Common Council - Special Meeting

My clock says 531. All right, we're going to call this work session and special meeting to order. Please silence your electronic devices. Could we have a roll call of counsel?

Mayor Hartless? Here. Vice Mayor Jent? Absent. Council Member Shantz? Here. Council Member Daniels? Absent. Council Member De Leon? Absent. Council Member Matanewski?

Here.

Council Member Grenwalt?

Here. All right, so we do have a quorum. Our first item is a discussion for the 26-27 budget. Dennis?

Yeah. It's all yours, man. All right. Well, thank you, Mayor, Council. So we're here, I think, a little over a month ago talking about the budget, and we presented sort of the preliminary numbers where we were at, and we did talk about that we would get that budget down, which we did. So we're going to walk through that. So I'm going to hit some of the highlights. Some of these slides we already covered last time we were here, so I will kind of skip over them quickly, but I did want to touch on a few things. Again, just to reiterate the budget philosophy and putting this together. We are looking to move closer to a balanced budget We've been getting closer every year I know a few years ago. We were pretty far from that, but we're we're getting closer to that point In putting together the budget we have to make some projections on what our expectations are as far as some of the state shared revenues you know what our State town sales taxes are going to look like some of the local revenues that we have and then we put estimates in there for grants as we go through there we've got some grants that we know uh we're putting in for we've got others that are annual type grants that we plug in a budget for but really we try to drive our expenditure budget based on what we're projecting for revenues and that that's where we're looking to get the balanced budget SOME OF THE THINGS THAT WE DO LOOK AT IN PUTTING TOGETHER SOME OF OUR PROJECTIONS FOR REVENUES IS SOME OF THE THINGS THAT WE KNOW THAT ARE OUT THERE AS FAR AS, YOU KNOW, CHANGES THAT MIGHT BE COMING UP. YOU KNOW, OBVIOUSLY IN THE PAST THERE WERE SOME INCREASES IN WATER RATES, SO WE TAKE THOSE INTO ACCOUNT. ALSO WE LOOK AT, YOU KNOW, LIKE BUILDING ACTIVITY FOR SOME OF THE LOCAL REVENUES AS FAR AS LICENSE AND PERMITS AND BUILDINGS AND PERMITS. And then grants that are out there, but we also go back we do three to four year look back Just to true up some of the revenues On the budget side of it if we're seeing a trend that some of those revenues have leveled off or they're generally increasing or decreasing We take that into account as well As far as on the expenditure side, we do look at some of the infrastructure needs. So I'm going to go through a list of some of the capital projects that we have. And Steve's here, and he can speak to some of those as well that are included in the budget, because that's obviously a need that we look at going forward. The other need that we look at is how we reward the staff that's here as well. So those are probably our two biggest costs that go into what the town does here. We want to be able to continue providing some of the highest quality public service to our constituents and When we looked at a lot of the capital, especially for those one-time purchases, I say one time because it's one time over the next five or ten years that we're looking at when we're doing capital purchases. We are looking for grant assistance on those, obviously giving the highest priority to anything that's 100% funded because that's, I don't want to say free, there's a lot of work going into getting those grants, but we're not using our own funding sources in order to fund some of those. The next priority would be probably equal to anything that affects the public health and welfare but also grants that have a level of contribution from the town so we sort of prioritize those based on what type of contribution that we're looking at obviously the more that we have to contribute the more we have to scrutinize that type of grant as well So we do have challenges in our fund balance. We mentioned this last time in the general fund. We do need to look at building that fund balance. The highway user revenue fund is really. Carrying the cash for for our town and so we've got to look at what we can do what we did last year for the 2026 year. We looked at the reallocation of some of the salaries. And Steve and I had sat down and spent some time looking at how to reallocate some of those salaries Where we were legitimately able to charge some of those salaries over to the highway and street fund Not at not a that makes doesn't make a huge dent in the general fund fund balance, but every little bit helps so those are things that we're continuing to look at also looking at some of the infrastructure as far as wants versus needs and prioritizing some of the needs over wants and And then as I mentioned previously, some of the grants. salary adjustments, I know that we included within there a Bonus as that was paid to to employees as it was done this year. So that's included in the budget and then you know one of the things that we really need to focus on is the aging of facilities buildings and equipment and and Focus forward on doing an inventory of all of that and coming up with a capital plan for those because that will impact not only the you know upcoming budgets but future budgets down the line as well and As I mentioned capital we prioritize some of those projects will go through the projects that we have in the capital budget And then we did we were able to reduce that subsidy for the home delivered meals Which helps the general fund quite a bit because that was that was funding Basically coming out of the general fund 100% from the town of Parker and we were able to reduce that substantially and thank you to Nora for for the work that she did on that and So generally, as far as the revenues, as I mentioned, we started with projections through 2026, and then we did a three- to four-year look back on sort of what the trends look like and then some of the economic factors that we know could potentially impact some of the revenue that we're seeing. So we put together a conservative but realistic forecast for the revenues. We want to be a little bit conservative because, again, we really want to drive our budget based on what our revenues look like, our expenditure budget. far as the general fund the largest funding source for the town is the general fund sales tax and state shared revenues and I the next slide that I'll show will show you the percent that's coming from that again budgeting conservatively you know expecting a pretty flat or decrease in the state shared revenues just because I'd mentioned previously or Kyle had at the last meeting with the incorporation of Santan that that sort of cuts into some of that funding now obviously Santana is bringing its own tax revenue as well but they are taking a share of that state shared sales tax so it doesn't impact really every municipality within the state of Arizona SO THIS IS THE SLIDE I WAS REFERRING TO AS FAR AS THE GENERAL FUND REVENUES. SO YOU'LL SEE TOWN SALES TAX AND THE STATE SHARED REVENUES MAKE UP ABOUT 82% OF THE REVENUE SOURCE. SO WHEN WE TALK ABOUT, WELL, LET ME GO TO THE SORT OF THE SMALLER PIE CHART THERE FIRST. SO THAT SMALLER PIE CHART IS SORT OF A BREAKDOWN OF THAT 82%. 