Good afternoon.

Before we do the call to order, I want to congratulate our newly re-elected council members on your successful campaigns.

Also a huge thank you to Councilwoman O'Brien and Councilman Robinson who led a very successful campaign with Mo Stein for the overwhelming passage of the general plan.

And thank you to Councilman Jim Waring for leading our campaign on home rule.

Also incredibly successful.

The city is in a much better place, and today will be a much more pleasant conversation.

Thanks to those passages.

All right, now I'll call the meeting to order.

We do not have a roll call today, so we will go right into agenda item one, which is a discussion of our budget.

This will begin what will be a long road of conversations about the city's budget.

It hasn't been easy, but I'm proud of the work we have done to build a strong fiscal foundation since the economic downturn in 2008-2009.

And you'll see some silver linings in the presentation today.

We've had robust community engagement and common sense decision making.

We've had throng strong growth over the past three fiscal years with a continued increase in investments and resources.

And our constituents have played a big role.

Led by Councilman Waring, they approved home rule on the ballot.

They have also, led by Councilwoman Hodge Washington, approved 500 million in general obligation bond dollars towards major investments, ranging from affordable housing to building new fire stations in areas of high demand.

And that is one of the topics we'll discuss today.

As a result of state's budget negotiations, we are losing our ability to collect residential rental tax because the city of Phoenix has led the way in welcoming apartments and other types of rentals.

This is a huge impact to us.

And it is money our voters have allocated to fund police, fire transit, parks, and so much more.

Some of the good news is the incredible work that our team has done in pursuing grants, particularly from the federal government.

And so I will thank Jeff Amber and the entire budget and research team for their work.

And so I will introduce Jeff to start this presentation.

Mayor, members of the council, good afternoon.

Thank you for giving us this opportunity in time to discuss the results from 23-24.

Mayor, I think you you had a perfect segue into the presentation that we are going to give today.

And I do want to give kudos first and foremost to you and your counterparts on the dais for helping us navigate the storms over the last couple of years.

You know, last year was a particularly tough year as you, the council committed to certain things as far as what what your employees were going to receive in terms of compensation, as well as what services we were going to continue providing to our residents.

And in the aftermath of doing all that, the state pulls a fast one and takes lots of revenue from us from two different state actions.

But we were still fortunate and able to balance our budget because of your wherewithal and your insight and the hard work of our good budget and research team led by Amber.

And we're going to hear about that today, how well and how great they are at forecasting our revenues.

And I don't think there's another budget department in the entire country that can get as accurate as we do and have done over the over the past you know few years.

So today you will hear, as you mentioned, some dark clouds, but there is a silver lining, and I think the silver lining is I think that together with the council, your hard work, your dedication, your direction, and the expertise of our budget and research department and our departments that provide those services.

I think we can definitely navigate those storms, but it's not going to be easy.

And so with that, I'll turn it over to Amber.

Thank you, Jeff.

Thank you, Mayor, members of the council and residents.

Today I'm pleased to be here to present to you the fiscal 2324 general fund budget results.

I'll go over the results, and then I'll talk about some budget challenges that we will be facing as we construct the 25-26 budget as well as our multi-year forecast.

I'll then talk about next steps in our budget development process, and I'll provide an overview of our 2526 budget calendar that is on the council agenda tomorrow for approval.

So for 2324, our general fund resources were estimated at 2,132.1 million.

We ended slightly above that at 2,138.4 million for a variance of just three tenths of a percent or 6.3 million more than what was estimated.

For our general fund expenditures, we estimated 1 billion 855.5 million.

We came in slightly under that at 1,844.9 million for a variance of six tenths of a percent or 10.6 million under the estimate.

Arriving at a 2324 general fund inning balance that was estimated at 276.6 million, coming in higher at 293.5 million.

That's 16.9 million is considered one-time savings.

It'll remain in the fund balance.

I'll count for that as we construct our 25-26 budget status.

So some budget challenges we're going to be facing as we move forward.

First and foremost, as you know, council, as it's been mentioned, the state's actions to diminish our tax base.

This was done through Senate Bill 1131, elimination of residential rental, effective January 2025.

That impacts not only our general fund but also our public safety specialty funds, parks and preserves, as well as transportation 2050.

In addition, Senate Bill 1828 signed into law by former Governor Ducey.

This reduces the individual income tax rate to the current flat tax of 2.5%.

Both of these actions will have negative impacts to our revenue going forward.

Estimated loss to our general fund, $18.5 million, $4.6 million to public safety specialty funds, $1.5 million to parks and preserves, and 10.8 million to transportation 2050 for a total loss in the current year of 35.4 million.

Next fiscal year, we see that first annual loss, general fund estimated at 44.6 million, all funds 85.5 million.

As you can see is on the table as we move forward through the multi-year forecast horizon through fiscal 28.

Total estimated loss to the general funds 157.6 million, all funds 302 million.