Tri-City Council - Regular Meeting

call this meeting to order. Uh this is a special meeting of the Kingman City Council held uh at 4 PM on Tuesday, January 27th, 2026. We'd like to welcome all those who are here in chambers and those who might be participating via the internet. Um we will turn some time over to our city clerk for roll call. Mayor Watkins present. Vice Mayor Samley is with us on Zoom. Council member Dykins here. Council member Savage here. Council member Staley is excused. Council member Walker here. Council member Ward here. We have a quorum.

Thank you. If we could all stand for the pledges of allegiance and I'll I'll lead us. I pledge algiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

Thank you. The council may go into executive session for legal counsel in accordance with ARS 38-431.03A3 to discuss any agenda item. The following agenda the following items may be discussed, considered, and decisions made relating there too. Item number one on our agenda 1A, year-to- date financial recap, five-year forecast, and budget priorities. City staff will present the fiscal year 2026 year-to- date financial summary and five-year financial forecast, as well as discuss budget priorities for fiscal year 2027. Let's turn some time over to our city manager first, even though I know it's going to be the Tina show. [laughter] I'm sorry.

No, that's a good That's all right. That's why we're here. All right. What? Sorry, ma'am. I'm it right now, too. So, let me see. Get this. All right. We're sharing. [laughter]

Good. Control LR LR alt. All right, we'll go with that. Thank you, Mayor Council. Um, we are, as you mentioned, presenting the year-to- date financial recap and five-year forecast uh for our budget priorities. Uh Tina has done an amazing job in in going through and preparing this. And with that, I will turn the time over to her. Um as we go through, please don't hesitate to ask if you have any questions. We're happy to pause as we go and and discuss, but otherwise, we'll we'll just kind of go through it and and uh be ready to to speak. So, thank you.

Thank you, Manager Walsh. And good afternoon, mayor, vice mayor, and council members. So, we'll start with so we know that this is something that we do every year. This year, we incorporated a new segment to it, which are looking at a very small number of budget priorities that we've heard from the council over the last few months. So, it'll be a little bit different from from years past, but also very Miss Molen, will you please pull your uh mic forward? They can't hear you online.

Thank you, Miss Meredith. Better better. All right. So today's agenda we will cover the key budget dates where we are in the budget process as far as the meetings with council is concerned. We will do a quick fiscal year 26 year-to- date recap. We'll give you some status on some key capital projects. quickly look at our five-year forecast, what we've got included in the five-year forecast, kind of what that baseline forecast looks like, and then move into the fiscal year 27 budget priorities. So, looking at our key budget dates, we have today and then we will have a strategic plan town hall on March 27th. We will then hold our budget and CIP work sessions in bin May. The second session is only scheduled in the event that we don't complete our full work session on part in day one. Then we have our tentative and final budget adoption in June and then the new fiscal year July 1. So, looking at the fiscal year 26 year-to- date financial uh recap, and I guess let's start with just some quick housekeeping about the slides. Um, at the bottom of each slide kind of gives you an idea of what we're going to be covering under the major topic that's covered at the top. So, just as you follow along. So, we're going to look at the highlights first. And of course, the FAA land release, right, is a huge highlight. It's nearing completion and we're expecting that to be completed by the end of this fiscal year and then we will begin making our annual payments uh

from basically the general fund to the airport fund for that purchase. We also know that we the one of the council's priorities is to ensure that we are staying staying fully funded as far as PSPRS is concerned. So this year council approved a $4.6 $6 million payment to PSPRS to ensure that we are staying fully funded. We also uh the council also adopted or put into place convenience fees as a way to save the city money and uh offset other costs primarily in utility billing but across the board actually. So that went into place in October. We also funded a portion of ANT funded and will begin construction of a portion of the connector roads for Flying Fortress Parkway TI. We also began the annexation process for phase two of the industrial park as well as the area just north of Walapai Mountain Road between I40 and Walapai Mountain Road. And then of course continuing to fund the street repair, maintenance, and improvement program. And we are in year three of the seven-year plan that that uh council approved a few years ago. But with highlights, there also come some challenges. And what we're seeing so far this year is that our sales tax revenues are trending flat. I will cover that uh with you in the future slides. We are also noticing a downtrend in our building permits. So that is also a challenge. Uh, also identifying funding for the rest of Flying Fortress Parkway from airway to industrial, finding a development partner to construct Kingman Crossing TI and then also addressing the impacts of our water service line leaks.

Question Tina on the building permits. Is that commercial or residential or both? Right now we are Thank you, Councilman Savage. Right now we are seeing it as residential and I will one of the slides is going to show you what we think it's going to look like and we were able to director Moin was able to provide some information on what we're seeing locally on that too. Tina, I have a question too. Are we going to talk about You said we're going to talk about sales tax a little bit later. We sure are. Okay, good. I know. I thought we were, but I just wanted to make sure.

Thank you, mayor. Yes. So moving on to sales tax right now. So where are we from July to November? So a good gauge of where we might be in the future is to compare our July to November sales tax revenue collections or our year-to- date collections in what we have collected in years past. And so I want to uh share some of the categories. Retail is our largest category and producer of sales tax. And we are seeing that retail is currently flat. Uh we are noticing however that people even though they may not be spending money at the stores they are still eating out. Our restaurants uh continue to increase and we are seeing that increase year-over-year but definitely this year still hotels. I don't know if you might recall, but maybe six, seven months ago, our tourism manager, Josh Noble, had shared some information that he was hearing that the Las Vegas area was they their tourism activity was trending down, hotel sales were down, and at some point it might affect us. And at that time, we weren't seeing that affecting us. But you'll see here where we are with hotels uh for fiscal year 26, which is the pink bar on the graph, you will see that it is starting to affect us. We are seeing a downtrend in our hotel tax collections. Now, I'm going to skip skip past construction for now. I'll come back to that. Our online and remote, people are still purchasing online. So, we are sending an upward trend in our online and remote. And that has been year-over-year. We continue to see that. We're not noticing any decrease in that category. And then the rest of them are a much smaller group of collections. Uh so those first five is what we really want to focus on. I want to look at construction because you'll see that construction sales tax is trending up and may say well gosh if building trending down why do we have so much

construction sales tax right one of the big reasons over the last few years actually we've seen a real big spike in our construction sales tax is that we have some pretty big projects going on here in town. Right? We've got the two traffic interchange projects and those bring big construction sales tax to this pot of money and um also city has some big capital projects that we have done and though we have to pay sales tax although we get it back right we do have to pay sales tax. So that's part of the reason once those projects are completed, meaning some of those traffic interchange projects and maybe some of those big road projects, we will likely see that number uh go back down to uh more in line with uh under $2 million. So just wanted to point that out that although it looks fantastic, it's really more of a one-time increase and it will go away at some point.

