City Council - Regular Meeting

Welcome,

welcome to the regular council meeting. Today is Tuesday, April 21st, 2026, and I would like to call this meeting to order. Notice is hereby given to the members of the city council and to the general public that at this regular meeting, the city council may vote to go into executive session, which will not be open to the public, for discussion and consultation with the city's attorneys for legal advice on any item listed on the following agenda. Can I get roll call, please? Mayor Daget, here. Vice Mayor, here. Council member Alen here. Council member Garcia present. Council member House here. Council member Matthews

here. Council member Spence here. Council member Matthews, can you lead us in the pledge of allegiance? Sure. Please rise if you're able. To the flag of the stands, indivisible, liberty and justice for all.

The mission of the city of Flagstaff is to protect and enhance the quality of life for all. For land acknowledgement. The Flagstaff City Council humbly acknowledges the ancestral homelands of this area's indigenous peoples and original stewards. These lands, still inhabited by native descendants, border mountains sacred to indigenous peoples. We honor them, their legacies, their traditions, and their continued contributions. We celebrate their past, present, and future generations who will forever call this place home.

Thank you. We are down to approval of minutes from previous meetings. We have city council regular meeting of March 3rd, 2026 and city council special meeting executive session of March 24th, 2026. Is there a motion? I'll move to approve the minutes as presented. Is there a second? Second. I think Garcia had it. Thank you. Any discussion? All those in favor? I. Any opposed? I.

That carries. Thank you. Down to open call to the public. Open call to the public enables the public to address the council about an item that is not on the prepared agenda. Comments relating to items that are on the agenda will be taken at the time that that item is discussed. Open call to the public appears on the agenda twice, at the beginning and at the end. The total time allotted for the first open call to the public is 30 minutes. Any additional comments will be held until the second open call to the public. If you wish to address the council in person at today's meeting, please complete a comment card and submit it to the recording clerk as soon as possible. And I do have some cards. First, we have River Ramuglia. Sorry if I mispronounced your last name. Hi there, my name is River and thank you for allowing me to speak here today. Based on what I've read in the news, Immigration and Customs Enforcement or ICE is in the process of establishing a base of operations in this city. I understand there has been some heated conversation between the public and this council about this matter. I believe that if this council is unable from a legal position to prevent Immigration and Customs Enforcement from establishing operations in Flagstaff, and if this council is concerned or afraid of legal or other kinds of retribution, that this council could at least make something like a joint statement denouncing the activities of ICE in so far as those activities violate due process and human rights. Regardless of whether or not this council believes that ICE violates due process in human rights, such statements would be constitutionally protected speech. Does this council believe in constitutionally protected speech? It is ignorant to say that citizens who

protest against any entity that violates due process and human rights causes more harm to individuals affected by that entity. Protest can be made in many forms, not just as media spectacles around public confrontations between opposing groups. In today's oversaturated media climate, we are facing the politics of eraser and denial, and this is an inappropriate time to stay silent, lest our speech get swept away by the currents. The words and actions of this council matter. If you are unable to pass a joint resolution as described, I suggest wearing black to future meetings instead, both in protest to all violations of due process and human rights and in complicity with them. One last note about some funding decisions. Based on some quick internet research, the average cost of operating one bed at a shelter for people who are unhoused for one month costs between $500 and $1,000. A single rack unit at a data center at standard density costs between $900 and $2,000 per month. I understand that allocating $200,000 for new police vehicles and hiring software might seem like a good buy, but can we first make sure that everyone in this city has a safe place to sleep? Or perhaps three, maybe four years of a dedicated case worker who can get our unhoused family closer to housing and employment? or do you need new hiring software for that? Thank you.

Thank you, River. Next, we have DJ. Hello everybody. My name is DJ. It's a pleasure to be here. you know, uh, Lori Matthews, Anthony Garcia, Austin, Miranda, Callah House, and David Spence. Thank you for allowing me to be here today. Thank you for the city of Foxf. I'm gonna mention something that really, really freaks me out. That's why I'm wearing a helmet and a mask. I used to live in a town called St. George, which is in Utah. And the town is in an argument about who the town was named after. There's two guys. There's George Smith, which who's a who was an apostle of the LDS church, and then there was Philip St. George Cook who was a US Army officer. When I was there, I tended to side with I think it was uh Philip St. George Cook. Why? Well, the tame the the town is named St. George. It has to do with like seeing a dragon. This guy saw a dragon and I have as well. The dragon that I'm going to bring up today, please forgive me if it bothers anybody here, but it has just bothered me too much. I just have to bring it up. It's going to save my soul if I talk about it. Something that's really bothered me is is my circumcision. When I was a baby, a a doctor approached me with a a very sharp knife and and made a a mortal flesh wound that has completely destroyed my life. I've I've I've looked endlessly trying to solve this problem. What was this all about? Why did why did I get this injury? I've I my research has led me to rights of passage and blood debts in Africa. In Africa, the women are routinely their genitals are routinely mutilated in a for a blood debt because a murder had occurred in the tribe nearby or something something such as this. In Christianity and and also in Muslim Brotherhood, these

circumcisions are rights of passage. The both of these the rights of passage in the blood debt, it's not given me anything. I don't want a right of I don't want a right of passage by getting my my genitals cut off when I'm a child. And I don't want to I don't want to be any part of any type of blood death. I just thought I'd bring this up. I think it's an interesting form to bring it up in. I want to encourage the men in my in in our society to start arguing. Start arguing against circumcision. When you do, you'll you'll the blessings that you'll get are from children. You'll find little boys that will start communicating with with us more. They'll say, "Thank you." You know, they're the boys are literally saying thank you to me for arguing against circumcision. The reason is because these doctors that later argue against circumcision in their books, what they constantly write is, yeah, they they were trained in circumcision and they did about a hundred circumcisions before they realized, what the hell am I doing? And then they and then they got out of it. And so there's just this kind of routine barbarism that's been going on that's been giving these these wounds to to men in our group. And I think it's I think it's something we can start discussing. Not we, not personally, but just something to bring up because uh it's I think it's a dragon. And in in closing, I think it has everything to do with Easter. A bunny rabbit and eggs and hiding it. I think it's all a a total scam.

Thank you, DJ. Next, we have Eric Wolverton. Good afternoon, mayor, vice mayor, council members, city manager, city staff. My name is Eric Wolverton. I have the pleasure of being the CEO of Habitat for Humanity of Northern Arizona. First, thank you for participating in our dedicated stud event on April 11th. We had a great time hosting community members, including Vice Mayor Suite, who shared messages of kindness and hope to our future homeowners. I'm very excited to celebrate the anniversary of the Fair Housing Act of 1968. For 58 years, the Fair Housing Act has been serving minority populations to ensure that all Americans have an equal right to housing to protect everyone from discriminatory practices from landlords, lenders, agents, and our own governmental programs. Despite our changing societal makeup, functionality, and evolving community needs exacerbated by disruptions like the Great Recession in COVID, I think you may be surprised that the last time Congress made any amendments to the Fair Housing Act was in 1988 when I was only 10 years old. I say this to encourage you to work with higher levels of government to explain that housing programs can be developed in a manner to be even more equitable or at minimum fair to all concerned. I challenge you all to follow the Rotary International four-way test of the things all Rotarians across the globe are challenged to think, say, and do. Is it the truth? Is it fair to all concern? Will it build goodwill and better friendships? And is it beneficial to all concerned? I wanted to share a conversation I had

with Habitat's Bank teller, an essential job for any business to function day-to-day. She's currently paying $1,800 a month in rent. But she wants to stay in Flagstaff, though those costs are making her to rethink her long-term plans. Let's do some quick, simple math. If that bank teller continues with her rental for the next three years, she'll pay $64,800 to someone else forfeiting her hard-earned wealth. If she owned a Habitat starter home instead, she'd save $30,000 in equity while only paying $9,612 for her insurance taxes, HOA fees over those three years. This is a net savings of $85,188 in just the first three years of ownership. Our math is simple and it's already working for 12 Flag Staff families. So, please think about that. I'll end with one question for council and city staff. How can Habitat continue to support your housing goals for Flag Staff after our Timber Sky development is completed? We are listening and we are ready to help. Thank you.

Thank you, Eric. Next, we have Lindsay Shubi. Uh, thank you, Vice Mayor. I am on the agenda later for for my action item, but just wanted to say on behalf of Symmetry Companies and um STL 405, we've been working very closely with the extension of JWP, you're going to hear a report later from David Peterson and Paul Mood, but just wanted to let you know that we are working to grant access across our property. Um we're not doing anything out there. just like to let the public know. Sometimes when we're on our property, they're worried if they see machinery or those things. Um, but we're working in partnership with the city so that we can get machines where they need to go. So, we're really excited and just if you get any calls, city manager, if you get any calls, it's working in conjunction with the city. So, thank you very much.

Thank you, Lindsay. Next, we have Colleen Maring. We're on mute, right? Tell me.

Good afternoon, mayor, vice mayor, council. My name is Colleen Maring. I'm the chief people officer at Northern Arizona Healthcare. And May is mental health awareness month. And we are going big this year in our goal of raising awareness around the community needs and mental health and resources available um locally and nationally. um aiming to reduce stigma, continue the conversation. We know that one in five adults in the US experience mental illness in any given year. Um so we know that this affects every single one of us either directly or through friends or family, um co-workers, neighbors. We know also that no one should nor needs to struggle alone. Our month of programming is called Mental Health Matters and we're hosting many events, co-hosting events and um events are being put on by our partner organizations throughout the region. Um the city, thank you. Uh the county, NA, CCC, NAKa, um others are all coming together um to truly make this a regional awareness month. Um, some of the events are also fundraisers to support um, NAH's first responder counseling service. It's a program for our Guardian Air Transport and Guardian Medical Transport colleagues um, to receive specialized uh, trauma-informed counseling around the their experiences um, in onseen uh, responses to traumatic events. This program launched in 2023 and provides confidential counseling, crisis debriefing, and other resources um to these everyday heroes uh who protect and care for all of us in the community. Whether you're interested in supporting that program or learning more about local services, there's many options um that can meet anyone's interests and schedule. Um and you may be thinking, "It's not May yet. Why are you talking about this?" Well, they start next week.

um and they continue almost every single day from April 28th through May 30th. Um a full list of events is on our website naalth.com. And I also want to call special attention to the marquee event of the month. Um a screening of a film called Blind AF about an EMT who sustained a traumatic brain injury on the job, lost her vision, um and how she lives her life today. That's May 28th at NA's Klein Library. Um all the events are on our website. Um, we would love to see any members of council and the community there. They're all free and open to the public um with details uh some of them have capacity uh constraints details on the website. And then I also want to end one of the um most important resources we're highlighting is 988. Um, if anyone needs a me uh immediate h help or assistance with their um mental well-being, the 988 lifeline, you can call or text confidentially for judgment-free help at any time. Thank you so much.

Thank you, Colleen. And next we have David Portry. Uh, good afternoon. Um, as you know, my name is David Portry. I have called Flagstaff my home since 2000. I am retired. These days, I am on the Northern Arizona Pioneers Historical Society board and the Flagstaff Cookanino County Public Library Board. I am also a volunteer tour guide at Rearen Mansion State Historic Park. I speak today as a private citizen. I am here to tell you about a project I am part of. Most people in Flagstaff don't know why Milton Road is called Milton Road. They assume that Milton must be the name of a person in Flagstaff history. The truth is much more interesting than that. Milton was the name of a town. Milton Road linked Flagstaff and Milton. Milton grew up alongside early Flagstaff. It was once known as Flagstaff's twin town. It was located about a mile southwest of downtown Flagstaff. Milton was the company town of the Arizona Lumber and Timber Company, the largest employer in Northern Arizona from the 1880s to the 1930s. The Ruden families ran the Arizona Lumber and Timber Company during its heyday. Ruden Road was Milton's main street. The main Arizona Lumber and Timber Company sawmill was located at the west end of Rearen Road. The Ruden family homes, now part of Ruden Mansion State Historic Park, are located near Ruden Road's east end. The project I'm here to tell you about is called the Rearen Road Historic Corridor. A partnership of Flagstaff organizations seeks to place historic markers along Rearen Road. Our aim is to bring Milton back to life in the minds of Flagstaff's residents and visitors. One marker is already in place and we are have the beginnings of a website. A QR code on the marker links it to the website. We are moving ahead with two

more markers with associated website content. We hope that they will be in place in 2027. We are also thinking about art installations. To conclude, I want to tell you about two upcoming opportunities to learn more about Milton. The first takes place on April 28th at 5:30 p.m. at Rearen Mansion. I'll be doing a joint talk with NAU history professor Michael Ammonson. We'll focus on Milton as a company town of the American West. The talk, which is free, is part of Flagstaff's Arizona 250 commemoration. On May 10th, I'll be leading a walking tour of historic Milton, the first of three I will conduct this summer. We'll meet at the Ruden Mansion Visitors Center at 9:00 a.m. More info is available by calling Ruden Mansion or the park's website. And I can tell anybody here at the meeting more about the Ruden Road Historic Corridor after the meeting if you're interested. Thank you. Thank you, David. Okay, I believe that ends our public comments. So, now I am going down to proclamations and recognitions. We have three tonight. We have Child Abuse Prevention Month, Administrative Professionals Day, and Fair Housing Month. So when it is your proclamation and you're here to celebrate that, please join us at the front of the I call it the stage and we will read the proclamation and then do a group photo and then someone from the group can do um a a comment if they would like. So we will start with the child abuse prevention month.

Whereas keeping children safe is a community responsibility and child abuse prevention must be a community effort with top priority. And whereas child abuse and neglect not only harm children but increase the likelihood of judicial system involvement, substance abuse, health problems, and risky behaviors. And whereas effective child abuse prevention programs succeed in part because of the partnerships among service agencies, health and law enforcement professionals, schools, businesses, the media, government agencies, community and faith organizations, and especially parents. And whereas the earlier the community takes an interest in providing for the development of youth resiliency and that quality intervention is provided to a child and family in crisis the better chance for positive outcome and life success. And whereas preventing prevention programs and resiliency strategies targeted toward our youth offer positive alternatives for young people and encourage them to develop strong ties to their community. And whereas I call upon all Flagstaff citizens and organizations to observe this month by demonstrating our gratitude to those who work to keep our children safe and by acting in our community to continue to make it a healthy place where children can grow and thrive. Now therefore, I, David Spence, on behalf of Mayor Becky Daget of

Flagstaff, do hereby proclaim April 2026 as Child Abuse Prevention Month. Hi, my name is Amy Kennedy and I'm here representing CASA. Uh, if you're not familiar with the CASA program, um, CASA is courtappointed special advocate for children in the foster care system. These volunteers are essential at giving children in foster care a voice. Our CASA volunteers get to know the child, the family, and the placement, and they can make recommendations to the court about what's best for the child and speak up for the child for their best interests. Currently, only one in six Arizona children in foster care have a CASA volunteer. Foster children with a CASA volunteer are more likely to find a safe and permanent home, more likely to succeed in school, and half as likely to reenter the foster care system. If anyone would be interested in learning more about the CASA program or how to become a volunteer, we'd love to talk with you. Valerie and I are both here. We've got flyers and cards if you'd like one when you're ready to leave. um if you might be looking to volunteer or even if you know somebody that might have some spare time, has a heart for children and would like to help, we're always looking for more people. Thank you.

