Board of Supervisors - Regular Meeting

Welcome. I'd like to welcome everyone to the Maricopa County Board of Supervisors informal meeting of 05/18/2026. I call the meeting to order. And I get I think Madam Clerk, would you please call roll? Yes.

Thank you. Good morning. Supervisor Stewart?

Here.

Supervisor Galvin? Here. Vice chair Lesko? Here. Supervisor Gallardo?

Here.

And chair Brophy McGee? Here.

So item one on today's agenda is the economic forecast presentation. We call on mister Jim Rounds to come forward and present the happy ish, sad ish news.

Yeah. Always good news. Always good news.

And Mr. Rounds, when you are seated, please make sure the microphone is on and close enough we can hear you and introduce yourself for the audience.

Thank you. Good morning. Jim Rounds Consulting Group. We put together the forecast for the county, the revenue forecast, and do some additional policy analysis whenever it's required of us. And I was asked to put together a fairly short but short and to the point economic presentation on what's happening in the across the nation just a little bit, but more on what's happening here.

But we can't completely disconnect from the national economy. So I just wanted to show a few of the slides that when I have to give interviews or things like that and you don't have a lot of time, these are the main ones that I rely on. Okay. So in terms of the fiscal position, we've been finding that Maricopa County is still more stable than most government entities. This has been consistent for years.

I think the first time we started doing analysis for the county, the first time I did was back in 2002. And the performance just keeps getting better in terms of understanding how the budget needs to align with the revenue forecast and what's happening with the economy. And that economic uncertainty right now is driven by a lot of things outside of the county. And so we have issues with Iran, We have we had to deal with some tariff issues before. There were just a number of issues that we that were going on nationally.

We have inflation is starting to creep up a little bit, but keep in mind, after it went up fairly high before, it didn't really come down. So the prices are still high. So we're looking at a different kind of slow down than you would normally see and I'll cover that very briefly. But the great thing about you planning for these things ahead of time is that you have choices. And I remember with state budgeting and Ms.

Lesko, we dealt with that before where if you push the envelope too much and you spend every penny that's available, then you end up in a situation where you don't have a choice when the economy slows. But the county seems well positioned. I am not gonna be available to sit through the very, very long budget presentation that's coming up. And judging by the notebook that I saw Kersten had, I'm happy that I have a conflict. But I have no doubt that it was well prepared.

Your staff continue to be exceptional. They reach out to us quite a bit. And while we do quarterly updates and you see our quarterly documents, we talk three or four times a month and we talk about different issues. So they stay on top of things for you. And I know that sometimes you all have questions for us and we try to get back to you immediately.

So this is one that we did for you a little while back where we took a look at what would happen if the state's budget grew at the same rate as the county. And this gets back to when there were when the federal spending increased by 10,000,000,000,000 in a four year period, we knew that there was a lot of money that was coming, that was trickling to the counties and the states and the cities and businesses and everybody else. And so revenues were artificially inflated. And you all made an adjustment. One of the assignments that you gave us was to work with staff and help identify what is part of that base and you used it for one time expenditures.

But if the state did that, they'd have 2,200,000,000 more in the bank right now. 2,200,000,000. And that probably can be considered a conservative number. And so that just shows you the difference that public policy makes and these types of financial fiscal decisions make in terms of the health of an economy. And I think this is more important than people realize because there's all sorts of economic development things that make the economy tick.

You have to have competitive taxes, which we've worked on a lot, economic development programs, which we've worked on a lot, infrastructure, all sorts of things. But the government entities that are part of a business expansion, they have to have a balanced budget. When the budget is balanced and is well maintained, then you know that there's appropriate infrastructure, but there's not too much. You know that there's appropriate spending on item X, but not too much item Y, same thing. So think I'm going to start putting in my little list of things that matter on economic development a balanced budget, especially coming into the next couple of years.

Sorry. All right. So national economy, just some key indicators. When you're expanding, when the economy is expanding at a decent clip, you usually want to look for about 200,000 jobs on a monthly basis. Those are the reports that you get where recently it was in the hundreds.

At this point in the business cycle, you would be happy with getting close to 100. And we actually had 115 for April. But we've been adding two twenty thousand since January 2025 and about 75,000 since January 2026. And then when you take a look at the I'm sorry. This clicker is a little

Madam Excuse me. Mister Rounds, question from vice chair Lesko.

Yes.

Of course. Thank you.

On that last slide with the number of jobs that have been produced, it seems like there's large adjustments. So can you tell me what what's going on there? Is that normal? Not normal? Like, for instance, the 115,000 jobs, are we expecting that that's going to be downgraded? Do you know?

Members of the board, I think that the answer to this is going to be it's going to vary. I think there's going to be more adjustments. Some are going to be up, some are going to be down, just because the way the economic data seems to work, in my experience, is that when you're in an economic expansion, all the data is positive, and you would typically have upward adjustments. When you're in a recession period, like some people think that we are, but we're not, you would have downward adjustments and things continue to get worse. When you're at an inflection point, which is where we're going, when the economy is slowing, but we don't know how much it's going to slow, then you have adjustments that are up and down on a monthly basis.

And so I want to see if I have this slide on here. So I'm gonna I'm gonna buy the county a new clicker for next

time. Okay.

So this is the employment net change recently. And I highlighted the ups and downs because this is what typically happens when it's when you have those inflection points and there's uncertainty. And unfortunately, on the far right, what if that's an upward trend building? We just don't know. And I'm hoping that things will stabilize first. I'm hoping that going forward, you're not gonna see much of this up and down, and then we're we'll just have a soft landing in the economy across the country. But we have to differentiate between the nation and then the individual states, and then actually different levels of income for households within the individual states. They'll be different it'll be a different type of recession.

And I'm gonna ask a follow-up question to vice chairs. Excellent question. And that has to do with you can create a job, but does that you know, what about creating higher wages? It's my understanding that Arizona has overall been creating higher wage jobs than in the past. That's my first question, and then I'll go back to my other comment.

Yeah. That's absolutely correct. So prior to the Great Recession, we had we were always top five in terms of general growth, but we had thirty years of decline in per capita personal income compared to The U. S, which is a measure of quality jobs. A lot was done back then. There was a lot of economic development reform. We changed our tax rates. We had one economic development program at the time, and it needed to get swept because of the budget problems at the state. And then taxes had to be raised for a short period to make the budget balance. But after that, we've had fifteen years of increases in the statistic.

So we've adding higher wage jobs. We're still not at 100% of The U. S, but we're moving upward. And so in my opinion, in looking at the different data, Arizona has recovered more and has outperformed all other states since the Great Recession because we went to forty ninth in the country in job growth, and for one quarter, we were fiftieth. We are last after all those years of being in the top five, and now we're posting higher wage jobs.

But keep in mind that there's gonna be some flux in some of the job creation. So we've been hearing about all these wonderful high-tech manufacturing jobs that are coming to the state, and they are. But now we're competing internally. Businesses on one side of town are competing with the other side of town for the workers, and then we're competing with other states for the workers as well. And we do a lot of analyses for these businesses, and we've had more than one indicate that they're going to be slowing down their hiring and their activity for the following year because of also the additional risk in The U.

S. Economy, then they'll be ramping it up again. So we'll be increasing in terms of job growth and then it'll be stabilizing a little bit and then we'll see an increase again. But during that stabilizing period, it'll look like we're not growing as rapidly and people accuse the state of not doing as well. And it just has to do when you're growing rapidly, you need a lot of resources.

So my introduction happy ish, sad ish still applies. So then the other issue has to do with how the jobs are actually counted. And there were massive revisions during the years twenty through twenty four. And then the new administration came in and started really looking into who goes out and who counts, and it was it was like the dinosaur age. They had, for instance, a couple of women who up in the North well, in the middle part of the country, North States, went out and would sample their their people in retail centers.

I mean, have they, at The United States, adjusted that process so it's more data driven, more factual?

There's a lot of smaller problems, but the biggest issue is over time, a much smaller percentage of businesses were responding to the surveys. And we didn't have a real good sample. And who knows, maybe the businesses that responded were skewed a certain way. And so the big push nationally is to have as many as possible so you have a solid sample. I think that's what we're going to see going forward.

The one data point that I've been assured by people in the industry that it doesn't it's not in conflict with the economic data, but with everything happening in health care and how we need to make some revisions related to Medicaid and fraud and all those other issues, we've been a lot of our growth has been driven by health care employment growth. And as an economist, that just doesn't make a lot of sense. So I talked to some of our clients when we do analyses for hospitals and others, and they said they're more concerned about the end of the decade when we might see some kind of a shift in is a state going to become more responsible for Medicaid? Are we going to have to go through and make adjustments? But they're not quite worried about it yet.

But it's 2026 and the end of the decade is 2029. So that's the only data point that doesn't make sense to me right now. But again, hearing from the experts, they say it's okay. I'm still skeptical even if somebody is considered an expert because you never know.

Well, so your point being is they are correcting the issues about how they were collecting the data. To your point, I agree about the health care as a data point. And the way I look at it is we've got three years to screw this up and we'll find a way. Not the county, but anyway, please proceed.

Okay. And and actually, I don't disagree with you. We had to analyze the Medicaid issue when I brought up that the first thing that we have to do is resolve some fraud in a legislative meeting. I had a lot of people send me emails about how I wasn't supposed to say that after I put together a report on the cost of Medicaid adjustment. Well, it's true though, so I'm going to do it.

I don't know what I'm doing wrong. You know what's gonna be embarrassing is Kirsten's gonna get up here and it's just gonna go perfect for her. This is an issue that's been coming up and I'll send staff tonight, I have to do an interview on KTAR about this very topic and I'll send staff the video clip when it gets posted so you can see it. And so there's been a lot of discussion about where we stand as a state in terms of our employment rankings. And we were recently asked to help OEO at the state try to better understand what's happening with the employment numbers.

And when you look at any individual report, they might pick out, all right, well job growth between February and March of this year were thirty ninth. Well, we're third if you look at this quarter versus the prior quarter. So it kind of depends on what data you look at. And this gets back to you have some funny things going on with the data on a monthly basis. So you pick one month versus another and you're all over the place.

But we did the same analysis for a number of different points in the past and it was kind of a test on the argument that when the economy is slowing, the data just gets kind of messy. And so in 2017, when we were still doing really well and we were ranked very high in terms of some of the job growth, we were top 10 in all the categories. And so be very careful when you see anybody report one data point because you could easily in the same period of time point to something else. But the main point is if it's all over the place, that makes it a little bit more difficult to forecast what's happening because you're getting mixed signals and you have to figure out which one to put more weight on. Hey, I figured it out.