46% OF THAT IS TOWN SALES TAX. And then, you know, the rest of that is more coming from some of the other state-shared revenues. But nonetheless, 82 percent coming from town sales tax as well as state-shared revenues, you know, there is potential legislation or legislation that was put out last year and they continue to look to reduce some of the tax revenues going back to the municipalities, one of those being the food tax. A COUPLE OF YEARS AGO, WE HAD THE SHORT-TERM RENTALS. SO I WOULD ANTICIPATE GOING FORWARD THAT THAT'S PROBABLY A TREND THAT'S GOING TO CONTINUE. AND, AGAIN, THAT'S PART OF THAT 82% OF YOUR GENERAL FUND REVENUE. SO THAT'S GOING TO HAVE AN IMPACT ON YOU. And then, you know, another portion of that 82% is your state shared revenues. That's your urban revenue sharing, highway user revenue, vehicle license tax, and state shared revenues. And again, those are going to be flat or reduced a little bit just because of the incorporation of Santan as well. okay so let's get to the budget um and i i've got this title wrong it should be 27 and 26 general fund revenue budget so i've got a comparison of the budget for 27 and 26 for the revenue budget so you'll see we've got about a 108 000 decrease compared to the 26 budget so we're budgeting 4.9 million a little over $4.9 million in the general fund for revenues, about $2.4 million of that coming from taxes, and $1.9 million of that coming from intergovernmental. That intergovernmental, included in there is some grant revenues that we have, but that's also your vehicle license tax, urban revenue sharing, and state-shared revenues. And then your taxes, that is your town sales tax collections that you're getting. Okay, so this is, for the general fund, this is the total budgeted revenues and expenditures by fund, and then I've also got transfers in there. So you'll see the total revenues there, the 4.9 million. We have budgeted expenditures of 5.2 and transfers of 182,000. Now, that shows basically a net deficit of about $461,000. However, about $200,000 of that, which I did not label the line, but the $200,000 on that line is contingency. And that's funds that we don't anticipate using. But because we have a voter-approved expenditure limit, we do budget up to that expenditure limitation amount. And so we have that $200,000 included there in contingency with the anticipation of not using it. But it is included within the budget. So if you take that contingency out, we're at about $261,000 deficit as of right now, which is a You know, we worked to get a little over, I think, $300,000 out of what we originally had brought over to council. THE REMAINING FUNDS YOU'LL SEE ARE LARGELY BALANCED. THE WATER FUND IS SHOWING ABOUT $113,500 DEFICIT. HOWEVER, AGAIN, THERE IS INCLUDED IN THAT EXPENDITURE BUDGET, THERE'S $170,000 IN CONTINGENCY. AGAIN, MONIES WE DON'T PLAN TO USE. SO IF WE DON'T USE THAT, THE BUDGET WITHOUT THE CONTINGENCY IS ACTUALLY A LITTLE OVER $50,000 IN THE POSITIVE. So all of our other funds are either a balanced budget where you'll see that variance is zero or without the contingency would be Basically in the positive AND THEN JUST A BREAKDOWN OF THE TRANSFERS, WHAT FUNDS ARE TRANSFERRING TO WHAT. SO THAT $182,000 TRANSFER FROM THE GENERAL FUND, THAT IS GOING OVER TO CONGREGATE MEALS AND HOME DELIVERED MEALS. SO THAT IS BASICALLY THE TOWN'S SHARE OF PROVIDING THOSE TWO PROGRAMS. AND THAT HOME-DELIVERED MEAL IS THE ONE THAT HAD A SIGNIFICANT DECREASE IN THE PAST. THAT WAS CLOSER TO ABOUT $150,000, SO THAT WAS ABOUT A $100,000 DECREASE IN THE SUBSIDY FOR HOME-DELIVERED MEALS. THE $112,000 TRANSFER FROM THE WIFA FUND, SO THAT IS A We're applying for a WIFA grant, and so that would be a transfer over to the Water Fund in order to fund some of that capital. And then the $92,000 transfer from the Highway User Revenue Fund is to provide for the debt service on the equipment in the Highway User Revenue Fund. So this is a breakdown of some of the capital projects that reconciles back to the budget that we have in there. And so these are the projects. So in the general fund, we've got three separate projects that are included in there. And then I listed in there as far as what's included in the budget as being grant funded and what percentage it is grant funded. One of them right now, so in the Highway User Revenue Fund, we have the curb and gutter and sidewalk projects. That's only a partial amount of the total that we're looking in order to do that project. And so that one would be 95% funded with future costs coming later. And then we've got several projects there in the water fund. Three of those would be funded by basically water revenues. And then the AMI antenna and software, we're looking for a grant for about $150,000 for that project as well. So these are the capital projects that are included in the budget. This doesn't include some of the vehicle purchases or that type of thing, the minor ones. These are more of some of the bigger capital-type projects that we're doing. I don't know if there's any questions on those at all. Okay. On the next few slides, it's just the water budget. Just wanted to provide just a little bit of, I guess, historical data related to the water fund, the operating revenues versus expenditures. Prior to the water rate increases, you know, we were pretty much Mostly operating break even there wasn't much of a difference between what we were getting as far as revenues and expenses. Um, we're budgeting for more revenues over expenses from an operating standpoint. Um, and, um, you know, the purpose of the water fund is not to make a profit, but we do need to build reserves for future capital. that we may need to purchase and the investment that we need to make in that infrastructure. So what we're budgeting as far as for 2027, it looks like a lot larger revenue than expenditures, but that is something that is definitely needed because we need to make investments into the future for our infrastructure as well. And then this is just a quick slide just showing the water fund, the contingency versus the capital budget. So our capital budget for this year is larger than it was for last year. Some of that, again, is grant funded. That's included in there with our contingency slightly less than it was last year, but we're still at about $170,000 in contingency for the water fund. So that is it on the budget, unless there's any questions or comments, the total budget budgeted expenditures for the fiscal year for the town is almost 12.7. It's about 12692. um is what we're budgeting at and we were at 12 million 172 i'm sorry uh what were we at last year i can tell you that in just a second um versus uh 12 million 172 in revenues but again keep in mind that 12 million 692 also includes contingencies in there as well so i don't know if there's any questions that any of the council members have