Administrative professionals day. Do we have any administrative professionals here? I know we've got a few. Come on down. Come on. So whereas administrative professionals play an essential role in coordinating the office operations of businesses, nonprofits, government, educational in institutions and other organizations. And whereas the work of administrative professionals today requires advanced knowledge and expertise in communications, computer software, office technology, project management, organization, customer service, and other vital office management responsibilities and most importantly have the willingness to learn and accept new challenges. And whereas administrative professionals are vital uh contributors to today's team oriented work environment and are key frontline public relations ambassadors for their organizations. And whereas administrative professional day is observed annually in workplaces around the world to recognize the important contributions of administrative support staff and is sponsored by the International Association of Administrative Professionals. And whereas administr administrative professionals day serves as a time to acknowledge the valuable contributions of administrative professionals in the city of Flagstaff and to recognize the importance of their work in accomplishing the mission and vision of their place of work. Now therefore, I, Lori Matthews, on behalf of Mayor Becky Daget of Flagstaff, Arizona, do hereby

pro proclaim April 22nd, 2026 as Administrative Professionals Day in Flagstaff, Arizona, and encourage all residents to recognize and appreciate their administrative support. All right. All right.

Thank you. Thank you. So, um I just want to say um thank you to mayor and council for um celebrating um their admin staff and the admin staff of team flag staff. Um we all love what we do, so we wouldn't be here if we didn't have such a great team. Thank you. All right. I will be reading the proclamation for fair housing. So, housing team, if you'd like to join us up here. Whereas the Fair Housing Act, enacted in April 1968 and amended in 1988 ensures the right to housing free from discrimination. And whereas despite this landmark law, housing discrimination continues to disproportionately affect protected classes, including people of color, women, persons with disabilities, and families with children. And whereas in Flagstaff, disability related complaints make up the majority of discrimination complaints, black and Hispanic mortgage applicants face higher denial rates, and women held households, Native American communities, and LGBTQ

plus individuals experience significant housing instability and rental discrimination. And whereas we can only be a truly resilient city if our most marginalized residents have access to stable, equitable housing. And as federal protections erode, the city of Flagstaff remains committed to fair housing initiatives, recognizing that local action is more critical than ever. Now therefore, I, Cara House, on behalf of Mayor Becky Daget, mayor of the city of Flagstaff, Arizona, do hereby proclaim April 2026 as fair housing month and urge all residents, landlords, policymakers, and housing providers to uphold the principles of equity, inclusion, and justice in housing. Thank you, mayor, vice mayor, and council members for declaring April as Fair Housing Month. My name is Justina Costa, and I serve as the city's housing investment director. Fair housing is more than just a policy. It's a commitment to ensure that everyone in our community has access to sta safe, stable, and affordable housing free from discrimination. It reflects our shared vision of equity, dignity, and opportunity. I'd like to introduce Braden Sans from Northern Arizona Association of Realators to accept the proclamation.

Good afternoon, everyone, mayor and council. First, I want to take the time to thank everyone for allowing us to be here today to accept the proclamation on behalf of the city of Flagstaff. As we all know, April is fair housing month, a time to recommmit to the idea that everyone deserves access to housing without discrimination. But I want to make one thing clear today. In Flagstaff, one barrier that we see with fair housing is not just discrimination, but it's a lack of affordable homes. The National Association of Realtors identifies this as one of the top obstacles to home ownership nationwide. A lack of affordable homes and limited supply. And here we do not just have a shortage. We have no affordable housing. We have teachers commuting from Winslow. We have healthcare workers being priced out of the community they serve. And we have young people, Flagstaff locals, who cannot afford to stay and build their lives here. As a reminder, the city uh council of Flagstaff declared a housing emergency. So my question today is what are we going to do about it? And how can we help solve this? Because this is no longer a conversation. This is a call to action. We need to build housing now. We need to simplify and fasttrack approvals for missing middle housing, including duplexes, triplexes, town homes, and condos. We need to remove the barriers that make it too expensive or too timeconuming to build. And finally, we need to incentivize development and not discourage it because the reality is simple. Simple economics will tell you that when supply does not meet demand, prices rise and housing becomes unattainable. So, let's increase the supply. And I'll say something bold. Maybe the city of Flagstaff should become a better

developer. Hire a project manager, partner with builders, and deliver projects that actually get built. Not just studies, not just plans, but homes. Because we don't just need rentals. We need ownership opportunities so people can build wealth, stability, and build their futures here. We need condos for young professionals. We need attainable homes for families. And we need a ladder so people can move up instead of away. Fair housing is about access as we know. But access means nothing if there is nothing to access. So I urge you, let's move from policy to production. Let's remove the barriers, support the builders, and build housing our community desperately needs. Because right now, Flagstaff does not just have an affordability problem, we have an inventory problem. And until we fix that, fair housing will remain out of reach for far too many in our community. Thank you.

Okay, we are moving down to the council liaison reports and I would like to start with our online very own mayor Dagot. if she's able.

Okay, I am going to move to Council Member Matthews. I have nothing to Council Member Garcia.

Uh, thank you. Uh the parks and recck commission met onsite at the new Bushmaster Park sports courts and had a tour of the facilities yesterday and we discussed um upcoming um studies that will be taking place around um some of some of the noise mitigation things and also just um the beginnings of the courts. uh well the beginning of the people coming back to the courts and just kind of seeing how things are going and what we could do to improve um the visitorship um experience there. From all things that we saw at this meeting, I was very impressed by not just how um the design of the courts impacted positively, how would I say that? impacted the noise mitigation to where it it eliminated it for the most part from many part many um houses that were that were complaining of it before. So, we're moving in the right direction there and um it was a really productive meeting. That's all I got for today.

Thank you, Council Member Alen. Nothing. Council member Spence.

Thank you, Vice Mayor. The open space commission is participating with the parks and recck commission in the strategic plan development. And I'll remind the public and the council that we're at the beginning of this uh consultation process. We've hired a professional team. They'll be doing community outreach and over the next year a plan will emerge that will guide our parks and wreck and open space for the next 5 to 10 years. So, um community participation is vital to have an effective plan. So, uh keep your eyes open for these public participation sessions. Thank you. Thank you, Council Member House.

Nothing for me tonight. Thank you. And I will briefly I went down to Phoenix and attended the RTAC meeting on behalf of Metro Plan. And I was able to meet with the governor's office on our West Route 66 improvements that we're continually advocating for the smart fund and um LITC funding. So, it was a great great time down there and glad to be back. And Mayor Daget, if you're on, I will take your update.

Great. Thank you. Uh, we had our PSPs board meeting and approved the rehire of a of a firefighter who had um left the department in Flagstaff and is back. So, that's good news. And tomorrow is the Commission on Inclusion and Adaptive Living. And I missed the housing authority meeting because we were in DC last week.

Great. Thank you. We are moving down to the consent agenda. All matters under consent agenda are considered by the council to be routine. Unless a member of the city council expresses a desire at the meeting to remove an item from the consent agenda for discussion, the consent agenda will be enacted by one motion approving the recommendations listed on the agenda. Unless otherwise indicated, expenditures approved by council or budgeted items. I will either take a motion for consent agenda A through D or if anyone would like to pull one out, we can do that at this time.

I move to approve the consent agenda A through D as presented. Do I have a second? I'll second. Any discussion? All those in favor? I I I.

Any opposed? All right, that carries. Okay, we are down to routine items. Our first one is consideration and adoption of ordinance number 2026-07, an ordinance of the city council of the city of Flagstaff amending the Flagstaff zoning map with a direct to ordinance zoning map amendment conditioned on a revised site plan of approximately 12.29 29 acres of real property generally located at 1801 South Milton Road. Hello, Alexandra Pelli, current planning manager with the city of Flagstaff. Um, at our last uh meeting, I gave a presentation on the direct to ordinance reszoning uh for Miltown. uh if I'm here to answer any questions on that. I also have a brief presentation for the development agreement if you'd like to hear that before you vote. Um that is also an option. Since you're up here, I say we do the brief presentation if that's all right with council.

Great. All right. So along with that resoning ordinance, we have a third amendment to the development agreement for that project Miltown. The purpose of the agreement um the first part is development allocations. So staff likes to build in a little flexibility especially on these multifamily projects and it's very typical for us to allow deviations of we say about 10%. Um this development agreement helps to clearly outline some of those um modifications that we would allow without having to bring it back to council again. So, we're in the DA. It talks about that the developer may increase or decrease the number of dwelling units by 10%. Um, they may not increase the number of those larger units, the four or five bedroomedroom units. It also talks about modifying the unit mix, but they can't do the following three things. Increase the number of four and five bedroomedroom units. modify the number of bedrooms, so not just units but bedrooms beyond plus or minus 10%. Or include units larger than five bedrooms. Another aspect of this amendment is the affordable housing commitment. So 12 of the units are to be subsidized a minimum of 30% below market. Um there's a maximum household income limit of 120% of the AMI and a maximum of 10 years

from issuance of CFO and then there's some language about we can renegotiate after those 10 years and the final component is sustainability features. Now, these features are being committed to as part of that res that large residential building, not necessarily the commercial pads. Um, but the features that are called out specifically are each bedroom will have a bike hook. Um, there's a minimum of six dualport electric vehicle charging stations. Um the exterior walls of the buildings will have an R21 insulation value or greater. Um there's a minimum SER2 cooling equipment to be used. Um there will be smart thermostats. Uh the building will meet bronze level certification standards under NGBS. I think that's national green building something S. Um, it'll be an all electric building. Um, there'll be LED lighting and Energy Star certified appliances and lowflow faucets, showerheads, and toilets. Um, when this was first proposed, I did reach out to our partners in sustainability and building safety just to get a a feel like, is this just standard stuff? But they agreed these are all sort of above and beyond what our current code requirements are. And then we can come back to making a decision on this. Um the applicant is also here if you'd um like to hear from them.

Great. Thank you for that information. And I'm going to start with 9A. And on that one, do we have any questions or comments? Council member House.

Thank you, Vice Mayor. Um, thank you for the the presentation. I just wanted to go back to um the comment that you had or the the um affordability slide if you can. And just noting um the reference to the maximum household income limit of 120% of AMI. I'm wondering if you can explain that a little bit more because I I think some people might see that and think that it's not actually affordable, but from my understanding what that's doing is hitting that middle missing middle target. So I'm hoping that you can maybe speak to that a little bit. I could, but I would also love for Jennifer from housing to speak to that.

Sure. Hi everyone. I'm Jennifer Michaelelsson, housing planning manager. Um, I actually have the income limit if you're interested. Um, for a household of two, the 120% income limit is um 104 thou about $105,000. And you're right, we are we were just trying to um allow for or target up to middle income um rather than having a really restrictive lower income limit and not knowing the income or I'm sorry, not knowing the rental rates that will be charged necessarily. Um, the middle income is just better flexibility.

Thank you very much. I appreciate that. I think it's just one of those things that's important to point out is because we're so used to seeing the 60% AMI, 80% AMI, um, that a number that like that can look like it's huge or or targeting a higher income, but what it's actually doing is hitting that middle mark. And I think that's really important for people to understand especially with our um focus and goals towards addressing that middle missing middle housing goal. So thank you for that. Well said. Thank you. Any other questions or comments?

So I'm going to scoot back up to 9A. Can I get a motion to read the ordinance? Mayor, I will vice mayor. I will move to read ordinance number 2026-07 by title only for the final time. Second. Any further discussion? All those in favor? I I I. Any opposed? All right. That carries. City clerk.

An ordinance of the city council of the city of Flagstaff amending the Flagstaff zoning map to reszone approximately 12.29 29 acres of real property generally located at 1801 South Milton Road APN's 103-21-024 103-21- 025 103-21-026 and 103-21-027 by modifying the prior zoning map amendment with a revised site plan and conditions providing for severability authority for clerical corrections and establishing an effective date. Thank you. Can I get a motion to adopt?

Madame Vice Mayor, I move to adopt ordinance number 2026-07. A second. Any further discussion? All those in favor? I I. Any opposed? All right, that carries. Now I'm going down to 9B. Can I get a motion to read? Vice Mayor, I move that we read resolution number 2026-13 by title only. I'll second. Any discussion? All those in favor say I. I. I.

Any opposed? I. Okay, that carries. City clerk, can you read? A resolution of the Flagstaff City Council authorizing the execution of the third amendment to the Miltown Development Agreement between Vintage Partners LLC and the City of Flagstaff related to the development of approximately 13 acres of land located at 1801 South Milton Road and establishing an effective date. Great. Can I get a motion to adopt? So move. I'll second. Any discussion? All those in favor? I I I. Any opposed? All right, that carries.

Thank you. Thank you.

Going down to 9C, consideration and approval of audited financial reports year ending June 30th, 2025. Good afternoon, mayor, vice mayor, and council. Brandy Suda serving as the city's finance director. I'm here for before you for the approval of the fiscal year 202425 financial statements and single audit. I'm accompanied today by one of our auditors, um, Michael Lison from Heinfeld Meech. per state statute. Um the certified public accountant who performs the audit must present the audit results to council for approval. Um the audit committee did meet on April 7th and unanimously approved the financial statements and single audit. Um, and before I turn the presentation over to Michael, I'd just like to um do a special thanks to the finance team and my grants team um for all of their hard work in preparing for the audit, the financial statements, and the single audit. Thank you.