So there's a gold dot on the thing and I wasn't hitting the gold dot. Why wouldn't you notice the gold dot? Here's another chart that just shows our recovery when you index it against The US. This is what I this is a kind of alternative data that I like to look at where at the end there, you can see where Arizona greatly exceeded The US in terms of adding jobs. But any little blips up and down, tiny little blips will make us drop in the rankings or increase in the rankings.

And when we were forty seventh in the country in job growth year over year, which is one of my favorite numbers, there was actually a reason. We were forty seventh because we were did so well after we exited COVID. We ended up being a top state for growth, and we got back to normal rates of growth when states like Arkansas and others were still catching up. So we got to the top of the hill prior to the rest of the country. So the country was posting higher rates of growth than us.

So the fact that we were 47 actually meant we were there because we were one or two coming out of the recession. So that's why, again, you gotta be real careful with what numbers you rely on. We didn't revise the forecast significantly. We're going to continue to review the data on a monthly basis. So we go through an exercise where every quarter we look at data in more detail, but we work with staff and we're going be looking at it in more detail every month.

If anything unusual comes up in a particular report, you'll be notified right away. If it's a big enough deal, we'll drop it into something, a formal format, where you can all get a copy of it. And for the recommendations in the path forward, I always recommend this conservative budgeting because that lets you take care of the taxpayer but then not overtax the taxpayer at the same time. We have to monitor labor and inflation data. We talked about the labor data, but we may see some significant increases in inflation moving forward.

A lot of it's going to be driven by fuel. I think gas prices were up by like 19% or 20% in the latest report. So you're going to see inflation not get to where it was before when we were at 12%, 13% for the greater Phoenix area, but it's going to move upward. But these will be transitory scenarios. This isn't a lot of the stuff is going to return to normal conditions, the normal trend, but it's going to take a little bit of time.

In some cases, it might take until the end of the decade. In other cases, it might take a couple of years. I feel like we need a little bit of a downturn. It's a little bit of a cleanse. I even don't mind it when certain government entities have to clean house a little bit during a downturn because it's a good time to kind of bench where you're spending.

And I think the state's going to have to do this where you've already been managing that. And then soft landing, it's just going to be a little bit later. We would have had a recession already if we didn't add all that money to the national debt. And we had a huge increase in money supply floating out there, and it was 0% cost to gather it. So the federal government greatly manipulated this business cycle, and there's still some kind of tailings on it.

But overall, I still feel like Arizona is going to be well positioned compared to most states, And that means that Maricopa County will be as well. I don't have this slide in there, but just to cover it real quick, economists love to talk about recessions in terms of a letter like it's a W recession or a U shaped recession. A W would be a double dip. A U would be a little bit of a slower downturn. The weakness lasts for a while.

Now they came up with K. And I was thinking, what the heck is a K? Then put it together. And, well, the K has an upward sloping arm, and so there's going to be some states that are going to be doing better than others. Arizona's going to be in that upward sloping arm of the states, and there will be some states that are going to be weaker.

I feel like we'll have a soft landing when some other states are more at risk. In terms of households, the households that already had a decent amount of wealth either through their homes or where they invest, even though there's been volatility in the stock market, will probably have more of a mild downturn. The lower income households will have a more severe downturn because they don't have the wealth to get through it. And when you go into a downturn, typically there's percentage of lower income individuals that lose their jobs, but they're also the first ones to get the jobs back when the economy starts to expand. So that's where the K comes from, in case anybody asks.

Additional issues, the big beautiful bill we've been asked about a lot. We already covered Medicaid. The bill when you have tax cuts at the national level, you're going to see an economic boost. The question that people have, and I think it follows whether or not the economist is a little bit left leaning or a little bit right leaning when they talk about it, is, is it borrowing from the future or is it taking some of the money from the future that's going be generated from new activity? I feel like it's going to be a little bit of both.

Even the federal government acknowledged that there's going to be some additional debt that will be associated with the bill, but they want to have that extra economic growth right now. And so it's almost like the opposite of Keynesian economics, where that economist Keynes always said, Government don't spend much money until you have a downturn than spend a whole much. But what happened at the federal government level is that they followed Keynesian policy when times were good and bad, so they just spent at all times, even though we had some advocates that didn't want to do that, even in this room. So that will still impact us longer term. Levels of confidence and forecasting.

In order to maintain a decent level of confidence in the numbers that we put forward to you, it's hard to do that when there's a lot of uncertainty. So if we need to maintain a consistent level of confidence in what we submit and there's more uncertainty, then we need to usually lower the forecast a little bit. And so we have that option where you can change the percent level of confidence, but we also have the option of you have conservative and a baseline forecast, and you've already been shifting to the conservative forecast, somewhat made that adjustment already, you made it before other entities and it ended up being a wise decision because your revenue flow is more consistent with where I think your expenditures are going absent the long presentation that you'll be having next. And again, don't rely on a single data point, but keep an eye on the state budget related risks. One of the problems that we have with them right now is there's already discussion about how are some of the additional costs going to get pushed to the local government entities.

But when we were working on that flat tax, the 2.5%, there was a negotiation. There was some interest in reducing it down to maybe 1% or 1.5%, but there were some, including myself, that thought, let's use $1,000,000,000 to pay down the debt and let's put some extra money in the rainy day fund for something that could be happening like right now. Our biggest mistake was putting it in the rainy day fund because now the state doesn't want to use that unless there's a recession where there's a half 1,000,000,000 in there that was supposed to be used for exactly what's happening right now. So if I could go back, I'd change, I'd put that in some kind of a separate fund if we had an opportunity to do that. But the state has more than enough to get through a downturn.

The problem is, is spending going to continue with the current rate so that they can't just use the rainy day fund money because a rainy day fund money is limited. It's a fixed amount. But when they have budget imbalances, they tend to continue for a while. And the forecast numbers are coming down a little bit for the state. But here's something positive.

And one more this will be the last comment. So I took a look at all the historical recessions at the state level, and I looked at the revenues that were calculated, and then I took a look at the forecasts for those periods following the when things turned around. The first year, on average, the state underforecast revenues when things turn around by $400,000,000 and the second year, they underforecast by $400,000,000 So as soon as we come out of the downturn, the state is going to be flooded with extra money compared to their forecast. And that's where everybody's going to come out and want to spend money on every program you can think of. We're actually recommending that they try to identify some higher return on investment programs that are friendly to taxpayers ahead of time and trigger those.

And a lot of my conservative colleagues previously didn't like triggered legislation, but we triggered the tax cut. So if a trigger was used in their favorite bill, I feel like we could maybe put that into the budget at some point, but we'll have to see where that goes. And that, I think, covers it now that I learned that that glittering gold dot is what you're supposed to hit.

The interim question and answering was to give you chance to figure it out, so I'm glad you did. Super quick, I'm gonna ask my colleagues on the board for any questions, but could you speak to housing affordability at this point? Is it an inventory or is it the fact that mortgage interest rates remain incredibly high? Or can can you talk where we are on that cycle of housing shortages?

It's a real problem. It's now an economic development constraint, where before we didn't even have to mention it because people knew that they would be finding housing for their workers if a business was going to locate here. Now these same businesses, the same types of businesses are asking, are my employees going to be able to live near where we're going to put this plant? How are things trending? And a lot of it had to do with a lot of the financial issues from the last few years, so there's some financing to it as well.

But also, our friends at the cities have been a little bit more difficult to deal with on some projects. And I've always said, and this is still true, at any given time, we usually have two or three clients where they're trying to get some additional housing built into an area that's currently designated as employment in one of the communities, and the economics suggest that it should be shifted. And even though we put very strong arguments forward, I feel like they're sometimes just blatantly ignored. And so the cities can do better, but at the same time, there's also an argument for the homebuilders aren't just going to go out and build a bunch of homes and lower prices if the market right now was still going to demand higher home prices. So it's not an immediate fix.

I feel like this might be a problem for this would be one of the problems that will continue through the end of the decade easily, but it's a major issue. It's an economic development issue. The again, when the CEO says the third question, what about housing for my workers? You know that it's serious. It's not a socioeconomic problem anymore.

Okay. Back to SAD. Then I also think even though the county doesn't regulate water, that water is becoming a huge issue. How are you running across that in your economic development conversations at the state level?

We did one analysis where the Buckeye Region was going to be severely impacted by something that the state government was going to do. And it was going to have a pretty significant impact on not just growth in that region, but it was going to be a loss for Greater Phoenix and Maricopa County as a whole. And that was resolved before we published it. But the good thing is that it's done, and it has the word draft on it, so if it comes up again, we have a pretty robust report to deal with some of these issues. But the thing that bothers me still is whenever I ask if there's a water section of a conference or if I'm on a panel and that's one of the pieces, I always ask why is it that when I say, what's the water supply issue if we have a one hundred year supply, one hundred and five year supply?

Or what is it if we have an eighty five year supply? Why isn't there an answer to that? No one can answer that. And I feel like if we have one hundred year required supply, there's got to be some math to it, correct? If that's the case, why can't there's got to be some kind of a curve in there.

Why can't I get an answer on some of those issues? And it's very frustrating because I think that should be question number one. And the only time I got a response on that was from a member of the audience, and that was just last week, who had some ideas about it and worked on some water issues in the past, and so we're going to get coffee because I'm curious to hear what he has to say. But if we can't answer that question, and when I ask when we're going forward, are we making adjustments? If we're saying that this project that requires one hundred year supply, are you looking fifty years out?

They say, no. The water supply issue, the current water demand is based on the most recent year's adjustment in terms of what's consumed at the household level. Well, if you're restricting something that's going to be built and utilized thirty years out, how come we don't have a projection for how we're going be utilizing water thirty years out? It might be different. And I may be the only person in the state that actually read a book on water pricing, because I had to do an analysis of cities selling their water to APS at one time, and that was the most boring document I've ever read.

But at some point, we may have to price water where we just price the delivery system right now. But the thing is, there's always a solution. Whenever we run into problems, we always figure out a way of fixing it. That's never considered in these models. And so I guess my answer is I'm horribly disappointed that if people can't answer some of these basic questions, can we rely on them to be managing setting up the contracts for future supply, future sharing? And I just don't know.

Well, that's honest, but I agree with you. Any questions from board members? Supervisor Galvin.

Thank you, madam chair. And I'm gonna dovetail on that water question because I had a question in my mind similar to that. But it was more in terms of forecasting and also the inability to control what's outside of our control, which is the federal regulation of the Colorado River and the factors of other states, including the Upper Basin states and the lower basin states. So how are you able to forecast in light of that? It seems like there's a lot of shifting variables here, but also a lot of uncertainty, but also we're dealing with other states that frankly are not as good as Arizona at all in terms of managing water.

