City Council - Special Meeting

Call City of Apache Junction special meeting for May 4th, 2026 to order and ask everyone to put their cell phones on silent. Roll call. Mayor Wilson here. Vice Mayor Schroeder. Council member Cross here. Council member Hec here. Council member Johnson here. Council member Nesser. Council member Ser. You do have a quorum, your honor.

Thank you. Um, presentation discussion for fiscal year 2026 2027 budget classification and compensation plan for city employees and the S PSRS uh pension funding policy. Who's going to start? Let's go to Matt. Yes, Matt. Thank you, Mayor. Council members, I was just checking on um Council Member Nesser's mic here. It looks like Oh, now we hear. Is that on? That's on. Okay.

Thank you, Mayor and Council members. Um we're pleased to uh present to you tonight the city manager's proposed budget for fiscal year 27. I want to begin by thanking the finance staff, especially Connie and Angelie in their work in the budget um uh getting it prepared, as well as all the finance staff. You'll also see in the audience tonight our department directors who they and their staff also put a lot of work into this to get it to this point and so we really want to express our thanks to them. Um all of their efforts combined reflect our continued commitment to transparency, responsibility and thoughtful long-term planning. We truly have a an exceptional team to work with and I think they'd all um express that same sentiment. Apache Junction continues to grow at a fast pace as you well know. onetime revenues remain strong and local sales tax collections continue to perform well, but we're also seeing an underlying recurring um slowdown in our recurring revenues. Uh they're not going down, just a a slowdown. Uh so we're being very mindful of that as we approach budgeting for our revenues and our expenditures. This is also going to be the first fullear impact of the incorporation of Santan Valley, which impacts our budget to the tune of about um $2 million uh decrease in our our annual budget. That's about a million dollars in general fund and a million dollars in HERF. Um because of those various items in out in the the environment of budget planning, the operating budget is intentionally conservative. departments held the line with uh close to flat operating budgets and only two new two and a half new positions were added to the the budget this year in the general fund. At the same time, we continue planning for major capital needs across the city. We're also monitoring several financial pressures that shape our long-term outlook, including potentially utilizing debt service for building some

new buildings for public works, the police substation, and the the library branch. and um a significant usage of fund reserves set aside for the purpose of funding that capital and other capital maintenance needs in parks and other areas of the city. One thing that you will notice this year is a noticeable decrease in the spending on fleet. We kind of had a big increase the past couple years of spending on fleet, but we caught up so to speak for at least for a little while in purchasing new vehicles. And so you'll see that as a as a nice um reprieve there. One major investment you'll see in this budget is um for our people. We did a classification and compensation study this year. More than 75% of the positions in the city were 5% behind market in their comparator uh cities. With the implementation of the classification and compensation plan and a modest cost of living adjustment included in that, we're strengthening our ability to attract and retain the workforce that we need to serve this great community. The average increase across all the positions will be approximately about 8 8.8%. So in short, this budget emphasizes continued fiscal discipline, a conservative approach to both revenues and expenditures, and investment in our workforce. um and also planning for the long-term needs uh capital needs of our community. With that brief overview, I'll turn it over to Angelie Holly, our finance director, to go through some of the budget specific numbers and then um I'll mention a couple last things at the end and then we can go to any questions the council might have.

Thank you, Matt. Good evening, Mayor and Council. Angelie Holly, finance director. I'm here tonight to present our tenative budget for fiscal year 27. We'll start off with budget key assumptions. Sales tax activity remains positive. As Matt indicated, our Santan Valley's incorporation state shared revenues will decrease. A full impact of shared income tax is an estimated decrease of 2.1. With our budget, we included employee compensation and capital projects proceed as planned for general fund and special revenue funds. Here's a listing for budget summary, sources and uses, general fund, special revenue fund, capital fund. For general fund, on the revenue side, we have city sales tax at 30.4 million, state shared sales tax at 6.6, state shared income tax of 9.3 million. On the expenditure side, we have personnel at 41.8 8 million, purchase services at 10.5 million, commodities at 7.3. We'll now look into special revenue funds on the revenue side. Superstition Vistas community facilities districts at 46 million, HERF at 9.9, development fees at 6.6. Special revenues for the expenditure side we have superstition vistas CFDs 46 million HERF 22 development fees at 12.2 this is a quick overview of our capital projects listed by department revenue general fund herf and development fees. Here is a listing of our future projects.