No, it's good to see that. And I think Steve gets a lot of credit for this water. We were upside down, which we found out at one point the state really didn't like that. It was, in fact, illegal to run a deficit on a utility. So you guys did the rate study, the gradual increases, and this is showing right here. So that's great.

should actually level out.

The only other comment I would make is this bathroom thing, the restroom thing, which is CDBG. Is CDBG still a viable program?

Yes, and so we're still on the same rotation. So it's like every other year between the town and the county. Obviously, ADA-compliant rotations.

I was just worried because that was one of the hit list last year of programs that we're going to get rid of.

As it stands right now, the state is holding firm with the CDBG. I haven't heard anything different. This year's amount is actually higher than last year's amount. for these projects when I put them forward. In my mind, in my opinion, they meet the criteria. For instance, parking lots. It's actually in their handbook that infrastructure like building a parking lot for, say, a community center or a police department, which we desperately need over there, it meets the criteria. But yet when we put these projects to those at the state, They say, no. Well, then take it out of your handbook. Give us a chance to, because it has to benefit the community, and they look at it, well, how does that benefit the community? I don't know. It's a community center. It's a police department, magistrate court. Of course it benefits the community. Do they use it? Yeah, some use it. They don't use ADA handicap restrooms that are actually employee restrooms. But it qualified. So it's really, it's a struggle for me because when I go with these projects forward, for instance, the shop needs to have a whole new building built. services that we do. Without that, we don't have it. To me, it meets the criteria. And of course, it was shot down.

