeah, okay, that's a lot.

And and then that's not even counting all the part-time.

Correct.

Correct.

Yes, our part-time is in we have um 150 FTE equivalents in our part-time, right?

Because we count them a little differently.

At the height, we had about 700 part-time staff.

Yeah.

Wow.

Okay.

What was the height?

Summer.

That's like a turn that on.

Is that like lifeguards that are part-time and things like that?

Correct.

So, mayor, thank you.

Thank you, Mayor and Councilmember Go Forth Taylor.

Um, yes, so the way that our department operates, as thank you, Alison for notating.

So around, and we do have a lot of fluctuation of positions within our department in terms of just the kind of coming and going, and luckily promotions within internal staff.

So we average over 200 full-time, around the 240 full-time positions.

Um, but then the department is really truly those that are impacting our community are in large part from the part-time non-benefited staff, and which we'll get to within our next position reductions proposal.

That really can go up to that seven um hundred mark when it is the summer season primarily or peak season for those types of programs.

So starting in the springtime with our springtime activities through the summertime is when we're gonna have the bulk of those positions.

Um for every one FTE.

This is um, I know it's a little bit um non-traditional in how our department counts that, you know, trying to fit it into the citywide model.

One FTE, so that equivalent to a full-time position, you could have anywhere from five to ten people filling those 2,080 hours of an FTE position.

So that's why there is that fluctuation in the number count, um, where some years you may be on the lower end and in the 600s, and other years you may be up to 800.

It's just the availability of those different individuals and how many hours they want to take on.

But yes, that's going to be the positions such as the the lifeguards, those that are you know, opening the doors for the pools that can be the ones leading the the basketball coach team and you know, all the different offerings that you primarily see out.

Um that leads into then sorry, one question.

Absolutely.

You know how we talked about how at our aquatic centers, we have a lot of these um outside entities, these businesses that come in and they offer like you know, competitive swim and whatnot.

Um, do any of them bring in their own lifeguards or their own?

We provide that service for them.

They just come in and they're like, this is a coach, you pay for them to teach you how to be an Olympic swimmer.

Correct, yes.

Thank you, Mayor and Councilmember Taylor.

That is a very great question.

So the fees and charges, that cost recovery model.

Um, if we go back to um the the cost, let me double fact check myself.

That's where we're looking for that um 50 to 100%.

I would generally say right now, we had let when we last looked, we're probably more in that 60 to 70 percent of what we're actually cost recovering through our fees and charges to those for-profit entities that they are paying only strictly for the staffing cost.

So that is not the maintenance of the facilities cost, that is only um trying to subsidize the staffing cost, and that is primarily of the part-time non-benefited um staff that is there to be on available for those facilities.

So that's why it is a pressure point uh for the public, but why we're we're continually trying to assess as well how we are positioning those part-time non-benefited staff to make sure it's as efficient and effective for us citywide, but also to make sure that it is meeting the needs of those particular groups.

So, for example, for us to have the level of quality of to be able to have those nationally recognized aquatic complexes, we have to have a minimum of three lifeguards available at the pool side to even open the doors.

And so that's where our costs begin to quickly accumulate.

Or is it is there like a standard that the city has to have their own?

I don't even know if they offer to do that, by the way.

They might be like, no, we're not coming anymore because you don't have a lifeguard.

So, mayor, council member Taylor, certainly our ability, we are not paying benefited costs for these uh part-time non-benefit employees.

There it's not coming with the package of cut of costs that an employee or staff would normally have for the city.

So we're on the lower.

So this is essentially the contract mechanism where we're able to ensure the appropriate certification and safety and training that we um had been awarded such recognition.

Right.

Okay.

Okay, correct.

Just kind of was thinking about it.

Well, mayor's mayor and council member tailor.

I mean, I you're there's those concerns, but I think in reality, let's let's be honest, these are in many cases for profit commercial activities.

They're trying to keep as low of an overhead as possible.

So I don't think many are beaten down our door trying to offer to bring this up.

You know, additional staffing uh to do that, and so um they rely on us, and we provide the facilities, we provide the staffing, and then they have access to that.

And that's where the cost recovery comes in.

And again, going back to that sometimes when your emails you know start to light up from people, um, you know, and and I I think sometimes they don't realize they're paying it through the entity.

Yeah, those games are played because a lot of times it's the end user, it's the parent, right, who then absorbs that cost because it's passed on to the parent by the club or whatever entity is is doing it, but that's the spirit by which those those increases occur is to try to maintain that cost recovery, and it's not always easy in that room.

I'm saying this out loud, they would just pass on the cost of their lifeguard parents.

They wouldn't have to do that.

So there's a pipe dream never.

Thanks for letting me walk through that.

Well, to that point, there's a high level liability with this programming, and so it's important that we control the training certification, we have everything in play to help, you know, re keep the cost as I mean, we're keeping the law cost as low as possible, and then again, they're a non-benefited employee contractual, and it helps them and their life progress.

