City Council - Special Meeting

Bye.

you Thank you. Yeah, it's not. It's COVID money.

The FEMA money is COVID. Oh, okay. COVID? Repayment phone.

Okay.

Call meeting to order. Shelly, could you roll call, please?

Yes, Mr. Mayor, thank you. District 1, Councilman Rios? Here. District 2, Councilman Pastor? Here. District 3, Councilman Latham is excused. District 4, Vice Mayor Stapleton? Here. District 5, Councilman Gonzalez? Here. District 6, Councilman Shipley is excused. Mr. Mayor, we do have a quorum.

Thank you, Shelly. Can you lead us in the invocation, please?

Dear Heavenly Father, Lord, we just come to you tonight, Lord, and we just ask that you would bless this time. Heavenly Father, we pray that you would just bless the sickness that is going around and heal. people who are feeling bad and both emotionally, Lord Godfather, and physically. Lord, we just thank you for this council, and we just thank you for their forward way of thinking and their proactiveness, Heavenly Father, when they think about this community and the needs that we have. Lord God, we thank you for their guidance and their decisions through the flood. As we do, thank you, Heavenly Father, for all of our all of our staff, Heavenly Father, that's worked so hard to come out of it, Lord Godfather, that we can resume our activities and work for this community the best way that we know how. We thank you again for tonight, Lord Godfather. We ask a special blessing on people that are traveling, Lord.

We pray that you would give them safe traveling mercies.

We ask these things in your name. Amen.

Amen. Freddie, can you send the plates? Yes, Mr. Mayor.

with liberty and justice for all.

First agenda is our community call to the public. Do we have any online? I do not, Mr. Mayor. Do you? Okay. I do not. Oh, you do not. And we have only one community call the public today on this special meeting then. Right. Okay.

I see nothing, Mr. Mayor.

Thank you. Okay, this special meeting is basically to listen about the budget. So item two is 2026-27. tentative budget. Item A is consideration to approve ordinance number 897 for the redirection of the 3.3% sales tax previously dedicated to additional payments to public safety personnel retirement system, redirecting said revenue for the purpose of funding the construction of the new fire station and related public safety infrastructure. Paul.

Mr. Mayor, members of council.

Oh, I'm sorry. Shelly, can you read ordinance 897? I'm sorry. Mr. Mayor.

ordinance number 897 an ordinance of the mayor and council of the city of globe arizona amending section 6 of ordinance number 834 relating to the city privilege license tax continuing the existing 0.3 sales tax previously dedicated to additional payments to the Public Safety Personnel Retirement System funding, redirecting said revenue for the purpose of funding the construction of a new globe fire station, providing for severability and establishing repeal criteria. Is Council please with that reading?

Yes. So Mr. Mayor, members of council, this action tonight is part of three different actions, including the passage of the tentative budget. The two actions prior to tentative budget are important because they're baked into the tentative budget. And so we need to get council approval to make sure tentative budget will fly. And then again, we come back in a month and do the final. But the first action that we need council to consider Is a a redirecting of the, uh, the point three percent sales tax. Um, and I want to go through a little bit of the history of how the tax came to be about. And then some of the public safety needs and the fire station, and then why, how, what this ordinance actual vote will do for you. Or for the city for the residents. Um, and so if you want to hit the hit the button. Okay, so as most of you remember, 2016, at that time, this is about when I started here, 2016, they were just starting to realize the fallout of the unfunded liability triggered by the 2008 financial crisis and what that did to the PSPRS system. Okay. And and we were we were facing a ten million dollar liability, which not only was now being carried on our books, but was something that that we needed to pay down the cost. We're inflating our public public safety budgets is and it's I'm going to go through a little bit of an explanation. All members of public safety, fire and police are members of every year we pay a portion of their benefits for that year. So they're making X amount of money as a salary. We pay a percentage of that to the system to fund their their their pension in the future. because of the $10 million liability, we were assigned an additional percentage that we had to pay on top of that. So this was payment for the unfunded liability, which we saw was growing and growing and growing. And this was making it very difficult to balance the budgets and keep public safety funded like it should be. What was worse is when you looked at the 20 year payout on this, the financials actually, the liability actually got worse over time. And this, we liken to making the minimum payment on your credit card. It's just enough to make the basics, but it doesn't really pull down the principle. And so we looked at this. We created the public safety, the PSPRS task force to develop options to reduce the liability and its impact. We had Scott McCarty, who was leading the push to change the Constitution. We had some outside people come in. Mayor, I think you were not on council at that time, but you came in as one of those experts. And we put together a plan. a palette or a schedule, a menu of options which Council eventually adopted. The one-time million-dollar payment to PSPRS, which would take down a lump of that right off the bat. And then what very few people, I don't think, I think we're the first of all the cities, a dedicated 0.3% sales tax to fund that additional PSPRS payment. Um, and Council adopted that we went, we went from two to two point three. Um, and and that was very important to have that money. Then every year when we collect that tax, we would pay and it was split half to public safety, half to police, half to fire. Um, The the ordinance that put this in place was designed to continue Until it was 80% of the liability has been paid down and met and then we would repay ourselves and that was something actually the vice mayor had put in the to pay back the general fund because Thankfully council pulled that 1 million dollar payment out of your council fund balance, which I know very protective of that so the And so we are at that point right now. If you remember when we talked, and we can talk now, getting to 100% payment of that liability, it's a moving target. Every year the liability is calculated by a number of factors. What are they earning on the money they've invested? What did they earn last year? How much are people being paid? So the salaries are calculated in there and the good news side note in between when we did this in two thousand and sixteen and did this now, they did pass that constitutional amendment, which created a tier three, which helps to limit the new people who we hired would not be in the cycle. But we still have many tier one tier two. People so so we decided we would not try to get to, um, uh, that that 100% funding, but, um, we are, we have hit the 80% funding, depending on how you calculate it. Uh, everybody's in agreement that, um, this was an extremely effective. Program. Okay. It reduced our costs significantly. Um, it kept us afloat. We are, uh, we saw other organizations with skyrocketing, um. Staffing costs, because they had to pay both items. Um, you saw city of Phoenix take it from a 20 year to a 30 year. Heela County went ahead and bonded to cover that and reduce that debt. There were some hiccups in there where they had some lawsuits which changed how they calculated. It's been a moving target, but I think our solution has worked very well for us, and you see the result in the quality of police and fire that we have right now. So, next slide. So, the... At this time, this is not the deciding factor in our budget and our public safety program that we have now about 2019. And we always knew this, but we started recognizing that we need to make plans to replace. our pre-1900s fire station. The building is historic, it's been around longer than the state's been around, and it's held up well, but it is not a modern designed fire station. We started by, first thing, and we started to find, well, actually, Our initial consultants that talked about this fire station when we 1st, you know, council's like, okay, we need to replace fire station. How much going to cost? We were told, and this is 2019, and it's before we had the land for the fire station in the 5Million dollar range. Okay. That is where we're at. That was a very much an overview, but that was put together by architectural consultants that we contacted and worked with. We needed to find a place we couldn't build it on the same site, but it need to be a generally located. Site for the, for the fire station, you need to have response time. We have, we will have only. One fire station, and it needs to be able to get to both ends of the city and equally amount of time. It can't be at 1 or the other ends. It needs to be centrally located. It needed to be in a 500 year floodplain. It needed to have access to 60. we wanted it on 60. I don't know if you remember that they put up the lights. So, when the fire truck heads that heads out the light turns and we can get out of there being on the 60. And then it had to be big enough to handle all of our vehicles, everything we need. It's a fire headquarters building. We found that property over by, what, 3rd Street, Nash, what we call the medical center, and we purchased that. And that is a good site. It fits all the needs. It's not a humongous site, and there are very few... Big flat sites in the five hundred year floods floodplain on the sixty, but we were able to purchase that and that set the tone for the building that we were going to have. We're going to build their most important thing is you could bring in the fire trucks from the back. And then drive through and park here at our fire station, we have to pull up back in and you just can't pull up and back in when you're on the US sixty because it's just not you can't do it. So, um, so we, we spent about after that, and we had covered those in there somewhere too, but we spent about 3 years pursuing funding. We were, we were told that many people across the nation were told that USDA could do long range 20 year fundings of about, um. Even some a little bit less, and we did a couple applications, couple trips to D. C. Trying to trying to make sure that our application was correct. So we can get this funding and finances fire this fire station. But it turns out many people found out there, the program that we were applying to was never actually funded by the federal government. And so. For better for worse, it took them a while. It took us a while to fully understand that because they were not clear. They kept saying it's around the corner around the corner. Well, it never came. At that point, I think council is like, we got to build this fire station and we got to do it ourselves. We can't wait for help. We can't wait for federal money. We need to take this bull by the horns and find a way. Um, so we are now at that point where, and this goes back to about 2,025, where, where we started taking a serious look at bonding bond, borrowing the money using municipal bonds. And then we would pay the debt service on those bar for 20 years. Build the station and and we'd be good to go. This is a common practice and. Many, many other cities. It was, it's a new thing for us. I think we've done 1 other bond that we did for water. Well, even before that, but but we, we, it's been, it's been through the with a program and so we've never gone out at this level and done this type of bonding. This would be a 1st for for globe. So. Um, we, at that time, um, now we're post coded now we're post the supply chain, labor. Inflation everything going on, we're, we're looking at. And we had a site, so we're looking at specifications for building. We had a tighter scope of what we needed and the price came out to the word is now about the 13 to 15Million. Amount some I wanted to take the time tonight to explain how we got to that point. What were, what are we actually asking council to bond for? And that is a fire station headquarters. This would be almost a trio of buildings. You, you have to have a 2 story design to fit on the site that we have to have the ability to come in the back and then come out the front, have the parking area. It's got to be 2 stories. So you have you have a an area for the vehicles. You have a 2 story area where you have living quarters for the firemen above and administrative functions below. You will have basically 3 different sets of buildings. The problem, the big and Mary, you know, this, the biggest. Issue with or concern or design the way it was designed is the fireman slept above the fire trucks. Okay. We know that that that is not the optimal way. The living quarters for the, for the firemen. And staff should be in a separate facility, a separate structure of separate. H back system a separate environment than that where the diesel trucks are idling starting up, you know, and doing the maintenance and then you have the turnouts and the turnout should not be with the staff. They should not even be in the in the facility. They should be in a separate area. So this design has a segregated area to put those turnouts in once they get back from the fire for safety of everyone involved. And so that's why this type of construction gets complicated and gets expensive. So it also needs to hold all of our fire vehicles. Um, we, we, we can't have them scattered around. This is not going to be right here in our global complex. It will be a way. So you need to have the vehicles there and able to be used. Um, you're going to have to have separate environmental controls HVAC systems. So it's not like you have multiple units, but you have multiple systems. So the two units and the two systems are not connected. Um, the drive through design has cost and then, uh, and then you have to build to the, the IBC, um, health, uh, safety building code, and especially the most current fire codes. So, so all of these had contributed a little bit, um, in the, in to the, that cost that increased cost. of the building, along with all the factors. And today we know with everything going on in the economy and the world and everything like that, I think 13 to 15 is a solid number. But it's different than what we started with at 5 million. I know to our frustration, but we've got to build this. Any questions at this point?