I got a question. Yes. Do we have any comparison of the amount of tax difference on Bee Street from before and after.

Uh, thank you so much, uh, Councilman Ward. We actually put out a monthly report on all of our sales tax collections. It's a six-page report that we post on the website. The very last page of that report is a comparison of year-over-year data month-to-month of the downtown sales tax collections. And we are s we are seeing um an upward trend not anything significant but certainly something worth touting as far as the collection what the collections were before the construction and then what they are currently so yes. Okay,

Tina, since we're we're talking still on sales tax too and all this, I wanted to bring up the point. Of course, our Wayfair the Wayfair bill and of course the tax the online and remote sales tax is less than a million dollars. What around $850,000? Uh, mayor, it's actually well over a million dollars now. Is it now? Okay. Well, we all heard about the legislative update the last meeting we had and the possibility that one bill has been introduced or there's they're thinking about introducing it where only where those centers those distribution centers are that city will collect that sales tax. That could tremendously impact us, I would think.

Mayor, thank you so much. Um, I'm actually was going to cover that on on another slide as far as what that bill is. Uh, and we can certainly talk to it now as well. Uh but there is that bill that's being introduced. It was also introduced last year and it did not it you know it did not make it through. Uh we're hopeful that that's the case this year but certainly if that does get approved right then it will be a very big impact on our sales tax collections. So it's something that we certainly do not want to happen and it's certainly something we want to work with Tom Dorne and our legislators. uh to oppose. So, thank you.

Hi, Vice Mayor. Hello. Thank you. Sorry for my lateness. All right. So, moving on to the building permits. So, giving quite a bit of history and then also sharing a little bit of what we're thinking is going to happen. Where that red arrow is is this year. what we're estimating by the end of the year as far as new building permits. So the blue line or the dark line are single family residential, multifamily or two family dwelling units are also included in that number and then the gold line are commercial. So you will see that we are noticing a a a decline in in building permits and that is something that we are noticing not just locally but it's nationwide, statewide. We're hearing about it on the news. We're hearing about it in the governor's executive budget. She talked to that as well. So, development has slowed and what we're seeing locally at least is that has to do with tariffs and mortgage rates. Uh, also locally are we've noticed that our duplex inventory is moving slower than expected. So, that's another reason for the downturn. There is an uptick in the inquiries and the purchases that are being seen for single family residential units, but sales are still expected to be flat going into next year. Uh for the outy years though, we know that the interchange is going to hopefully spark and bring growth and certainly in that commercial corridor. So we are not we are not forecasting any sort of major downturn in commercial permits commercial growth. Uh certainly we are not we I I feel that we are being conservative in that and I think that it will probably exceed what we're expecting just based on the interchange but keeping it fairly flat with a little

bit of growth is what we're seeing currently and what's expected at least through fiscal year 26 and fairly flat going into fiscal year 27. Let's see. Get there. Okay. [clears throat] All right. Moving on to the next slide. As far as fiscal year 26 year-to- date revenue growth, the two are are our major sources of revenue, which are sales tax and our state shared revenues. Just giving you a fiscal year 24, a fiscal year 25, and then an estimate for fiscal year 26, where we think we'll be in each of those revenue sources, and then a comparison of percentage growth or decline at the bottom of that table. [snorts] So you'll notice overall we are expecting that there is going to be a downturn in our TPT which is that first column or really the second column for fiscal year 26. When we take construction sales tax into account we're expecting an increase but if you take it out we are expecting a slight decrease. And that again that's what we're seeing with all of the categories with the outlier of being construction sales tax. When we move on to the state shared revenues, uh, in general, the state is expecting an uptick in their state shared revenues for fiscal year 26. However, the city is expecting moderate growth or even a decline in some of that. And part of part of it is due to Santam Valley recently became incorporated. And so now cities and towns and it starts this fiscal year. So it's starting in fiscal year 26 we now have to share our revenues right state shared revenues with Santam Valley and that will be going forward as well. So that's part of

the reason when we look at that state shared revenue income tax column it's got a pretty big decrease of 8% that is merely because that this year is the last year of the tax reform that went into place a few years ago and we knew that we were going to not receive the amount of revenues that we had seen in years past. But this will be the last year that we'll see that drop. Going forward we'll start to see an increase. So, just wanted to cover where we are at the end of fiscal year 26 for the city of Kingman with these revenues. Okay. All right. Moving on. We're going to uh talk a little bit about convenience fees since they went into place. So, citywide, we are seeing an increase in alternative payment methods since the convenience fees went into place in October. Uh but I want to point out specifically utility billing. We track that data on a daily basis and they are the biggest users of credit cards. So I wanted to show what we're seeing trending uh for since July through December as far as the types of payment methods and what customers are using. And you'll see that from July to o to to September we had a very large number of users of credit cards. And you'll see that our credit cards, which is the gold line on the chart, has trended down since October. And that the other two payment methods, which are the blue and the red lines, which are bankdraft and cash and check, are trending upwards. So, we knew that was going to happen. And uh and that is happening citywide. That's not happening just in utility billing. Uh however we did this because it because there's a convenience right for credit card users we want to offset or those users should pay the fee and it was a way to save money in across the

city and we are seeing that. So for fiscal year 26 we expect to save about $300,000 citywide and $420,000 in fiscal year 27. So that's certainly working solely for utility billing which is paid by our water rate users. We're going to see next year a savings of about $300,000 and that's what we thought we would see. So that's exact what's happening is exactly what uh the the council expected to occur. I have a question uh Miss Molen on the EFTs. Is that a cost to the city at all?

Thank you very much vice mayor. Yes it is. It's a very small cost to the city. So right now on a monthly basis those EFTs for utility billing are costing I want to say maybe just under $3,000 or so for that. Okay. All right. Thank you. So we still are absorbing some costs. It's not completely the burden has not been completely shifted over to our customers. That is correct. Okay. Thank you. You're welcome.

Okay. We also want to cover a little bit of the golf course. We like to talk about the golf course on an annual basis and we know that we recently increased rates starting in July actually to help to help offset the loss really or the amount of expenditures that are incurred in the golf course. So wanted to just share with you there's a lot of numbers here. So really the key number is at the very bottom of the table where we see the surplus or the deficit. And we know that the golf course does not break even. And in fiscal year 24 fisc well fiscal year 23, fiscal year 24, 25 and 26, you'll see that the deficit is more than $400,000. And even with the increase in golf revenues this year, we still expect uh almost a $500,000 uh loss or deficit in for the golf course. However, I do want to point out that if you look at it's almost all the way at the bottom of the chart, well, this is where my cute my really wonderful pointer would come in. Um, if you look at this line right here where it says capital outlay, this year we invested quite a bit in the golf course as far as HVAC replacements, some uh, greens, and I don't know the verbiage for it, but something to help with the greens. I want to call it a green mower, but some of that equipment. And so, we invested quite a bit. That is not something that will happen year overyear. So, if we were to go back to maybe investing $50 to $100,000 in the golf course every year as far as equipment, we would be closer to uh 400 a $400,000 loss or less than that. So, those are the projections for the golf course. We are seeing even with the rates increasing. There's the chart on the right hand side. We are still seeing an increase in rounds compared to last

year. And then last year, we had more rounds than the prior year. So, we're still seeing an increase in golfers and the 9-hole and 8 18hole rounds. Uh, but with that, there are still increased costs. Tina, what was the reason for fiscal year 22 being so low versus since then it's been over 400,000?