We're recapping tonight's presentation with completed capital projects. We'll start off with a cooling tower replacement for our public safety department. Our reading garden coming soon in June of 2026. Our library roof repairs. Broadway road pavement overlay. Also, Superstition Boulevard pavement or chip seal pavement preservation on multiple locations. We have Delaware road drainage phase one completion of rodeo grounds shade structure addition for Dutchman dog park. Also adding shade structure for Prospector Park. Ramada installation for Superstition Shadows Park. Addition of 10 pickle ball courts. Superstition Shadows Aquatic Center improvements that were completed. And lastly, public safety realtime crime center integration. This concludes our presentation tonight. And if you have any questions of us, we would like to address them.

Mr. Mayor, if I can step in, I'll I'll mention one thing. Um, this is just the budget work session tonight. So, it's your opportunity to ask us questions. Also in the agenda packet, uh besides just the tenative budget is included the classification and compensation plans as well as the pension funding policy as required by state law. Um the intent after tonight is to bring it back in two weeks uh on Monday uh May 18th. 18th. Thank you. And um uh for your consideration and a public hearing for that night. Um but now we're available for any questions you might have for us. Yes.

Um, this is really not so much a question as a comment. Um, I know a lot of effort was put into that employee classification and that evaluating where we are in terms of compensation and I know that's an extraordinarily complex process, but I appreciate the fact that you did that and you you're doing right by all of our staff. you know that it's a hard thing because every time you feel like you're caught up, the next town over raises up their their wages. But I appreciate the fact that you put that kind of time in and it's really I think it's it's while it's costing the city additional funds. I think we're going to see stant that are going to be much more they're going to feel better about working here and feeling like they're being appreciated because as much as you like the workplace and all that bottom line is it helps to feel like you're being paid fairly. So I appreciate everybody's effort in in doing that.

Thank you. Anyone else? Yeah. Yes. So that's a 8.1% you said for the average across all positions is 8.8%. 8.8. Uhhuh. Okay. And I guess that compares positively with most of the rest of the communities throughout the valley. We compared uh to our nine comparator cities which include many in the valley. Yes. Okay. Thank you. Anyone else? Okay. So, I don't have any additional questions.

So, we'll bring it back in two weeks for a bud public budget hearing and uh and then your consideration to adopt the the tenant budget. Okay. Thank you, your honor. I just wanted to also add my thanks to everyone involved. Um, one of the ways that our budget can be balanced, we have to balance and the federal government, state government can do different things, but we have to each year. And I just want to say thanks to all the department directors who worked really hard because this is a year every 10 years or 12 years. How many years on since we've done the work um

11 years, 11 fiscal years that we've done a class and comp. We're not adding staff. It really is a function. Number of people times their rate. And so this next year we've added two and a half uh full general fund and several grants. I just wanted to say thanks to the staff for working with us on that so we can manage conservatively our investments so that we can carry out the great service we've always done.

Your just add a little bit of levity. I mentioned this at the budget meeting on last Thursday, but for anyone who wasn't there, I looked for the article, but I couldn't find it. But if I remember correctly, when the city 48 years ago uh incorporated, um I believe they took out a private loan with Wells Fargo Bank with Renee Lutra and uh to get the city started and to do that they borrowed $25,000. Great start. Yow.

Starts with the muster seed, right? Those are the days. The good old days. Okay. Thank you, Tess. So, I will adjourn this meeting.