yeah i'm i'm trying to reflect back on some conversations that we've had uh regarding the turnouts um and probably a simple ask or a simple answer but the decontamination of the turnouts is that sent off for dcom or is it done in-house with this new station with the new station yes we would we would have the option as we start looking at equipment and stuff to to to do either

There's some value to us to send them off because every time they get sent off, they get inspected. Any needed repairs get done. and we get back a set of turnouts that's bagged that can sit on, because we have two sets for each individual, those can sit on, we can put them in a storage area where they're stored, they're not getting contaminated by anything, and then when the other set gets used in an environment that would require decontamination, they can be bagged up, set aside to be sent out or cleaned on site. There's Value to both. We've had a good relationship with the company that we use right now, and we've had a lot of good results, and I think we're getting a greater duration and better quality in our gear, and it's safer for the individuals that are wearing that gear.

Thank you.

And Gary, before you go, also, and I forgot to mention, there will be an emergency management setup. We'll have that type of function. What will that consist of? Correct.

The goal would be a combined use space that can operate our EOC as well. That would be a training space, a meeting space, as well as be able to operate and have the technology to operate our EOC. That way our EOC is separate from City Hall, separate from the function here and can operate without negatively impacting the day-to-day operations of City Hall.

And I got a question on, and I'm sure as we go, if this is approved, you go through design, there'll be more questions and answers. But will there be a space, you're saying EOC, will there be a space for public training classes for the public also, such as CPR, first aid for?

The goal is to have an equipped training space in there that could potentially be available.

And then one question on the bays. Will there be any building above the bays or is that separate? Is there a two-story section and a one-story section?

So there would be, you know, in order to get the apparatus floor space, there would likely be spaces above those, which would mean, you know, whether there is or isn't, it'll need to be equipped with the appropriate exhaust removal systems to negate that concern when it comes to diesel exhaust contamination.

Okay. Mariano, you had a question.

A couple questions. I'm sorry to waste your time, Mr. Mayor. Paul, in the interest of clarity and informing our public because six months down the road, we could be called onto the carpet on this and I want this clear. Define the mechanism for a municipal bonding.

So can you say that again?

Define the mechanism for municipal bonding that we're going to use.

So like I say, we will come forward. What we are going to do is work with a financial advisor and a financial attorney to go out and put a package together to market these bonds based on basically our credit rate. Linda's going to speak a little bit more to this.

Thank you, Linda. Of course. Thank you, Mayor and Council. This is like going, it's like seeking commercial financing, but we're going to the bond market for the loan. And so because we're a municipality, it's a municipal loan. And so putting together all of the pieces for a successful entry into the market that our council is supportive, our community is supportive, that we do have the need for it, that we do have a dedicated revenue source that we can put towards the debt service on this, which we had talked about it previously with the PSPRS sales tax. These are all pieces that are needed, and of course, updated audits, so which we are very close to completing the 26 audit, 25.