That's a great question, Councilman Dyken. So in fiscal year 22, we were still the recipients of quite a bit of COVID money from the federal government. They gave uh and so we received ARPA funds and we were able to offset much of our general fund costs with those monies. And so that is the reason why we were the golf course was able to benefit from that.

Yes. Yeah. So, with the with the continued losses, have we looked at all at outsourcing it?

Thank you, Councilman Ward. We haven't gotten to that point where we've looked for outsourcing the golf course yet. At this point, we we uh we're tracking this. We are working on a a marketing plan that that uh council had requested last budget. Uh we're looking we're working on the RFP on that right now. So should have that marketing plan out fair within the next month or so. Bring a consultant on and help us see okay are there better ways that we could be marketing this better ways of um maybe scheduling [clears throat] you know different different things. So um we wanted to go that route first and and see if we're able to address some of these losses. Um, and then if that still isn't working, that would be our next step is to look at, you know, other options that way.

Yeah. I I'm just dumbfounded that we continue to lose that much money and and don't look at some other way of doing it. And yeah, no, it's it's definitely one that we are trying to find a way to to at least break even. I mean, that that's to not lose money is the goal there. Um, but yeah, we want to start with this marketing, see what we can do with that, and then continue from there and look for those improvements. But yeah, thank you.

I have a couple questions um on the golf course. So, it's my understanding that the commission's looking at another increase for non-residents that could be coming before council. Yes. So, the commission met just I think it was last week and then I think they have another meeting coming up in February. uh they discussed some of the rates at the last meeting and which was mainly an increase for for non-resident rates and then I think I believe they're going to look at some additional costs that they're meeting in Feb or some additional fees that they're meeting in February. Um once they have that it'll be brought before council for uh for consideration.

Okay. And then the la the last thing I mean I know we're not going to make up the deficit obviously with non-resident golfers. I I am not thinking that that's going to happen, but I would I would be interested to know in a percentage um of uh resident non-resident golfers because I would like to know and and as we are preparing to do this RFP for this marketing plan, that's something that I would like um staff to consider is that we are tracking that because if we can start to see that that boost and that increase in non-resident golfers, you know, that then we know our marketing is working and that's going to, you know, help. I know also with all the improvements that are being done on the driving range that's going to allow it to be open more frequently, you know, more convenient. So, we'll hopefully see some, you know, some more revenue stream. I mean, the deficit is vast. So, I I understand that, but they are making some improvements to try to be more revenue uh conscious of bringing in more and I I want to thank them for that. So, thank you.

Thank you. on uh [clears throat] the uh resident rate. Why are we giving as many people as we are resident rate? Why shouldn't it be just the people that contribute, the people that pay their water bills or live in the city? Councilman, that's a great uh great question. Definitely um a decision that that council can make. Um, I believe when we looked at the the rates last, uh, council's direction was to include the area that we did. So, if if when we bring these updated rates to you, if if we want to narrow down that area, that's definitely a discussion that we can have.

But if you're paying a water bill, you could be a county resident. Say what? If you're paying a water bill, you could be a county resident. Also, just saying if we're going to go by water bill county. So, I mean, just saying. Well, The golf course don't pay for its water. Agreed. That was my only reason for saying that. Gotcha. Otherwise, I'd just do in the city. And that's the way most cities do it. There's very few that have half the county included. Okay.

And definitely that's a consideration we could uh bring before. Thank you. Perfect. Okay. So, looking at our recycling program, this was a program that was launched on October 2nd. We set up the program to be open from Thursday through Saturday, 8:00 a.m. to 2:00 p.m. Originally, the cost per load was $753. We changed that or the council approved to reduce that to $7.50. 50 cents and it is open to city and county residents and businesses. So, one of the goals of the program was for it to be self-supporting. I believe that's what uh the council spoke to when they approved the program. And for the program to be self-supporting, there would need to be annual recurring revenues of $265,000. So that's about 3,000 loads a month as uh and what we're seeing through December, you'll see the chart here or the table that shows the number of loads that we have collected since or from October, November, and December. And it's a total of 114 loads. And we've generated just about $812 in revenues for that. And through December, our total program cost with all of our one-time purchases, right, equipment, containers, and then with uh people is $147,000. So, there is a deficit of almost $147,000 for the program currently. This is something that we will be bringing to you when we bring the solid waste rates to you in March will be the first time that we'll be bringing some

recommendations as far as what the rates look like and how to subsidize recycling if we want to continue to have the program, how to make up the the deficit that we're at currently and where we will be in March. I have a question. Um, so what would you say would be a fair evaluation period for this? I I don't recall council saying we're going to reevaluate this in a year or we're going to reevaluate this. I mean, I obviously want to give the residents who really wanted this an opportunity. I think there's still some out there that still don't know it exists or where it is or what they can take or how much it is. So, um I just wonder what's the recommendation on a a fair evaluation time frame. You know, looking at the program, um we've got a a large gap between how many we have participating and where we need to be. Um, we are working, uh, Sarah's working diligently on getting some videos out, some other some additional marketing, get get those things out there to to make it make people aware of it. Um, I I don't know. I mean, just just looking at the numbers, that's that's a big gap to overcome. I I don't know that there's enough marketing to to overcome that. Um I I believe there are, you know, opportunities out there for, you know, other other recycling programs that may not charge. So So if you have the option of of having to pay for the city or or maybe even not not being charged or um being paid for those, I know I would go and and take it where it's not going to cost. So So I think there's some of those hurdles that we might be up against. um looking at it myself, I I don't know how

we get to that 2950 um from 114. So, okay, to me I I I think we we've gone through this and and it's it's not getting to where we need it to be. I don't know if there's something that maybe we could do on top of what we're doing or or some additional marketing, but in my eyes, I don't know that there's enough marketing that would get us from 114 to well, I'm sorry, 57 to How much have we invested in it already on top of what we lost. So, it's the 147,000. 147. That's the equipment and everything. That's what we've invested. I think we should cut our losses, just kill the program. That's my problem. Well,

I it's not it's a public meeting that you're allowed to attend and and watch, but um actually we we will one of us will we'll get with you after the meeting, sir. So,

so I mean I I kind of agree with u councelor Ward that the recycling either we need to increase the rate or we need to I mean we need to be good stewards of our programs and what we have to offer. And you know you hear all the time we need a recycling program, we need a recycling program but then so then we roll it out and we expend all the costs to put it up and we don't get the participation. So, I mean, I I not a super fan. If it doesn't pay for Yeah. If it if it's not going to at least break even,

I got that 147,000 that included the bailing machines. Okay. Have we received those yet?