And, you know, there's a lot of issues here in Arizona where we kind of go to our partisan corners, but it seems like in terms of water and defending Arizona in these negotiations is a bipartisan issue. I also see it as a national security issue for the country because we have TSMC here and other major important investment in projects. And so how do you work in forecasting as I guess maybe just like all of us or maybe you're privy to more information in following the negotiations and how the federal government is reacting to the different states jockeying to make sure that they get the best outcome in the Colorado River negotiations?

That's a really good question because it depends on the time frame of the forecast. So when we're forecasting revenues for you for the next handful of years, we don't assume that there's going to be a major change in how we might see growth related to an individual input. But there's times where we have to forecast thirty years out, forty years out, when we have to deal with funding for transportation projects or other major infrastructure. Then we get into uncertainty. So you're going to see a report from us that's going to come out soon that's going to show that longer term, we're going to have a pretty significant workforce supply compared to the current robust forecast for the state.

And we monetized that and converted that into an estimate for fiscal losses at the state and local levels, well, that will be a call to action for let's develop some positive ROI programs in order to take care of that issue. So in that case, we won't change the forecast, but we'll identify that extra risk, and then we monetize it. And just as a quick preview, the gap between supply and demand for workforce going forward, based on the recent current wonderful performance that we've had will total $8,000,000,000 in state and local tax collections over the next decade if we don't balance if we don't figure out a way of balancing this out. So all of these issues can add up, but that's why we need good public policy. We need to be efficient with it, though.

Usually when people say, well, we took care of looking at housing issues, it depends on how they try to take care of it, looking at the housing issues. Depends on what was implemented. Did we just create a program that's going to spend $10,000,000 of state money or did we actually address one of the fundamental problems? Same thing with workforce, same thing with others.

Thank you.

Other questions from board members? No? I think you're off the hook, Mr. Rounds.

All right.

But thank you for that excellent presentation.

It was good to see you. Thank you.

Yeah, I could talk to you for the next while, but I'm going to suspend it because now we get to the great part of the show, or at least the longest part. And while mister Rounds is exiting and Mike and Kirsten are coming forward, I'd like to take a moment to introduce District Three's new communications and outreach lead, Ben Flores. Today is his first day. Ben, could you stand up and wave? Nothing like terrifying your brand new employee on his first day.

All I can say is welcome to the county. Ben comes as a senior PIO advisor in the Department of Economic Security, and so he and I speak the same language in terms of all the different agencies I used to work with. Ben, welcome to the county. You will love it, and I look forward to working with you, and our office looks forward to working with you. Thank you.

We're a lot more fun than the state. Plus, we get a lot more done. So, I would like to introduce our presenters for Agenda Item two, the presentation of the 2027 Maricopa County Recommended Budget, Mike McGee and Kirsten Prindle. If you would please make sure your microphones are close and that they're on, and please introduce yourself for our audience.

Thank you, and good morning, Chair and members of the Board. My name is Mike McGee. I'm the county's Chief Financial Officer. And with me is Kirsten Prindle, Deputy Budget Director. And in the next few slides, I will be presenting some highlights and an overview of the recommended budget. Then after my comments, I'll turn it over to Kirsten to walk us through some of the specifics. I will pause at the end of each slide just in case there's any questions from the

board. Thank you, sir.

This recommended budget focuses on funding increased medical costs, retaining employees and satisfying state mandated payments. It provides flexibility to navigate economic surprises, as Jim Rounds had mentioned, such as potential downturns or unanticipated costs. Note that later on, I will cover the conservative assumptions that we used in preparing for economic surprises. This budget invests in capital and infrastructure and reduces the overall number of positions. And lastly, it sets the property tax rate to keep revenue from existing properties at twenty twenty one levels.

The budget process began on December 10 with the board's adoption of the budget guidelines and priorities that are summarized on this slide. Based on this direction from the board, I'm happy to report that we focused on assuring a sustainable budget that advances the county's mission and strategic goals. The budget supports the county's workforce by focusing on retention and competitiveness in the job market. The budget process required all departments to to present new funding requests to the board, and all new requests went through a thorough review by our office focused on mandated services. We reviewed capital projects using a new process to ensure that all estimated costs were updated and accounted for.

And for the last bullet, I want to point out that we paid close attention to all budget requests for their impact on the expenditure limit that was established in the Arizona constitution. This year, we were facing many headwinds as we prepared for fiscal year twenty seven. We have the jail excise tax that is expiring in March 2027, and now it's going to the voters in November. If not passed, the county faces a projected revenue shortfall of about 300,000,000. Beautiful bill act.

Some of the impacts of reduced funding, reduced federal funding, and federal tax cuts are not yet fully known yet. And some of those impacts are gonna be felt by the state which tend to trickle down to the county. For the third bullet, economic uncertainty has increased since we started the budget process. The conflict on Iran and rising oil prices have heightened that uncertainty as mentioned in the previous presentation. In addition to the ARPA funding that is going away December 31, the county has also been subject to federal grant reductions and cancellations.

Some of these grant some of these grants fund mandated services which presents a significant challenge for us to fund those activities.

A little closer, please.

Alright.

And for the last bullet, the state, you know, as the state is going through their budget process, we still don't know what some of those impacts might be on the county. And so sometimes those don't come out until we adopt the budget. So we have to be prepared for those challenges. These are some of the assumptions that we used in our methodology. The first bullet, you know, it appears to be just kind of a given and expectation that we're structurally balanced and we have been for years.

I will point out though without naming names that other jurisdictions are not in this position where they're structurally balanced and where they actually are in a deficit and have to use one time money to make it through until they catch up. So I feel fortunate that we've been maintaining this long history of a structurally balanced budget. And to the second point, for revenues, the county has a history of budgeting conservatively. That's a reason that we've been able to navigate surprises and difficult financial times. We took a conservative approach to our revenue forecasting for several reasons.

One is that we've experienced uncertainty in sales tax growth. Second, we don't know what impact that economic uncertainty and the war in Iran and the higher fuel costs will lead to, including the increasing inflation, which was most recently 3.8%. The third bullet, our contingency, is necessary for unforeseen risks. Increased revenue risks and heightened economic uncertainty and state cost shifts. And to the last bullet, general, we maintain two months of reserves for our general and detention fund.

This is is a recommended best practice for local governments by the Government Finance Officers Association, but it's also kind of our last defense if we ever go into an economic downturn and our contingencies aren't enough to to weather the storm. Here's a summary of our fund sources. Starting at the top right and going clockwise, state shared sales taxes are the county's largest funding source. This is why our forecasts are so critical. Committed fund balance represents funds that are committed to one time uses such as capital projects, computers, vehicles, and to pay off debts for capital projects.

This funding was derived primarily from pickup from prior years. The third is property taxes. The next to that grants and other intergovernmental agreements. Then we have permits, patient revenue, fees and charges. I do wanna point out the slice for sales taxes is our gel excise tax of nearly 300,000,000.

We have state shared vehicle license taxes and highway user revenues and miscellaneous. This summarizes our budgeted use of funds. The biggest portion is public safety at 44%. This includes the sheriff sheriff's office, probation services, county attorney, superior and justice courts, planning development, and public fiduciary.

Please?

Madam Chair. Supervisor Galvin.

I have a question for you regarding this chart and public safety at 44.48%. In my recollection, those numbers recently were hovering around 50%, slightly below around 48%, 49%. So I'm just curious where would be the increases of the other segments of this pie chart be?

Yeah. Chair and Supervisor Galvin, your perception is very accurate. It did become a smaller percentage of or a smaller piece of the pie. The primary reason for that is capital project spending has gone up significantly. A second reason is that significant cost savings from paying down the pension liabilities for law enforcement also shrunk that piece of the pie for law for public safety. But I would say the major contributor to that is that our capital project spending took up a larger piece. Kirsten, do you want to add to that?

Madam Chair, Supervisor Galvin, if I could just add a point of clarification on the capital project spending. It's the actual capital projects that are making a bigger piece of our budget this year. We're ramping up spending on our downtown office and elections facility. And then we also have been going through what we're calling the office space optimization project where we've been renovating county facilities in order to get out of lease space. And then when our capital project spending goes up, that becomes elections and administrative in nature.

We also break out our debt payments for those capital projects, and so a bigger portion of our debt payment is also related to those projects, which is what's causing the shift. We don't have a lot of big elections and administrative capital projects in the pipeline. We're shifting towards the jail master plan next, so I expect the public safety piece of the pie to go back up to normal levels in future fiscal years.

Okay. Thank you. And that arises another question out of me, Madam Please. Chair, that's Can you kind of walk us through because the decision made on pension pay down happened a few years ago. Could you just kind of walk us through for people watching online what that was about? Because it seems like that has, in effect, been a good effort to save money. And how can you explain spending there has actually been a cost savings? Thank you, Madam Chair.

Yeah. Chair and Supervisor Galvin, I'll take the first part

of that and turn it over

to Kirsten. So paying down the pension debts for law enforcement has been a multiyear effort. And some of those payments have still we're seeing those impacts today. I believe the last payment was made recently and impacted us for this year. I don't believe we'll see any reductions for going forward because those are fully funded at this point. Kirsten, do you have any clarifications?

Madam Chair, Supervisor Galvin, since I was part of this office when that board made the previous decision to start spending paying down our unfunded liability because it had gotten to the point where our unfunded liability and the PSPRS, which is law enforcement and corp, which is detention officers' pension plans, had gotten so large that our employer contribution to those plans had increased every single year, which was a huge impact on our operating budget and spending. And that ability to use the one time funds to be able to pay down those pensions has resulted in significant cost savings for the county that we've been able to use for other capital projects and one time needs. We haven't put it towards operating items because of our expenditure limit. So the Board had the ability to cut the budget or we've been using it for our capital projects, which we go out for debt to stay under the expenditure limit.

Thank you. Thank you.

Yeah. Thank you. And please continue. Alright. I I would note as a follow-up to supervisor Galvin's question that I'm on the County Supervisors Association for the State of Arizona. I'm on their board, and there are a number of smaller counties, or at least one that I'm aware of, that have had to finance their debt because they had no other options. So I think we are very, very blessed.

I will move on to the next slice and kind of describe what that consists of for health, welfare and sanitation. That is consisting of air quality, animal care and control, environmental services, human services, medical examiner, and public health. For the portion attributable to elections and administration, that is primarily elections and recorder's office, county administration, highways and streets, that is Department of Transportation, culture and recreation is parks and recreation, and education is school superintendent's office. This slide further breaks down the budget and shows the revenue sources for the general fund. This further emphasizes our reliance on state shared sales tax revenue and the importance of our conservative forecasting.

State shared sales tax revenues continues to be a lot become a larger piece of the pie over the past few years as property tax rates have been reduced.

So may I just ask a hopefully quick question? In terms of the Wayfair decision and the boost in state shared sales tax that we received, has that run off? Did we overestimate what would be our ongoing revenue for state shared sales tax? Madam chair, I I Or did I get the category wrong?