We were this everything that we're bringing together tonight is is a culmination of getting our ducks in a row. So we will have the best opportunity not just to qualify for the bonding, but to qualify for the lowest rates for the bonding.

Yes.

And so that's real important. And and we had intended to do this. prior to the flood that we would do in the spring. Now we're looking for the fall to do this. Go ahead.

And as Paul had mentioned, when we had met with the financial advisor last year, thinking that we were looking at in the neighborhood of 13 million based on the initial renderings, Now we are almost completing the feasibility study. In fact, Gary should be receiving that any time now. We were expecting it this month. And so then we'll know what the maximum amount that we we probably will be spending. And of course, everything can be value engineered. I mean, we all have been through that. And so, again, as Paul had mentioned, these are all the pieces that we've been able to put together so that when we do enter the bonding market to market our municipal bonds for sale, then we are seen as a good risk, solid risk, and with good return.

A couple more questions, Mr. Mayor. Paul, please clarify for me this definition of bonding. This isn't a vote out to the voters to approve. This is an internal, what would you call it, mechanism?

It is an excise tax bond. It's an excise tax revenue bond, which is Different than a general obligation bond.

Okay.

A general obligation bond is normally a debt service off of property tax. That is not what we are doing. We are doing an excise tax revenue bond, which is obligated off of sales tax. And the key difference there is sales tax does not require a vote of the people. A property tax would require a vote of the people. And it's not about whether we want to have a vote or don't want to have a vote. For all the time we've been here we've always talked about the conundrum that that globe is a small city in a regional hub while we have seven thousand. Citizens, residents in Globe, we have passed through of 30,000 or more people. So we collect literally 10 times more out of that sales tax because 73% of the sales tax we collect are from visitors and travelers, the people traveling through here, the time to work, our daytime population, our weekdays. A weekday population, and so bonding off of a sales tax is going to share the cost with the people who use the services. The people who are here from the minds of people who are traveling from the valley coming through, and they have a need for medical services, fire services. They will be contributing to the cost of paying the bond because they are there. paying sales tax up here. And so that is why doing it through a sales tax rather than a property tax is so key because this way we share that burden with those visitors and travelers to Globe. And I think Linda, did you wanna add?

No, I think you covered it very well.

Okay, I'm sorry I've taken up so much time, Mr. Mayor, but I'm trying for clarity tonight Because as I said six months down the road somebody's gonna pick a scab and I don't want that scab picked what I'm trying to say is as You said in the previous slide. We've been on this journey for three years We've been to Washington numerous times just to get funding to help us build and Replace a hundred and twenty year old fire station. We've been led down a path Not naming agencies, but we've been led down a path for three years And we finally, I finally agreed with you, Paul, about self-funding it. We need to do it ourselves. Now, the population of Globe is roughly 7,000. Vis-a-vis the entire population of this region, about 17,000. I could be wrong on the census count, Mike, but you tell me. Today, we're taking on the responsibility of serving the entire region, and I'm not bragging about it. I wish we didn't have to. but we are looked on as a leader in the region and this helps us to meet that need. But I just don't want confusion about one, that this is not a bond election. This is a finance moment that we've been up against the wall for three years to try to get to. Now we can have our own building inspectors come in and shut down our fire station because I'm worried about the building coming down. And after a flood, it was above high ground, I get that. But the point is, We're trying to get to our future. We can't get there unless we do something about this. So those are the things that I think have been made clear to me tonight. The summarization is good and makes it easier for me to, what's the polite word, banter with the public. Here's why we're doing this. We have a, I don't know how many million dollar investment just coming online with the new hospital remodeled. As you said, we have major traffic headaches, but the people are here, they're creating our economy, and we have to find a way to help protect them as we go through this near-term future. So I'm all for it. I think we've clarified tonight how we got here. And I think I'm done, Mr. Mayor. Thank you, sir.

So Mr. Mayor, members of council, and to Councillor Gonzalez, a couple of points I can fine-tune, but Linda, did you want to...

I'll go after you.

Okay. So, no, so it's frustrating that we've taken this long, but the good news, the reason that we're here tonight is that we now have a mechanism to fund this fire station without increasing taxes. Taxes do not have to go up. The timing of the end, the success of the PSPRS payment program, we have achieved that goal. And while it's taken those three years, those kind of got us to land at the point where now we can pivot and redirect that without any additional cost to anyone. We just pivot that 0.3% to back up. This bonding effort, the other the other 2 things I wanted to say, you know, we saw right after cobit and then all the infrastructure funding. Construction costs were skyrocketing. Our bridge costs were immense, much higher than we thought. We think that construction costs are coming back down to a realistic equilibrium. And the 2 other points we. This is not just a fire station. This is a fire department headquarters. Many people can Google fire stations and come up with costs of under $10 million, but they are not a three-bay administrative emergency management drive-through, pass-through. This is an expensive scope, but not an expensive building. The requirements that needs that we need to have going on here are what run the price up. But but it is, it is not anything extravagant, which you will see another in other cities. And the other thing on the bonding, I know that a lot of people have come to us and we've talked to them about doing GATA loans, which is through the state. And what that does is it takes a number of projects, puts them together to a bond package, and we can get assistance through that. This is not the optimal size. A lot of the GATA bonding is for $1 million to $3 million projects. This is a $13 million to $15 million. stands on its own as a good product that someone who wants to invest in. Again, we're applying for a loan and we want people to be attracted to us. We want them to see the leadership and the quality of our town and our region and say, you know, Globe is a good investment and we can trust our money here. We have professionals that are operating the city and our money is safe and this is a good value. and Globe needs a fire station, so we're gonna invest in that. So I think all of those are good points to make. So go ahead.

I just wanted to clarify one point that you had on a couple slides ago regarding the USDA program that we were pursuing. That was a community facilities loan, so I just wanna make sure that everyone does understand, I know that we do, of course, but our public, that it wasn't a grant that we were going after that we were unsuccessful in. It's a federal program that unfortunately the state of Arizona, our community facilities program is grossly unfunded and we were working on our application to get in the queue so that once funding was provided through USDA to the Arizona office for us to apply to that we would be prepared and ready to submit our application. And so, and because we were going in that direction because it was a very competitive interest rate, it's between two and 3%. So we did put our eggs in that basket for quite a period of time. And then when we did realize that the funding wasn't forthcoming in the time that we needed to really be serious about building a fire station for our department, And so that's when Council gave staff direction to pursue other avenues, and that's what brings us here today.