Thank you, Councilman Savage. So, yes, it includes the bailing machine. We were able to get one for well under $30,000. So, that's great because we thought we were going to spend much more than that. We have not received it yet, but it has been ordered and we have talked with the vendor to find out, hey vendor, if this program goes away and we haven't received the bailor yet, can we just UPS it back to you or ship it back to you and we are not able to do that. So we did happen to to check with the vendor on that. All right. The next thing is uh as far as con constituents, I I was in contact with one uh very adamant about the program, but he found it too constrictive as far as the processing and what's accepted and what's not accepted. And basically, he just boiled down it's time for the dump. He wasn't happy about it, but I think that may have been a possible problem as far as what's allowed and what's not allowed, but yeah, it's doesn't look good to be honest. And you make a good point. Um really the that we set up the program based on the the basically the the RFP that we put out there to see, you know, really the council's direction was we want to do this, but we want it to pay for itself. So, uh we put out the RFP to see what commodities would we could get um reimbured for, paid for as as we recycled those. So that limited it to to which items we could recycle uh and still be able to to make a revenue on on the on the program or for the program to fund it. And so that that narrowed down what we would accept. And then as you go through that, there's certain requirements as you accept those commodities, you know, they have to be in certain condition otherwise um it's just going to get thrown out anyway because they can't use it if it's not in that condition. So yeah, there are certain restrictions in order to to generate revenue for it that we had to

meet. So no, it's it's a great point

comment. If if we have a new business open up in town, the place gets swamped like for the first month, huge business, great attendance. I would have expected to see that with this program that the first month or two months would have just people coming out the the back doors to come and recycle, but we've not seen that. Um, a question though, out of the $147,000 that includes one-time purchases. take away the one-time purchases. Where are we at total costs that we would just if we weren't buying the bailing machine and all these other things, where would we be at our investment versus the 812 in revenue?

Uh, Councilman Dykens, I don't have that data in front of me. What I can share is that if we ran the program for if we ran the program taking out the one-time purchases, it would cost us over $300,000 to run it, taking into account any revenues that we're hoping to collect when we recycle the material. The program costs us $265,000 to operate. And much of that is people, right? That's that's a majority of what of the cost would be the couple of people to operate it. I'm just concerned like everybody else as far as the

how valuable this really has turned out to be though we just have three months into it. I realize that is a small window to judge but still I would have expected like I said a whole lot more being it's a you know a brand new program and people I would have thought would have been saving things up knowing this was going to start and it to me it's it's flopped. Um, I'd like to make a comment about that if I could. Uh, you know, to your point about a new business opening and, um, it getting a lot of attention and and a lot of people showing up, you know, what what those businesses do to market their grand opening. they they um you know are advertising, they have a ribbon cutting, they get the chamber out, they build that excitement and we have not done that. We have not promoted this pro this new system well enough to to get that excitement and and you're asking people to change their habits. I think that takes time. It takes more than three months. So, personally, I'd like to see more promotion. I'd like to give our clean city commission the opportunity to help get more people recycling, maybe going to the schools and and talking to the kids about recycling. I I know they used to do that in the past, but previously when we just had the containers at the parks where people could recycle, I remember there was a survey and and I think it was over half of the citizens of Kingman were recycling using those bins.

So, in my opinion, we just need to make sure that people know about this, know how how to get out there, how to recycle, and then give them the opportunity to change their habits and and start recycling again. And then I have a question for manager Walsh. How many people are we hiring to work at this facility four days a week? One and a half. Okay. So, thank you. We have turned the microphone off. Um, sorry about that. So, we we currently have one full-time employee and two part-time employees working to cover it.

Is it possible to go to one full-time employee until there's more demand?

Councilwoman Staley, this is Tina. If I can just chime in the program, sorry, and I I apologize, manager Walsh, for um not clarifying my response for you. So, the program as far as what it would cost to run the program if it was ongoing included one full-time and two part-time employees. What we are currently doing is utilizing our existing staff paying overtime for them to to work because uh we we had hired a a couple of part-time people and a full-time person and then there's, you know, been shortages and vacancies and no longer had them. and our our solid waste department chose to uh utilize existing staff for that. So, and as far as if we can get away with one full-time person for that, that would be something that we would need to, you know, to talk with Solid Solid Waste about and see how how we could operate that. One of the concerns was we need a person at the booth, right, collecting and letting people through and then we need people actually directing and taking the trash and putting them in the bin. So, it makes it difficult to only have one staff member uh manage the program and I know that was some of the discussion when we went to when we made the recommendation for one full-time person and two part-time people.

Thank you. Manager Walsh, have have we been advertising on our electric our electronic boards for this? We have. We we have an ad. I don't know, Sarah, do you know how long we've been doing that? Since since we opened it, I I believe. So, yeah, on our our digital messaging boards throughout the throughout town, uh we have one that comes up about recycling. I've seen it. So, yes, I can attest that it's there.

Well, and that's why I asked how long should we I mean, what's what's a good period of time to councelor Staley's point, you know, we do have to change some habits, but we're not reaching all the people. I mean, I got a call from an a constituent who is just now finding out about this and wanted to know, you know, where they could get a flyer or where they could get, you know, a rack card or something to go pick up a bunch of them to go spread the word in the community. So, it's not that we're not advertising it. I think we need to be more strategic about who we're advertising to and actually feed the information out into the community in these various, you know, venues. So that's why I say, you know, if we're going to give it six months, if we're going to give it nine months, you know, we need to give it a fair shot. This this isn't a great amount of time to test a program.

I'll just add that when we started this, I wasn't real sure about this thing, and I'm still not, but I think we owe it at least six months. Um, and I think I did ask for it in that meeting to come back at six months and give us some numbers, but I'll have to agree. I don't think I've seen it I haven't seen it really advertised. I don't pay attention to the boards that much, but maybe we can get on Facebook or whatever we can do because I I we owe this thing a chance to to make it work. I mean, we've spent some money. We've spent time and I'd hate to see it fail, but you know, these numbers don't look good. But, you know, I think March we need to look at it again. March, April.