I see Kirsten shaking her head, I'll let her answer.

Madam chair, we did not overextend ourselves when that Wayfair decision was made. It was an interesting time because the Wayfair decision was made, and we started seeing that revenue come in right at the height of the pandemic. So things kind of all ended up mixed in there together. So, originally, it helped offset our loss because that covered bringing in the Wayfair revenue and being able to collect from online retailers, covered that small loss we had during the pandemic. And then as you're aware, we saw unprecedented levels of growth in our state shared sales tax revenue.

We did not bring ourselves up to that level and start spending that money on ongoing department needs or other things in the county and used a lot of that, what we consider to be one time funds, to actually pay down the pension unfunded liabilities. Thank you.

I will move on to the next slide. This slide shows our operating uses of the General Fund. The largest portion of the General Fund use is public safety so that our residents are safe. State mandated payments are the second largest portion. Between the two pieces of the pie, they make up 78% of our general fund use.

This slide shows the total budget amounts compared to the prior year. I want to focus on the first line that's showing an $85,000,000 increase in the operating budget. And as noted below on the slide, those primary contributors to this increase begin with state mandated costs. State man mandated costs increased 7.48%, which is a large part of our budget. And to put this into context, if we excluded the increase in state mandated costs, our operating budget increase would be 2.1% instead of 3.2%.

That's well below the rate of inflation and any adjustment for population growth. We'll talk more about state mandated costs in the next slide. Other key contributors to the increase include investments in pay for performance to remain competitive, increases in employer medical contribution costs vary and then also some of it is used for above baseline requests. But that portion was very limited this year. If we turn our attention to the second line in the table, our nonrecurring budget is increasing $107,000,000 or 8.27%.

And this is primarily due to capital project spending that Kirsten spoke to earlier. To put this into context, if we exclude the increase in capital project spending, our overall budget would be going down, not just for nonrecurring but the overall budget. Vice Chair Lasko?

Thank you, Madam Chair. I think you just answered my question. Because, you know, when you look at the inflation rate over the last twelve months, you have written here it's 3.8%, and that's why when we total these two together, you have 4.86%. And my question is, why are we increasing our budget? And I think you just answered it, it's mostly capital expenses, correct, which is increased by 8.27%, correct? Exactly. Thank you.

Madam Chair, Madam Vice Chair, if I may add. And also state mandated costs increased 7.48%.

Madam Chair.

Please.

To that point raised by the county manager, would that be in the total operating row or the total nonrecurring row?

Madam Chair, Supervisor Galvin, that would be in the total operating row. I believe the total operating would actually be a 2.1% increase.

Thank you.

That brings me to the next slide to discuss mandated state payments. This slide summarizes some of those mandated payments. And as you can see, about a fifth of our operating budget is just for that. I'm sorry. Oh, for the general fund.

Sorry. So totaling 412,000,000 in state state mandated costs or 19.8% of the general fund operating budget. And that's made up of contributions for access of 14,400,000. Arizona long term care system is our most significant cost of 300,000,000. Dollars and Arnold versus Sarn is $91,000,000 total cost.

Madam Chair. Please. Can you explain to me this Altec's contribution? Every legislative year does the legislature and their budgets just determine what it is so we have no idea what it's going to be the next year?

Yeah, Madam Chair, Madam Vice Chair, that is exactly correct. We never know what the exact amount is going to be until the state adopts their budget. So sometimes the estimates don't pan out and we're surprised, you know, after we've adopted our budget. This year was an increase of 25,000,000, at least tentatively.

And to that point, don't we also get money back out of this I just call it a black box because I can't figure out how they calculate But then that money that comes back to us cannot be used on recurring expenses.

Correct. Madam chair, we not always receive money back, but during the pandemic and even more recently, we have received refunds because the state also receives some, you know, federal offsets to that. And so they recalculate, give us a refund, and that refund is one time money. We can't commit it to any ongoing uses.

Thank you. Madam Chair? Yes. Didn't last year this is an accounting budget question, but didn't last year the state legislature hand out what I call earmarks to different legislators? So you're saying they increased the cost to county on the alt text, but then had this extra money to give out to each legislator that voted for the budget?

Madam chair, madam vice chair, I don't know if the Altec's excess that they refunded to us, if that was a requirement that it had to come back to those that contributed or if it could be used for other things. But yeah. Kirsten, do you happen to know?

Madam chair, madam vice chair, I'm not sure if those are two different pot of money pots of money as Mike was pointing out. But, yes, I do believe that they were given pots of money to use on certain priorities.

Supervisor Stewart.

Thank you, madam chair. So, Mike, is the money that we send for Altecs, that would be ongoing if we didn't have to pay that. We could still use that for operating budget. But when it gets there and then it comes back, it changes the designation and then we cannot spend it other than on one time projects for capital improvement? Yeah.

Yes, chair. Supervisor Stewart. Kirsten, do you wanna take that?

Yeah. Madam chair, supervisor Stewart, if I could just add, part of the problem is if they had given us that refund, let's say we got a refund of $1,515,000,000 million dollars dollars and then lowered our payment in the next fiscal year, then it would have been operating because we'd know our payment is now $15,000,000 moving forward. But they're giving us the refunds and then they're increasing our payment in the next fiscal year. And so it's causing this disconnect for our office where we don't even know if we're going to receive a refund until midway through the fiscal year or what that amount might be. And then at the same time, they're increasing our payment to Altex for the next fiscal year.

And so it's been difficult to try to determine what our payment might be. And if we're getting a refund, we would prefer they just keep the money and apply that to our payment for the next fiscal year so then we could try to smooth out the curve in our payments because last year, we were informed that it was going to be a 6% increase over three years. So we thought, that's great. We can plan for a 2% increase over the next three years in our budget. That did not happen. We got hit with a $25,000,000 increase this year. So we're just trying to watch the numbers and plan for it accordingly in our budget.

I have a quick follow-up, Natalie. Thank So who would solve for that problem? Would it be the legislature, auditor general? Who would help us kinda get past that to where we could then put the money back in into an ongoing or operating fund.

Madam Chair, Supervisor Stewart, the County Supervisors Association is currently trying to work on this issue, especially because the smaller counties get seriously impacted by this as well in trying to even balance their budget. And so they have been working trying to get more information from Access to try to figure out the formula that they're using to calculate the cost. And hopefully maybe we can get some more information and be a part of the process. I think that would be a great win for the county if we could be a part of how they're calculating these numbers that seriously impact our budget.

Thank you.

Please. All right.

This

slide shows a history of increases to our state mandate costs, which is increasing 7.48% for FY '27. This assumes that there's no further increases resulting from the state budget, which is still under negotiation. Using fiscal year twenty twenty two as a baseline, our mandated state payments have increased 46.8% over the last five years. This far exceeds the inflation rate during that period. And as mentioned earlier, the large portion of that increase is due to rising costs in the Arizona long term care system or ALTCS.

Madam Chair? Please. Can explain that again? Like why is why, you know, on this line inflation is the dotted, you know, green or whatever you call it line. And so but yet, our what we're charging, our levy is has been higher than that for many years. Can you explain why?

Yeah. So on this slide here, it does show the tax levy change over time since fiscal year twenty seventeen. And the dotted line for inflation, that is when we're looking at the levy change, we're looking at a couple of key contributors. One is change in property values or limited property values and those increasing 5% generally each year. The other piece of it though is the population change.

And so there is no population increase factor shown here or reflected here, but that contributes heavily to the levy growth. A couple of other points that I want to make on that, if you bear with me, I'll put my glasses. If you compare 2021 to '20 FY 2026, inflation has increased twenty three percent while the levy increased 9% 9.9% during that period. So that was during the period where the board was taking action to reduce and lower the tax rate. Also, if, you know, if we wanted to look at a more meaningful reflection of levy growth and looking at population growth and not just CPI, we would look to the growth in the expenditure limit, which is adjusted for inflation and also population growth.

And the expenditure limit grew by 30% since f y twenty one, and it grew by 49% since f y twenty seventeen. So that would be another key part to consider when looking at this chart. I think the CPI is meaningful when looking at or the inflation, the green dotted line is is meaningful when looking at the alt text payments and also the home prices over those periods.

Supervisor Galvin.

Thank you, madam chair. This is a question for the county manager because this is a a policy question. Obviously, as a county, we're limited by what's mandated to us by the state either through the constitution or by statute. We are creatures of the state. But what you know, I look at the statistic, and the overall number, as they said, was 46%, but the alt text contribution, I just did quick math, was 63% increase since 2022. What policy changes could or we could not pursue? Or what should we think about pursuing going forward as a board and in conjunction with our government relations team?

Thank you, Chair and Supervisor Galvin. That's an excellent question and something that, as Kirsten mentioned, CSA has been engaging on because we essentially are a payer, but we don't control any of the policy levers that can make meaningful change to keep cost control over this significant line item in our budget. So, our government relations folks are always very focused on how we can manage anything that could impact the growth here, and we will continue to do that in conjunction with CSA. I don't know if assistant county manager Zach Shearer has anything to add on government relations actions on that.

Mister Shearer? Thank you, madam chair, and board members. Yeah. Just it remains a top priority of the government relations team to keep an eye out on these state mandated payments and to ensure that they don't balloon past where they are now or that we add any additional ones to the list that we currently pay. So that they remain a priority every single year and will remain a priority moving forward.

So is it thank you, sir. Is it too much to ask for a slide that shows from this slide that includes CPI expenditure limit and population increase? Or is that silly? Yeah. You can say silly.

No. Madam chair, actually that's a great idea. I think that'd be a great improvement for next year. This was a new slide for this year, so we're looking to make some tweaks and improvements. So we appreciate that feedback.

I really like it. And then when you said all this stuff isn't included to answer Vice Chair Lesko's question, it made me think of it. Thank you.

All right. Moving on to the next slide. This graphic shows how the property tax rate has been going down for the past five years, thanks to the actions of the board. Next slide. And this slide shows how the counties Madam

chair, Vice chair. Okay. How much are we reducing the property tax rate from last year in this proposed budget?

Madam Chair, Madam Vice Chair, it's just over 1¢ for the county property tax rate.

And the that's the county primary tax rate, and then flood control and library are the same. Correct?

Madam vice chair, yes. That's correct.

Okay. Thank you.

This graphic shows how the county's primary property tax levy for fiscal year 2027 will be 278,400,000 below the maximum levy allowed by law. And as you can see on the far right, the last few years have moved aggressively below below the maximum levy.

Supervisor Galvin.

Thank you, madam chair. This question about the maximum levy, I was just thinking about this. I have pointed out that this board is very proud of that statistic and it's a fantastic chart, basically saying that this board is taxing folks at $270,000,000 less than it could. But let's say a different board came in here and said, You know what? We do want to raise taxes on folks by $270,000,000 In my opinion, that would be a nightmare.