And then I'm gonna go back to the slide, but I do, so, and this is, we had advanced the slide. Like, say, this budget is designed to put the pieces in place that when we sit down with our bond council and our lenders that that we have all the check all the boxes. So we're ready to go again. We have the audits will be done. We have our finance department in good standing and we have that dedicated debt service source of money. We need the, it is makes it very valuable to say not just that we're going to. Pay for this out of our general fund, but a dedicated source. This point 3% is dedicated to public safety and we, and the action tonight would would focus that on. Infrastructure and the fire station that's going to help us. I know at 1 time some people, and I think the city had talked about using. Wildland fire funds, but that just does not rise to the amount of money and it's not consistent. I know we're using it to supplement some of the payments on our type 3, but but that is that is not at this level to do that in back in the day. It might have been. Um, but, uh, and luckily we don't, you know, well, I'm going to talk about I'm not going to jinx us on talking about wildfires. But anyway, um, so so we are, we are proposal tonight is, um, that we are going to ask council to pass an ordinance that redirects the 0.3% PRS sales tax to fund the bond. Again, that sales tax was put in place to support public safety. This has always been about public safety. That goal has been achieved. We've hit our eighty percent. We and in this budget, we actually do move almost a million dollars. There's some other money that we've done and we pay ourselves back this year. Although some of this money is going towards the preparing for the bonding. But that is built into the budget tonight. Also, the public safety, the most pressing need for for. Public safety is the fire station, but it will benefit PD also, because it'll clear up some office space and bays for for police. Um, and and there's not, there's not many other options, uh, sources of revenues ways that we can fund this. This is what. This is what cities do to fund infrastructure construction costs. But the good news is, is by doing this council can fund the new fire station without raising any additional taxes. It's a redirect to fund the bond service. Go ahead and hit the side. So, so the ordinance in front of you, the ordinance is actually on the agenda that that Shelly read. It builds off and swaps out from the 2016 ordinance. That ordinance created the tax. This changes only section 6, which is what the tax is to be used for. Okay. So the original ordinance was number 834, passed in 2016. The summary of what this change in Section 6 does, it continues the existing tax. it dedicates that existing tax to revenue to fund the fire station construction, to fund the equipment, and to fund future public safety infrastructure costs. This is gonna be a 20-year bonding, and we don't know what's gonna happen in 20 years. We're not sure when we go forward and sit down with the bondings, there may be something else. We're trying to put into this ordinance that we need to have in place as much flexibility as possible. Okay, so we're talking about the bondings and we're also talking about or other that we were giving us some some wiggle room as to. in general funding the fire station. We're also saying that if the bonding amount is less than what we're bringing in, we can put it into maintenance. We can put it into additional infrastructure. It gives the future councils, I don't think any of us will be around, but the future councils, 10, 15 years from now, a little bit of flexibility. But the third thing is it still, so the bonding, The bonding entities need to know that if we back this bond with this 3%, that it will be in place for the time period of the bond. We're looking at a 20-year bond, and we need to make sure that the 0.3% stays in place for the lifespan of that bond. So the language is written that it cannot be repealed until the obligations are fully paid off But once they are fully paid off, council has the ability to repeal it at their will at whatever point they deem. But we need to have that protection so that the bonders know before they invest in the city that that we're pledging this point three. And this point three will be here for the 20 years or whatever the duration of that bond. We're not saying 20 years. We're saying the duration of the bond. And so, in essence, that is the change. in the ordinance that passing 897 does, it modifies ordinance 834, redirecting it to the fire station.

Clear as mud. Question on what do we anticipate for the public's information? What do we anticipate an annual payment would be for that tax bond and does the The point 3% satisfy that total payment.

And now, at this point, we are anticipating 1.2Million a year. We believe that the point 3 will bring in 900,000 of that. And then we will also be using additional 300,000 from. Our fund balance that comes that we have, and we have been planning to use all along to do that as as the economy grows and things change that nine hundred thousand. I mean, I think when we put the point three in place, it was collecting six hundred thousand. It's grown to nine hundred now, and it'll probably grow over time. We are under the assumption that as it grows, it will meet the full obligation of the bond. But right now we will be adding in about 300,000, at least the year coming up to supplement to get that. Now, we have to again, this is all in preparation for the discussion, negotiation and the terms of that. We have been asked to find to dedicate 1.2 million in debt service towards that bond. It may be that we don't need all that, but we want to be able to make a commitment when we go in there that we are prepared to put $1.2 million every year into this bond, hoping that our rates will be lower, terms will be better, and we might be able to get it a little bit cheaper. But we've got to go in strong with we can afford this, and we can afford it. You said a fund balance 300,000 what does that clarify that a little bit that that would just be it's not it's not all your contingency fund balance. It is money ongoing funds from from general revenue collections that we will we will automatically budget towards that. People say, well, can we afford that? What we do is we start every every budget cycle. We start with things that we have to pay. We have to pay staff. We have certain obligations that we have to pay. This bond will become an obligation that we will have to pay right off the bat. And then the budget will work itself out with whatever the towards the amounts that are optional. But it will be it will be a requirement. every year in our budget to allocate whatever the difference is between what we are pulling in from the 0.3 and what we need to make our debt service payment. And that will come right off the top as we go through.

And one more question, I'm sorry. How long do we anticipate the procurement process will take to get a bonding company? Because this station is well overdue, and if we approve this today, how long will that delay it even more?

So we believe that once we sit down and do the negotiation, getting everything done, I think the last piece of the puzzle is finishing the 2025 audit, which should be in August. I think we can sit down. I think we can have something approved by council before the end of the year, and then we go out for the sale and see how long that takes. So we believe we can get this done still within this year, definitely through this budget cycle, but hopefully before the end of the year. Linda, does that fit with what?

It is. And that was part of the presentation that we gave, the timeline at our last meeting. that, again, the feasibility study coming in, this is gonna give us that estimated maximum price, the audit, we finalize the funding plan, and if Council does support this ordinance, and then we move forward into procuring bond council and going to market our municipal bond for sale, and then it goes into full design. which we all know full design will take a little bit of time, given the complexities of that site, and then may need to do some value engineering, and then we go to building. So we could break ground within this fiscal year. It could happen. But again, fiscal year, correct.

That would be nice. Any more questions? Yeah, sorry, Mike.

So a few months ago, maybe, We had two gentlemen come in that talked about bonding.

Yeah, we have we have got an engagement letter with a bonding firm and a bonding person that we have been working. This is a person that we selected. It's a professional services and they come highly recommended and have worked with Pat Walker, a financial advisor many, many years. I've known Jim Strickland. known him and his company for many years. But Pat says, there are many people out there that can do this. But Pat's very comfortable working with Jim. And then Tim Stratton would be the bond counselor. because there has to be a second set of eyes on all the documentation to make sure that the person doing the bond, who's the broker, and the person approving it is the bond attorney and bond counsel. So we're learning a lot about this, but it's worked very well for others. Gila County's done bonds, and we've seen this in other locations, but these people are very professional, highly respected, recommended by Pat Walker, who we trust immensely. Well, we've been we wanted to get to this point if it was important that we set the stage and And and like say we we want to make sure we have all the information because they And the other thing I was just thinking and and Linda we hadn't talked about this but the five-year strategic five-year look ahead our our financial Planning five-year plan is going to help assure everyone that this is baked in, that we can afford this, that that money will be there, the 300,000 that we were talking about, with everything we do. So that'll be part of that five-year financial plan.