Also to go along with what Councilman Staley said, could we promote it a lot more with a ribbon cutting and all of the the big advertising that these other businesses do? Can we do that? Yeah, we're open to anything. Definitely. We could I mean, yeah, we could do a ribbon cutting. We could do some sort of event out there. Absolutely. Okay. With that, what would it take? Is that something that we need to bring to a regular council meeting or is that just something that staff can move forward with?

We can move forward with it. Absolutely. and Councilman Dykins, Councilwoman Staley, and all of the council uh Vice Mayor had shared at the last one of the work sessions that we had and about how great the snipes were on the utility bills, right? You don't have to open your bill. You see the you see a a QR code and you're able to download it and it takes you to this great page. And we've got a great recycling page. Uh, so I know that our solid waste team and Sarah are working on getting that snipe out also. And I don't know if it's scheduled for next month or the following month, but they're working on that, too. Recognizing that that's another way, right, to reach a lot of our water customers, city and county, uh, customers, too. So, we are working on that advertising method, too. So, if we could just take that QR code and just have it directly connect the customer to that one page, that you knowformational piece and just put something out there about recycling, those that are interested are going to scan it and they're going to get all the information that they need. So, I think that's a fantastic path in addition to all the other things that were said for sure.

And of course, let's not forget the app on our phones, too. And of course, I know we've seen pushes that'll come up every so often on the app. Maybe we could ask for some more pushes just reminding you know about recycling that recycling is available. And another another advertising avenue that the team took before we launched it is First Friday was still happening and so they promoted it at First Friday. We've got First Fridays that'll be coming up again, right? So certainly we would continue to use that. There was some interest in flyers that were handed out at those two. So, appreciate the feedback.

So, it sounds like we should pro I know all of us here on council. It sounds like we should probably keep it around for at least one year and then if it's not working, kill it. I know I I know I understand councelor Ward. Um I I would like to see at least six months possibly, you know, nine months. Maybe we could reevaluate it at six months like councelor Walker said. Um, true. You know, after we go into a very aggressive, robust marketing program,

there's a there's a lot of people that know about it. You see a lot on Facebook about it. They're not going to pay to recycle. And and that's basically the message you're getting here. The message you're getting on Facebook. Good point. I'm willing to recycle. I'm not willing to pay to do it. And I've seen that nationwide, not just here. And that was why I wasn't in favor of it to start with, but I hoped it would work. And I I don't believe it's going to. That's all I got.

So, we have, if I if I may just make a suggestion, we we've got our budget work session uh scheduled for May 13th. At that point, we can bring back a report on on what numbers we're seeing. We'll we'll hit it hard and heavy with a a full blitz on the media campaign and and try and make it as as uh known to as many people as we can as through from now till then and and it may we'll we'll give you an update on where it is and we'll look for that ribbon cutting to be scheduled. You got it.

And manager Walsh, if I can also just share that we will be bringing solid waste rates to the council in March and this will have to be a part of that conversation. Uh, so you'll probably get a little bit of a Yeah, you'll see it probably in March also for consideration. All right, so moving on to the status of some key capital projects here. I don't necessarily want to go through all of them, but I'm going to just because they are our key capital projects and I want to make sure that we share what the status is on these. So, we've been talking about a smart gov permitting. It's our smart gov online permitting, licensing, and project management system. And we are nearing so close to getting that launched to the public. We're expecting to have that launched to the public in March. So, just, you know, a couple of months away. So that's exciting. Our team has been working so hard on this over the last year and a half or so. So thank you so much for the teams on that. We've also talked about the shared workspace with our Wave CED partner and the construction contract I believe has been awarded and we are working on the office lease. Uh that that lease is currently under negotiations. The driving range lighting, if you've been by the golf course, you see the polls up. So they have already started that project and it'll be completed in the next two weeks. Then looking at Grand View Pool, it is messy over there, but it is making progress for sure. It is underway and our pools team has shared that it will be completed opening day of pole season. Then we have our Sunb Belt Park and that drainage channel is 90% designed. The park itself is at 60% design. They're currently defining what phase one looks like and then the construction of the

channel is going to take place in the late spring and then phase one construction will follow thereafter. So we're making some progress on that park also. Fire station 21 and and 24 remodels are completed and fire station 23 is underway and the gym and the mill work have already been completed. And then the fire station 25 design the Seymar ha uh the Seymar presubmitt conference. So we have we have already issued a formal solicitation. So this was the presubmitt conference and that was held on January 7th. And then moving on to our transportation, water and wastewater projects, we have a handful of the connector roads and the Flying Fortress Parkway traffic interchange that we know are underway and construction is expected to be completed in August for that project. We do have the airway, the Flying Fortress Parkway, Airway Avenue to Industrial Boulevard that there is no real status on that other than we're trying to identify funding sources, but we know that we have 95% plans already designed. So, so that that's some good news with that project. Walapai Mountain Road. If you've been on Walpai Mountain Road, you see that the turn lanes have been cons have been constructed that there will be a chip seal and restriping in the next few months. As far as our street maintenance program, the crack sealing in well, I copied the wrong thing in here. So, crack sealing in residential district 4 is already complete. I apologize for the wrong slide that you have in your slides. Crack se ceiling in district five will take place uh next year. There will be something to you I believe that was the status something to you the end of this fiscal year and it'll start early next fiscal year. As far as uh the Grace Neil sewer main it's underway and the project's expected to

be completed in April. Our effluent filtration enhancement we are awaiting a cost analysis from the consultant and that's expected by uh late this week. Then as far as our main tanks transmission line, the plans are currently being reviewed by ADEQ and a formal solicitation supposed to be issued in the next few months. And then lastly, the Santa Rosa transmission line is moving along really well and that's going to be completed in February. All right, moving on to our five-year forecast as far as our major service level changes that are being considered in that five-year forecast. So, what we have included in the five-year forecast is the fire station 25 being fully constructed, fully equipped, fully furnished, and fully staffed in fiscal year 28. We also have the Flying Fortress Parkway TI, the connector roads fully constructed in fiscal year 27 with the exception of the segment from Airway to Industrial Boulevard. We also in fiscal year 27 expect that phase one of Sunbelt Park will be constructed. We will continue funding through fiscal year 30 the street maintenance program. And we know that there is a purchase of the 790 acres for phase 2 of industrial park. That 10-year repayment plan will start next fiscal year and that is included in our five-year financial forecast as well. There are it will be new debt service for the connector roads on Flying Fortress Parkway as well as fire station 25 that is included. There are annual recurring rate increases for water and solid waste services. There will be ongoing public safety pay plan step increases, open pay plan increases and across the board colas. uh and there are no changes in from what