Hey, I was a lifeguard once for Mesa Public or for the city of Mesa.

So there's a cost benefit to that.

Yes, thank you.

Um, and and just the final note on that as well is certainly we want to maximize our facilities as much as possible.

So we want to have those partnerships with those groups that are coming in and utilizing our pools because otherwise they would just be open for public swim and some of these other activities then that we would have to host.

So there's definitely still a city benefit within that.

Um, so moving along then within the part-time non-benefited hours, um, you can see that we have the proposal for 7.24.

I know that's not an arm and a limb of a person.

That is again going back to then the hours that we have available.

This equates to approximately 15,000 hours.

However, this is less than 5% of the availability of part-time non-benefited hours that we utilize across our departments.

So this is we have over a hundred different lines of programming within our department.

We asked all of those different areas to make minor tweaks and to really look at, and I think this was the challenge that mayor and council had proposed to the department in past years.

Really look at how can we be innovative, how can we right size um the availability of our staffing hours and make sure that we have no um we feel confident that we're gonna have no impact to the programming, we're not reducing programming, we are not um proposing any sort of reductions that we feel will be felt by the public.

This is just maybe shifting some things, like rather than having three people come in at one time, you're maybe alternating some schedules a little bit more so that there's coverage in other ways.

Um, so and this was this was stretched across all of the many different lines, hundreds of programming that we offer where it's just minor tweaks.

So we feel confident moving forward with that.

Um, as was mentioned then by council member Taylor, um, the closing of Fremont Aquatic Complex was something that we had broached with all of the council, um, and and the city did move forward in that we are not going to be um offering any summer programming at Fremont Aquatic Complex and decommissioning the facility after May 23rd.

With this, council had directed this was part of the discussions that was proposed to council last year.

And during that discussion, council had made the recommendation to move forward with opening for summer, but then the OM, the ongoing OM was already removed, knowing that this would be the last summer for this aquatic complex.

Given that we are not going to be moving forward with the summer programming, we still had in our department's ongoing budget the 3.5 FTE.

So this is again not full-time bodies.

This was not permanent staff.

This was in the part-time non-benefited hours for the lifeguards for the additional staffing that goes to operate that facility.

In our ongoing budget, that we were able to make this as part of our reductions.

And it is the nearby aquatic complexes of Shepherd, Brim Hall, and Stapley that we did feel confident that we were able to redirect those affiliated groups that we have partnerships for classes.

We were able to move them to the available lanes at those three complexes.

And then the public swim is where there would have been an impact to the public.

However, in uh it was 2024, we had just over 1,100 individuals, and this could have been reoccurring individuals.

This was usage coming for the public swim.

That decreased last year to only 711 that participated in the public swim at Fremont.

So certainly you can see how that justification for the FTE did not offset those that were coming for the open public swim when we were able to absorb all of the other classes or program participants in those other three nearby complexes.

To council member Taylor's question earlier, we were not able to redirect that savings into other ways because it would not have had an impact on you know the OM or maintenance costs that would have offset maybe those felt by those private groups.

Thank you.

All right.

We're at last one.

We're almost there.

All right.

So then we did have some nominal savings within our umpeh our operation and maintenance budget.

Um you can see that there was some program savings within our adaptive services.

Um I did want to know with reducing excursions from summer camps, we do offer summer camp programming, which um individuals sign up on a weekly basis.

Um we did have within those programming budgets, um, not every week on occasional weeks where they would bust the kids to different locations, whether it was even going to like the science center in Phoenix or some outside locations.

The costs for buses is very expensive now, as well as the safety and liability of transporting children these days.

Also, we want to encourage now that we have such a city investment in these recreational vehicles, including our own fun and fit and more.

But now we have the read runner, we have ACMH with their vehicle.

We're able to have a more equitable model across all of those different weeks, have a more safe model by ensuring that now we're bringing a lot more of those activities to the summer camps rather than quite frankly, the very big cost of paying for buses.

And that was through the schools that we did have a significant discount on the buses, but even then that was just that's we know there's a need for bus drivers in the school systems.

It's a very high cost still.

Um we fully confident that our summer camp experience will be just as fruitful as it always has been.

We also did not eliminate um each week in those summer camps.

The the kiddos are taken to the aquatic complexes for swimming.

That has not been removed.

So where we can have Mesa location and excursions, we will continue to do that.

And then lastly, what we wanted to discuss with you is the elimination, the proposed elimination of the spring celebrate Mesa.

Again, this was up for discussion last year, but we do feel confident in moving forward with this as another um budget reduction.

Um the city hosts two celebrate Mesa events, as you all know.

We have one coming up in just a couple of weeks on April 11th.

This is the city's intended way to be able to engage with the community, be able to showcase all of the different departments and resources.