Yes? Paul, Mr. Mayor, if I can clarify. We would anticipate the design, the full design process, just based on conversations, to run somewhere in the neighborhood of eight to nine months to do a full design. You know, and that's going to, you know, that's, the site has some complexities to it, and that added in a little bit with there. You know, I would just anticipate that it's probably going to be, you know, it's probably going to be that to get to a full design, you know, which puts timeline, you know, starts to go back once, and then you have any other procurement process that has to go along with that, so.

With the prices of construction going down, taking advantage of that, is there a point that we tie into it even through the design process, or you've got to wait until the design process is done?

Well, and we're probably going to do a design build, but I don't want to get deep into the procurement. Is that your understanding, Gary?

So... One of the services that we've been offered is to have the people that have worked on the group that has done the feasibility work on it bring to council some information on the different processes and what could be a benefit to them, whether it's design-build, a CMAR process, design-bid-build. That would be based on council decision on how we would proceed there. There's advantages to each one, you know, there's timeframes that are associated with each one, you know, so it would be, you know, it would be based on that information and you as a council would be able to make a decision on what process would best serve the city's interest.

And in this room's Council, I would just say it probably would not be one of the design companies that would present to Council. We would have someone independent not affiliated do that. If we're talking about how we're going to, we need to have the procurement method nailed out before we go through procurement. There still is a procurement factor in here. And and that could, depending on everything, procurement is procurement. You have to do it right. You got everybody's got a fair shape, fair chance. And so we have to look at that. This is a, like, say, it's a good project. It's a good project. And now that the market is where we're at, I think we have a lot of people who want to participate this. And so, so we're, we have a little bit of. We have a we have a a project that many people want to want to help us with, and that benefits us to have the competitive market. We did not have that in twenty-two when we did. So and so go go ahead.

So this Council is taking a step forward on this whole project, but if the Council changes over the next three to five years, right? Can it be changed? Future councils, will they come in and say, no, we don't want to spend any more money on it?

I hate to be negative.

Let me just say this.

This council has the legal authority to bind future councils. And by passing this ordinance, you are binding future councils because if you can't bind a future council and make commitments over time, then nothing will happen in any city. And so that is what this ordinance does.

I'm good with it.

So questions, that's the next slide is questions. Any questions or are we ready to vote?

Yeah, I'm good.

So this would be in...

So that concludes my presentation, our presentation. Okay.

And...

Where are we at?

B? Mr. Mayor, for other comments or questions, at this point, may I make a motion? Motion to approve ordinance number 897 for the redirection of the 0.3% sales tax previously dedicated to additional payments to the public safety personnel retirement system. redirecting said revenue for the purpose of funding the construction of a new globe fire station and related public safety infrastructure.

Second.

Okay, we have a motion and a second for approval of ordinance number 897. Any further discussion? I do have a question since this is an agenda item. Do we open that up to any online questions or comments? I know we have nobody in the audience here to ask questions, so... Nothing nothing by email anything by phone Okay, I will call for the vote all those in favor say aye Any opposed nay? Let's get it built Item B is council will discuss and possibly approve a request by staff to waive Section 3 of the 2025 Council General Fund Contingency Reserve Policy and allow staff to reduce the budgeted Council Contingency Reserve Fund from $3 million to $2.5 million for the fiscal year 2026-2027 budget.

Mr. Mayor, members of the Council, our Council has been fiscally responsible, fiscally holding everyone accountable. I think it was 2025 we did put in a policy that staff bring forward a general fund contingency reserve of $3 million each year. And this is, again, pre-flood. Everyone agreed to that. It's something we've done most of the time, I think the majority of the time. But there is no reason to not put that into a policy. It's something we intend to do, but I, but I think it laid out some of the mechanisms in there. Lo and behold, we have the flood. We had a drop of we did did not realize about a 1Million dollars in revenue that we had projected during the current fiscal year. We did get some money that fell back into the budget, but. And we, in talking to council in the budget ad hoc meetings and other meetings, council had shown that they were willing to allow us to waive that $3 million and go down to $2.5 million So that we could better put together a grouping of 1 time purchases fund balance is capital money. It's for 1 time. Purchase is not for for salaries or anything that's ongoing, but this allowed us to do a little bit more to bring some of the really. Necessary items that that will be in the budget that the tentative budget we're about to hear. We talked about this a couple of times. It does so. Item Section 3.1 is what you'll be waiving, and that is that we don't bring forward the $3 million, but we'll bring $2.5. But we still will be, and in actuality, we were only putting $50,000 in the capital contingency reserves. Um, but that's our choice and and not something that I, I think that you need to leave on that side. Um, and then we will try to rebuild this back. Um, we'll try to get it all back. Next cycle, um, and and put it in there, but by this policy, we need to. Dedicated an additional 300,000 to at least get it to 2.8 by next year at the end of the 28 budget. But but this gives us an elbow room, so we can accomplish some of the things because we don't want to let this flooding event define us. We, the Council has goals. Council has strategic actions. They want to see done. We are staff is trying to bring forward a council that that we. that serves our need to do flood recovery, but also maintains our commitment to move forward projects that are strategically important to council. And by allowing us this flexibility in that 500,000, we can do that best. And so that is why we're asking the waiver. Questions, comments?

Just a comment just for the public purposes. The revenue loss was projected at $1 million, but due to the work the staff did internally to move projects around, that deficit was brought down to half a million. That's why we're only requesting half a million.

Yeah, right and normally normally we have unspent funds. We had unspent funds that go fill that back up. But but we didn't we didn't it didn't fill the bucket totally. So that's why we're at that 1, that half 1,000,000. And again, we, when we get to the actual tenant of budget, we do believe that the that. that lull in our collection was due to the flood and we went back on a good projection is not a permanent, but a lull because of the event. Do we have a motion?

Yeah.

Should be pretty. Yes, Mr. Mayor, I'll make a motion. Thank you, Freddy. To approve a request by staff to waive section three, number one of the 2025 Council General Fund Contingency Reserve Policy and allow staff to reduce the budget Council contingency reserve fund from $3 million to $3,500,000 for fiscal year 2026-2027 budget. 2,500,000. Correct. I'm sorry. Let me rephrase that. From the contingency reserve fund of $3 million to $2,500,000 for the fiscal year of 2026-2027 budget. Second.

Motion second for approval of item B. Any further discussion? All those in favor, say aye. Aye. Any opposed, nay. Motion passed. Item C is consideration to approve the adoption of the City of Globe fiscal year 2026-2027 tentative budget in the amount not to exceed $97,691,340, which includes budgeting general funds in the amount of $22,269,297, budgeting enterprise funds in the amount of $9,000,000, $18,254, budgeting capital projects in the amount of $19,036,654, and budgeting grant capacity in the amount of $47,367,135, and direction to make possible adjustments within the budget and announce a public hearing date of June 23, 2026 for the adoption of the final budget and July 14, 2026 for the adoption of the property tax levy. Linda.

Good evening again, Mayor, Vice Mayor, and Council members. It's our pleasure to bring forth for your consideration the tentative budget. This is something that we've worked hard on the last four or five months since the Council's Strategic Action Plan retreat and our Director's retreat and countless other meetings with our department directors and our ad hoc budget committee meetings. So I'm going to invite Tina Allen up to the podium to present our tentative. Happy to answer any questions or any comments that you might have after.