Thank you. Um, thank you, Mayor, Vice Mayor, Council, for having me here tonight. As Brandy said, my name is Michael Lison. I'm a partner with Heinfeld Meech. Uh we are the independent auditors hired by the city to perform a number of audits and I'm going to run through some of those uh in detail today. Um I also want to say a special thank you again to Brandy Suda Heidi Dairberry for coming back in from budget to help out as well. Um all of the finance team uh contracts and emergency management uh the housing department uh who we have to select extra samples from their uh activity as well. So we appreciate their hard work. procurement, IT, and all the different um divisions we work with. We uh we were here after for three weeks on site. Uh and also a lot of work in between uh remotely requesting documents and so we appreciate everyone's hard work. Um and so yeah, I'll go ahead and get started. Uh as Brandy said, why are we uh here? Uh well, we're required to by law. uh you're required to have a presentation by the auditor to city council um uh after the completion of the audit. Uh also it's it's within city charter and state statute. Um and then you because the city receives and expends more than $750,000 in federal awards and in fact that number is much larger closer to 20 million. Uh you're required to have what's called a single audit and I I'll get into more details there as far as what programs we looked at as well. In addition, you're required to have your ACT for your annual comprehensive financial report uh posted online at least five years worth. So what's the importance of the audit? Uh we're verifying management rep representations regarding the finances demonstrating stewardship and accountability to citizens, council, grtors, federal agencies, bond holders, IRS creditors. There's a lot of people

are interested in what happens within the city finances. Um and so we are uh providing assurance to them as well. Uh reviewing compliance with certain laws and regulations because you receive and expend not only state funds but also federal funds uh you're required to ensure compliance with those regulations and ultimately for the council to ensure that management is fulfilling its responsibilities. Uh so what is the audit process? Uh we actually began planning in May of 2025. Uh so uh you can see that already next month we are already going to start planning for the next audit. Uh we had site visits in June, October and November of last year. The June visits primarily focused on compliance and internal controls and the October and November visits are primarily looking at the city prepares their uh copy of the act of the 250ish page uh financial report and we're only responsible for three pages in that report. So we're coming out and verifying that these substantive the balances within the report revenues expenditures cash um liabilities capital assets all that information has accurate support for that. Uh and we're also doing various requests in between u and we're utilizing a a secure share file so that way we're ensuring that the city's documents are maintained securely. Uh the good news is uh the annual comprehensive financial report was issued on December 19th of 2025 and then the single audit report followed there uh in on January 30th of 2026. Um I'll kind of touch on this a little bit as far as audit methodology. We're obtaining information from the city. We're looking at your general ledger, comparing that uh to supporting documentation, documenting internal controls, um testing again sub substantive test work, ensuring that balances are supported, and then also doing what we call analytical test work, looking at seeing why did revenues go up, why did expenses go down, obtaining

explanations from the city, and then ensuring that those explanations can be supported. We're also obtaining a copy of the draft schedule of expenditures, federal awards, the SIFA. Uh and then we're using a riskbased approach to determine which federal programs we have to test for that year. And then each federal program, the federal government puts out a list essentially telling us what we have to test for each federal program. Uh whether it's allowability, eligibility, reporting, subreient monitoring. Each federal program has a different requirement. We have to look at looking at test controls of compliance and then also test of compliance uh as well. And so the number of reports we actually issue is is a decent amount. We have the annual comprehensive financial report, the ACTUER. We have the single audit report. Uh we have a report in compliance with the highway user revenue fund, the HERF funds. We're ensuring that the city is maintain is within the expenditure limitations set by the uh state. We're also looking at requirements related to the landfill for ADQ. Uh there's agreed upon procedures related to housing to the HUD, FDS, and REIA. And then finally, we're looking at the passenger facility charge program uh related to the airport. And so as you can see there's a lot of different reports we're issuing. So a lot of different uh divisions we're working with and so we again appreciate everyone's help. Um the act was due by December 31st and all other reports are typically due by March 31st and the good news there is all of the reports have met the required deadline. So all of the reports have been submitted to the various required agencies. So the highlights why are we here? Uh I'm happy to report that we uh gave an unmodified opinion which is the highest opinion we give on the financial statements. Uh and it's again we always like to add this kind of clarification. It's not a statement of perfection but we are saying the financial statements are free from material misstatement due to error or fraud. And I always like to add this as well. The purpose of a financial audit is not to catch fraud but rather to review material amounts on

the financial statements and for compliance with state uh or federal requirements. In addition, we had no internal control deficiencies noted. We uh did not have any significant deficiencies or we call material weaknesses which those are required to be reported within the single audit report and we had nothing to report on those. Uh and then again uh the acter was issued in time to apply for the GFOA submission for the certificate of achievement and excellence in financial reporting. uh the city received the award for the 2024 aer and previously a number of years as well and we anticipate the city will also receive the award for the 2025 one. Uh on to the single audit highlights as well. Um the city qualifies as what's called a lowrisk audit based on prior audit results. This means the city has not been late and has had not had uh material weaknesses in the prior audits. Uh we again gave what's called an unmodified opinion on compliance with federal requirements which is the highest opinion we can give. We tested the four following federal programs. Community project funds from congress congressionally directed spending community development block grant cluster the housing vouching cluster and the public housing capital fund. Total expenditures of the city were $21.7 million for federal awards. And our audit coverage, those four programs alone, uh meant that we ended up testing 58% of those monies uh as a part of our audit test work and 20% is the requirement based on a low-risk audit. And that's the presentation I have today. And I'd be happy to answer any questions you have.

Great. Thank you, Council Member Matthews. Thank you, Vice Mayor Michael. Thank you so much for this presentation. Um I'm on the audit committee and it is always um reassuring and refreshing to know that uh we're running a tight ship. Thank you, Rick. Um I just wanted to thank finance grants and and Randy and Rick and Heidi and housing airport and it everybody else who had to submit information. it's an addition to their daily workload and could be a lot. Um, and you don't definitely want to submit something halfhazard um because it could come back on you. Um, it's really important to have an unmodified opinion. Um, it kind of sounds to me it always sounded like a negative. Um, so I always have to refresh back on what that means. But also the low-risk oddity um is important when we're out seeking grants. um it helps us score better with with grants. So, it is super important and we do have a very large budget and so it's reassuring to the citizens and to council that um we got our checks and balances in and we have a great team that ensures that it's not just one person, but it's a whole team doing the work that they're supposed to do. So, I just want to say thank you all.

Thank you, Council Member House.

Thank you, Vice Mayor. Thank you very much for the presentation and thank you to the full team um that got us to this point. Um I don't want to repeat or reiterate too much of what Council Member Matthews said, but particularly as we've had more and more conversations about the importance of communication and transparency with our community. Um getting results like this really is is telling and says how much work has gone into um the work that the budget team and and all of the different divisions within the city are doing to ensure that we're being fiscally responsible that we are um taking care of the finances that have been entrusted to us as a city organization. Um and that really you all are are doing the work that keeps us going. Um so very very grateful for the work that you all have done and uh also very grateful for the uh very simple and easy to understand reporting that we we just received. Um I am not a financial person. Uh but this was very easy to follow and and um definitely very much appreciated. So thank you all.

Thank you. Any other questions or comments council? I'm not seeing any. So, can I get a motion to approve the annual comprehensive financial report and the single audit report? Vice Mayor, I'd like to move that we approve the FY2024205 annual comprehensive financial report and the FY2024205 single audit. Second that motion. Any further discussion? All those in favor? I I I. Any opposed?

Thank you. Thank you again for the presentation. Moving down to 9D, JWP extension project construction phase services agreement phase one GMP1 clearing and erosion control with J Banaki Construction Inc. Go for it. Mayor, Vice Mayor, members of council, David Peterson, project manager in capital improvement engineering. Happy to be here this afternoon. I'm going to be presenting on GMP1 for the John Wesley Pal extension project. Giving a little bit of updates, kind of some timelines in here as well. And I even have an exhibit, but it's conceptual, so bear with me. Uh, this is where we're project is is going to be uh working here coming up this summer. It's a southwestern, southeastern, excuse me, corner of the city. handful of you joined us in our walkthrough which I want to say was maybe a year year and a half ago. Appreciate that and I mentioned that so you can conjure up those thoughts as we're talking about the project today and what we have to do uh to build an extension of the road through this area. This map is at the end as well. So if there's questions feel free to refer to this map at the end end of the project. And I appreciate Lindsay Shouy coming up and talking about symmetry. Uh there's a lot of partnerships that make this project happen which I love partnerships because it makes us accomplish just remarkable things as you saw in waterline uh in inner basin as well and this is no exception as well. Uh with symmetry we're building the middle section of this road or the red line on this map. Uh but if you notice to get there we have to cross these yellow lines. Um so earlier this this uh session today we did the easements and the rideway. We worked very hard with our team to get that approved. Thank you for approving that item that allows us

to construct this this roadway. Uh we have to get there and we appreciate partnership with Cemetery to be able to get there as well as Little America uh coming in from the north as well. Canyon Del Rio, Elkridge, uh they've all been wonderful to work with. With that, I'll jump into my presentation. As a segue from the previous slide, we've had lots of meetings uh with these entities and especially their engineers. As you can imagine, when we have three different designers working on three different portions of a road, we want to make sure that you have continuity when you're traveling this extension. Whether you're on a bike, whether you're on uh a pedestrian, if you're in a car, we want to make sure that the roads not changing, the standards aren't changing. You know, things like catch basins are are really simple, but we want them to be uniform. Uh and you don't get that unless you have really good communication. We've had a lot of meetings, and we have ongoing meetings with their engineers as well. So, thank you to them as well. Uh we have Banaki Construction on board as our Seymar or construction manager at risk that will be building this project. Uh part of that benefit of having a Seymar is you get them on board during the design phase. So we have them part of uh working with Peak Engineering who's with us today and Lonnie is online as well with Banaki. Um but we have them in the design phase to really bring down cost. So the value engineering of that partnership is really the strength of having a Seymar and it's really exciting as we've been going through things since they've been on board the last couple months watching prices come down uh on things that we construct. So it's it's really neat to see that partnership happening and growing. Uh currently we're sitting right between the 60s and the 90% plans for the design. I'm happy to say that because we have Banaki on board that we are looking at doing a bridge to cross the Rio. We've had those discussions in many council meetings on how we were going to cross those with various structures and we are looking at uh doing a bridge and that's the newest component of design since panicky has come on board. So I'll show a conceptual design here in a second. Um but because that is the newest component that design

is a little bit behind the rest of the design. So we will be coming forth with that with the change order here in in June. Um, but I just wanted to share that that that component is a little bit behind the roadway component. And then working with FEMA, we've worked with uh J Fuller doing a lot of hydraulic modeling. We've worked with Little America on pooling elevation, but we are working on getting that submitted to FEMA so we have the permitting to be able to construct our bridge across the Rio. Uh and then GOP1, GMP1, excuse me, uh this afternoon, what we're talking about is simply for clearing the rightway, uh as well as for establishing erosion control. So, we're not going in there to grade. We're not doing road construction. Um but we want to get in there prior to the heart of an average fire season. We know that we're going in there with chainsaws. We're going in there, you know, with a handful of spark creating uh equipment, and we wanted to get ahead of that, which is why we're here in April uh instead of bringing this forth in May or June when we have drier conditions. Uh so we've worked a lot with our wildland crews, our fire department crews and with Bicki Construction to come up with fire management plans, industry plans, what equipment needs to be on each piece of equipment uh for fire mitigation and observing when you know hot work is attending or occurring uh to make sure those protocols are there because this is our community and want to make sure that we're not obviously starting you know potentially any sparks or fires that uh are could be detrimental. So, uh, as promised, here's our exceptual or con exceptual conceptual exhibit. Uh, this one is showing the the bridge structure here. This little dip here is the lowflow channel on the Rio. Uh, it's about 12 feet from the existing grade to the bottom of the bridge deck. And then each opening is about 38 feet. So, it might not look exactly like this, but conceptually, this is pretty close to what the bridge that we're looking forward to bringing forward in this design. So, this is really exciting. I know it's just a slide with some numbers and

image, but there's a lot of work that's gone behind this. Uh, and very exciting. Uh, GMP1, as I mentioned, we're here tonight uh, to approve that hopefully. And then we're going to be back again in June for that change order 8. So, as I was spec talking about earlier with the final bridge design, that's lagging behind the roadway design. So, we're going to have to add that into the contract with Peak Engineering to do the final bridge design because that wasn't part of the original design work. So, we'll be back in mid June to ask for that change order. And then we'll be back in July, right before break to do all the construction as part of GMP2 minus the bridge work. So, we'll be back again sometime this fall with the GMP3 that will cover just the bridge construction costs, but we'll be back in GMP2 in July so that we can be working through the summer. uh hoping to really start the heavy construction probably in August or September and then construction is looking to start August or September and then continue on through most of 2028. And what are you getting for GMP1? Uh a lot of the surveying and setting up the perimeter obviously we want to make sure that we're doing work within our legal righted land uh within the rightway. So we will have to make sure that that's surveyed that's marked. Uh then we also have to clear that corridor. As you recall from walking that there's a handful of trees that are in that corridor that need to be removed. Uh and establishing the erosion control or the silt fencing in that area to make sure that we're not causing any undue runoff. Uh and then a big one that we do on all of our projects, but you know, essentially we want to make sure that dust is controlled. Uh we don't want to be creating any dust for any neighbors or any uh neighborhood or people that are trans transporting through that area. So that's one thing that we like to make sure we hit on very strongly is our dust control. The cost of the GMP is a little under $893,000 and the time frame is 150 days. And we did 150 days because we wanted to have a

little time that if something came up that was out of our control that we had that contractual time to keep working if for some reason GMP2 had to be pushed out. So that's why we're doing 150 calendar days. Uh, I also wanted to mention in the timelines that we're also going to be having Beta PR come on for public relations and we're going to be sending out a mailing notification letting the neighborhood know in that area that was in that black circle in the beginning of the presentation uh to know that we're doing clearing and erosion control so no one is getting concerned that we're starting construction without having an open house which we're also planning to do. So, we're going to have a community event where people can come similar to what we did for Bula here in the lobby where people could come and find out talk about the design before it's completed. Uh, as well as just be able to kind of go over timelines and what to expect. Uh, and especially the all the neighbors that are in that area. Go back to this map. All these personal owners here that are come off of Herald Ranch Road. So, I did want to share that even though that's not on the slide. That's really important to make sure that communication's out there. So, with that, I'm happy to answer any question or comments. Thank you.

Thank you, Council Member Alen.

Thank you very much, David. Thank you. Um, just can you quickly integrate a conversation around wildlife quarters into this uh the riot flag under the the bridge you were just talking about? Is that going to serve both purposes? So that was one of the the benefits of having u the bridge deck versus one of the items we had talked about several council meetings ago was the box culverts which dimensionally are much smaller of an opening which restricts a lot of the unullet. You didn't think I'd make it through the presentation not saying unullet right? Um from passing through there we've had several meetings with game and fish. Uh they are skeptical that elk would readily use this. Uh it's certainly not impossible. I actually was attending a meeting watching video of underpasses actually in Utah where deer helped moose get comfortable to use an underpass. It was actually really amazing watching.

Um, so I don't want to say they wouldn't use it, but dimensionally they it's called an openness ratio. And one thing that uh this diagram here doesn't represent very well is the depth of this structure. So, because it's I don't remember off the top of my head, it's probably 90 95 feet wide that it's really hard for an elk to feel like it has enough openness to walk through there. But I say all that to say this that the fact that there's 38 foot wide openings that it's going to make it very comfortable for deer, for coyotes, smaller uh animals that pass through here readily. And hopefully the elk will um get used to that. But one of the other key components with having a successful uh elk system like that too, as you'll see with the wildlife crossing over I7, is it takes a tremendous amount of fencing, miles and miles in each direction to make just this bridge crossing correct successful. So even if we had a 50- foot tall bridge that was 300 feet wide, the elk still wouldn't necessarily use that crossing because they don't have the fence to force them to that central area. So, is there really not any plan for uh getting for addressing elk crossing the road?

Uh, Council Member Alen, we're continuing our discussions with Game and Fish to see what we can do to ma maximize this and there's a handful of things that we have to balance to make sure that we can do that. Um, but we'll continue to have that conversation and relay information as we can. Wonderful. I would think that's very important. Right now I'm just sort of backfinding and asking questions about it, putting it out there for you guys to consider. Thank you.

Absolutely. Thank you council member for that question and I really appreciate relationship with game and fish and they're very honest with the fact that you know that in order to have a the most successful system it needs to include XYZ including all those miles of fencing and when you take away that component the success of that system drops exponentially. So it's not something that you can just add on and it's little better. It's really almost a all or nothing situation. So, thank you, Council Member Matthews.

Thank you, Vice Mayor. Um, thank you so much for um asking the question, Council Member Alen, um about the uh wildlife bridge. Uh, I see the one being built out on the 17 and the the miles of fencing that they have had to put in and these little arches I think to keep the electric fence line running um is quite an extensive um effort. So, I'm I can't wait to see how successful it is. I know it's been successful in other areas, but yeah, the the fencing is is kind of crazy. Um, so I appreciate you um it being brought up and you explaining that to citizens. Can you remind me and us um what the speed limit is on this to be on this road? Council member Matthews, I was trying to recall that off off the top of my hand head hand head hand head hand head hand head hand head hand head hand head hand head hand head hand head hand too as well and I I believe it's 35

and I was going to mention that to council member Alen as far as uh in those discussions with game and fish and looking at studies like out of Jackson and Yellowstone where they have larger unullet and the speed limits are 50 and 55 and seeing with I17 where it's 75 that is one benefit to you know wildlife crossing is that our speed limits are significantly lower,

right? And that and that's a good point. I mean, we have a lot of um elk and deer crossings throughout our city. Um and we all see that sometimes not very successful. um even though the the the speed limit's slow. Um and I I guess that's just you know part of living up in the mountains but it does help tremendously that our speed limit and we talked about that at great lengths if I remember uh to ensure that our speed limit was down so we wouldn't have those um heightened u risk for our wildlife. So thank you.