was adopted in fiscal year 24 that is forecasted in the next five years. And then we know that there will be some staffing impacts for annexation minimal, but there was a planner in year two of that an of both of those annexations that is that was included in that costbenefit analysis. So that is included in our five-year forecast. The rest of the staffing that was going to be needed for that annexation wouldn't be needed until fiscal year 32. So, they're not included in this five-year forecast. All right. So, what does the debt look like for the five-year forecast? Just a chart to show you how where we are today, where we expect to be in fiscal year 27 as we add the connector roads to our debt to our debt service plans and then what it looks like with the fire station. So, just a a quick peek at that. And then moving on to the five-year forecast in general, just looking at sales tax and state shared revenues. So the state shared revenues do take into account, we talked a lot about this at the Tri City Council meeting, the partial conformity with HR1. And what is that? The partial conformity with HR1 is really the the bill that the president uh put forth where there is no tax on overtime, no tax on tips, there's changes to the standard deductions, and the state of Arizona has the authority to either comply with all of what the federal tax changes are, a portion of it, none of it. And in the governor's executive budget, she has partial conformity with what the president has brought forward or with what that bill is. So the state shared revenues take into account slight loss of revenue, which would mean cities and towns also will be the recipients of less revenue. And then they also take into account that Santan Valley

incorporation. What they don't take into account, as the mayor shared, are any potential reductions due to any of that online sourcing from the bill that is currently been introduced. It does not take into account any of that. So, what we're seeing is growth. The state is seeing growth in their state shared revenues and they are projecting it anywhere from 3 to 5% for the most part across the board. And we uh and then we of course are planning it to be fairly flat next year with some growth going into 28 29 30 and 30 and 31. So that gives you an idea of what we're planning in the next five years.

Tina, can you tell me um when will we know for certain what the conformity is going to be with HR1? Yeah, we will uh Vice Mayor, thank you. We will not know until later in the year. Okay.

Thank you. You're welcome. And that loss right now, just so that you are aware, is under partial conformity is a $200,000 loss for the city of Kingman. And full full uh full conformity would be a loss of another $200,000. But we're already we we already have in our forecast that initial loss of $200,000. That was going to be my next question. How conservative are you being? But I know that about you, so I appreciate that. Thank you. Okay, moving on. Just in general to give you an idea of where we are with general fund revenues, expenses, and transfers. Really, this slide is just showing ideally we always want to have a very small gap, if any, gap between our revenues and expenses, right? Whatever we generate, we don't want to keep too much on hand. We want to make sure that we're spending wisely and using taxpayer uh dollars fiscally responsibly. This shows a gap negatively where our expenditures and transfers are higher than our revenues. Our expenditures and transfers are that dark line and that's because we had a pretty uh a fairly healthy surplus of revenues or some balance rather and over time we are depleting that and transferring that over to herf right for the street program. So that's why our expenditures and transfers are high in those first few years and by fiscal year 31 we're exactly where we want to be. They're pretty much in line with each other. So uh and and that's good news. That's that is where we want to be. And then as far as our unassigned fine fund balance, I want to make sure that we talk about that in the general fund. So, we have a formal policy that says we need to our unassigned fund balance needs to be 25 to 50% of our expenditures and outgoing transfers. Council's informal policy is anywhere

between 30% and 35%. So, you'll see as time goes on over the five years, we will get to that 30 to 35% in fiscal year 29. And that ensures that the street program continues to receive those one-time transfers to fund that program year-over-year through fiscal year 30. Okay. As I shared earlier, uh we're including a new segment this year about fiscal year 27 budget priorities. And I want to just make sure that as we talk about the budget priorities doesn't necessarily mean your strategic priorities. It actually is any something that will impact the budget. So there are a few of those that we know have come to light and have been at the forefront of your budget priorities and wanted to make sure we cover those. So the first one are water service lines. Certainly that's not any surprise to you and I just we wanted to share some data with you so you knew that we're thinking about this and what we're uh proposing in the upcoming budget. So the chart on the left is really came out of the information that uh Mr. Yarborough shared with you back in October. We know that our water leaks over the years continue to increase and that has a bearing on our labor. So, emergency call outs and our patching. And so, what we spend on emergency callouts and patching is about $600 to $700,000 a year just on those two things due to those water leaks. So, it's a pretty significant cost that our water rate payers are paying just for that. Yes, Councilman.

Does that include the outside contractors that we use to come in and patch the whole Councilman Ward? Yes, it does.

Okay. Uh we know or we estimate that there is about 15 to 20,000 lines that need to be replaced at a cost of approximately $3,000 per line. It's a big number. I didn't need to put it in there, but that is a big number. And so, uh, we'd like to hire a consultant to first evaluate the system and then make recommendations on the replacements, identify the right lines that need to be replaced, and provide some sort of estimate, real estimated costs. These are what you know what we believe, educated guesses certainly from our teams that deal with it, but really put an estimated cost to that this upcoming fiscal year. So, that is one of the budget priorities. Do we know what our estimated consultant fee could range?

I that is a great question, Vice Mayor, and we have not reached out. This is initial research, so I don't know what that would look like. Certainly, you would see that during the budget, the recommended budget workshops. Okay. All right. I'm interested in that. And then will this consultant also tell us, you know, I mean, just in looking at the $600,000 to $700,000 cost, will they tell us it's more cost effective to replace lines? And that's the recommendations I'm looking at is to get rid of this patching costs and leaks and just start replacing lines. So, they're going to do an analysis of that. Okay. Thank you. That would be included with it. Yes.

Thank you. Okay, moving on to the next budget priority. We talk a lot about Flying Fortress Parkway and how to get it to the airport right all the way to industrial. So cost estimates could reach about $22 million based on what we're seeing and what we saw for the last two segments. We know that it is they were higher than what we anticipated. So cost estimates could reach $22 million. Now development fees, we are currently collecting developments for development fees for a portion of this, but only $750,000 of the development fees that we collect can be applied towards this project. So it's something, but it still leaves a pretty a pretty big gap. So, some funding options for consideration would be we could issue debt for that project and a repayment source could be an increase in sales tax rates. We could also use the remainder of our street maintenance monies that we have set aside, which is $22 million to fully fund the project and then increase sales tax to fund the street maintenance program. So, a couple of options for uh for consideration in an effort to get this project completed and constructed. If we did that with the sales tax or if we took the 22 million rem remaining and used it for the to get the road all the way to the airport, would a half a cent increase cover that much to repair the streets over a period of time?