Thank you.

Paul, did you have any comments you want to start with? Yes, I did. Just an explanation to the public and a reminder to everyone, the tentative budget, when we adopt this tentative budget, which we are adopting earlier than we ever have under my administration, which is, you know, and thanks to the... This is what happens when Linda takes over the budget. But this sets the maximum amount of money that we can spend. It really is the key point. We will come back and adopt the final budget in a month. We have requirements, and I think Tina will go over posting twice and publicizing this, getting comment, make sure it's out there. Traditionally, when we get to tentative budget, everything is pretty much set. Decisions have been made, allocations made, and the tentative is only for things, oversights, it's like we're looking at our stuff and realize, You know, we, we did not include this, or this didn't get moved and we make small adjustments, but those adjustments are within the cap that that are set in the in the agenda. So, this, while this is tentative, this is the probably the most important. Budget vote that we will have all year. So. Tina's here to present live in person.

Zoom is not as good for this. Mr. Mayor, members of council, thank you again for allowing me to participate in the development of your city budget. This is my fourth presentation to you and you all feel like family now. And so I expect you to get tired of me pretty soon, much like family as well. So the first slide, I've had a few presentations with the ad hoc committee as well as the full council in the last month or so. So I will try to move smoothly through this and not repeat too many things. This first slide is the revenues by fund. The second slide is the expenditures by fund. Normally they match exactly because we have balanced budgets. And I just want to say that this one is actually 14 million higher than the next slide because the fire station bonding, while they've been putting out the number 13 to 15 million budget people, It's 16 million, because again, this is capacity. It's about having what's the maximum. So the revenue slide has the 16 million. The expenditure slide will show that we don't actually expect to spend that in the FY27 budget. So it has only two million. So when you look at this one, you'll see that second to the bottom line where it says the bond fund is only $2 million. So that's the difference. So this slide is your big picture of all your expenditures by fund. The only fund right now that is looking in the forecast column, that third column, to be running over budget is the library, which is really such a small budget that it's due entirely to a single employee health change. A change in health coverage can cause that in a small department. The general fund, of course, is not projecting to be over budget, but by department pool and community development are, and we'll talk about those when I get to the department slides, and we will still bring those budget adjustments back. Overall, you will see that your expenditure budget is increasing 40.2 million from that bottom line of 57.4 to 97.7, and last week I demonstrated how the bulk of this increase really is to provide that capacity that you will need for your NRCS grant funding, the DEMA funding, as well as other potential new grants for bridges, and the WIFA loans, and the fire station bonding, so the general fund you can see is actually going down. So the growth in this budget is again all about the capacity for the response to the flooding. I will point out in all my slides, you'll see that it adds up first on that yellow line to the 98 million, which includes your budgeted transfers. Those aren't considered part of your expenditure limit. Basically, what's that saying is you don't have to count it as an expense when the general fund transfers it and then count it as an expense again when library and active adults spend it. So you eliminate that. So the budget motion has that 97 million, 691, 340. And as Paul said, that is your maximum expenditure limit, not to exceed. This is the slide that I went over quite in detail last week. So I just want to point out here that you are keeping your city tax revenues flat. So the budget we hoped to see in 26 is also the budget we hope to see in 27. The only growth there is your general fund property tax on new taxes. So I'm not gonna go through each of the fees since I did that, rather, unless there's questions. I will touch briefly on this. I kept this here just for the completeness of the presentation. We also reviewed this last week, that in order to keep your tax levy flat, you will be reducing your rate from 1.1892 to 1.1639. so that the levy you had this year of 545,264, which is that second to the last row on the left, is what you start with in 27, and the only growth you will have is that $2,710, which is the new rate on new construction. So no truth in taxation levy. You're actually keeping your levy flat and reducing your tax rate. So the next slide is going to be the general fund by department, and I do wanna just reiterate what Linda said, that to develop the expenditure budgets for this coming year, Linda, Danny, I met with individual department directors, as well as the city manager, several project managers, ad hoc committees to go over each department. And I do want to say that we do treat the budgets each year almost like a zero-based budgeting. You don't just get to say, well, you gave me this much last year. Start with that. We look line by line. So while I will cover highlights, big changes, literally every line, every accounting string can go up or down based on what we think is the projection and the actual need next year. So I will go through these. Council has dropped by about 17,000 overall. There was an increase of 15,000 in your audit line because again, we do anticipate having both the 25 and 26 audit to pay for in 27. All of the departments will have a increase in liability insurance. That's a difficult one because we were given a letter that says we think they're gonna go up by 12 to 15%, but we won't actually find that out until June usually. So the budget's already adopted. So to plan for that, I built in 12 to 15% increases in liability in each department. The council also holds the employee wellness fund for the gym memberships. That was actually much higher in 26 because we had a big fund balance. We use some of that for the body scans and things like that. So that budget's coming down to what the anticipated revenues are each year. The bed tax community groups are budgeted flat at the same rate as this year. Administration is reduced by a little over 430,000, which primarily is what we just talked about. It's the reduction in the contingency in the project reserve. So essentially there was still about an increase of about 200. in other operations, which are mostly the increases for the general fund portion of the matching funds for NRCS and for DEMA. So there's some money budgeted there to meet the general fund portions of those projects related to the flood cleanup. Also, I just want to mention during the budget year, the council used 200,000 of contingency to the United Fund of Globe, Miami. They approved 20,000 for the Axon Taser settlement, so that came out of your contingency this year, and 150,000 started this year with the NRCS match. So those decisions came out and we didn't have the capacity to put it back like we have previously. FIRE. is up about 785,000, which again, there's actually a $247,000 reduction personnel, and that's due to that reduced PSPRS retirement rate. The increase is really entirely attributable to the carry forward of that 0.3% PSPRS funding. So that's being, this year's money's being carried forward to make up that extra $300,000 toward the bonding payment, as well as a replacement for the chief's vehicle that was totaled in the flood. Some contribution towards the new fire ladder truck. So that's the pluses and the minuses in the fire department police is down 600,000 and the bulk of this is that previously the 0.3 percent PSPRS payment was split between fire and police So it was in both those budgets now It's out of the police's budget because it's all going towards the bonding of the fire station So that's the bulk of the drop in the PSPRS. Like the fire department, they had significant reduction in personnel costs due to the lower retirement rate, but council also made a decision to address retention concerns, I believe that was discussed last week as well, and increase the base rate of shift staff. So that offset some of those reductions. So overall, their personnel costs did increase by about 97,000. Some other changes in police department in 26 five vehicles were purchased. So that was a big one-time payment that was budgeted in 26 that came out in 27. But then we added back two vehicles. Like I said, it's all a give and take. It's give and take. Five vehicles came out, we put two back in. Five leased vehicles did come off their leases this year. So that's a big thing. That's one of our goals is to get off that leasing of vehicles. I'm pleased to say that neither fire nor police should be needing a end of year 26 budget adjustment So I think overall, and that's even if we had made the PSPRS payment. So we're budgeting them appropriately. We're getting to the point where we're not every year saying, oh, the overtime hit us so badly that we didn't plan for it. So I think that's a good thing as a budget person. The magistrate department decreased by about 76,000 over the adopted budget in 26. That was primarily due to the reduction in hours for the part-time clerk and the public defense contract. Public works decreased by a very small amount, about 104,000. That again is entirely due to one-time purchases that were in their budget last year for dump trucks and other vehicles. So really the department's increasing by about 16,000 in equipment. and contracts. Museums down about 85,000, and that was because they had their construction project still budgeted last year. So without that, they actually increased about 14,000, which again was primarily personnel costs. Economic development is down 57,000 year over year. This is due in part because the general plan is being brought in-house. Contractual services and first Fridays were reduced a little to meet some of these general fund reductions. However, the match for the Michelson building did go up 37,500, so that was a carry forward in their budget. The pool is up by another 83,000 this year, even with the decision to be closed on Mondays, and so staff coverage alone for that is about 250,000, and of course the liability insurance for the pool is significant, budgeted there for a 15% increase in that department. Community development has increased by about 180,000. 36,000 of that is that one-time funding we talked about for the mandated unfunded legislation regarding housing plans that we're required to provide. And the community development department added the zoning director at the end of 26. Transfers are up as well because the revenues for the library and active adult have not grown. I don't think we've even received the contract yet for active adult next year. So we kept those revenues flat right now until we know what those contracts are. So I do want to remind you that all of these budgets, and I'll talk about police and fire separately, do include merit increases that are anticipated for 27. They are applied throughout the year and given upon annual evaluations. And then there is, do you want to talk about the 2.5% for fire at all?