Yeah. And council member Matthews, also I wanted to mention that we'll have the uh dark sky compliant street lighting as well at our standard engineering distances as well. So the roadway will be lit as well, which will al also help with wildlife especially at night.

Thank you. And I just wanted to thank you for the presentation and for addressing the community outreach. You took it right from my thought. So, I I'm glad to see that you're on top of it as I knew you would be. Um, this has been very thoughtful and I want to make sure that the community out there is aware of the progress and and the different stages and I know there's a lot of concerns. So, it it sounds to me like you're addressing it. I appreciate that. Thank you.

Any other questions or comments? If it's uh right, can I make a motion to approve the construction manage manager at risk um CM construction phase service agreement phase one GMP1 with is it vanic construction inc for a guaranteed maximum price of $892,834.98. I love those. Just round it up. and the contract period of 150 days. Second the motion. Sorry to interrupt. Council member Matthews, there's also an to authorize the

city. I add that too and to authorize the city manager to execute the necessary documents. Now I will second. All right. Any further discussion? All those in favor? I I I. Any opposed? That carries. Thank you. Thank you, council.

Moving down to 9E. Consideration and approval of a contract for services with Sunnyside Neighborhood Association of Flagstaff to implement the Lived Black Experience Program of Flagstaff. Good afternoon, Mayor, Vice Mayor, and Council Members. Heidi Hansen, um, interim deputy city manager. Just wanted to say that we're here today to talk about the live black experience program and our contract for services. Um, just a little background on the live black experience program. This initiative hosts a diverse range of events and activities designed to educate, inspire, and engage our community about the rich history and contributions of the black community. Through thoughtful programming and strategic outreach, the program actively fosters greater awareness and understanding. The Live Black Experience program has been operational for four fiscal years with the city of Flagstaff beginning in 2020 to 2021 fiscal year. In June 2025, staff sought input from the city council on a draft scope of services to be used for formal procurement, a request for proposals to identify a community partner that would implement the live black experience under a multi-agreement. The RFP was issued and Sunnyside Neighborhood Association was the highest scoring respondent. The contract shall be effective as of as of the date signed by both parties and performance shall commence within 10 days of the notice to proceed and it will be a term of one year. The contract may be renewed for up to four additional one-year terms by mutual written consent. And lastly, the financial impact. The Sunnyside Neighborhood Association will be paid $55,134 to create and implement the program. And with that said, are there any questions?

Thank you, Heidi. You're welcome. Any questions, comments? Okay, I am not seeing any. Can I get a motion to approve and authorize the city manager? Yes, madame vice mayor. I would like to move to approve the contract for services with Sunnyside Neighborhood Association of Flagstaff LLC to implement the Black Lived Experience program of Flag Staff and authorize the city manager to execute all necessary documents. I'll second. Any further discussion? All those in favor? I

I I Any opposed? That carries. Thank you. Moving down to 9F, consideration and adoption of resolution number 2026-17, a resolution of the Flagstaff City Council ordering and calling a primary election, if necessary, to be held on July 21st, 2026, and a general election to be held on November 3rd, 2026. Stacy,

thank you. um Stacy Saltzburg, communication and civic engagement director. Um so I will actually be presenting on this item as well as the next item because they are both related um to our upcoming elections. Um so the first resolution would formally call the primary and general elections for 2026. Um the resolution will provide the required notice to the public of the city's intent to hold a primary election on July 21st, 2026 and a general election on November 3rd, 2026. Um should there be any additional measures that need to be added um uh to either election, uh we would do an additional call that would include that information. The second resolution uh will approve the IGA with Cookanino County to provide election services for both the primary and the general elections. While the city is responsible for many election activities such as preparation of resolutions, the ballot language, public notices, and the information pamphlet, um the county will conduct the election, which includes things such as preparing ballots, operating and managing polling locations, ballot counting, and much more. Um, we are grateful for this partnership with the county. We, um, have partnered with them for many, many years for elections. Um, and we look forward to continuing our relationship with them. I'm available for any questions.

Great. Thank you, Council Member Alen. Oh, we've got a motion. Before I take that, any questions or comments from council? Okay. As mayor, I move that we read resolutions number 2026-17 and 2026-16 by title only. If we have to do them separately, let's uh make a motion to read resolution number 2026-17 by title only. I'll second. Any further discussion? All those in favor? Any opposed? I

that carries. City clerk. A resolution of the Flagstaff City Council ordering and calling a primary election if necessary to be held on July 21st, 2026 and a general election to be held on November 3rd, 2026. Is there a motion to adopt? So move. Second. Any discussion? All those in favor? I. Any opposed? I. That carries. Going down to 9G. Um, would someone like to

Yeah, I'll go ahead and just move things over here. Um, I move we read resolution number 2026-16 by title only. I'll second it. Any discussion? All those in favor? I I. Any opposed? That carries. City clerk. A resolution of the Flagstaff City Council approving the intergovernmental agreement between the city of Flagstaff and Cookanino County for election services for the primary election if necessary to be held on July 21st, 2026 and the general election to be held on November 3rd, 2026. Is there a motion to adopt? So move. Second.

Any discussion? All those in favor? I I I. Any opposed? That carries. Thank you, Stacy.

Moving down to item 10, discussion item with an introduction to data centers. Joanne. Um well, good afternoon, mayor and council. Almost good evening. Um, I'm Joanne Keane, your city manager, and I am surrounded by a dream team this afternoon to to uh do a presentation on data centers. Um, I did just want to let all of you know that um the plan tonight, it's an educational presentation. Um, we will be bringing back the uh the zoning code amendment related to data centers on May 5th. Um, and so any questions related to that zoning code amendment or any questions related to um where could the city allow data centers in the community? Um, we would prefer to answer those on the 5th because they're more relevant to to the code amendment discussion. Um, but what I wanted to do is just kind of give you an update on on the plan for the presentation tonight. Um, you know, we've been very thoughtful about this presentation and some of this came out um during the discussions with um both the water commission and the planning and zoning commission um when our staff was asked questions. So, what we've done is kind of we've compiled all of those questions that came up during that um those several meetings into a presentation. So, um I'm I'm hoping it will answer a lot of the questions. Um we're going to start with CJ who's going to give kind of just a just an overview of what is a data center. Uh Dave McIntyre with economic development is going to talk about the the process that city the city utilizes

if we're contacted by an entity who's interested in a data center and what that process looks like. uh Nicole Antonopoulos with sustainability, our sustainability director. She'll discuss the impacts to energy and sustainability. And we also have Lee Williams here who will talk specifically about um water and water utilization related to data centers. And then we'll have Dave and um Heidi Hansen come back up to wrap up the presentation to talk about economic development impacts and also kind of lessons learned from other communities. So, I feel really good about what we're presenting this evening. Um, and again, um, if you don't mind saving the questions till the end, I think it might, um, help just get everybody back together and answer the questions. So, with that, I'm going to turn it over, um, to CJ. All right. Thank you, Mayor, Vice Mayor, Council. I'm CJ Perry, your CIO. Um, so data centers, you know, are a major national conversation right now and for good reasons. You know, there's real concerns and we're going to work through them tonight. Um, but before we dig in, um, I just want to be clear of like what a data center actually is. So, you know, at its simplest, a data center is a building or a portion of a building that houses computer equipment. So that's, you know, servers, storage, networking gear, power and cooling infrastructure, um, to keep all of that equipment running. Um, every time you stream a show, check your email, pull up a medical record, run a credit card, that request is being handled by a computer equipment sitting in a data center somewhere. So they're the physical backbone of basically every digital service that we use. Um the part that surprises most people is how much

variety sits inside that one label of data center. So data centers come in all shapes and sizes. Uh the term covers everything from million square foot hyperscale campuses you read about in the news to you know like a 100,000 square foot commercial facility that a handful of businesses share. Uh to the server room that's down the hall from my office. um to the small sheds that we uses to deliver fiber internet to your home. Uh on top of that um what the facility is used for uh matters just as much. You know, training an AI model is much uh a very different activity than hosting like a local business's servers um even in the same size of building. Um those differences drive very different impacts on a community. So, I'd ask council to kind of keep that range in mind as we kind of work through the information tonight. Um, I find it uh helpful to think about data centers in the the same way that we think about roads. And I kind of gave this analogy at the planning and zoning commission uh meeting. And I know it sounds strange, so just bear with me for a moment. Um, roads are uh, let's be honest, generally very big, ugly things. No disrespect to Scott and his streets team. They're they're wonderful people. But um you know roads are endless strips of black asphalt. They have significant upfront construction costs which provides you know a short-term job boost. But in the long run roads don't provide a significant number of permanent jobs compared to the amount of space they consume. Roads have re real environmental impacts. We cut down trees. We disturb natural habitats. We create heat islands. We generate noise from traffic. In a lot of ways roads check many of the same concern boxes that data centers do. And yet, I don't think it'd be very popular to remove all of the roads in Flagstaff, even the big ones. Uh, if we dug up I40 and I17, I think we'd all uh recognize that the impact to on our community would be

enormous. Flagstaff would essentially be cut off from the rest of the state. In fact, in recent discussions, this very council has worked to write widen roads in Flagstaff through the complete streets initiative, adding protected b uh bike lanes and better pedestrian infrastructure infrastructure. Uh not removing roads, but making them work better for the community. So now that being said, I'm fairly certain that the same people who support complete streets and the same people who'd be very upset if we dug up I40 and I17 would also be upset if we decided to build a six lane in each direction uh Phoenix styles style freeway right through the middle of Flagstaff. It just doesn't fit. Um that's a Phoenix freeway. It doesn't reflect the core values of our community. So I don't think any uh one in the room is arguing for that. The point is the word road covers everything from a quiet residential street to the I 10 in Phoenix. The uh shape, size, and use of a given road determines what it does for a community and what it costs a community. The same dynamic applies to the word data center. So what would be most helpful for staff as we move forward is understanding, you know, what are the specific concerns that are driving this conversation. Once we understand the specific impacts council and the community care most about, we can match the right tools to the concerns. Whether that's performance standards, conditional use requirements, sighting criteria, or other approaches, each tool is better suited to addressing different types of concerns. Are the primary concerns about energy consumption and its effect on rates, water usage in a community that rightfully values every drop, the physical size of the building, and potential visual or noise impacts? or are the concerns more focused on AI specifically or big tech in general rather than the physical infrastructure itself? Helping staff understand the core impact concerns will give us the right context to provide the right toolkit and framework to minimize impacts on our community as we move into future policy decisions. Every decision

in life is a trade-off. So saying yes to one thing is saying no to another and vice versa. So what we need from council is help understanding which trade-offs matter most to this community. So staff's going to give you a lot of information tonight. We're going to talk about energy impacts, water impacts, economic impacts, land impacts, there will be pros, there will be cons. We've done our homework, but all of that information is most useful when we understand what uh council and the community are trying to protect and what they're willing to consider. So with that framing in mind, I'm going to turn it over to economic development to walk you through the general process we follow when someone approaches us about building a data data center in Flagstaff. I'll give it to Dave now. Thank you, CJ. Uh, mayor, vice mayor, council, Dave McIntyre, community investment director. So, from an economic development process perspective, there's really two paths forward when a data center approaches the city of Flagstaff. Um, one is when that data center wants to construct within the city limits on land that is not owned by the city. And the other is when a data center contacts us and wants to construct on city-owned land. And of course that could be in the city or the city does have land outside of city limits which would be uh subject to county regulations in that situation but still a city-owned asset. So we'll talk about the first type first. Um when a data center wants to construct in the city limits on land not owned by the city. Uh sometimes the staff will be approached either with the planning and development services team, the economic development team, actually with data centers, it can even be water services. They can come in from many different angles. But no matter where uh within the city staffing structure that first contact is made, if it's going to be on in city limits on land not owned by the city, the project's guided into the pre-application process uh and goes through the development review process to ensure it meets development standards. So this could include obtaining conditional use permits, zoning map amendment, or other public processes. But really it's considered just like any other commercial or industrial development that comes into the community uh for for permission to

produce. The second type is when a data center inquires about constructing on city- owned land and that could be inside or outside the city limits. In that case, economic development will work with the work to ensure that all the relevant city divisions are aware of the prospect. So that depends on who generally is in control of that land, what that land's preserved for. We'll make sure that uh planning and de development services is involved. Engineering, water services, sustainability um anybody who might touch that particular parcel or that particular project would be uh brought to the table to have a conversation around it and information is sought to understand what that project's intention is and what some of those impacts could be and usually that'll turn into a meeting being scheduled although sometimes with simple things it can work uh through email. So some of the information that's sought in that type of a situation from whoever is approaching the city uh but also in relation to the questions being asked by our divisions is what is the project scope? What is that location and the size? What is as CJ just mentioned the purpose can actually really be impactful to some of that resource use. So what is the technology that's going to be in that particular facility and what would the purpose be of having that particular facility? What's it trying to accomplish? What's the antip anticipated capital investment? We call that capex. Sometimes you'll hear that term used. And that's really the amount of money that goes into that specific construction. And why is that important? Well, it's important for a number of different reasons. One is it shows a little bit about what the impacts of the construction will be. It talks about sort of how much value is being brought into the city. Uh it also is something that is taxed. Construction sales tax is based somewhat uh in a complicated way on capital investment. And so those are re revenues that can come to the city. We look at what the potential revenue and the jobs created by the project are both in terms of its initial construction and then later in that ongoing maintenance. And then we look at potential secondary economic or public

benefits. Back to that question of purpose. What is this particular project trying to accomplish? How does that impact our community? Would there be positives for the citizenry? Would there be negatives for the citizenry? What is that going to mean in terms of use? potential resource requirements of course going to be a specific here water power land many of the other things you're going to hear about in the next few slides and then some of the potential impacts challenges or required mitigations. What's the size of the particular facility that's trying to come here? What are the things that where is it going to be able to be located and is that going to impact other users in the area? How is that going to impact the values of our community as put through in the code and in council policy? And then finally, other information relevant to assessing the project's costs and benefits. If it is going to be on city-owned land, are they trying to rent it? Would there be some real benefit in terms of revenue? Are they going to be putting in infrastructure in that could be beneficial to the community and the city in other ways? So, what are those individual pieces? Because remember, every single project that comes forward is different. And so, looking at what those pros and cons are can be very complicated. Um, but there's usually multiples of both, right? there's the good things that are going to come from the project as well as potential uh consequences that we can work to mitigate in that situation. It's really economic development team's intention to ensure the business understands if there is a timeline, zoning, or other constraint that will impact a potential opportunity. First and foremost, we have to tell them there's going to be a procurement process that's probably going to be required for any use of city-owned land. Second, we want to make sure they understand that that there is um many parts of our code that help define the values in the community and they're going to have to work within that no matter how exciting they are about their project. But we also make these meetings about communicating with our city colleagues for these real-time opportunities and providing these details that assist in policy discussions. It's really in these situations where we see who's interested in being here and what they're trying to

bring and that helps really take the policy conversation and ground it. this is kind of the thing that we're looking at. This is what the revenue that would be produced is. This is the kind of energy that's going to be used. Until we have real projects on the ground, we're guessing about what's going to be interested in being here. And so part of our intention in these types of conversations is helping the developer know what their potential timeline could be, what the other u issues are, but mostly it's about making sure that the different divisions that are involved and the different uh parts of city leadership know what the potential for possibilities are and what some of those good and bad pieces are that would have to be looked at. And with that, I'm going to hand it off.