Any other comments?

I have a comment. On the page 2026 general fund revenue budget, there's some variance on some buckets like charges for services, fines and forfeitures, culture and recreation decreases in this year's budget proposal versus 2026. Were those simply just being more realistic and not hitting the mark on last year's numbers?

Yeah, they were. So when I when I sort of made an introduction to the revenues, one of the things that we did, the first thing that we did is we made projections as far as where we were going to end up at 26. And then I went back and I looked at the last three to four years to see where we were at, because sometimes what happens, like with building permits, for example. They're kind of unpredictable, but sometimes you see trends where they go down one year, like it's every other year they're up and down, up and down. But we weren't really seeing that trend. We were seeing more of where it was pretty stable and the budgets over the last several years were a little higher than what actuals, because there was an expectation that maybe there'd be more builds or something. And so that was more of a true up. And for... Actually, for each one of these that you're seeing where the decrease is happening, license and permits, charges for services, fines and forfeitures, all of those, none of those are anything that we're not doing, like that we cut out of the operations or anything like that. That's just more of a look back, true it up, and be a little bit more conservative on revenues based on what it historically has looked like. and where our projections were for 2026. So we kind of brought those down a bit. So, yeah, that's what that is. The intergovernmental, though, that one is down a little bit. Most of that is some items that were budgeted for grants last year that were not included this year. But then a part of that is also some of that state-shared revenues that we're talking about.

Okay. Yeah, just in my mind, I feel like, you know, we've implemented a new fee schedule for parks and, you know, recreational use, and also we have a new compliance officer that's hired. So in my mind, I was just wondering, like, with those new potential things, is that going to maybe help with our revenue in those particular areas, and if that was... maybe factored into this, or we're just going to kind of wait and see how those maybe play out over the year.

Yeah. I didn't factor it too strongly, to be honest with you again. Um, I wanted to take more of a, a realistic conservative approach. If we do better, that's great. Um, and, and my thinking is, is that right now your, your fund balance is not where it should be. Um, and so, you know, if we are able to generate more revenue than that, and, and by no means am I like, uh, you know sort of intentionally understating anything you know based on historical trends and and projections these are these are good numbers um relatively conservative but not overly conservative um but in my mind um if we're going to try and budget based on what our revenues are coming in and we if we come in higher with revenues um that's just going to add to your fund balance and that's going to help the town into the future okay thank you

Anything else? Anybody? Thanks, Dennis. Appreciate it.

Sorry, question just overall with the capital projects. You guys do have a list of capital projects listed, is that correct?

Yes.

Okay. For the, you may see a handful of those capital projects have the grants that anticipate allocated over there. Is the industrial reconstruction for $850,000 Is that using like her funds or what type or is that just straight? What type of funds is? Yeah, it's her.

That's her. That's her funds. Yeah. Highway user revenue funds. Okay.

For any other. So are we limited for capital projects strictly limited over here, even if we get different funding, say, in the future?

No, no. So are you saying that if we got funding for something that potentially we didn't budget for or?

Yeah, because I don't see, you know, like say if we wanted a skate park or something overall with that, say if we found funding in different directions, would we still be able to do that if we found funding? Funding in other directions.

Yes, even without lifting over here you would and and that's as I mentioned earlier So the budget for this year is almost twelve point seven million And that's about equal I should have had it up earlier, but it's about equal to what last year's was as well And that's so that you guys are budgeted up to your approved expenditure limitation amount you guys don't really come close to hitting that and um so if there is a project that comes up and if you guys get funding for it um you guys can actually you can absolutely spend that money and um you won't you know unless it's a 10 million dollar project um you won't exceed your expenditure limitation amount okay And if it is a big project, what I would propose to do, and we would just cross that bridge when it comes, is we would just do a budget transfer from a department or a fund that's not using their available budget for that particular project.

Yeah, $12 million budget, and the actual budget's five-something, so there's a good bit, 50% kind of. swing there i guess all right anything else anybody okay we'll um adjourn this work session and call the special meeting to order a roll call of council darcy

Heartless Vice-Mayor Jent present Council members on here council member Daniels absent council member de Leon absent council member Adonis key here council member Grenwell here Okay, this item is discussion and action to approve deny the posting and publication of bid packages for the parcels

Listed at 905 desert 905 Eagle and 900 Eagle in Parker and I would make a motion to discuss this matter an executive session because we're gonna need some legal advice, right? Okay, it's been moved and seconded to do an executive session all those in favor aye motion carries