So just for clarification, as we had discussed, we are transitioning this coming July 1. raises or the increase for fire would be on a on a step, a hard step process rather than a merit process for right now. PD will also eventually go to a hard step where people can see what they're getting. This is to be competitive in the market with the people who are cherry picking our police and fire. So we are moving to that hard step for police and fire. the remainder of the city will be a merit two and a half percent and then we are going to look at the financial plan to see what we can the five-year forecast to see what we can do in the future other than the fact that we are doing the four dollar an hour Bump for Pd shift workers that is baked into this budget also, which we, as we have talked is, is necessary to make sure that we can retain officers during this highly competitive period where the, the. State of the. organizations in the valley. The the cities in the valley are are paying premium dollar and and cherry picking from us because of our quality of our of our staff that they're right to be picked. And we're trying to do the best we can in order to retain the people that we trained and have come up here and worked. So The bump is baked in and the steps will go into place for police and fire, although we'll work out the details. Everybody else will maintain on a 2.5 merit. Okay.

The next slide is your full-time equivalency. Just a reminder each year that this count doesn't include the seven members of council, your reserve and volunteer fire, or your three volunteer fire pensioners. but the changes since the start of fiscal year 26 was that the administration dropped a payroll clerk from 14, so they went down to 13. Public Works dropped three positions as part of their five that they dropped to increase their base salaries, and then one position moved from Water Enterprise back into the general fund, so that was a net minus two. Community Development added the zoning director. Fleet dropped the other two positions for the public works pay increases, but then added back a vehicle supervisor. So the net change was a negative three in the general fund overall. For FY27, don't panic, it says public works minus two, but the reality is that was two positions that were shifted to enterprise, so you will see those on the next slide. And the .85 in the magistrate was that the reduction of the court clerk from full-time to only a few hours a week that they're actually working. So then the special revenue here, you can see that there's the plus two and 27 for water. Those are the ones that came from general fund. And the minus one in water administration was that we had a position double field that year until someone retired. so that position's gone away. But overall, the net change going into 27 is just that down .85 that I talked about in the magistrate. Next slide's one of my favorite. This is all things streets, bridges, and sidewalks. It shows the combined operational revenues in each of those funds, as well as what the beginning fund balance is expected to be. The biggest fund balance you have right now is in that bridge fund balance, that 3.7 million. which is the prepaid grant for the Jesse Hayes sidewalk project, and a little bit of a balance left on the Cottonwood Bridge grant. HEERF revenue, their new revenue is down just a little, but that's based on the Arizona League projection. They did have a little pickup of their fund balance, though, after the 24 audit. Their spending in HEERF is dedicated to some staffing as well as a portion of street lighting and street repairs. That's what we spend HEERF money on. The fund balance, that 518,000 in HEERF fund balance is really being held kind of in project reserve until the completion of the 25 audit. I just, again, want to be careful about what we know until the audits are completed. The excise tax is only growing just a little bit in its operational revenues and its one-time balance is down because of the purchase of the non-CDL sweeper in FY26. That fund balance is also being used mostly for matches, so the excise tax has the match for the Jesse Hayes sidewalk, the Cedar Street sidewalk match, and the Broad Street sidewalk match, so that's how that fund balance one-time money is being used. And then the bridge revenues, where you see it going from zero bridge revenues to 6.3, That is completely the possibility of grants for the Yuma Street Bridge or the Haskins Bridge. Again, if the grants don't materialize, the expenditures don't materialize. So that's part of that capacity we talked about with the budget growing so much. Water is down overall by 2.6 million, going from 8.6 to just 6. 77%, the bulk of that reduction is because of the expenditures of grant funds this year, because the WIFA water conservation project is completed, so those revenues are going away and those expenditures are going away, as well as we had started this year the Army Corps 595 water line project. So you can see that the one-time fund balance is down 900,000 from fiscal year 26. They also had some one-time purchases out of the water fund, bought half of a dump truck and vehicles. Overall personnel costs are up $172,000. Operations are up $92,000. Securing future water is down. I call that out because that's a set aside, but that was also used as the match for the WIFA water conservation, so that's why that one dropped. The WIFA principal amount is down just a little because I think when we built the 26th budget, we thought we were gonna borrow two million. We didn't, so we're borrowing one million in the WIFA project this year, so that just came down slightly. And then capital and contingency includes, just so you know what's in that budget, 150,000 for well pump repair, 1.6 million is the remainder of the Army Corps grant, as well as a very small contingency in water. Similarly, the sewer fund is down 1.3 million in part due to completion of the audit, the 24 audit adjusted the beginning fund balance considerably down, but we also spent 667,000 in fund balance for the jetter truck shared vehicles with public works. So as I mentioned in the, you probably don't remember the presentation last year, but when we had that big fund balance, I was not comfortable with that because the audit hadn't been completed. It was really just set aside until, and it was good because the audit did show that there were considerably less. In total, personnel costs are increasing 179,000. Operations are down about $49,000. But this one, sewer has a large $372,000 match for DEMA for the sewer. So a lot of the sewer bills that we have paid already that are going towards DEMA, the bulk of those are hitting sewer for the match. So those are based on the invoices that have been submitted so far. Sewer does have a 20% operational contingency. There's $200,000 for sewer common line replacement because those come up. 300,000 is project reserve, which again, I would not recommend tapping into until the 25 audit is completed. Sewer revenues did not perform quite as well this year as anticipated. That was mostly incapacity fees, so we right-sized that budget projection. I do wanna say regarding water and sewer, the enterprise funds, it's always a balance to determine what their appropriate share of general fund administrative costs can and should be attributed to these funds. They benefit from central finance, the city manager, HR, several consultants, and as such, we were working so hard this year to balance that shortage in revenue in the general fund that some of the increases were shifted over to the enterprise fund. As we move forward with the five-year forecast, it's very important to look at these again and make sure that the enterprise funds are not in operational jeopardy as well. It's a pendulum. We swung a little bit towards enterprise this year. I expect it may need to swing back a little bit next year. But again, the five-year forecast will help us determine that as well as seeing those general fund revenues come back. We also are watching the revenues in water and sewer. Your current WIFA debt between water and sewer is about $850,000 a year. that doesn't include the principal on the new loans. So again, it's very important to keep these enterprise funds healthy and in operational balance.