It does um attract a lot of viewership in terms of the spring celebrate mesas, generally hover between the five to 7,000 mark.

Our fall celebrate Mesa is much higher between eight to ten thousand participants.

So this is why we had made the recommendation to eliminate the spring, as we also know that there are other um downtown related springtime city events.

We just had the Cyclo Mesa event, there's other offerings at Pioneer Park.

So we do feel that there is more of a presence of citywide events in the downtown region, whereas um Red Mountain in the fall um is certainly an area that can um continues to see a lot of uh activation when we host the the fall celebrate Mesa.

Um you can see that the savings, the $36,000 is the uh the direct cost.

What is not included in here, where we feel is actually going to be a bigger impact is that this is truly a really big undertaking for our department specifically to post on, and then for the departments that are participating in in the event, the staffing cost, the indirect staffing cost is um quite large.

So that savings is where we feel that there's going to be a greater impact.

I can say at least 500 of those part-time non-benefited hours that we proposed on the reduction in the slide before is attributed to specifically just to the celebrate Mesa event.

Um additionally, you know, the week before it's an all hands-on deck for our full-time staff.

So that's where I say we can really reutilize the staffing in a more effective way in maintaining our day-to-day operations.

So Mayor, we don't um take that lightly, but uh as Andrea mentioned, it's really the overall activation that we see with different programming, both at Pioneer and in downtown over the spring that still allows a lot of public engagement and public opportunity that um so we're not eliminating a program um without the notion that there's still a lot of spring activation that occurs in and around this this area.

So it's a tough decision.

We wish we wouldn't have to do it, but um just looking at attendance numbers and just prioritization.

We realize that um the fall event is is definitely we get a little bit more bang for our buck, and there's not those other activations that occur at that uh at out east that compensate for um the loss of this facility um in the spring.

So I would just make a comment that I I would agree.

Um my mantra is always quality over quantity, and I would rather see less events and more attendance at each event than and I and I understand why we tried to get on two both sides of the city, but I think sometimes we have more events, less attendance, and I would rather see less events and more attendance.

So I think this is in line with that.

So I appreciate it.

Thank you.

And it's staying at Red Mountain.

So, Mayor, bringing it all home again, um, just to notate that our department's two percent budget reductions comes to that just over 942,000.

You can see that based off of our proposal and the city manager's support.

Um, it is the removal of the three vacant positions, um, the part-time non-benefited hours from both Fremont pool and across our programming, and then some OM attributed from um those other events and and the spring celebrate mesa.

So, with that, we are not touching any um again our full commitment that we are not gonna have any significant impact to any programming that benefits the community from a programmatic standpoint, um, and we are also able to confidently assure that we're able to keep um our full-time staff in the positions that they currently have.

So, with that, happy to answer any final questions.

Well done.

I'll just add that you know, I think last year we got um asked about fee increases, dollar amounts for all the different programming.

Not that it was confusing, but there was a lot to discuss there, and I know there was a lot of um thoughts about you know the so we're not dealing with that this year.

I I like that.

Correct.

Um you can do that internally, I think if you you need to on the cost recovery aspect.

One thing I'd just like you to consider is I know that there's some outreach on baseball little league rental for the fields, and some of the baseball leagues, little league baseball needs an hour and a half versus a three-hour field rental.

And so maybe they they were asked, well, could we combine it with another little league team to get to the three-hour threshold?

They were told no.

You have to take the whole three hours, just keep that in mind.

Maybe there's some flexibility there.

Um and then I I like the uh being strategic on the cost recovery component and keep us uh uh abreast on that.

So I mean that's all that I have, you know, paying attention to detail and you know, these are one of the services that people will that see what Mesa does and outreach our our parks programming, our recreational our it's it's incredible, but we have it's cost sharing too.

We have to have people cost share into the program to help things keep going, especially during this time.

So thank you for your input, Mr.

Butler.

Mr.

Smith, anything you want to add to thank you, Mayor Council.

Um again, I just want to compliment Andrea and the entire executive team.

She's got it as she alluded to, she's got a great team.

I uh mayor, you you touched on this, but it's really important to highlight.

This is I feel like a night and day discussion than the one that council was faced with this time about 12 months ago.

And thank you.

And it's kudos to this executive team, though, that um got creative, they found ways to um continue, as many of our departments do, to do more with less than to be able to continue with uh the vast majority of the programming and not um have to come up with the cuts on the back of that.

And so I'm very appreciative to this team for uh their creativity and and the way that they they did this, and I think it will positions our programming in a much better discussion and light than what the council was faced with uh last year.

So thank you for that.

I do have one question.

Sorry, I should have checked my notes first.

So your total budget on slide nine is the difference between the expenditures and the revenues, and that would be your budget net, right?

Can you go back to slide nine?

Nine I'm trying, sorry.