But how could they do it, right? Because don't we have limitations with the assessor and the treasurer on property tax increases? So could they raise that $270,000,000 overnight? Or would there be limitations, but they can get there over several years? Or are there other combinations that you're saying that a potential board could do that?

Madam Chair, Supervisor Galvin, I believe in statute any increase over a certain threshold would require unanimous support of the board. So I believe they could go all the way up to the 278,400,000, but it would have to be unanimous.

Okay. So Madam Chair, as a follow-up, so even though we hear that there are certain limitations in how your property taxes could be raised, theoretically a board could come in here and just raise that levy past those percentage limitations to get to that $270,000,000?

Madam Chair, supervisor Galvin, the two limitations is the maximum levy increases by 2% every year and the limited property value increases by 5% every year. We the net assessed value is the lower of the either the limited property value or the full cash value. We're typically charging on the limited property value of a property, so that impacts the net assessed values that we receive from the assessor's office. So those limitations excuse me. Those limitations would be built into that when we receive those values on February 10 every year.

And then this maximum levy piece because we're already so far below, it's my understanding the board could tax us up to that amount if they're to have that unanimous support.

Mister McKee? Yes, madam chair, supervisor Galvin. I think that one of the more important guardrails in that situation would be the expenditure limitation. Once you start raising more revenue and spending more, you know, we're already, you know, kind of at that limit. And so they would have to find some way to get around that, which would likely require going to the voters to raise that limit.

Okay. And Madam Chair, my question is just limited to the revenue portion because of a it seems like this is a policy choice by this board to be $270,000,000 under the limit which we have been historically, I think, unanimous on since I've been here, which includes this current board. But if I go out to members of the public and say, Hey, the alternative is, and I'm trying to show what a nightmare it could be. So you're confirming that, yes, another board, if we replace this one, could very quickly raise taxes by $270,000,000 without expenditure considerations. Yes?

Madam Chair, supervisor Galvin, yes. That

is correct.

Okay. Thank you.

Just feedback to the nerds in the budget office, whom I respect respect greatly, greatly. I I was was at at a a festival festival in up at Cave Creek Park this weekend, and I had a couple people thank me for keeping the county property taxes low. It it's there are a lot of different income levels and socioeconomic levels that showed up, and they do notice, and I just wanted you to know.

This is my last slide. This graphic shows that for fiscal year twenty twenty six, the county's primary property taxes made up about 11.35% of total property taxes. And with that, I'm concluding my part of the presentation. And if there's any questions, I'm happy to take those before I turn it over to Kirsten.

All right. The

chart on this slide shows the budgeted positions from fiscal year 'eleven to the fiscal year 'twenty seven budget. Overall, the number of positions is decreasing by 61 positions to a total of 15,086. This captures the changes that occurred during fiscal year twenty six and fiscal year twenty seven budget development. One important thing to point out is the staff to population level is now at its lowest point and continues to decline at 3.05 staff per 1,000 residents. The only new positions added during the budget development process in the general fund operating budget are for the new Canyon Trails Justice Precinct.

Parks received one time funding for six positions for the opening of Vulture Mountain Park, but those positions will be covered by fee fund once the park is operational and collecting revenue from visitors. The reduction in the number of positions is primarily due to recent reductions in grant funding for human services and public health. Over the next several slides, I will go over the individual elected and appointed department budget recommendations. We only include a slide for a department and if above if an above baseline request was submitted. The departments on this slide did not submit an above based request for the fiscal year twenty seven budget.

In addition, I want to point out that the individual department slides do not include the budget impacts for medical, retirement, telecom and radio charges, and risk management charges. The largest cost for the General and Detention Fund was the increase to the employer medical contribution for $16,700,000

Madam Vice Thank you.

It's not thank you. On this chart with the no above baseline request departments, it's not totally related, but I do want to reiterate to the public the information. How much was the above baseline request and how much did we end up giving above baseline request?

Madam Chair, Madam Vice Chair, we received approximately $45,000,000 in general and detention fund operating above baseline requests. We ended up funding about $5,000,000 of that.

Thank you. And I do, you know, I do want to thank all of these departments that didn't even ask for anything. That makes thank you, if you're here.

Madam Chair, Madam Vice Chair, I will give credit to the county manager for highlighting these departments. This is a new slide this year. So thank you. The constable's general fund operating budget is recommended at 5,900,000, which is an increase of 401,000 or 7.26% over the FY '26 revised budget. New funding of 155,000 is for a new constable for the Canyon Trails Justice Precinct.

One time funding of 16,000 is approved for equipment for the new position, plus $39,000 added to equipment services budget to purchase a vehicle for the new constable. The County Attorney General Fund operating budget is recommended at 138,000,000. The County Attorney's Office received new funding of 98,000 to support two positions that are not able to be covered by the revenue received in special revenue funds. The retirement contribution budget was adjusted by $576,000 for investigator positions that are enrolled in an alternative pension plan. Contingency has been set aside for the expected funding reductions for grant funded positions, the pilot program to address the shortage in beds and delays in mental health treatment, and for positions currently funded by ARPA.

The County School Superintendent General Fund operating budget is recommended at 3,400,000, and the detention fund operating budget is recommended at 379,000. The budget will include additional forest fees funding of 493,000 to support department priorities, including professional development. The general fund operating budget for the judicial branch, which includes adult probation, juvenile probation, and superior court, is recommended at $278,400,000 which is an increase of $9,100,000 or 3.26% over the FY '26 revised budget. The detention fund operating budget for the judicial branch is recommended at 96,500,000, which is a decrease of 4,900,000 or negative 4.66%. The branch can shift fund between appropriations, which is why the why the general fund went down and the detention fund went or why the general fund went up and the detention fund went down.

New funding of 706,000 is included in Superior Court's budget to hire four part time judicial officers to staff the overnight initial appearance court at the intake transfer and release facility. The Justice Court's general fund operating budget is recommended at 30,100,000, which is an increase of 3.59% from the FY twenty six revised budget. New funding of 106,000 was added to the budget for additional Pro Tem staff to meet the demand at the intake transfer and release facility. In addition, new positions for a total cost of 1,200,000 are included in the budget for the Canyon Trails Justice Justice Precinct. The increased funding was partially offset by rightsizing the supplies and services budget based on historical spending.

The recorder's office general fund operating budget is recommended at million dollars quarter was $33,000,000

million dollars quarter was dollars

New one time funding of 458,000 is recommended for mailing out active early voting notices for voters that fail to vote one early ballot in a four year cycle, notice to voters when their record is canceled, voter registration envelopes, and new voter registration forms to comply with state laws. The sheriff's office general fund operating budget is recommended at a $150,000,000 which is a decrease of $7,600,000 or negative 4.8%. The budget is lower due to the PSPRS employer retirement contribution rate decreasing from 25.98% to 16.89% due to the contributions the county has made to pay down the unfunded liability of that plan. This resulted in savings of $5,300,000 The lower retirement rate impacted the overtime retirement, vacancy savings, and dropped budget line items resulting in additional funding of $220,000 needed. The general fund nonrecurring budget includes onetime funding of $275,000 for year two of the retention incentive payments approved by the board last year.

The payment will be 5,000 per employee who did not receive any other hiring incentive payment.

Question, Vice Chair.

Thank you very much, Kirsten. You know, I asked this question about this PSPRS Corp employer contribution rate. I'm still unclear about this. So is this 202,000 an increase or a decrease?

I'm Madam Chair, Madam Vice Chair, so the retirement rate went down for PSPRS and Corp, which resulted in a budget reduction. Outside of that, there are other line items in the sheriff's budget that are impacted by that retirement rate change. So when the, employer retirement contribution rate goes down, we have savings on overtime costs because we also pay retirement on overtime for PSPRS. However, we also budget for vacancy savings in retirement. So when the retirement budget goes down, the amount of vacancy sorry.

The amount of vacancy savings that we can apply to that budget is lower, so that resulted in a cost. With DROP, we have employees who are enrolled in the DROP program and we budget a negative amount since we do not pay the employer contribution for employees enrolled in DROP. But same thing, because we're paying less in retirement, that negative credit goes down resulting in a cost. It's a little complicated. There's just a lot of line items related to retirement changes.

The sheriff's office asked for this funding last year in their budget, but they did not ask for it this year. However, when reviewing their operating budget, we felt it was appropriate to give them this funding back. Otherwise, they would been starting the year with a budget issue in this area.

And so, Madam Chair, I just want to confirm that is complicated. It's not intuitive. And so, I just want to confirm we're not subsidizing the employer contribution rate.

Madam Chair, Madam Vice Chair, we are not subsidizing the employee employer contribution rate. We just have to right size all the line items in the budget that are impacted by the employer contribution change. It happens every year when it changes within the sheriff's office. And then the county attorney had a similar issue in that a lot of their investigators are retired returning to work. So we have to pay a different employer contribution rate for them. So we have to do some complicated math with retirement for some of these departments to factor all these different items in.

Thank you. Madam Chair? Supervisor. Come back in. Answer, by the way, to her question. I think we followed it. But nonetheless, so wait, why didn't they ask for it? That'd be my question.

Madam chair?

If they know they need it, why wouldn't you ask for it?

Madam chair, supervisor Galvin supervisor Gallardo, I apologize. They don't probably know the exact amount until they did it, and the sheriff's office asked for a vacancy savings adjustment in total. So I in my impression would be that they thought they could cover that change without asking for it specifically. For It's complicated. So even for them trying to get up to in front of the board last year and explain why they were asking for that funding was difficult.

Thank you. Thank you. Please proceed. I think one other thing to add is just to remind the board with the detention retention incentive payments. This current fiscal year, it was $2,500 per employee. It will be going up to $5,000 per employee in fiscal '27. All employees are eligible as long as they didn't receive any other hiring incentive during that year.

Madam Chair, can you repeat that? What's going up from 2,500 to 5,000?

Last year, the board approved, I'll call them bonuses for simplicity. Last year, the board approved bonuses for detention officers to help with retention. We approved it over a three year period. So the first year is $2,500, which was fiscal year '26. Fiscal year '27 will be $5,000, and then fiscal year twenty eight will be $7,500. The person must stay for a year or they will have to give the payment back.

Thank you. I was gonna ask if

they were prorated. Okay. Please. Madam chair, so how how many employees or officers, just are we talking deputies or civil employees as well? Who are we talking about here?

Madam chair supervisor Gallardo, it includes just orange. So it would have been deputies, sergeants, lieutenants.

And and how many deputies or officers?

Oh, it's just sorry. It's just detention officers. I apologize. It didn't include the higher level positions. I believe we have 1,800 detention officers.