Thank you, Dave. Good afternoon, Vice Mayor and Council. Nicole Antonopoulos, sustainability director. So, as of late January 2026, there were just over 3,900 data centers across the United States, nearly 37% of the world's total. Yet, market trends suggest that hyperscale development, so the largecale development is highly concentrated in just a few regions. And you can see on this map on the right side of the slide the density of those 3,900 data centers. There are um these developments as I said are focused in just a few regions and these areas serve as national hubs for cloud and AI infrastructure hosting a disproportionate share of large-scale facilities given their size. So 60% of US data centers are located in 10 states. As of January 22nd of this year, Arizona hosted 146 of those data centers. Data center expansion is unfolding at a larger scale and faster pace than ever before. They are framed as urgent strategic national infrastructures. Yet their impacts are felt and experienced locally. We have a lot to learn from these 3,900 communities from impacts to solutions. Regarding sustainability impacts, what we have learned are there are consider considerable local impacts to water, energy, air quality, equity, noise, and land degradation. As technology advances and computing demand grows, data centers are becoming increasingly energy hungry. Estimates of total future power demand from data centers varies significantly. One study

from the Lawrence Berkeley National Laboratory found that data centers could represent up to 12% of all US energy consumption by 2028. APS recognized the growing energy demand of their grid in their 2023 integrated resource plan. They recognized it as the number one driver of growing energy in their service territory. This all adds up to concerns about rising power costs across the United States. In 2025, we saw over $60 billion worth of rate increases across the country w increases countrywide with Americans paying almost 10% more for electricity on average compared to 2024. The reasons for these rate hikes are complex and variable, but there is evidence that the need to procure and build new energy infrastructure for data centers contributed to price increases. Many states and utilities are exploring ways to ensure that data centers can come online without shifting costs to the rate payers. Last year, for example, the AE Ohio utility introduced a new rate schedule for data centers requiring them to pay for at least 85% of their energies they are subscribed for, regardless of how much they use. Data centers need a constant and reliable power supply. Many facilities rely on gas fire generation for routine operations alongside diesel generators for emergency backup and when the electric grid is below capacity thresholds. Air pollution is the most acute concern here. Fossil fueled power plants and diesel backup generators that power these data centers admit hazardous pollutants such as nitrogen oxide and fine particulate matters. increasing

rates of respiratory disease, cardiovascular conditions, and elevating cancer risk in nearby communities. From the literature, we found a trend in the lack of transparency around data centers. Research also shows that data centers are being clustered in areas that are already subject to high levels of pollution and environmental stress. This image on the right is of a data center in Ashurn, Virginia. It sits between the Washington and Old Dominion Trail, which is in the lower right hand quadrant of the photo. So that's visible in the foreground, and a largecale senior living facility in the background. Trail users and local residents alike are at risk from the line of huge diesel generators running down the right side of the building. I've circled that in red for reference. And then finally, we want to talk about the last two impacts. Research also shows that data centers generate significant noise pollution primarily from those diesel generators as well as the heating, ventilation, and air conditioning systems with internal noise levels reaching up to 96 dB well above the safety threshold of 70 dB which is equivalent to a washing machine. Larger industrial units can approach 100 dB which is equivalent to a jackhammer. The literature also shows that data centers generate significance significant amounts of waste heat and can create heat islands, raising surrounding air temperatures in the most extreme case by up to 16 degrees Fahrenheit and affecting areas up to six miles away from the data center. This added heat can impact local biodiversity and make conditions drier and hotter for surrounding wildlife and communities.

I'm gonna go ahead and hand it off to Lee Williams to talk about water related energy impacts. Thank you.

Thank you, Nicole. Mayor, Vice Mayor, Council, Lee Williams, water services director here to talk about the water impacts of data centers. Um, as CJ was saying, there's a just a huge amount of variability in these. Um, we have a small room, 12 square feet at one of our water plants where we have a rack of servers and it's one of the only air conditioned rooms in the plant. So, um, it's essential to run the plant. Uh, does that does that constitute a data center? And how much of an impact is that having uh all the way up to, as CJ said, million square foot buildings where they're consuming, you know, 500,000 gallons or 5 million gallons of water a day. So, a lot of variability and a lot of different trade-offs. There's different ways to run these that has an effect on the amount of water that they consume. Um, so, as I said, we have small ones that don't consume any water. They're air cooled. Uh we have large ones in other states that consume five million gallons of water a day. Um so different strategies. I'll go through these in a minute on how you can reduce the amount of water, but there's a trade-off. It takes more electricity to run these ones that don't use water. Um cooling methods used air cooled and there is water cooled. So air cooled is basically an air conditioning system for a room. Um if you've ever tried to run your air conditioner in Phoenix in the summertime, you know it's expensive. It takes a ton of electricity. So, that's that's the trade-off on those. Less water, more electricity. Um, water cooled, they circulate water through the data center to cool it off. Um, or even just evaporate the water. Uh, they don't use any kind of chillers, so you're sending a bunch of water up into the atmosphere and creating humidity in some areas and also using a ton of water. Um, we brought this before the water commission last month and they supported the idea of only allowing air cooled systems within the city of Flagstaff. Um, what does that mean? It's it runs on the same principles as an air conditioner, chillers, etc. Uh, frequently they'll have some sort of a fluid, typically water or an antifreeze that they circulate around uh to conduct

the heat away from the the processors that are doing the the computing and then bring it back to the chillers where they can cool it off again. Uh, local water usage is reduced. I have local underlined here and I'll get into that in just a minute with the difference between uh local water within the city of Flagstaff and then water that is used elsewhere for a data center. Um and as I said initial startup or the ones that have that are air cooled, you still have to put water in them or antifreeze uh requires some water to fill the systems and then because of mineral buildup they occasionally have to dump it down into the the sewer. um which is where we kind of got into the code with the water commission and with planning and zoning um with having to have a WHISA and having to know exactly what it is that they're going to be discharging to our sewer system so that it doesn't have a negative impact on our treatment facilities. Uh so direct versus indirect water usage. Um air cooled systems have a lower local water usage um but it's offset by increased electrical demand. Um, it's just kind of it's this reciprocal thing that we have with APS. Um, APS uses water to generate electricity. We need electricity to pump water around. So, uh, when I say it uses less water locally, we're still using water at a power plant somewhere else within the state or within the grid to generate that electricity, whether it's hydroelectric or whether they're pumping it out of the ground for steam generators in some form or another. Um, solar and wind generation can offset this in a significant way. Um, the problem with solar is that it's the sun's up during the day. These data centers need to run 247. So, they either need to have a backup uh battery bank or as Nicole was saying, they have to have diesel generators that run at night, which is typically the time when people want it to be quiet. Um, and then because of the connected nature of everything uh these days, regional water managers need to be in contact with each other with these things. Um, so most of

Flagstaff's water comes from the sea aquifer underground. Um, should we say no to data centers within the city of Flagstaff, but the county says yes, um, they would still be tapped into that same resource. Um, so it's just going to be a balancing act as to whether um they they're able to bring infrastructure, can they can they bring new water production, can they can they bring water conveyance to the city of Flagstaff that offsets their usage and it's a possible benefit to the community. Um, it's it's not impossible. So there's a lot of variability with what you need to consider when we're talking about data centers. And with that, I'm going to hand it back to CJ. All right. Now, so I kind of want to talk through uh what data centers actually look like in practice because, you know, as we've discussed, they're not all the same. And um just like that road analogy, uh the the range is enormous. And we're going to start at the very top and sort of work our way down. So this slide is that six lane Phoenix freeway of data centers. Um these are the hypers scale facilities. The one that the ones that like Google, Meta, Microsoft, and Amazon are building across the country. Uh we're talking about buildings that are over a million square feet. Um for reference, that's roughly twice the size of the Flagstaff Mall and I'm sorry, yeah, roughly twice the size of the Flagstaff Mall and the marketplace um combined. And so these these are, you know, campus scale facilities that they they probably need their own zip codes in some areas um and all of that. So let's talk energy. Uh the hypers scale data center consumes between 500 gawatt hours and 1.5 terowatt hours of electricity per year. Now those numbers don't mean a whole lot to me specifically. So to put that in terms that actually means something, that's the equivalent of the energy consumption of 50,000 to 150,000 average American homes. Um the entire city of

Flagstaff has, I believe, roughly 30,000 housing units. So one of these facilities could use two to five times the electricity of every home in our city. Um that's a staggering number. Um and I want to make sure that lands, you know, two to five times of every home in Flaxa from a single facility. Now, let's talk water. Um, and uh, this is where I think a a local comparison really helps. Um, Hypers scale facility uses between 1.5 and 5 million gallons of water per day, every single day. Um, that's the equivalent water usage of 3,000 to 10,000 average homes. Uh, but here's a comparison I think resonates for Flagstaff. Uh, we have four golf courses in our region. An average golf course uses somewhere between 500,000 and a million gallons of water per day. So a single hypers scale data center on the low end uses more water than all four of our golf courses and on the high end could be equivalent of maybe 10 golf courses worth of water every day year round. These facilities don't take the winter off. Now I know um some folks in the community already have strong opinions about golf uh course water usage. So imagine putting five to 10 more golf courses worth of water demand on our system except instead of green grass and frustrated golfers, you get a big gray building. That's the hypers scale world. Um, and here's the part that surprises a lot of people. Despite consuming the energy of a small city and the water of a chain of golf courses, a hypers scale facility only generates about 30 long-term jobs. Good jobs, don't get me wrong. 60,000 to 120,000 salary range, but only 30 of them. Such a data center would also generate somewhere between 1.25 and $3.6 million in annual city revenue. Um, this is kind of just an estimate, but primarily from uh projected property tax revenue and APS franchise fees tied to the facility's energy consumption. Um, actual revenue would depend on the assessed value of the facility, how it's classified, and the energy it ultimately

draws. Um, that's meaningful revenue and likely why some communities have allowed uh data centers in the first place. Um, but the jobs to impact ratio is well, let's just say it's not going to solve solve our workforce housing problem. 30 jobs is barely enough to fill an HOA board these days. So, these are the kind of facilities you read about on the national news. They're what's driving the conversations in places like Northern Virginia, Virginia, central Ohio, and the Phoenix metro. Um, they are real and the impacts are real, but as we'll see in the next couple of slides, this is just one end of a very wide spectrum. Now, uh let's step down uh from the hypers scale world and look at what's considered an average size data center. roughly 100,000 square feet. That's somewhere between the size of Fries and Sam's Club for those of you who are kind of visual thinkers. Um, now I'll note that this average is based off of an older industry standard. The national average has been creeping upward in recent years because of all the hypers scale construction, but 100,000 square feet is still a very common size for a standard commercial data center, and it's a useful benchmark for our conversation. But even at this size, the type of work happening inside the building matters enormously. This slide shows what happens when a 100,000 square foot facility is dedicated to AI training workloads. Now, let me explain what AI training actually is because I think it's important. When companies like OpenAI or Google are building a new AI model, uh the kind of thing that powers chatbt or Google's Gemini or any of those other ones that you've used, they're essentially feeding enormous amounts of data through an incredibly powerful processors for weeks or months at a time. That's AI training. It's computationally brutal and it requires an enormous amount of electricity and cooling. An AI training facility at around 100,000 square feet consumes about 150 gawatt hours per year. That's

the equivalent of about 15,000 homes. On the water side, we're looking at roughly 500,000 gallons per day, equivalent to about a thousand homes or roughly the same as one of our golf courses. So, we've come down significantly from hypers scale. Uh this is about a tenth of the energy, but it's still substantial. 15,000 homes worth of electricity is nothing to wave away. There's now there's a couple of practical realities worth noting here. First, AI training workloads overwhelmingly go into those hypers scale facilities, the million square foot plus campuses we just talked about. The computational demands of training are so intense that companies typically need massive purpose-built infrastructure to do it. A 100,000 square foot AI training facility exists, but it's the exception, not the rule. Most AI training uh is happening in those hypers scale facilities we talked about in the last slide. Second, even setting the building size aside, AI training operations needs proximity to deep pools of AI research talent. We're talking about PhD level machine learning engineers, data scientists, specialized hardware engineers. The workforce concentration that exists in the Bay Area, Seattle, Austin, you know, Flagstaff has NAU in a terrific community, but we're not an AI research hub. uh a company looking to site an AI training data center isn't going to pick a location where they can't recruit the specialized talent they need. It just doesn't make economic sense for them. So between the zoning constraints we already have and the workforce realities, the likelihood of a dedicated AI training facility landing in Flagstaff is quite low. To go back to our road analogy, this is more comparable to say a three to four lane freeway than that kind of six lane freeway we were talking about. Now, this is where I'd ask ask council to really lean in because this slide uh starts to change the conversation as we bit dip below that kind of 100,000 square foot building, but instead of AI training, we're talking about

collocation or edge computing. Um, which I'll explain in a in just a minute. Um, and you you know, you look at that first line under energy impact, positive impact or up to 80 gatt hours per year. You notice it starts with the word positive impact. That's not a typo. Let me explain why. Right now across Flagstaff, we have dozens of independent server rooms and data closets scattered all over the place. Each run each one is running its own cooling system and its own backup power. The city of Flagstaff has two primary server rooms. Each one has its own dedicated cooling infrastructure and diesel backup generators. We also have several smaller server spaces around the city that have similar uh those smaller scale cooling and backup needs similar to what uh Lee had described earlier. Coconino County has a couple of locations with their own setups. Uh FMC has the same. I'm sure Pyina has server infrastructure. Gore probably has a server room that's nicer than my office and probably better air conditioned. Um but here's the problem. Every one of those facilities is independently over consuming energy for cooling. Cooling is by far the biggest energy cost for any server environment. And when you have a dozen small rooms each running their own systems, none of them are operating at peak efficiency. It's like h having a family of five each driving separately to the same grocery store instead of car pooling. And here's the kicker. When the power goes out, we need to spin up more than 10 uh diesel generators at various locations across the city just to keep all of these separate facilities running. 10 plus uh diesel generators, each one burning fuel, each one generating emissions. As we heard earlier in this presentation, diesel generators uh create real environmental and air quality impacts. Each one also uh requiring its own maintenance contract, fuel delivery, compliance, etc. It's expensive, it's inefficient, and it's the opposite of what we want from a sustainability uh standpoint. Now imagine we colllocated all of that city, county, hospital,