Okay, I apologize.

Can you please repeat the question?

What is your total net budget?

Is it just the 55.1 minus the 17.9?

Yes.

Yes, okay.

Okay, I didn't know if there's any other figures or numbers involved that we'll see in the final budget.

Correct.

You're correct.

Yes.

Thank you.

Mayor and council member.

Mayor and council member def.

So just to just to be clear, when we say the budget, it would be the authorization, so that would be the 55.1.

But yes, you're correct.

The net impact on the budget would be the difference between those two numbers.

Yeah, so we so we budget the full amendment.

You budget the full expenditures, that's your authorized budget capacity.

That would be included in Brian's overall budget, would be the 55.1.

I think what we're allowed to spend.

Correct, correct.

And then and then we'll we'll generate the net impact to our financials would be the difference.

Which is which is reflected in the sources and uses um that it so that is our estimate for what our revenue would be, but of course, we allocate that total expenditure.

Um that we will go out and spend 55.1 million dollars on parks and rec this coming fiscal year.

Thank you.

And then we'll recover 17.9.

Well, 177.7, whatever it is.

Correct.

So just this is really think about this department budget is a small version of what Brian produced for the citywide, right?

Where you have your total expenditures and then your total anticipated revenues.

So same situation here.

Okay.

Great.

I just want to say thank you.

Thank you.

I was a public park kid.

I went to the public pool all the time when I was little, and I just I have a personal bias that it it creates a very positive impact in the lives of a lot of families.

We did not have a pool.

I didn't come from a house where we had, you know, a giant backyard where we could have one.

And so I made a lot of friends.

My mom made a lot of friends, and I saw those people every week.

And um, I just I think we often forget there are many, many families who enjoy these services that the city offers, and it brings them together where they otherwise may not have had that opportunity.

And not everyone lives in a neighborhood with a community pool either.

So those are big impacts in lives of children and and their parents.

So thank you for doing all the work that you've done and taking good care of our parts and rec.

All right, ladies, thank you.

Thank you.

Next, we'll move over to item three to acknowledge the receipt of minutes.

Is there a motion to that effect?

Thank you.

Ms.

Duff Vice Mayor, all in favor say aye.

Aye.

Next is current events and conferences attended.

Do you want to dispense with that, Council?

Okay.

So saying yes, uh, we're gonna move from the away from conferences attended.

We'll do it next time.

Uh Mr.

Butler, your turn's uh schedule a future meetings.

Don't throw anything at me because I'm gonna talk about our our next budget discussion.

So we will convene on Monday at 4 45 p.m.

will be an earlier start time for study session because we'll have uh the transportation department uh presenting on the transportation budget for the coming fiscal year.

So Monday, April 6th, 4 45 p.m.

And then we'll be followed by our normal scheduled council meeting at 5 45 after that.

Uh mayor, I would just note too.

Um speaking of our spring celebrate Mesa, um probably bad timing on that, but uh Saturday, April the 11th is our spring celebrate Mesa here at Pioneer Park.

So this is a free family activity, so um please come out um and and celebrate on on Saturday, April the 11th from 10 a.m.

to 2 p.m.

Also, um I'm sure uh this will be mentioned on during the transportation presentation on Monday, but uh the city's bike to work day is on uh Wednesday, April the 15th from 7 to 9 a.m.

out here at the plaza at Mesa City Center.

So um our Mesa Moves is our annual bike to work day and community celebration that encourages everyone to swap their four wills for two.

So that will be and I'll just close on uh it was Brian mentioned this earlier, but there's a little event happening on Thursday, April the 23rd that the state of the city uh the mayor might be a little bit busy preparing for that, and that will be at the Mesa Convention Center on Thursday, April the 23rd.

So look forward to that, Mayor.

Very funny.

Okay.

Can I raise one question here?

This is a little unrelated that I was looking at it.

The comments that come into the council specifically on budget, who answers those?

Yeah, so um Holly's team collects that and then those are those are coordinated with O and B on who is the appropriate uh entity responsibility to do that.

Because we get them and we review them, which I think is great, the council, but I just want to make sure they're being responded to they they are if if they're asking for a response.

Sometimes it's more of a statement and sure, and so those are passed on to you.

But if it's something that there is a question and we can clarify the respective departments and or OMB um allocate that out.

Okay, great.

And also the mayor's office weighs in too.

We we do some of that as well.

So it's a coordinated effect.

Uh which yeah, I mean certainly you get that list, and if and if you want to, you you certainly can.

That's but then staff will um staff will follow up as well if it's a more technical question.

Um that's handled and and we keep track of that to make sure that the questions are are answered.

Yeah.

Well, with that, I'll entertain a motion to adjourn.

Thank you, Miss Duff.

Miss Taylor, all in favor say aye.

Aye.

We're adjourned.

Thank you, everyone.