It's about $25,000,000 in total. Okay. Vice chair. Thank you. I have

a follow-up on this. Have we seen any improvement on retention due to these retention bonuses?

Madam Chair, Madam Vice Chair, I haven't looked specifically at retention to go back and look who was here and who has stayed, but that's probably a great exercise that we can do with our HR department. We have seen that the sheriff's office has significantly ramped up hiring, and we've been able to fill more positions. So I will say they are successful in hiring, but we can do some additional analysis on retention.

Thank you, Madam Chair. That would be a great analysis because we're investing the money thinking that this is because the sheriff's department, if I remember right, said we need help retaining these people so they're not stolen by, you know, some other jurisdiction or whatever. And so we agreed to do this, and so I want to make sure it's working. And also, you know, the overtime keeps going up too, so that doesn't make sense to me as well.

Please proceed.

The Sheriff's Office General Fund compliance budget is recommended at $35,700,000 As discussed on previous slide, the compliance appropriation also includes additional funding of 82,000 for the impact of the PSPRS contribution rate. One time funding of 43,000 is for year two of the retention incentive payment. The sheriff's office detention fund operating budget is recommended at 275,100,000, which is a decrease of 2,200,000 or negative point 8%. The budget is lower due to the corp employer retirement contribution rate decreasing from 12.85 to 7.08%. This resulted in savings of 7,700,000.

The lower retirement rate impacted the vacancy savings budget resulting in additional funding of 1,400,000 needed. The detention fund nonrecurring budget includes onetime funding of 6,400,000 for year two of the detention retention incentive payments. The funding for a new inmate transport bus is an equipment services budget. Additional contingency has been set aside for a second bus for board approval next year. The annual care and control general fund operating budget remains flat at 945,000.

The shelter fund continues to be subsidized by the general fund to cover the revenue shortfall with an increase of 88,000 added to the transfer in the FY twenty seven budget for two shelter diversion navigator positions previously funded by ARPA. This brings the total subsidy to 9,000,000. The nonrecurring budget is for the last year of the three year PetSmart everyday adoption pilot that began in fiscal year twenty five. The correctional health general fund operating budget is recommended at 4,200,000. The detention fund operating budget is recommended at 89,200,000.

The board approved a pilot program last year with one time funding to utilize contract nurses in the prescreening area at the intake transfer release facility to reduce wait times. The pilot program was very successful and reduced wait times by 40%. Ongoing funding of 1,800,000 is included in the budget to continue utilizing the staffing model. The detention fund Graves operating budget is recommended at 5,400,000, and the sign on incentive budget is recommended at 210,000.

Madam Chair. Vice Chair. I just want to make a comment. One of the things when I was running for office that all of the cities kept telling me, the police department cities said it takes too long to intake these inmates, and our police officers have to sit there and wait for hours instead of being out in the public. And so, I just want people to understand why we're increasing the number of nurses for the intake and also the number of, I think, pro tem judges, correct, in the middle of the night, so that our police officers aren't sitting there waiting for hours instead of being out on the street protecting the public.

Madam chair, madam vice chair, that is exactly correct. It's one of the issues that also came up during the public safety funding committee that the board put in place while we were reviewing the jail tax extension, that it was a significant issue for local jurisdictions. One of the other things that is a capital project that has started designed with facilities is additional improvements that for the cities, for the Sally Port, so where they're dropping off inmates to harden that area as well, which was requested by the local jurisdictions. Mike and I actually just toured it last week. The enterprise technology general fund operating budgets are recommended at 56,100,000, which is an increase of 3,200,000 or 6.14%.

The budget includes a 181,000 for Election's imaging software, cloud data storage, and VMware licensing. The current three year term for the Microsoft Enterprise license agreement ends in August 2026, company's is recommended at 143,000, which was submitted under baseline by 51,000. The Human Services General general fund Fund operating operating budgets are recommended at 4,600,000. One time contingency of 800,000 has been set aside for a pilot project to help reduce housing instability. The grant fund budget is recommended at $124,400,000 and the ARPA budget is recommended at $117,100,000 The Medical Examiner General Fund Operating Budget is recommended at $19,700,000 which is an increase of $1,900,000 or 10.96%.

Additional funding of 218,000 is to cover increased costs for toxicology, transportation, and transcription services as a result of case volumes and prices per unit continuing to increase. During the pandemic, the board approved the use of ARPA funds to add positions to handle increased caseloads thinking it was temporary. The caseloads continue to rise and have not returned to pre pandemic levels, resulting in the need to transfer the ARPA funded positions to the general fund for a cost of 1,200,000 in fiscal year 'twenty seven. We were prepared for this potential and able to use ARPA contingency that was set aside in the fiscal year 'twenty three budget for these positions.

Thank you, Madam Chair.

Madam Vice Chair.

When you talk to the medical examiners, is the number of people that die, how much is it increasing by? Because I remember when I toured there and they said there's so many people dying from overdoses of drugs. Is that still the trend?

Madam Chair, Madam Vice Chair, it's our understanding and having the medical examiner come to present that they are seeing more people dying that they have to examine because of the opioid crisis. And really that has been a huge driver for what's been causing the increase. And so those caseloads just haven't come down for the medical examiner's office.

Madam Chair, Madam Vice Chair, Assistant County Manager, Marcy Flanagan, probably has more exact numbers, and I don't know if Doctor. Johnston oh, Doctor. Johnston is here. He would have the most precise numbers. Okay.

And while he is coming forward, Supervisor Stewart.

Thank you, madam chair. And this might be a question for county manager, but will opioid funding be able to be used for the medical examiner's office, or does that have to be 100% public facing?

Madam Chair, Supervisor Stewart, I will let the county manager answer that or Mike. Which one are you? Thank you, Madam Chair, Supervisor Stewart. We can use some opioid funding for the medical examiner's office. How the opioid funding is structured though is that public health department did an extensive plan where they did community surveys, stakeholder surveys to develop a plan that was adopted by the board with significant community input and how those funds were spent.

So, that is what we are spending off of right now. A good portion is going to actually correctional health for medication assisted treatments. But as I think you're all aware, is with the expenditure limit we have a challenge in spending those opioid dollars even if it is to the medical examiner's office. So, we are currently working with the legislature right now to have a process to allow us to expend those dollars, and the chair and the vice chair have been engaged in that. Much appreciated.

Mr. Stewart? Thank you.

And that's good news. I was curious about the expenditure limit thing. Is it and I appreciate addressing that, and I appreciate chair and vice chair working on that with the legislate. That's important. Like, we get the money. We need to be able to spend it to help the community. Thank you.

Please. Doctor, thank you for coming. If you'd be so kind as to introduce yourself for the record and the people online, I'd appreciate it. Yes.

I'm Doctor. Jeff Johnston. I'm the Chief Medical Examiner and Department Director for the Office of the Medical Examiner. And I believe the question was around the caseloads that we've continued to see. Again, as Kirsten said, our hope was that we were going to see a temporary spike in cases during the pandemic, maybe a few years after the pandemic, that would then return back to normal. And unfortunately, that just hasn't happened. We hit record case loads last year. I have some statistics. From 2019 to 2025, we've seen the county population grow about 5%. Unfortunately, the county death rate has exceeded that, so it's grown 16%.

So we have more people in the county dying than the population growth. But on top of that, as Kirsten said, certain kinds of deaths are required by law to be investigated by our office. So when that proportion shifts and as she correctly said, a lot of that is drug related deaths we get a bigger proportion. So our proportion has grown twenty nine percent in that same period. So unfortunately, we're still kind of exceeding all of those and need to move to, you know, more permanent funding for these positions.

Madam Chair? Please. Now you've got me interested. So does every drug case need a medical examiner examination? Madam Chair, Madam

Vice Chair, yes, that's correct.

And how do you determine that?

Madam chair, madam vice chair, so, we do, what we call an inquiry. So when someone reports a death to us, so it's usually a medical facility or law enforcement personnel. So if it's a death out in the community, it would be law enforcement. We'll, over the phone, ask them questions about what the scene looks like. Sometimes we'll talk to the family, understand what their risks are for having maybe a drug related death. So if they've got an addiction problem, those types of things. And then we can use that to determine whether or not it meets the criteria under the law. So we do keep our rates really low. So we have a good process to screen those cases so that we're only taking jurisdiction of those that we have to by law.

And Madam Chair, is it still the number one cause is meth? I think that's what you told me in the past.

Madam Chair, Madam Vice Chair, you're correct for 2024. So the big race has been between fentanyl and meth in our community, unfortunately, the each around sixteen hundred deaths each year, but a significant overlap where we see, decedents die with both of those. So about half have both of those chemicals in them. So fentanyl, kind of took the lead for a while. 2024, meth was on top. I think fentanyl is going be back, unfortunately, again in 2025. Okay. And while you're up here,

I just wanted to call you out on two things. First of all, I still get the newspaper in the mornings. And I'm always reading about the cold cases. You have a division that's working on that, and I try to call you out at board meetings every chance I get for solving those, and bringing those poor families closure. And then the second thing is to thank you all for your customer service.

I got a call from a constituent who had a friend die in the country, but he lived overseas, and he needed his body needed to be taken back to his home country for appropriate ceremonial burial, and you all really stepped up to the plate. And I cannot thank you enough. Appreciate all the good work you do, and I'm not quite up for a tour quite just yet, but I'll get there.

That's it. Perfectly fine. Thank you so much, madam chair. I appreciate that.

Alright. The Parks and Recreation General Fund operating budget is recommended at 1,300,000. One time funding of 953,000 is for the new Vulture Mountain Recreation Area Park startup costs. The temporary funding is needed for personnel, equipment, supplies, services to manage the opening manage opening the park and operations until they achieve full cost recovery from park fees. The general fund operating the public defense general fund operating budget is recommended at a 179,100,000.

The f y twenty seven budget includes additional funding of 150,000 for a new attorney at the Canyon Trails Justice Precinct. Contingency funding has also been set aside for public defense to support the two year pilot program to add attorney positions to address the shortage in beds and delays in mental health treatment and for positions currently funded by ARPA. The public fiduciary general fund operating budget is recommended at 9,000,000 and includes 800,000 to transfer 16 positions from the ARPA fund to the general fund. The caseloads have also not returned to pre pandemic levels for public fiduciary, and the positions are needed to support meeting mandated obligations. The ARPA contingency was utilized to offset the cost of transferring the positions.

The public health general fund operating budget is recommended at 21,400,000. The non recurring budget of 859,000 is for heat relief efforts. The funding will support heat relief respite centers and a coordinator position. And that is all for department slides. I will now move on to talking about our capital improvement program.

The fiscal year twenty seven capital project budget is $631,200,000. The largest category of spending is elections and administration at 31.68%. This category is typically the second largest. The projects in this category include the downtown election facility, the office space optimization project including the current admin building renovations, and Durango Campus electrical infrastructure. The second largest category is public safety, which is typically the largest category of projects.