Gore, Pyina, you know, the list goes on in Flagstaff into one shared facility, one centralized optimized cooling system instead of a done dozen inefficient ones. One set of backup generators instead of 10 scattered across the the city. Um, it's not just an energy win, it's an air quality win, too. The energy math works in our favor. So, a collocation facility at its baseline use case would likely represent net energy savings for the community. It would directly support our carbon reduction goals um and and and really help uh from that perspective. Now, let's layer on something else. When you sit down at night and you fire up Netflix or YouTube, I'm not going to ask you who among you watches reality treat TV. That's between you and your streaming algorithm. Um but those videos have to come from somewhere. If every time someone in Flagstaff hits play on Stranger Things, that data has to travel all the way down to a server farm in Phoenix, we would just bog down the internet for the entire community. Everyone's Zoom calls would start buffering, and nobody wants that, especially after what we all went through in 2020. So, what do these companies do? They ship physical server nodes, small racks of equipment into local communities and preload them with the most popular content. It's called a content delivery network or CDN. When you stream a show, it's almost certainly coming from a server that's physically much closer than you think. Now, I'm not 100% certain um there are NDAs involved here, but from what I've been able to explore, it's very likely that these uh CDN nodes already exist somewhere in Flagstaff. Companies like Netflix, YouTube, and others are not eager to publicize exactly where that infrastructure sits, but these nodes are standard standard practice in any community of our size. They almost certainly already live here. They're probably in some closet in a commercial building paying rent right now. Collocating these nodes into a shared purpose-built facility would also save

energy. Better cooling, better power management, less duplication. And then we start talking about the elephant in the room, AI. Um, there's a term called AI inference, which is part of the AI that people don't hear about on the news because it's not as scary enough for the headline in in regards to this discussion. So AI training as I mentioned is a power- hungry phase where models are built. AI inference is what happens after it's the serving of the already trained model. So when you ask Siri a question, when your phone autocomp completes a sentence, when the doctor's office uses AI to help read an X-ray, that's inference. It requires dramatically less power than training. And similar to the Netflix comments, there's our advantages to having certain AI workloads closer to the source. And then I want to take a moment to talk about where the industry is going because I think it's important context. The energy impact numbers we're showing tonight are based on where things stand today. But the the trajectory of the industry is is moving strongly towards efficiency, not just scale. Now don't get me wrong, we're scaling at the same time, but they're also working on the efficiency side. So a few things worth noting. Uh the AI models, they're getting smaller and more efficient, not just bigger. While some companies are still building building massive frontier models, a growing share of the industry is focused on making models smaller and more efficient. A technique called mixture of experts allows a model with a trillion total parameters to only activate a small fraction of them for any given task, dramatically reducing energy per query. A UNESCO report found that tailoring AI models to specific tasks can reduce energy consumption by up to 90% when we're talking about serving AI. In fact, I am currently running a brand new AI model from Google locally on my smartphone. Not going to any servers, not going to any data centers. It's it's literally running and I can ask it questions without internet access on my phone. There are more and

more options to run AI models locally on uh a machine smaller than my laptop. It consumes about as much energy as a gaming computer your kids might have at home. If you've got a teenager with a gaming PC in their bedroom, congratulations. your kid's Fortnite habit probably uses more electricity than the local AI model. That's the reality of the AI inference at the local level and it's and it's we're heading more and more in that direction. Um IBM's principal research uh scientists recently stated that 2026 was going to be defined by the split between frontier models and efficient model classes like I described. Uh additionally uh zero water cooling is becoming an industry standard. Microsoft announced that all new data center designs starting in August 2024 will use closed loop cooling that eliminates uh water evaporation entirely. Their Arizona and Wisconsin pilots go live in 2026 this year. Um each facility saves over 125 million liters of water annually. Uh and then data center data centers are being designed now to support the grid not just consume from it. Um, a study published in Nature Energy demonstrated softwarebased systems that allow data centers to adjust uh, workloads in real time based on grid conditions. Uh, most energy providers, you know, run at around like 60% capacity because they have to plan for that worst case scenario, that hottest day in the summer where everyone's got their AC on, it's the maximum demand. Um and so what a lot of these new things are doing is they're starting to actually work on turning down the data center during those peak demands um in order to you know you'll get slower AI responses you know if you're using chat GBT or whatever um but it saves uh on energy usage. So um so when you kind of look at this you know when we talk about uh total energy impact when we talk about collocation getting all of our stuff together we look at some of these efficiencies on the smaller scale we actually could have a you know even a positive impact but as we start to add some of those other

things on top of it there still will be an energy impact. Water impact as we described can be extremely low. the more we we focus on air cooling as opposed to water cooling, the more we get closer to zero with that that water impact. On the economic impact side, we still have kind of a similar 20 plus jobs um and and a certain amount of you know estimated uh city revenues depending on that. So I think this slide will be the funnest one for you guys to look at. Um so let's put this kind of in physical terms because I think seeing this on a map really drives the point home. So during the planning and zoning commission meeting, I was asked, "What does 1 million square feet look like versus 100,000 square feet?" And frankly, I had no clue how to visualize that. Um, so I brought visuals. So on the left side of the screen here, you'll see some building front prints you're familiar with. Uh, Pyina 576,000 ft. Harkkins 72,000 square feet. Fry grocery store 71,000 ft². Sam's Club at 148,000 square feet. Um, these are buildings that you drive past every day. So, they're they're part of the community. So, I kind of want you to hold those sizes in your mind when you think of of scale. Now, a hypers scale data center is over 1 million square feet. That's bigger than the mall and marketplace combined. An average data center is about 100,000 square feet. So, that's somewhere between a fries and a Sam's Club. However, collocation data centers can literally be as small as like 10,000 square feet. you know, there could be a sweet spot where we're talking more like 10 to 30,000 square feet. So that's kind of basically the size of a large retail storefront. And then here's where it gets really interesting. So this is the part where our existing zoning code does a lot of heavy lifting already. So data centers as currently uh classified fall into heavy industrial zoning. In all of the city of Flagstaff, there is exactly five zones um classified as heavy industrial. Five. That's it. And of those five, only three are even remotely viable for any

kind of development. So the other two, the one north of the area shown on the screen is a cinder mountain that's actively being mined. Uh data centers need flat stable land. So unless someone figures out how to build a server farm on a volcanic uh cinder cone, and I wouldn't put it past Silicone Valley to try, uh that's not going to work. The other is where the Flagstaff Police Department currently sits. I'll go at a limb and say we're probably not relocating the police station to make room for a data center. Chief would have some thoughts about that one. So, we're left with only the three zones shown in purple on the screen. The one on the left is the largest, but it's predominantly a flood zone. Flooding and servers don't mix very well in case you didn't know that. Uh the one below it is tiny, barely enough for a kind of a small warehouse, let alone anything any meaningful data center facilities. So that leaves one zone that could support a significant data center structure, just one. The heavy industrial zone on the right side of the screen is about 18 acres. So this is the only realistic viable when we're talking about size, when we're talking about large scale. It's right next to the Wildcat water treatment plant. Um the space immediately adjacent is where our solids processing happens. That's the less glamorous side of water treatment. And I'll leave it that at that. Um, there are already heavy trucks, industrial machining, uh, machinery going in and out of this area on a regular basis. The ambient noise and industrial character of the site, it's likely comparable, if not louder, to what a data center would generate. Um, I'm going to I'm going to just skip straight to the the size overlays. So, when you look at these these three squares, I've got a green square around that zone right there. That green square is what a 1 million square foot facility would look like. So even if someone with a blank check said we want to build a 1 million square foot facility in Flagstaff, it doesn't fit. Uh we we cannot put a 1 million square foot facility here. All the other ones are are smaller or awkward or in flood

zones and that sort of thing. The yellow one represents kind of a 250,000 square foot facility. I think that would fit. I don't know all of our offsets and you know requirements from that. it would be tight. They could probably make it work. Um, and then 100 thousand square foot is is kind of um of what the the red one um would look like. So, that's just kind of giving you kind of a a sense of scale of what we're uh sort of talking about. One thing I should mention that isn't shown on the map, data centers can also be cited in light industrial zones, but only with a conditional use permit. Uh which meant uh means any proposal in a light industrial zone would have to come before council. uh before um approval on that. Um which means if one of these does show up in a light industrial zone, you'll get to spend another Tuesday uh evening with me talking about it. Something I look forward to. Um but no, when I looked at all the light industrial, most of those parcels were kind of 3 acres to 5 acres. This thing's an 18 acre. We just didn't we don't have anything in that light industrial that would support anything of a scale even close to this. So, you know, here's the takeaway. If council changed absolutely nothing, you know, when we when we start talking policy in a couple weeks, um not a single line of code about our zoning, even if they came in and said we want to build it, it you know, a hypers scale facility, it doesn't fit at that scale. Um and so then I think I just want to kind of close with this. What defines a data center? I think this is an important discussion. Are we talking are we talking about million square foot facilities when we start to have some of these conversations? When we start to talk policy in a few weeks from now, we're talking million square foot facilities, big impacts, probably not the best fit for our community. Are we talking 100,000 square foot facilities? There could be, you know, in the subund,000 collocation facilities where we actually have a positive impact from an energy usage perspective. We're

talking server rooms. Does any equipment uh count? What about networking equipment? We sent Centry Link, those types of things. they have individual structures that just deliver internet to your homes. Um, are those the types of facilities because under certain definitions and as as we talk about what is a data data center, what does that mean and what are we actually kind of looking at? So, um, that's the thing I kind of, you know, want to get across. The term data center does matter in all of this. We can scale it up, we can scale it down, it has very different impacts on our community. So, with that, I'm going to turn it over to economic development again to walk through economic impacts. All right, Dave McIntyre again. And you've already heard um through some of CJ's slides and some of the earlier conversations a little bit about the e economics. We're going to get a little bit more granular here. So um starting with indirect impact and and actually it it's kind of interesting because we say the potential impacts of data centers but what's interesting is that on the two slides one talks more about the impacts of not having data centers and one talks more about the impacts of of having data centers. So I want I want to acknowledge the title is a little bit of a misnomer because this first slide is more about what happens if we don't have data centers available in our community and one is that the economy is using AI and big data more and more in different ways every day. Um we don't know exactly where that's going to go. That's one of the really interesting parts of being alive in this time right is we don't know what AI, what big data, what computational um models are going to be required for the economy of the future. But we do know that we're already a community that has companies that have major computational needs. We know that we're already an economy that has significant tech companies here. So, so we know that maintaining that diverse economy requires the ability to provide some form of digital infrastructure

necessary for them to achieve their goals. because if they don't have, as CJ said, the proper roads, if they don't have the proper digital infrastructure, they may be forced to go somewhere else. And and in another um venue, we probably won't see folks come here if they're not able to bring that digital infrastructure with them. And so there is these questions about what what is the uh ability to retain and attract business going forward into the future. And and I'll admit I've talked to a couple different businesses that have really significant software needs and most of them said, you know what, we're fine with the latency that we get with going to Phoenix and back or going to Atlanta and back with your data. But we do know that when you're talking about things like for instance medical procedures or other um uh big data type situations with some of our tech companies uh especially if we do start moving with one of our sectors into space uh those types of things are going to take significant computational power and having the ability to have some of that here so that you don't have latency, you don't have uh the ability for disruption could be impactful. Outside of just what our business community needs, there's also the services to existing businesses and residents though. Um, as CJ mentioned, you know, on a very a very interesting uh type scale is is the Netflix, right? And and we know that if you have 20,000 people trying to stream the same kinds of movies, you're going to get that buffering. But also, we know from from co as CJ said that communications can be disrupted if people are trying to use the network too much. And so if you start seeing uh situations where our future tools become more and more data heavy, it is possible that not being able to have uh facilities in the community could be impactful in a way that would reduce the ability of citizenry to get certain services. Um, one example and and I've thought about this uh in terms of the conversations we've had about parking garages where we know that there's this uh belief and

idea in the future that we'll have autonomous cars that will make it less likely for us to need parking. One thing that I've been told and and I'm not an expert on this is that oftentimes with autonomous vehicles, they want to have data centers nearby because as the autonomous vehicles need to be able to process at a very instant level and you can't have that latency that's potentially possible if there's a disruption between you and Phoenix or you and Atlanta or you in Seattle or wherever the data center is. So I think there's these interesting questions that we don't know where the techn is going yet and so having that ability to adapt to it becomes more and more important on more of a direct impact capital investment could direct um you heard some ranges and and I will I will fully admit that what we're talking right now is not a company who's come to talk to us that we now have granular data on right this is just us sort of trying to extrapolate in a way that creates some context text. And so these numbers are very much us making certain assumptions in a very complicated situation. And it's funny because I did reach out to uh Rick Tatter, RTA TAD as you know him. And um he he looked at me and I said, "Well, can I can I make this number, you know, if I do this construction sales tax would be about this, right?" And he's like, "It is so much more complicated than that." Uh so we're doing the best we can with some generalities uh knowing that it does become much more complicated but capital investment could generate as mentioned before one-time city revenue and short-term construction and project management related jobs. So, if we took about $125 million project, which would be one of those smaller scale uh facilities that CJ was talking about, it could generate up to six 760,000 or so in general fund construction sales tax, 1.1 million in transportation construction sales tax, and there could be between 2 and 800 short-term jobs providing that economic activity. We heard about some of the construction projects earlier tonight that are going

on. And you think about that road analogy the same way. all those construction workers coming into town, they're going to be spending money here. They're going to be a part of our economic activity, and that does provide that short-term bo boost. Similarly with a data center, the construction of one, just like a hotel, just like any other major infrastructure is going to create that short-term boost. But um we would also have ongoing estimates of roughly 125,000 for property taxes and 100 to 350,000 in franchise fees depending on how much power they were using, things like that. So again, these are generalities, but some idea that there would be uh potentially a consequential economic benefit. Ongoing employment is more limited. I can tell you the economic development program has not been focused on uh data centers even though they were kind of a hot topic many years ago even. And that's in part because we really did believe that it wasn't something where the economic impact was worth the potential costs in those earlier days. As technology continues to change, we think those numbers are starting to shift. and we wanted to bring it forward, but it's never been something that we were focused on because those long-term ongoing jobs is really where your economic development program focuses and data centers just aren't focused on long-term economic jobs. But I will say that even with 20 or 30 jobs at 60 to $100,000 per year, that's an impactful business here in Flagstaff. That's one that we'd be excited as an economic development team to bring. And with that, learning from others. Heidi Henson.

All right, we're we're almost finished. You've been very patient. Um, so what have we learned from some other cities? I think these are some important points that I'll be sharing with you. Um, first off, it's important to note that we play the most critical role in how we want to shape this. So, you as city council will have a lot to say about this. Um, we're going to do that through zoning, permitting, site plan review, and more. um we we are going to be able to decide what we want that to look like in our community. Second, cities can influence whether data center growth will raise costs to their residents. This is an important one. So meaning we can require evidence that a new project will not shift costs to our rateayers. We can also encourage they offer more storage for example and we can require in the process that they coordinate with all of our divisions not just IT or economic development and to also to coordinate with our stakeholders especially our utility sector. Did I did the slide go?

Yeah. All right. I didn't see it go. Um next our cities can set clear expectations around water use. all the things that we talked about, water use, air quality, noise, and protecting our ecosystem. We can take it a step further and regulate the water use. We can mandate reporting to us and much more. We can also influence and determine whether data center development delivers real economic value. And we do that by using tools. We can ask we can do that with performance-based incentives, having workforce requirements to help strengthen our employment, and much more. So, for instance, if we don't feel like they're going to bring enough jobs, that could be a requirement that it's a no-go. And last but not least, uh many cities are creating what is called a community benefit agreement. So, this is something that might spark your interest. These CBAs can be legally binding between a project developer and the city of Flagstaff. And what's a highlight of this is in some cases the CBA development is including the residents and the businesses to participate and to contribute by giving developers clear clear expectations how they want to see something like this working so it's more useful for our community. So there can be a lot of engagement in this process. Um, so these are just some of the lessons that we um gathered from other cities and what they're doing. And I think the agreement is a really exciting idea, something you might want to think about. And with that said, I'm going to turn this back over to our city manager, Joan Keane. Great. Well, thank you. I just want to say thank you to this team for putting all of this work together and this presentation. Um, I think now opening it up for questions. And I do just kind of want to reiterate just one more time that we're we're not going to be talking specifically about the zoning code language that'll be coming to the council on May 5th. Um but open to other questions related to this topic. Thank you.