Thank you, Councilman Ward. Yes. Um, so right now we're estimating that a half cent sales tax half percent sales tax increase would yield just over 5 million a year. Um, currently we're budgeting uh as part of this the seven-year program. We're budgeting about 7 million a year in order to to do the road maintenance activities. So if we were to do the half cent sales tax increase um it would be a little bit less than that 7 million that we're using right now each year to do the maintenance. So it would extend that program out a little bit further. Um we wouldn't finish it within the seven years and and ultimately the seven years was basically how far can we get with the funds that we have. So that seven years was what we were able to calculate how far we could get. Um but ultimately we've got to continue road maintenance into the future. um once we end or once we reach the end of that seven-year program, we currently don't have a funding source to replace those those surplus funds that we have. So, the idea with this is at some point, we'll need to identify a revenue source to continue that road maintenance. By addressing it here, we could use those funds we have set aside for that program to complete Flying Fortress and put that that funding source in place now to be able to address it. Um the other alternative as Tina mentioned would be um to to go after debt in order to fund it. But that we're looking at the same process in order to achieve that because in order to to use debt to fund that remaining portion we'll have to have a revenue source to make those uh debt service payments. So, um, yeah, one way or another, in order to to complete Flying Fortress, at this point, a a sales tax increase would be needed.

And if we either way, we're going to have if we if we don't do it this way, then we'll have interest on top of that. If if we use the sales tax, you save yourself the interest that you would be paying on that 22 million over a period of time. I was just curious.

So, I had a couple questions on the 7 million um that you're anticipating to continue on with the road maintenance program. Is that also taking into consideration different treatments at different times or is this just a straight doing what we've always been doing to get the bare minimum?

So my understanding when that program was was established is likely looking at the programs that we currently implement. So that 50 million and I'll ask Tina to to help me out with this. Um but that 50 million basically looked at okay we have this much money that we can do that we can spend on this dividing that out looking at 7 million a year mainly probably through chip seal would be what what I would guess because that's that's what we've done. Um so looking at alternative methods that could change the cost could change that that time frame too. So

do you see where I'm going? We've got to have a sustainable road maintenance program and we cannot keep chip sealing over and over and over again because we have roads that just can't sustain that over the long term. So, I know that I mentioned it during strategic planning, but we have got to come up with a plan where it's a good mix of replacement or, you know, something because and and I want these forecasted figures to I would like for them to reflect that. So, they're so they're altruistic and we're not in the same boat years down the road. So, I mean, just just keep that in mind because that's going to be a question I'm going to ask over and over again because I really really want to make sure that we have a sustainable road maintenance program.

And we will be answering that question on February 17th. Fantastic. Jamie Jamie's got a presentation scheduled for council with um one of our consultants as well that that goes in that will go into not just chipsill but the various alternative methods. Well, as long as we are forecasting dollars to go after these programs that we're we're looking at too. Then my next question, if we do entertain the um half cent uh sales tax increase, are we able to um and remind me Tina, are we able to earmark that? Are we able to set that aside for strictly for its intended purpose?

Yes. Yes, we would be able to. So, so council would be you would if if you move forward with a half half percent sales tax increase. Um, you could say we're looking to increase sales tax by half percent. This would be dedicated to road maintenance and improvements. And and then that that half cent would be dedicated to just road maintenance and improvements. Okay? Because that's extremely important if we're going to go and and if we're going to entertain as a council, we we have got to do that. We've got to tip Tim um cost domest cost estimates could reach 22 million. That's going all the way out to the airport.

That's correct. So that's going from Airway Avenue out to industrial. So if we postpone that a year, couple of years in reality that price is going to be higher. It's great just due to inflation.

That's a great point. I mean we saw that with Flying Fortress. you know, initial estimates back around 2020. I think we're around the 26 million range and we ended up paying closer to to 56. So, if we do it sooner than later, it's going to cost us overall less money. But I also look at it as if we do it sooner than later, then it potentially opens up a lot of the property out there for either sale or lease or at least developing and getting businesses out there that's going to turn around and give us more income through additional sales tax. Is that the right way? be of thinking this.

That's accurate. Yes. Okay. I have one question for you, manager Walsh. This 22 million, is it that include any infrastructure, water, sewer, or is that just strictly roadway? That would be strictly roadway. And one thing as we're discussing this, and thank you, Tina. Um, looking at fund balances, um, if we were to enter entertain the second option that's listed there, using that 22 million up front to build it, that is a a big hit to to our reserves. So, that that does drop us down. I know there was a few slides back, actually, I don't know if I want to try and get there. Go back. Go back. Okay.

Um, right here. So few slides back we talk about um the un unassigned fund balance and council I think by we have adopted that it's 25% but um generally council wants to keep that around 35%. Um by using up that 22 million for this project that would drop us down below the 35% I think it gets us around 30 that first year

it gets us to anywhere from 27 to 29%. So that first year it does drop it down below the 35 that we'd like. Still above the 25 that's adopted, but it gets us pretty low on our reserves. It puts us right around that 27 to 29%. The following years, we're right back up to that 35 range that that we want to be. But that initial year, um, we would be really restricted on what capital projects we could do. It'd basically be we get this done and we we we save for a couple years to get back where where we need to be. And of course that is with a sales tax in place a half a sales tax increase increase. Correct.

And then Tina remind us what does the state require us to keep as a minimum reserve? Mayor, the state does not have a requirement on this. This is an adopted policy that the council adopted years ago and the council continues to uh to use that policy. Okay. And then are some of our sister cities or and I I know you've given these numbers to us before, but what are what's the norm for some of our other cities if you could maybe get that remind us of that report again and bring that to us of what some of our sister cities what kind of reserve they're keeping.

Mayor I appreciate that and I can certainly share that. can share that the GFOA which is the government finance officers association their recommended uh minimum is two months of operating reserves and certainly they that is if you have property tax and and sales tax and if your expenditures don't fluctuate there are all sorts of things that go into that so I would always recommend more more than that um but certainly I can bring back some comparisons for you to you. Thank you. Thank you.

Anything else on this?

Okay. Okay. And then talking about the street Oops. The street repairs maintenance program. Of course, that is a budget priority and has been a budget priority, continues to be a budget priority. So recurring street maintenance funding comes from the Hurst state shared revenues and our 1% restaurant and bar tax. And that equals $5.4 million this year. Those revenue sources don't cover the cost to maintain that good condition of our streets, the one that Jack talks about quite a bit. So that is why we've got the seven-year program in place that ends in fiscal year 30. Um, as after fiscal year 30, the general funds cash re reserves do fall to that 30 to 35%. So, we would no longer have those additional one-time monies to to provide for the program, which is why the conversation happened on the last slide. So, we would need to come up with those viable and recurring funding sources, primary property tax or sales tax. And as manager Walsh shared at the February 17th council meeting, you will receive a complete report on the street program, where we are today, and what it looks like going forward. So then as far as sales tax is concerned, this just gives you a breakdown of what the different rate increments if you were to increase it by one of those rate increments, the amount of sales tax that would be generated depending on which type of increase you wanted to make. So, if you wanted to, for instance, increase the rates by a half percent. If it was just across the board on our what I call our

regular sales tax, it would generate about $5.7 million. If you chose to just increase restaurant and bar tax by a half percent, that's going to generate just over 500,000. And if you chose to only increase hotels and motel by another half percent, then that would generate about $100,000. It's just a table to give you some ideas of the different sales tax collections based on the rate increments and the types of increases, category increases uh that could be made. One thing on the hotel motel sales tax increases is that any increase now that we make going forward has to be used on tourism related activities. It's the only caveat on that. And then over on the right hand side, I've just got a a couple I'm sharing with you what our current tax rates are. So, can you just refresh and maybe um for those that may be watching our sister cities, what do you know what sales tax rates they are? Uh thank you, Vice Mayor. So Lake Havsu and Bullhead City, both of their regular sales tax rate are 2% currently. Thank you. Like Havsu does have a primary property tax and Bullhood City does have a fire district. Thank you. So, for example, Tina, if we were to go with a half a percent across the board, that's the numbers that would increase, as you said, and that adding that half a percent would then of course be passed on to the other ones, too.