Some of the projects in this category include MCSO substations in Cave Creek Anthem Mason Surprise, the Central Court Building, and Public Safety Radio Replacement. In addition, the MCSO Food Factory Refresh, the ITR expansion Sally Port And Pedestrian Bridge, and the Southwest Justice Center are moving into year two of design for final approval by the board expected next year. The next category is highways and streets for all transportation related projects at 17.94%, followed by health, welfare, and sanitation projects at sixteen point o 4%, which are primarily the new West Valley Animal Care and Control Facility and the Public Health and Human Services Building. And finally, culture and recreation at 8.56% for all parks projects. I'll be going over the project detail in the next couple of slides.

On this slide, we have the FY twenty seven project budget and the total project budget estimate. The total project budget is an estimate because these project budgets may change as park starts different phases of the project or different park locations. In addition, we are working to update the project request process for parks to align with the process improvement made for the facilities capital projects last year. They will start requesting funds for the project design first before the board approves the total project budget. First, I'll go over the parks and recreation existing projects.

The FY twenty seven budget for existing projects is 50,800,000. The total new funding added for existing projects is 3,700,000. Some projects that needed additional funding include upgrading facilities and infrastructure to meet federal ADA standards, repairs and improvements to the Desert Outdoor Lake Center at Lake Pleasant to extend useful life and improve the customer experience, installation of a dishwashing station at the McDowell Mountain Park Campground, continued parking lot repairs at Cave Creek and Lake Pleasant Parks, and adding an additional host site site at the Adobe Dam Regional Park. This slide is a continuation of the existing parks projects. None of the projects on this slide received additional funding.

There are two new projects in fiscal year twenty seven. Parks will begin a phased renovation of restroom and shower buildings that have reached the end of their useful life starting with the Estrella Mountain Regional Park. The other new project is installation of pump telemetry at Adobe Dam Regional Park to meet CAP standards and ensure responsible water management. And if you're wondering what pump telemetry is like I did and looked it up, pump telemetry refers to the technology that enables remote monitoring and control of pump systems.

We all

do. I I figured, but just in case, a nice Google search helps. All right. The facilities capital project budgets total 412,300,000 in FY twenty seven. On this slide are existing facilities capital projects.

The total new funding added is $113,000,000 The two projects on this slide that received additional funding are the two twenty five West Madison HVAC corrections to finalize improvements in FY 2027 and Year two of design for the ITR expansion. Continuing with existing facilities projects, four projects on this slide received additional funding. The jail security access control upgrades is moving to a project implementation with 11,900,000 added to complete the project. The MCSO Food Factory Refresh Project received additional funding of 5,000,000 for year two of design. The MCSO Security Surveillance Project received 3,500,000 to finish the final site at the Lower Buckeye Jail, and the Office Space Optimization Project received $4,000,000 for additional renovations at the West Court Building for adult probation to move out of the Lurs Building.

Madam Chair. Vice Chair. Can you explain what the jail security access control upgrades are? You said that was increased by how much?

Madam Chair, Madam Vice Chair, it's increasing by 11,900,000 for project implementation. Facilities has been upgrading all of the cameras in our jail facilities, and they felt it was appropriate to update basically the locks on the doors and all of the access at the same time to fully upgrade the security in our jails.

The reason I asked that, my fellow former legislators remember, I think every single year the Arizona Department of Corrections would ask for money for lock upgrades. And I'm like, when are you finally going to fix these locks? I mean, so that's why I asked. Thank you.

And to that point, it was at the same facility over and over and over again.

And just to add to the conversation, I've, you know, I took a tour of the Gatorade factory out in the West Valley and I've been to all the state facility, correctional facilities. The security at the Gatorade factory, top notch. Top notch. I mean, you can't you can't even pull into the parking lot without them really searching you. I mean, I get it. It's You know, they're afraid of someone poisoning the food product or something like that, I'm assuming. But it's top notch. Okay. Gatorade's safe. Gatorade's safe, folks.

Okay.

Please proceed. Yes. Madam Chair, Madam Vice Chair, I will say the locks not working as great at the state facilities was a great recruitment tactic for our Sheriff's Office. We were able to hire quite a few detention officers because of that.

Well, seriously, I mean, every year it seems like they ask for millions of dollars and we give it to them and then the next year they'd say, we need more money because to upgrade these locks. I'm like, oh, why didn't you fix them last year? But, thank you. Mhmm.

And it continued long after you were gone.

Please proceed. Yes. Two projects on this slide received additional funding. The Southwest Regional Justice Center expansion will be entering year two of design with an additional 12,600,000 added to the budget. The West Valley Animal Shelter project was approved prior to the new process for funding capital projects.

Additional funding of 70,600,000 was added to the FY '27 budget to complete construction. In FY '27, we have three projects starting the design phase. The countywide ADA assessment of county owned facilities will identify if there are accessibility issues and inform subsequent design and construction requests. The quartz electrical and HVAC upgrades will modernize those systems, and the Durango Juvenile demolition will demolish the old portion of the Durango Juvenile Detention Facility. The technology capital projects totaled 45,800,000 in fiscal year twenty seven.

The only project that received additional funding is the public safety radio system. An additional 3,700,000 was included in the budget to cover planned improvements. Alright. That is the conclusion of our presentation today on the Maricopa County budget. The upcoming dates are the adoption of the tentative budget today if approved, then final budget adoption on June 22. The property tax levy adoption will be on the third Monday in August on the seventeenth. We would like to thank Jen and the Chair's Office for their guidance as we work to prepare the budget for this next fiscal year. We would also like to thank our staff for their dedicated efforts and hours worked to get this budget finalized.

Thank you both very much. If you would stand by, do Board members have been asking questions as we've gone along. Do you have any follow-up questions?

Madam Chair, I just have a quick comment. Vice just President, want to thank Mr. Rickey and Kirsten for your comments and your information you provided today. Kirsten, just a couple of minutes ago, supervisor Leste asked you a question, and you just knew the answer right off the top of your head. I don't know how you keep track of these numbers. I'm a lawyer. We don't work in numbers at all. We're terrible at math. So I'm always impressed by the really smart math folks. But obviously, of course, thank you so much for the serious work you've done and you've done consistently every single year.

You're the pride of Maricopa County. Your knowledge deep down of everything that happens here at the county is bar none. The fact that you point out that you went on a tour of a facility just to see that helps you further you do your job, it's just a testament to how all of you do such a great job. And you always provide information to all of us, to all five offices throughout the year, and we really appreciate that. So I just wanted to thank you both personally and to please extend those thanks to your team.

Will do.

Thank Thank

you, madam chair.

Any other comments?

Think Ditto.

Yeah. Once again, just great job as always. This is a just looking at your binder. This is no small task. All of us have been through some type of budget presentation through either the state or some in Congress. But it never goes without saying you all do just a great job. And I'll never forget this man in chair. One one evening, I I came down. It was like 10:00 at night. I came down to do an interview here in front of our jails.

And as I was pulling in to park in my little spot, your team was come leaving for the day. And I said, what are you all doing here? And they they were working on the budget. And it shows you the amount of hour and time they put in to create that, what, four inch binder there. So just great job to both of you and your entire team. Give us give them our thank yous and job well done once again. Supervisor Stewart.

Thank you. I just want to echo what my colleagues are saying here and thank Chairwoman Brophy McGee for delivering such a clear path forward with the budget. But to your team, when I'm out in the public, there's one thing that people do not have a question about. And I came from Chandler, which was very fiscally responsible, but the county is as well. And people are very aware that we are a very, very studious fiscal organization. And I want to thank you and your team for that. I think that's something we take pride in, and I know the community does as well. So great job. Thank you.

Thank you, supervisor Stewart. I guess you're free to go.

Thank you. You oh,

you have you have some presentations for the other Districts.

Madam, you

wanna stay there, please? Madam chair,

yes. We'll stay here.

It'll just be one short slide for flood control district and library district as you Correct. Okay. So stay put. The board will now consider item number three, adoption of Maricopa County fiscal 2027 tentative budget. Is there a motion to adopt the fiscal year twenty twenty seven Maricopa County tentative budget? Vice Chair.

Madam Chair, I move that we approve item number three.

Thank you. Do you need the specific language read into into the motion? So I think we have to.

Madam chair, members of the board, best practice might behoove you to put specific language into the motion just so that there's no question.

Do you mind, Madam Vice Chair, restating your motion with all I the

don't mind. Thank All right. I move that we approve the fiscal year twenty twenty seven Maricopa County tentative budget in the amount of $4,157,433,254 by total appropriation for each department, fund an appropriation unit group listed in the attached schedules and also adopt the five year capital improvement plan for fiscal years 2027 through 2031 and approve the attached executive summary.

Thank you. Is there a second? Second. It's been moved and seconded.

Madam chair, if I may, I'd like to explain my vote if we have the opportunity to

do so. Yes. What I thought we could do is a roll call vote, and then each board member can make follow-up comments as appropriate. Madam clerk, would you please call the roll? Yes,

madam chair. Thank you. Supervisor Stewart?

I'll vote aye. And just a quick comment. Again, thank you for the work that you're doing. I appreciate that we're able to do more with less. It's pretty much standard bear for the county to continue to shrink. There's economies of scale as you grow an organization. And when I saw the number of FTEs of 3.05 to 1,000 residents, we are keeping pace with the population growth, but at the same time, getting economies of scale. And that's a testament to the work that you're doing. Thank you, Madam Chair. I vote aye.

Supervisor Galvin? Aye. Vice Chair Lasko? Thank you, Madam Chair. I'd like

to explain my vote. I'm happy that we were able to reduce the property tax rate. It's smaller reduction than I would prefer, but I'm glad we were able to do it with inflation, the amount of money that some things we mandatorily have to cover that were covered by ARPA before, ARPA funds. And so I understand the perplexity of it, but I am thankful to that we were able to reduce the property tax rate on people and that you said, if I'm not mistaken, that we have not increased the tax levy on existing homeowners that were there in 2021. And so those are all positive things, and thank you, and I yield that.

And I vote yes. Supervisor Gallardo?

Thank you. Madam Chair, may I explain my vote?

Please.

Thank you. First of all, madam chair, thank you for your work and and your team has done with with putting the budget in front of us. We appreciate it. I've always said this, you know, as Maricopa County grows by leaps and bounds, I believe our responsibilities grows as well when the need out there in terms of just basic services, quality of life for the people of Maricopa County that they expect, we have to answer that call. I'm also first to say we wanna make sure that we're paying our bills, that we're we're doing what we need to do in order to create that quality of life.