Thank you. And I see we have an online commenter. So right now for council I want to keep it to our questions then I'm going to take the online commenter and then we'll do more discussion. So, Council Member House,

thank you, Vice Mayor. Um, so I think most of my questions are coming to you, Dave. Um, thank you all for the the presentation. This was great information. Um early in the presentation you referenced um in terms of the value or the the info gathering um that including um community values and I'm wondering is part of the info gathering both the relevance uh to the community needs and the relationship to community values. So, are we looking if if there was a proposal for a data center here, um are we looking at how much it's actually addressing a community need, not just um kind of forecasting potentialities, I guess, with if we brought a a data center to the community. Uh thank you for the question council member and yes that's the simple answer is we would be looking to see what they're going to be bringing that could be of value to the community as well as how they fit within the values of the community right so so I think the answer is yes both um one is are are they bringing something that's going to allow us to have our businesses do better that's going to allow us to be more efficient as a community that's going to allow our citizens to have better um medical care or logistics or transportation or or communication. Um, is this data center providing a service to our citizens that they would not have or would not have as good a version of without it would be one of those values. But also, how do they fit within our community? Um, as as um what you heard earlier in the presentation, a million square foot facility just doesn't feel like it would fit Flagstaff at all character-wise. And and I don't personally think a 500,000 foot one does either. As you get smaller though, are there are there ways that it could fit

into the community that it could match the values where it could be something that's not going to be creating a problem for this or that and that we could mitigate the ne uh any sort of negative impacts. So, so it's a question of of both. It's it's what are they going to be bringing to us and there's also additionally that economic impact, right? So, what are they going to be bringing to us in terms of how do our citizens benefit? But also, is there an ongoing revenue that is provided to our uh city, our county, our school district? Um, and then also h how do they how do they match the values as identified in the zoning code? How do they fit in the community in a way that makes us still know that Flagstaff as the unique place that it is is still Flagstaff while having these extra benefits? So, I think I think it's Yes. And did did that get there for you?

It did. Thank you. Thank you.

Um, and before going into the the next couple questions, I just had this conversation with someone um, I think yesterday about um, I'm a contrarian, so I often ask a lot of whatabouts and and whatifs types of questions. That does not mean that I am opposed to what we're talking about. It's just kind of how my brain works. Um, so that said, uh, I'm also going back to the slide talking about the the impact or potential impact of, um, 200 to 800 short-term jobs providing economic activity. I'm wondering what happens when those jobs and that economic activity goes away. So, do you do communities see kind of a fall off or is it just kind of enveloped into the everyday goings on within the community or is there any negative impact to the fact that that many jobs would be just gone? So, so it's an interesting question and one that I think has um has answers that you we can see in there's a variety of answers to that question, but the the the way I would answer it first is saying that we see these types of things happen on a fairly regular basis, right? A major facility is built here in town. Um, sometimes a local contractor is building it, but sometimes they bring in a group uh from the valley or somebody who's more sophisticated in terms of not more sophisticated than our contractors, but they're using a specialized type of construction. And we have those workers come into the community to build that project and then at the end they leave. Um, oftentimes that provides hotel stays, that helps out with our restaurants, those are people that are spending money in our community. Um but it's not necessarily a major negative when they leave because they were here to do a job and and they supported our community amenities but uh but it wasn't created on a completely le on a level

that completely changed the fabric of our community. Uh the John Wesley Powell project which you just heard that is going to be a significant amount of work that is going to be done and all those people are going to be getting paid and at the end that project will be finished and those folks will find other places to work. Some in our community, some probably not. But in in terms of infrastructure, this is a fairly consistent uh situation and it's one that generally has that short-term benefit. I'm sure there are some restaurants or some hotels that feel the impact in a negative way when the project's done, but in general, they're looking for that next project that's coming in to to um to create that same revenue. And so that revenue impact is generally a positive. And I I think anytime the project's over, there are going to be some who who see their revenue drop off. But but overall it's it's something that happens in communities now. Um data center is just another big project that brings another group of workers.

Thank you. That's really helpful. Um going back to the economic impact that you were discussing and and this might be for you or CJ, I'm not sure. Um but I'm wondering about the longevity of long-term jobs connected to data centers. Do we have from other communities a sense of how long those jobs are like what the the long term is for a long-term job? Does that make sense? I think I'm going to let CJ start with this one and I'll add anything if I have something to add.

Yeah, I mean really uh again kind of going back to some of Dave's comments. You know, we're not we're not trying to get data centers in here because they create lots of jobs. the the the typical jobs that are associated with the data center is facility management. So you think HVAC, you think um uh you know people that put things in the racks, takes things out of the racks, um you know, occasionally you'll have engineers and stuff um that are that are here for a period of time and some of them will stay long, you know, time. Um but you know, it's it's a low number of jobs. The the interesting thing about it and I and I don't know if I didn't really kind of go into it but if you noticed on my slides a million square foot data center and 100,000 square foot data center had about a similar number of jobs. You know, yes, the million square foot had more, but not significantly more because once you get a facility of a certain, you know, how many HVAC people do you need for a single facility? You know, at a certain point, even if you scale up the number or the amount of that um you know, one person or two people or or whatever they're they're um hiring can already handle that. So, um that's kind of the types of jobs they tend to be. um you know higherend facility management sort of personnel and and IT related personnel. That's where some of these salaries tend to be up because there's a little bit more of a specialties when it comes to data centers versus a facility like this facility. Um but that's effectively, you know, uh the type of jobs that we're we're hiring for.

Thank you very much. And last question, I promise. Um, I'm wondering how much we're considering the revenuebased impact of data centers versus the environmental or overall cost and resources. So, so as mentioned in in previous conversations before this became more of a policy discussion, uh we as an economic development program were not super focused on data centers because we felt like the revenue generation pros and cons with the uh resource use wasn't wasn't there. as the economy is changing um and some of these situations are changing, what I think's become clear in some ways is that each project is different and that that's really what the questions that have to be asked of each project are is is what's the revenue that they're going to be bringing? What's the value that they're going to be bringing? Um and then what are those cons? And and every project is going to be is going to be very different. If you're talking about a a 30,000 square foot or a 40,000 square foot facility that's able to provide a service to um some of the businesses that are here or some of our other institutions uh and is not going to have a significant impact on the environment. I think that's one pros and cons to weigh. If you're talking about a much larger facility that is providing service to other communities through a major company and creates the heat sinks that we've talked about and uses significant then that costbenefit ratio changes significantly. So, so I think the the key from from our perspective is is that you need to look at all of those for each project. And that's I think what some of the policy questions that we're talking about here is is what's the right number of gallons in a closed loop system? Um, and what's the right amount of energy to offset this particular benefit? And and at the moment, it really is an individualized project type of a situation where if someone comes in and they want a site on city- owned land and it's a low impact

situation that's fully fueled by solar power and doesn't use much water, but generates a lot of revenue that could go into uh helping with other council goals. Perhaps that's a good idea, but we won't know until we sort of see what those things that have to be mitigated to get there are. I hope that's a helpful answer. Very much so. Thank you.

Thank you. Yeah. And if if I could just quickly add to that as well, you know, there's there's the direct economic impacts, you know, when we talk about revenue impacts to the city and then there's a lot of those indirect. That's why I like the road analogy even though it's not a perfect analogy. Definitely not. But like, you know, why are we extending John Wesley Powell because we're adding ability to build infrastructure within our community. So when you kind of look at data centers as kind of the digital roads, the digital infrastructure, you know, I don't want to Phoenix style freeway through Flagstaff. We don't want the hypers scale, you know what I mean? From from a a community core value perspective, but some of those are are a little bit more difficult to quantify how much impact will John Wesley Pal, you know, bring to the community. I think we have an rough idea that the digital one is it's becoming a bigger discussion and a bigger impact. um uh as a lot of these tools are coming up, but it's also a little unknown. And so that's um that just ties into some of the conversation. That's why I like that road analogy.

Can I add just a little bit to this as well? I think some of the things that you're seeing in other communities is that um these data centers come into um communities and they offer to build infrastructure. So I think that's another economic benefit to a community if you can get um you know water, sewer, uh solar. I mean so are there there are things that they're bringing to other communities that are a benefit as well. Vice Mayor and Council, if I may add, we've also seen that other communities are utilizing matrices to help analyze because as you've heard tonight, the variables are so vast that without having it all really in front of you in a complete analysis, it would be really hard to weight that. So, we have seen that other communities are using that as a tool.

Thank you all. Thank you, Vice Mayor. Thank you, Council Member Garcia.

Thank you, Madame Vice Mayor. Um, and thank you team for the presentation. I had a question for Lee. And if you want to go back to your water slides, Lee, you you you just kind of touched on the fact that, you know, there's only one aquifer that we're feeding these any systems off of that requires water that's pumping directly from beneath us that carries on into the to the uh county as well and beyond. Um, so when you were mentioning that, the thing that I kept thinking of was, is it more advantageous for uh you as a as a as a our water resource director um to be able to manage that system through um through our pipes here? Or do you see it uh or do you see there being a bigger disadvantage for um allowing them to pump out in the county um kind of unwilling unwieldingly? Uh, thank you for the question, Council Member Garcia. Um, I I I kind of go back and forth on this one. Um, it's it's more for us to manage. Um, and if they are putting a burden on the community by us having to have larger crews to maintain the infrastructure to supply the larger amount of water to them, then then we need to negotiate something to get out of that. Um, but if they're bringing with them, as I think did did Joan just say, if they're bringing infrastructure with them, they're bringing the pipes, they're upgrading our wastewater treatment plant, they're developing a wellfield, they're developing solar that we can use to offset our electrical demand. Um, it could be a benefit. So, um, I'm sorry I don't have a concrete answer for you. There's just a lot of variables to kind of weigh back and forth. Um, so it could go either way.

Yeah, I'm I'm I'm happy to hear that that you thought about that this at least in some detail. We also have heard or at least I have from community members that are concerned um and and may not be experts about the amount of water usage that each uh of these places uh will be using. And then we sometimes hear contradictory um news articles from data centers that are saying they're reusing their um their water uh at a at a higher degree. Uh what what do you know about data centers and their use of water in that context? Uh so so again it's very variable but my my understanding from the research that I've been doing in the last six weeks or two months is that um when when data centers first these these large scale ones and I'm talking about the smaller ones that CJ was mentioning but these largecale data centers when they came out a few years ago they they moved into cities and cities didn't maybe really know what they were getting into and there's a lot of negative effects um since then there's a lot more awareness as we're developing right now um of of potential negative effects and people know about it which means it gives data it gives it gives the citizens negotiating power with these data centers. So we can we know what's coming into our community. We know what the effects are going to be and we can say well then what what are you going to bring to us rather than just this you know three years ago just this unknown coming into your community and all of a sudden like oh wait a minute we're using a million gallons of water a day and it's taxing our resources in various ways that we never knew about.

Cool. Thank you for that. My next question will be for CJ. Thanks a lot, Lee. Thank you. Good answers. Hello, CJ. How's it going? What a an effective delivery and thank you so much for adding some some humor and also some, you know, keep keeping things light up here while uh educating us along the way. Yeah, sorry. I've got three kids. The dad jokes just come out all the time. My apologies.

We do appreciate them. And I really like your analogy about that uh extra road down to Phoenix. You know, while I I don't think a whole lot of us would like to see a six lane highway in each direction going up and down the hill, folks that travel it frequently might advocate for one more lane um on most days. As we grow, things grow with it. Yep.

Which which kind of brings me into the the data question. So, you mentioned there's some 3,000 um scattered across the United States in in different areas. Is there a particular reason uh I can't imagine one, but you would know if anybody would here that they would that a data center would choose Flagstaff specifically u whether it be for um the amount of use that Flagstaff could could use it for or or any other reasons. And I I mentioned that because you you'll see manufacturing companies choose Flagstaff because of the connectivity through our road system. Is there any reason why geographically on this map a data center would just need Flag Staff?

The only one that I can really uh see is there's a lot of data centers going into Phoenix. And if you know about uh cooling in Phoenix, it's a little difficult to do that when it's 125 degrees outside sometimes. Um so that's literally the only only real one that kind of comes to mind especially when you when you consider at the large scale is typically in a data center you want it to be about 80 85 degrees is kind of about where they kind of keep them on the inside. So you think of like our weather most of the year. That means they could do more passive cooling um that type of thing uh during certain times of the year or significantly reduced um energy usage and cooling because the outside air is already freezing um cold. So that's kind of the only one that really comes to mind. Again, the only real exception and again trying to differentiate between what a hypers scale AI model training sort of thing. Um but at that lower scale that content delivery that get the data as close to the end customer so latency is as quick as possible that's the real benefit and that but that's not specific to Flagstaff that's specific to any community of you know any moderately substantial size and we're kind of a central hub for Northern Arizona. So from that content delivery, but we're again that's getting into that 30,000 50,000 square foot facility maybe topping out at 100,000. I I can't really see a a justification for bigger than that with the exception of cooling in Phoenix is a lot harder than cooling in Flagstaff. I knew the answer to that question when you mentioned it and uh and I would didn't want you to actually answer it but I knew that we had to face that because I think that's what a lot of our community is uh is concerned about. David, did you have a little more to expand?

Oh yeah, sorry. If I could just add a little piece to why why they could be coming um is also Arizona does have data center tax credits at the moment and so I think that's something that could be encouraging. That's for Arizona as a whole and we're seeing a lot of that down south. But there are tax credits for data centers in Arizona um worked through the Arizona Commerce Authority. And we've actually in some of the conversations that have occurred in the past. Um there's been the question of solar power is is obviously better here than in some places. And uh and that can be helping to offset some of those energy uses. So I would just wanted to add those are two things that make Arizona attractive. Not Flagstaff in particular, but Arizona.

Hey, that's Lee. just to add to the other two's comments. Um, and take this with a grain of salt. This is from one contractor that I talked with, but um, data centers are looking for um, a number of things. One is a population center nearby of approximately 100,000 people or more. Flagstaff is pretty close to that. An interstate highway, power transmission lines, and Northern Arizona is one of the best places in the world, I just learned this, to generate solar electricity. So they've kind of rebranded some of these and call them solar server farms, but um essentially we we have a lot of the things that they're looking for for some of these these facilities.

Thank you, Lee. And I can see why our con community is so concerned. CJ, one last question. So at the end of what you were mentioning, you talked about um like having local server to serve local communities for less latency, which I thought, well, that's awesome. But when we talk about this as a polit in a policy discussion, I wonder if you had any input on um can we um bind data centers to that because because my envision is is we do this for all the right reasons. we get we make sure that we establish it so that way we're only using the data that Flagstaff is using and it's a perfect world and then you know Netflix comes in and says well we're just going to take up all your data use space

council member I think this is a great question for the fifth okay sounds good then I'll I'll leave it at that um but but yeah secret of my own we'll be well I'll I'll be putting my festive hat on for that occasion and you bring me a real festive answer if you could I'll bring more bad jokes. How about that?