If you were to increase it by just a half percent for all categories, it would generate that $5.7 million. Okay. So, you wouldn't add the 509 and the 108 to it. No, I did that solely in the event that you decided we want to increase only restaurant and bar sales tax by x% just to give you some different ideas. Okay. Thanks. You're welcome. Thank you for asking for that clarification.

All right. And then in the event that sales tax is a sales tax increase is something to bring back to the council, an example timeline just so you know how this would work. We would bring something to the council at a council meeting. So we'll use February 17th and is as an example. We would need to get direction from you at that council meeting. Then at the next council meeting, I think we could put together quick enough to get to the next council meeting a notice of intent to consider increasing the sales tax at a public hearing for the future. And then we would post the report on the website and then we would hold the public hearing on May 5th. We would also have to notify the department of revenue in the event that the council did approve the sales tax increase at the public hearing. we would need to notify the department of revenue within a period of time and then the the tax rate cannot go the new tax rate cannot go into effect until the first of the month following 60 days after the approval. So it would be August 1st. So it's almost a six-month timeline from the time that council gives direction until that rate goes into effect where we start collecting those revenues. And that concludes our presentation this afternoon. There are any other questions? I had I I just want to talk about the elephant in the room. So the sales tax the reason that council is afforded the opportunity to look back into this I just for the public's knowledge why are we able to do this and you know the process for us to be able

to do this because just for the public there are those out there that state that you know we we didn't notice the public that we aren't um we aren't in the right place to be able to be doing this. So, whatever information you can put out there would be super helpful just so there's good information out there. I'll take a stab at that and uh correct me where I'm wrong. Um, so back in, my year is going to be off. 2018, I believe, there was a a re No, it was before that.

In 2018 was when when it was presented to the voters.

Okay. So So there was a a uh a voter initiative to um restrict sales tax increases um to only a voter initiative. Basically, it had to be approved by the voters before it could be done. And um at that point that went into place uh city honored that went along you know basically that that was what we we had adopted. Um recently um it was found in Paige Pac thank you knew it was a P. Uh PAC had a similar action go through PAC challenged it and found that that the city could repeal those actions. So, um that those those voter initiatives could be repealed. Um we looked at that. Um the city has tried multiple times at a sales tax increase. At the time that in 2018 uh there had been a half cent sales tax increase. Um an additional half cent was added to that for a total of 1 cent. At that point, that's when the the uh voter leled initiative came in, re repealed the the full s reduces the full 1% increase um and and basically restricted it to requiring a vote. Uh we've been monitoring the the PAC case. Uh the judge ruled that PAC did have the authority to repeal that action following that that voter le initiative. Um and then that was appealed to uh higher court. that was upheld. Um so basically the the direction was that yes that the council has the authority to repeal that action. I I think with a lot of the challenges that the city has faced um in in funding road repairs in funding waterline repairs in basically in funding government business. um council looked at that that ruling and

found, hey, it would be um advantageous to the city to be able to have that ability to do so. Um if we if we find that it's necessary um at this point, staff's recommendation is is that would be at some point it is needed in order to continue with uh road maintenance and repair. um in at 2030 we run out of those surplus funds and we don't have the funds to be able to continue with that the road maintenance and repair. So, um, with the opportunities that the city has right now with the opening of, um, the release, the land release of the 790 acres at the industrial park and what that could do as far as helping the city, um, providing better paying jobs for our citizens, providing um, additional uh, opportunities here, um, connecting that roadway there. Um, obviously that was a a high priority for the state as well. They they provided $20 million to be able to build that interchange. Um, so this timing right now with the interchange going in place and being able to fund that road um to get to the airport and really fulfill the intent of that interchange um it's it's really an opportune time uh to implement that that half% sales increase. it would allow for that road um to do and that interchange to do what the intent was and really provide a benefit for the city. Um that's where staff's recommendation of of utilizing those funds that we have on reserve that have been set aside for road maintenance. um use those to build this road, make it a make it come to make make it happen and then recognizing at some point that that additional revenue is needed, implement that now. And really we can we can address all of it

at this point. Um you know, I I would say I'll I'll leave it at that. Well, so, so the point is that we didn't just arbitrarily take this away from the opportunity for the voters to make the decision. Because of case law, it afforded us the opportunity to take back our authority to be able to do what's in the best interest of the city moving forward. Absolutely.

Thank you. The only the biggest advantage to doing it, if we're going to do it, is do it now and do it for the streets. That way, because we're going to run out of the street money in what, three years, four years, and we're not going to have anything to put in there to replace it. With this, you'll have the ongoing street money. And I I mean that's uh it's do it now or do it later.

I mean essentially and by doing it now we save ourselves the interest on that 22 million and we get the road to the airport which without that you're going to hold up industry and everything else out there. It all bo I think councelor Ward you're saying it it all boils down to timing and right now is sort of the perfect nexus of all of it to put into place. It's unfortunate that we have to consider it but it makes sense to do it now because even later it's just going to cost us more. So

if if that were to happen, if if council did pursue a half cent increase, it was voted for and passed. Um does that interfere at all with the HERF money? Because it was quoted that we get 5.4 million a year through HERF monies. Does that affect it at all?

No, it it would not. So we receive those funds based on that. There's a number of of calculations that go into it. number of lane miles that we have, population, all of those things go into um calculating how much funds we receive from the state for her funds. Her funds must be used on road maintenance and you know road road related projects. What this is doing is basically supplementing those those her funds.

Okay. So with those figures then each year if that was done we would get the 5.4 4 through HERF and we'd get ballpark 5.6 through that half cent increase which would give us $11 million a year towards roads. That's correct. So road operations and yeah maintenance and and improvements. Correct. Okay. Any other questions or comments? Tim, are we done then? Tina, we're done.

Okay, if there's no other comments or questions, we are adjourned. Thank you all for being here once again.