But I think everyone at this desk wants to be able to reduce the cost of government and shrink government, but that's I wanna make sure we're doing right by the people of Maricopa County by providing the services that they are are in just the immediate. So I'm very proud of the budget we have in front of us. I think it's fair. I think we are covering the cost of of what we need in order to take on our responsibilities as county government. I know many of our electeds had a pretty large wish list.

Me, personally, I wish I would be able to to grant everything that people our electeds want. But nonetheless, you know, it goes back think it was a couple of my other previous colleagues who always talk about the wants versus needs. I think we wanna look at that very carefully. But I think this is a very fair budget. I think we're taking care of our responsibilities. We're definitely paying our bills. And I just wanna thank you once again for the hard work you all put in. And thank you, madam chair, for presenting the budget. And how do you vote? Oh, I vote aye. I forgot about that part. I vote aye.

Thank you. And I'm gonna go back to supervisor Galvin to explain his vote, and then I will finish.

Thank you, madam chair. Well, of course, it's wonderful to see a unanimous vote here for this tentative budget. And I'm happy to say this is the fifth budget that I'm voting on, and I'm also happy to say that this is the fifth consecutive budget where I'm voting on a cut for the overall tax rate. But as we heard today is that we're facing a lot of headwinds. And we heard that in the briefing presentations today on an international scale and national scale, but also on a local scale because as a county we have to deal with what the state imposes on us, including some mandated costs.

But to me, this is a fiscally sound tentative budget that is structurally balanced in operating funds, recurring revenues that meet or exceed recurring expenditures. Simply put, we do not spend more than what we have. Built into this budget is conservative planning in these uncertain economic times. The focus is on mandated services and proven beneficial programs and infrastructure. Maricopa County carries no general obligation debt, but we have a triple a bond rating.

And unlike other large counties around the country, we have no interest in obligating future taxpayers to deal with bond debt. We continue to invest in services that resonate, law enforcement, elections, animal care, and parks. We're doing that in the face of rising state mandated payments of $412,000,000 which is 20% of our general fund's operating budget. The majority of the remaining general fund operating budget is dedicated to public safety so that our residents are safe. This is a lean and efficient county operation which reflects the feelings and sentiments of all five of us here on the board.

There is a reduction in overall positions and the staff to population ratio is at its lowest level on record, all the while still providing exceptional five star value to residents and taxpayers. This is the fifth consecutive year I'm voting for an overall tax decrease in rates. Even though inflation has increased upwards of 20% over the last several years, we're setting the property tax rate to keep revenue from existing properties at twenty twenty one levels. This is a standard that all five of us are proud of. And furthermore, the levy gap between the maximum levy and the actual levy is $270,000,000, meaning we are once again way below a levy that we could impose by statute.

Plainly stated, current homeowners in Maricopa County continue to keep more of their money for discretionary spending that they want to spend on or keep. I am proud to vote for this fiscally responsible tentative budget today, and I wanna thank madam chair for her leadership, and I wanna thank our budget team for their direction as well. I'm proud to sit shoulder to shoulder with this board and to make hard decisions to allocate resources thoughtfully and prudently. Madam chair, madam chair on leadership on this 2027 budget, and proud of the county manager and her staff for working so hard on behalf of four point six million residents as we are the fourth largest county in the nation and the best at shepardizing shepherding tax dollars. I don't know why I said shepardizing, but the lawyers here will laugh about that one.

Thank you, madam chair.

Well, thank you, supervisor Galvin. Let me start by finishing out this vote with a very grateful, humble eye for Madam Clerk's records, so I don't forget. I have been in public service for twenty seven years and served on multiple local boards. And it was during my early years that I learned that there needs to be a healthy tension between the board to hold the organization and their staff accountable, and the work that we do on behalf of taxpayers and constituents. And I've had very interesting experiences, which has confirmed my view of that.

So it was just so refreshing to come here to the county with that same attitude, and find what I found. First of all, I really appreciate the conservative fiscal philosophy. I get the expression wrong quite a bit, but I wrote it down today: Use it up, wear it out, make it do, do without. And that's how we approach it, with great respect for the taxpayer, and a real attitude and culture of customer service to our county residents and businesses. The other thing I really appreciate, coming from some very political venues, is that we take into account realities without judging, without politicizing.

We knew the ARPA funds were going to go away. We budgeted and planned and prepared for that. We know that the economy has upturns and downturns. My gosh, when I look at your valuing structural balance, all I can say is thank you, I've been on some boards that wanted to budget vacancy savings. Enough said. I mean, not withhold them, spend them, because we're not going to find the people anyway. I mean, it's just a shocking difference. I wanted to thank our elected officials. They came in with a lot of asks. I know that.

We also know we're going into very tough times, or I believe we have to prepare for that. And I wanted to thank them for their forbearance. But most of all, what really touched my heart was they came back, without exception, saying, We value our exemplary employees. We want to keep pay for performance. It touched my heart, because when you get to Maricopa County, it's the people who work here that define the organization.

Finally, it's just been my deepest honor as chair to work with the county staff and our budgeting office to build this budget. It really has been just a great honor, and I cannot thank you enough for the work that you put in, because I know when I go out there and I say it, it's real. It's true. You don't have to walk it back. And you do wonderful jobs, and I bet you, Kirsten, you probably have that binder committed to memory, or pretty close.

So, to Mr. Gallardo's point, they were late committing it to memory. But thank you so much, because you make the work that we do here helping our constituents possible. So with that, motion passes unanimously. Madam

Chair, if

I is correct with five ayes. So we will consider Item four and move very quickly through the rest of the agenda, at least I hope relatively quickly, regarding setting a public hearing, truth and taxation hearing, and special meeting on the Maricopa County fiscal 2027 budget. That's item number four. Madam Vice Chair, is there a motion?

Thank you, Madam Chair. I move that we set the public hearing on the budget, the truth and taxation hearing, and a special meeting for 06/22/2026, at the time and location outlined in the agenda and give notice that tax levies and tax rates will be set by this Board Monday, 08/17/2026.

Thank you. Is there a second?

Second.

It's been moved and seconded. All in favor will say aye. Aye. Any opposed? Motion carries unanimously. We will now recess as the

Board of Supervisors and convene as the Flood Control District Board of Directors to consider the tentative budget and set hearing dates for the adoption of the final budget. Mr. McGee and Ms. Brindle. The Flood Control District fiscal year twenty seven expenditures total 121,800,000. The fiscal year twenty seven capital improvement program budgets total 79,600,000, and the five year plan is projected to be $295,500,000 The proposed flat tax rate of 0.1428 results in a property tax levy of $85,900,000 Thank you. That is the conclusion

of Thank my you, Board members. Any questions? Okay. We will proceed then to items six, adoption of the Flood Control District Fiscal Year 2027 tentative budget. Is there a motion, Madam Vice Chair?

Number six, yes.

Thank you, Madam Chair. I move that we approve the fiscal year twenty twenty seven Flood Control District tentative budget in the amount of $121,820,725 by total appropriation for each fund and appropriation unit group for the flood control district.

Thank you. And then could we include item number seven in your motion? This is on me. Set public hearing, truth and taxation hearing, and special meeting on the Flood Control District fiscal year twenty twenty seven budget, if Brooks says yes.

Yes, madam chair. At the chair's discretion, you can amend that motion to include six and seven. Thank you.

All right. Thank you, Madam Chair. I move that we approve items number six and seven, and so I'll continue with number seven, and that we set the public hearing on the budget, the truth and taxation hearing, and the special meeting for 06/22/2026, as outlined and described in the agenda for the flood control district.

Thank you, madam vice chair. Is there a second, please?

Second.

It's been moved and seconded. Madam clerk, would you please conduct a roll call vote? Yes. Thank you, madam chair. Supervisor Stewart?

Aye.

Supervisor Galvin? Aye. Vice Chair Lusko? Aye. Supervisor Gallardo? Aye. And Chair Brokaimiki? Aye. You have

a unanimous vote. Okay. The motion carries unanimously. We will adjourn as the Flood Control Board of Directors and convene as the library district board of directors to consider the tentative budget and set hearing dates for the adoption of the final budget. Mr. McGee and Ms. Prindle.

The Library District Fiscal Year twenty seven expenditure budget for the Library District Fund is 38,700,000. The FY twenty seven capital improvement program budget totals 7,300,000. The proposed flat rate of 0.0462 results in a property tax levy of $29,700,000 Thank you. Thank you. Any questions for our presenters?

Hearing none, we will proceed to item nine and ten, nine being the adoption of the Library District fiscal year 2027 tentative budget, and 10, set public hearing, truth and taxation hearing, a special meeting on the Library District fiscal year twenty twenty seven budget. Madam Vice Chair, do you have a motion?

Thank you, Madam Chair. I move that we approve the fiscal year twenty twenty seven Library District tentative budget in the amount of $46,009,440 by total appropriation for each fund and appropriation unit group for the Library District, and that we set the public hearing on the budget, truth and taxation hearing, and a special meeting for 06/22/2026, as outlined and described in the agenda for the Library District.

Thank you, Madam Vice Chair. Is there a second, please?

Second. It's

been moved and seconded. Hearing no further discussion, madam clerk, would you please conduct a roll call? Thank you. Supervisor Stewart?

Aye.

Supervisor Galvin?

Aye.

Vice chair Lasko? Aye. Supervisor Gallago?

Aye.

Chair Brophy McGee? Aye. That is a unanimous roll call vote.

Thank you. We will now recess as the Library District Board of Directors and convene as the Improvement District Board of Directors. The documents regarding these districts are included in the backup materials where each district is listed, along with the associated direct assessment or estimated tax rate. The Board will now consider Items 11, adoption of the fiscal year twenty twenty seven tentative budgets for direct assessment of special districts and street lighting improvement districts, and number 12, set public hearing and special meeting on fiscal year twenty twenty seven budget for direct assessment of special districts and street lighting improvement districts. Madam Vice Chair, do you have a motion, please?

Thank you, Madam Chair. I move that we approve the fiscal year twenty twenty seven tentative budget for all of the special districts as described in the agenda and per the budget request as listed on the attachment, and that we set the public hearing on the budgets along with a special meeting for 06/22/2026, as outlined and described described in in the the agenda. Agenda.

Thank you. Is there a second? Second. It's been moved and seconded. Hearing no further discussion, Madam Clerk, roll call vote, please.

We have a unanimous roll call vote. Thank you. We

will now adjourn as the Improvement District Board of Directors and reconvene as the Board of Supervisors to consider Item 13, Motion for Executive Session. Madam Vice Chair, do you have a

motion, please? Thank you, Madam Chair. I move that we go into executive session.

Thank you. Is there a second?

Second.

It's been moved and seconded. All those in favor will say

aye. Any

opposed? Motion carries unanimously. And we will convene Executive Session in the Sullivan Conference Room. And with that, with great thanks to all of our staff, this meeting is adjourned.