Right on. And then also, uh, Joanne, while you're our city manager, Keen, since you're on the mic, um, another question that's likely for the 5th, when it comes to the, uh, yeah, for May the 5th, be with you. Uh, then we will uh, so the the question is the planning and zoning meeting. Um, I was confused of the outcome only because I figured that that meeting was designed to establish rules for something that we didn't have rules for already and in the end they just took all the rules away. So, we still have no rules. Are we still in the place where we're establishing those rules? Um,

um, Council Member Garcia, that is also a question for May the 5th, not May the 4th. Okay. close, but I have it down here. We'll be ready for that as well. All right. Thanks. Let it be known the city manager is pleading the fifth.

I have a couple of questions and then we'll move on to the online commenter. And my first thought, and I did um let our city manager know that I'd bring this up tonight, although I'm sure we will talk about it on the 5th. I'm wondering um why we're targeting the word data center when when I look at this, I I'm thinking large volume watery user. And when we do bring this back, I would maybe like to think about um not not being so specific and maybe broadening the the conversation to include chip manufacturing or something else that might take these resources. Um Lee, I had a question for you and I'm sorry I didn't email them. I was traveling all day and got stuck in a road closure on I17. So, um I apologize. I'll do my best.

Uh there was a lot of talk. So I've watched all the meetings and I went to the NAMWA meeting last week. Was that last week? Yes, last week. And there was a presentation um by a gentleman who helps build largecale data centers. It's very very fascinating to hear him speak. But he talked about two things that um I would like to ask. One is have we did you go over water recapture in regards to sewage and treatment

earlier in the presentation? I did not. Can you touch on that a little bit? And if not tonight, we can always ask later. I'm sorry I didn't preass. Yeah. So, so maybe just to clarify, Vice Mayor, as you're asking, um, that they're they're using five million gallons of water per day, but how much of that is able to be recaptured and reused by either them or through the water reclamation process for golf courses and irrigation and such. Yes. Yeah. Um, I have not looked into that. I can look into it for the fifth.

Okay. If you could, that was something that um, the presenter really touched on that there was a lot of sewage that that was left over and how do we deal with that? The other question was or I guess a comment I wanted your thoughts on it. The presenter was predicting and you know this is just one presenter that I I I heard but he is building these centers that all centers by 2030 will need liquid cooling. So essentially water. So can you touch on that a little bit? Um yeah, I I to the best of my knowledge um I think I stated earlier that there is some sort of a liquid even in the air cooled systems. There's a liquid that they circulate through the centers. It's like like your car's cooling system. Uh there's an antifreeze that goes to the radiator, it gets cooled off and then it goes back and cools off the components in your engine that are generating heat.

So even even in those systems, yes, there is some sort of a liquid. Um and then I think I mentioned also that it occasionally builds minerals build up in it. um it gets, you know, harder and it has to be discharged or they have to dump a certain portion of that. Um if it's antifreeze, they're going to have a different process for it through, you know, waste waste disposal. But if it is water cooled, then that would end up in our treatment facility. Um and whether we require pre-treatment for that water before it enters our collection system would be something that we're going to have to discuss through one of those uh Michelle McNelte is going to be more more up to date on the terminology here, but those development agreement type things. Okay. Um, thank you. That's that's a great answer. I think for my brain maybe at the next meeting when we talk about this audit at a different level, we talk more in depth on that.

I'd be happy to. Okay. Thank you. Thank you. Okay. At this point, I would like to take our online commenter. We have one online commenter, Brad Folet. Go ahead and unmute and offer your comments. Uh, can you hear me? Yep, we can hear you.

Thank you, mayor, vice mayor, and council members. Brad Flet spelled F O L L E T April 4th, 1970 and president of Earth Month Network and nonprofit here located in Miracle, Arizona. Our contact is earthethy.org. Center growth is expanding now to 4,231 centers in the United States, 157 in Arizona. Centers.

Brad, if you want to turn off your camera, it might work better for the audio, but you're cutting out. Brad, I think you need to unmute. Brad's using a data center in Phoenix. Okay. Did you What did you not hear?

Start over. I'm sorry. Um, I'm Brad Flet spelled F E T. I am the founder of Earth Month here in Maricopa, Arizona. And I'm gonna um send over the email to email miring council. Thank you. And sorry we lost you, Brad, but we will definitely read your email.

All right. So, council, um I assume we have some further questions or comments. Council member Alen.

Sure. Thank you, Vice Mayor. Um sorry, Brad, you didn't get to share your comments with us. I will look forward to reading your comments as written down and sent to us. Um, so yeah, just a a couple thoughts to share. Thank you all so much for such a thorough presentation. I actually learned several things. Um, I wish the entire community could watch this presentation. I think we could reset the conversation and the temperature a little bit, which is what you're trying to do. Um, and let's let's keep at that. You know, I I I get it. Not all data centers are the same. Um I would suggest that when we discuss the viability of smaller such facilities, we avoid calling them data centers. Uh we should come up with a terms uh that accurately describes the scale uh so that people aren't lumping a server room or a computational hub into their concerns. Um I've heard that mentioned already. Uh you know CJ, you mentioned that flood planes and data centers don't mix well. I just want to add that one thing I've learned is that data centers are starting to go underwater submarine and that's a great place for them to be and it's actually a really nice uh thing that works out. Um you know and I understand the policy discussion is forthcoming next month. Uh, but I'm I you know I'm going to repeat a couple things I've said before um just because this isn't the sort of environment where when we say something once everybody tuning in is likely to be on the same page. So bear with me and then I kind of want to start with the the road analogy. I I get that CJ and I deeply appreciate you painting a picture for us. I think it's helpful especially in terms of demonstrating that data data centers come in a variety of flavors. Um but I would like to offer a bit of a rebuttal if I may. Uh that at the analogy begins to fall apart pretty quickly.

Roads are public goods by design uh open access broadly shared benefit and funded because they enable everything else. Uh data centers aren't that. They privately they're privately controlled infrastructure built to monetize computation and the upside acrru to the operator and its customers not the public. They also don't behave like roads economically. Roads generate spillover benefits across an entire region, commerce, mobility, access, etc. Data centers can be relatively low employment, high consumption facilities whose benefits are narrowly captured while their impacts are local and persistent. I think that's what's getting at the heart of what everyone's concerned about. So, we need to be careful about that. Um, my interest in being proactive about keeping large data centers and water reliant data centers out of Flagstaff was inspired by a presentation provided by NAU's very own Dr. Ben Ruddle during a Cookamino Plateau Water Advisory Council meeting that I chaired late last year. He and his colleague Dr. Richard Rushforth recently published a paper. I suggest everyone look at that paper that calls for policymakers to consider adopting a set of socioeconomic water productivity measures as policies for how the community utilizes its water resources. I trust we'll get into this more on May the 5th. Um but just to just to just to make sure that everyone who's tuning in right now is on the same page as I've been. Um you know an example of this would be a data center knocks on our door and this is absolutely relevant even for smaller operations. They approach our business attraction team um for whether or not Flagstaff can accommodate their water demand. And the key here is that the question wouldn't be whether Flagstaff has the water or not um because that's a bit subjective. But the question Dr. Ruddle suggests is does the return on investment per gallon of water meet our policy? Does the

company bring the gross and net revenues, payroll, jobs, income tax, sales tax, and property tax that we established to be essential to Flagstaff's long-term e economic sustainability? Are they paying market rate for the water? I'm proposing city council work with water services team to develop such policies. And I heard some of that given voice to tonight. So, I'm I'm not trying to dismiss that or or say I didn't hear it. Uh I'm just adding my own my own uh accent to it. Um, you know, data centers are not necessarily exploring our region yet for serious consideration for sites. You mentioned reasons why they might be. Um, I realize I know that right now we don't have enough uh broad broadband bandwidth yet to really make that sort of thing attractive um for larger scale operations. But the day we do, uh, Flagstaff will become attractive to larger scale data centers. And that's what we need to be prepared for, and I suggest that's what Cookanino County needs to be prepared for. Uh, problematic data centers are the larger water inensive facilities that provide very few jobs for locals and the profits land far outside of the community in which they operate. They privatize profits while socializing the costs. And our APS rates are all going up and that's the reason why. Why in the world would we seek to accommodate such a model in a quiet city associated far and wide with the name Sinagua? This community will not want and cannot afford to accommodate data centers no matter what Arizona state law allows for. And we need to be as proactive about this as possible. And we need to make sure that our terms are very well defined when we're communicating with the public so that they their concerns are assuaged um by understanding the scale at which we're having this conversation. Thank you.

Thank you. Any other questions or comments, council? And I just want to verify the online comment card in the back. Is that new or that's old? No, I think it's existing. Okay. I just wanted to make sure. All right. Thank you for the great presentation. You really broke it down for us and I know that coordinating all of it probably took a lot and I appreciate that. Thank you.

Thank you. Okay. So, I'm not seeing any for open call to the public. So, I'm going to move down to announcements and updates to from council and city manager. And I will start with council member Spence. Thank you, Vice Mayor. I have two things. Um, at our Dark Skies event a couple days a couple nights ago at Heritage Square, I um put up two folding chairs and had a listening session uh for a city council member under Dark Sky. And I did have three uh engaging conversations and I would just encourage um and I'm going to try to do this more myself to listen uh to uh public input. The second thing is to um be sure everybody's aware that there's been announced a proactive um service interruption for starting tomorrow at 6 o'clock. So is there any uh further update that we have?

Do you want me to give the update now? I'm happy to if that works. Um that works.

Great. So, um, so we received word today from Arizona Public Service that they are going to be doing a public safety power shut off tomorrow. This is in response to, um, we're currently in high fire danger and predicted 60 mileph winds. Um, so if you recall, we had that presentation a few weeks ago. Um, we were preparing um, notices have gone out to residents who are impacted by potentially impacted by this shut off. I know Heidi and I both received notices today. Um, they're they're talking about it starting early morning around 8:00 a.m. and it could go from 12 to 24 hours. Um, we did just use the the the new city manager directive related to city facilities and just approved um the Red Cross using the aquiplex as a backup shelter. Um, and they'll be getting out I I know Sarah Langley did get a a press release out, but we'll be getting out some word as well from APS on um places for cold frozen water cubes um and things that will help people keep their food um chilled. So, we'll keep updated. Shannon actually just left to go be on a call with emergency manager cooperators and we'll keep council um in the loop on this, but we're starting early. Um but we are prepared. Thank you, Council Member Spence, for bringing that up.

Thank you. Yes. Thank you, Council Member House. Uh nothing from me tonight. Thank you, Council Member Alen.

Thank you. Yeah, nothing really. I just wanted to mention because I'm excited about it. Uh this evening I'm going to go to back to LOL for a late night. Um the membership team is hosting a member meteor madness uh event as the Liid meteor meteor shower approaches its peak. So, the rooftop the rooftop deck of the astronomy Discovery Center will be open beginning at 10 p.m. for members to sit back, relax, uh with a blanket, and enjoy the view. Um, yeah. Uh, and I'm just really excited about that. It's just a I I just mention it because it's an example of sort of the benefit you get by by getting a membership at LOL. Uh, the Liid meteor shower is always fairly spectacular. It's going to be a fun and novel way in a warm seat to sit back and sort of enjoy that with a community flare to it.

Council member Garcia.

Thank you, Madame Mayor. Vice Mayor, I just wanted to update the community on um our our trip to Washington last week. myself, mayor, and council member Matthews, as well as city manager and vice manager. Um, took a trip down to Washington to advocate for several of the city's needs and projects. We met with Bureau of Reclamation, Congressman Biggs, USDA Natural Resources, Congressman Staten's office, Senator Ggo's staff, the FAA, Deputy Assistant Secretary of the Army, Senators Kelly, Senator Kelly, and Congressman um Crane. And we had really um in-depth and robust conversations to remind them of some of the projects that we are on that we just need that final pushover and or push um to get the projects completed and also to make sure that we um you know that we that we stuck into the you know we stuck with with the groove of things to get things done on time that we have projections for. Um, everybody seemed to be on the same page with us as far as our community needs were concerned and I felt very honored to be amongst the team of community leaders that I was with, that of mayor, council member Matthews, and both city manager and vice manager. Um because when we walked into a room together, we shared a synergy that um really expressed the um connectivity of those who live in Flagstaff and our our ability to to convey a message um with giving each other enough space to share that message and um allowing everybody in the room a chance to be heard and speak. So, thank you all for for um for for helping me along on that journey. And um and sorry I had to miss the whole meeting, but we were in the middle of

something and going to something else at the time, so it was impossible for us to queue in. Council member Matthews.

Thank you, Vice Mayor. Uh just to add to Council Member Garcia's comments about our uh trip to Washington, DC. Um it was a great team. We we really um jailed well and and worked off each other. And I think it's important for um just to remind the community that our city as well as any other city in our nation can't fund everything that we need funding for. as well as we need uh we're dependent on good communication with our federal and state legislators because we are impacted by laws and regulations that they set. And so it's always important to keep those communications um open and to make sure that uh we're out there explaining um the needs and the asks that we have um and just to fine-tune it. Uh the main topics that we covered which are important to everyone in Flagstaff was the Rio de Flag uh project um Red Gap Ranch for our water forest health the airport's no removal equipment building transportation and housing. So, we had a a big agenda and a lot of asks that are critical to everyone in our city. And so, it was very um I think positive um trip there. It was very short and tight and exhausting. Um but it was well worth it. So, thank you.

Thank you. Um Mayor Dugget, are you online and do you have an update? I do not have an update. Thank you.

All right. Thank you. And I just have a couple of quick things. Um, Friday I will be going to the pallet to pallet. It's on the Lone Tree CCC campus. Looking forward to that. Saturday I will be bowling with the water professionals um bowling date. It's at um 2 o'clock on Saturday. And what you may not know about me is that I'm a pretty good bowler. So I hope they're ready. And um Saturday night is the Viola Award. So congratulations to all of those that were nominated. City manager, what do you have for us? Council member House, did you go?

Oh, you did. Okay, great. You just got back. So, just a reminder that we have our budget retreat on Thursday. Um, very exciting. All of the items for the retreat are online um for the public to to review. Um, but it'll be a great day where we'll walk through um the city manager's recommended budget, how we've aligned the budget with council goals and priorities, and then provide an opportunity for council to to provide um some input. So, we're really excited about the day. Um, a couple of more events this weekend. I know Sunday is the High Country Humane um brunch. Um, and u Miss Cleo's tea party as well is on Sunday. So, it's a very busy Oh, and it's the drop off day um where you can drop off your hazardous wastes, your batteries, um e-waste, um prescription um medication, um all kinds of things, paper, you can have paper shredded. Um I'll be out there volunteering as well. It's one of my favorite events to volunteer at. And I'd like to um ask Shannon to give an update as well.

Thanks, Joan. Um, mayor council wanted to let you know that uh American Traffic Safety Services Association um is sponsoring Go Orange Day tomorrow. Um, as a reminder, we do this uh to recognize and be aware of the hundreds of workers and motorists who lose their lives each year. Um, so wearing orange just allows us to spark conversations, build awareness, and remind the public to slow down, to stay alert, and respect the people working just feets just feet away um from live traffic. So, if you have some orange that you can dig out of your drawer or maybe your closet, even if it's just a scarf or a pin, please wear some orange tomorrow so we can show our support. Thank you.

Great. Thank you. Thank you. And with that, I am going to call this meeting adjourned. Have a good night, everyone.