Tina, I'm sorry, one question. So that includes the new ones that we submitted also?

It includes, it is, I included the interest on the new loans, but I haven't gotten, since we haven't gone out for the loans, I don't have a principal balance yet to plug in. So those numbers will increase when we get the principal on the new loans as well. The library fund, as I said, the middle one, this is looking to be slightly over budget because of a healthcare selection, so it's increasing in 27 for that same reason. For many years, the revenues would go up about 4% from the Gila County District. We haven't seen that. We didn't get that 4% increase last year, so I didn't budget for it this year. We'll see when we get the new library contract if that will be so it could go improve a little. Active adult, swapping what, $300 under budget, I'll take it. We've not heard about the contract for next year, so again, we budgeted the revenues as static, but could be hit with additional costs. Their budget is increasing about 26,000, which is healthcare increases, tires for their vehicles, and increased cost of meal supplies. So the general fund will be subsidizing them about $172,000. WIFA, we didn't have it budgeted in 26, but the anticipation is a $1 million in drinking water, $3 million in sewer. The WIFA loan is going to be used for the match for the Army Corps grant, and the sewer loan will be used entirely for the NRCS match. Finally, the grant funds we've talked about already. They're jumping up so high because of the DEMA and the NRCS grants for flood relief. I will bring up the next slide, which will show you some of these opportunities and how that number got so high. So you put that NRCS at the top at 24.7 million. I'll skip the miscellaneous grants for now. DEMA at 5.4, and then possible, the Brownfield grant I believe you said has been, we've applied for. The ladder truck is a congressional direct spending that we're hoping to get for the ladder truck. And then there's just, the rest of the list are either ones that we know are coming or ones that we may be applying for. So you've got a seven million just miscellaneous and another nine million in potential grants there. Do you want to say any more about the grants, Paul?

Yes. This is always something that when people ask us, what is our budget? And the budget is a number of revenue and funds we have. But we have to have the capacity to accept additional money. And that's where the grant fund comes in. This $47 million doesn't mean we have 47%. But we have the capacity to accept this money if it becomes available, when it becomes available. And it's hard to, it inflates what looks to be our normal budget, but it's very important that we do this. There's actually working on a bill this year that would allow us to accept grant-funded money and add it to the budget mid-year, but right now, legally, Um, if you were to, you know, all of a sudden boom, something happened and and injection of funds, if you don't have that capacity, you can't accept those funds. Um, so we, we put in everything that we think may. It would be a good thing if it did. We have to be ready, but sometimes it's a little bit hard to fathom why that grant fund is so high and that's just being ready for whatever comes around the corner. That's a good list, it is.

This one million on the ladder truck, then that's the anticipated amount we may get? Is that what that counts for? The remainder, if possible. Okay, that's not the payoff, it's just a monthly gain.

No, that's just what has been. We're hoping we get. We're hoping to get, yeah.

Just, Mayor, members of council, just for the record, all the funds that we've gotten already for the fire truck, we have paid to the manufacturer because then we're not paying the debt service on that and it's to our advantage. So the million represents what's remaining to be paid on the fire truck.

Really?

Yeah.

All right, I know this is a horrible slide. You're never supposed to do a PowerPoint with a font this small. But I love it, because it balances. It all ties out. And there's your 97-691-340 in the bottom right corner. So that's what will be published with your public notice next week, along with your property tax levy. So that's what's required to be posted for your tentative budget.

And Mr. Mayor and members of council, every city in Arizona uses the same form to plug in. So you can do side-by-side comparisons.

Oh, what's next?

Well, what's next is it's going to get published next week and for two consecutive weeks, and then we'll come back on June 23rd for the public hearing on both the final budget and the tax levy, and then do the final budget adoption, and then on July 14th is the date scheduled to adopt your levy, well before the first Monday in August.

So excited.

I am excited members Council as per Council direction on the there is no increase in property tax, other than new construction, which is very, very minor.

So the 23rd is a public hearing that's for the public, they can come and ask questions on the okay exactly. One thing that wasn't included and that we included last year was the flight insurance for our residents. That's not in this year's budget.

Not for the residents. Linda, remind me.

Thank you, Tina. No, it's included for our staff, but not for our residents. And we've had communication. with PHI, and they are aware that we are not continuing our contract with that part of it, and so they would like an opportunity to come to a call to the public, make a presentation to Council, because if a resident would like to continue that coverage, Between now and the time that our contract expires with them, I believe it's in August, they will receive a heavily discounted rate if they wanted to continue for another calendar year past the expiration date. I don't know the number. We just received this information this week, and so we'll bring them in for a council meeting presentation, hopefully the next council meeting.

So hopefully they're willing to do, along with us, a huge campaign to educate the public. I think we need to get it out there because it's important. I mean, it's not that costly if they maintain their own.

Absolutely. But because they're a private company and there are other companies that do provide the same service, we have to be careful of that. But we can provide this forum, of course, for them to inform the public of what they have to offer.

Okay. Sure. Great.

Thank you.

Questions, any?

Presentation. Yeah. I just want to thank Tina and Linda and our finance, all our department heads for the work you guys have done. I mean, it's a tough year, and it was a lot of work to get to this budget. And Tina, thanks for the breakdown and making it really simple to understand. It really helps us out, or helps me out to understand it.

Thank you. And Mr. Mayor, Council, thank you to Council for going down this journey with us from strategic action plan, the Council ad hoc workgroup, special meetings like tonight, being available and having the feedback and working with us. it helps us do our job it helps us serve you and serve the community um by being able to put something that that fits what what you want this is this is your budget you're passing your priorities with money applied to that our job is to put that together for you hopefully in the best way possible that meets all your needs and we hope we've done that i think it has it helps us

explain to the public that that's what that's what us going out there and really explaining this is really pretty simple to understand yeah and you have coffee with the mayor tomorrow that's it tomorrow so are you ready do we have a motion to approve the tentative

2026, 2027 tentative budget as presented.

Second.

We have a motion and a second for approval of the tentative budget as presented. Is there any further discussion? All those in favor, say aye. Aye. Any opposed, nay. Motion passed. Do we have a motion to adjourn?

Motion made. Second.

Motion second to adjourn. All those in favor, say aye. Aye.

Meeting adjourned. Thank you. Thank you very much.