Town Council - Regular Meeting

All good? Well, good afternoon, everyone. The meeting is now called to order, and I would ask if the town clerk could please call

the roll. Mayor Stanton? Here. Vice mayor LaBelle? Council member Andy Keller?

Here.

Council member Liechman? Here. Council member Moore? Here. Council member Pace?

Here.

Council member Thomason? Here. We have a quorum.

Thank you, sir. As a reminder, this meeting is being streamed live on the Internet and will be archived on the town's website for future viewing. The first item on the agenda is the study session. These items are scheduled for discussion among the council staff and their designees. Votes will not be taken on any of these items on any of these items at this time but may be scheduled for a final action later in the meeting or at a future meeting.

Members of the public are asked to hold their comments until call to the public scheduled to shortly begin after 6PM. Public comments will also be invited when the agenda topic is placed on a future agenda for action. There are four study session items today. The first is the annual review of the town's, investment portfolio and investment policy and it will be presented by our CFO, Leslie Duresh.

Hi. Good afternoon. I'm actually going to pass this over to Annette Gaston from PFM. She has a couple presentations tonight. Sorry. Am I too close?

It's kind of an echo.

Sorry. Yeah. And so she's gonna present tonight our portfolio and also cash flow analysis, and she has a recommendation for our investment policy. So I'm gonna go ahead and

turn it over to her.

Wonderful. Thank you. It's great to be here. Mayor, vice mayor, council members, thank you all so much for having me. So we have put together the fourth quarter overview and summary of the the town's current investment portfolio. So I'm gonna jump into that. I'll allow, time for questions. If you have any questions along the way, always welcome those as well. So just starting at a high level with the executive summary here. So I I compared both third quarter and fourth quarter for us.

And fourth quarter, a little bit different as we're thinking about it from a strategy standpoint. So I just want to start with on the top left hand side, the current market value of the portfolio, a little over 27,000,000 there. Just kind of going down the right hand side, we also show the book value which is a little bit more of a historical backward looking view as well, right around that same figure of twenty seven million with an unrealized gain of 345,000. So really being driven is we think about it from the current macroeconomic standpoint is yields have been a bit lower. We came off the heels of four rate cuts last year.

We had one in September, one in October with two in December. So we've seen some nice appreciation in the portfolio and that expectation is is to carry forward as we think about coming into 2026, what's on the horizon? As of right now, we're seeing about one potentially two rate cuts for this year, if we look at what the market is pricing in. So the town's portfolio well positioned to continue, absorbing, you know, some of that appreciation that we're seeing in this on the horizon. Now the yield market there at a three sixty one, that's very reflective of where the portfolio was at the December where market rates are at.

So if we were to sell off the portfolio, hypothetically, not prudent nor did we, but in purchase it back at the December, it'd be yielding about a $3.61. So for the town's portfolio specifically, just below that, we look at the yield at cost and that's the figure I really like to keep an eye on. That gives me an idea of what is the overall value currently in the portfolio with the securities that we're holding on behalf of the town. So very strong over 4% at four 0.18. So it just means that we purchased at some of those peak yields in the market.

We're holding on to those for the current duration of the next one to three years, which is where the the town's portfolio is at. So, well positioned there. And then just below that, we also look at how is the portfolio distributed over that one to three year time horizon. So we've got, you know, a little less than 4,000,000 coming due in the in the next six months. We look at, you know, in the next six to twelve months, we've got a little bit more with the bulk of the portfolio concentrated in that one to two year duration right now and then a little bit more in that two to three year duration.

So very important as I'm thinking about the town's portfolio more from just a strategy standpoint. As we closed out the year really on four rate cuts, as I'm thinking about how to position the portfolio, what's important is we kind of go into a little bit new environment now, right, a lower yielding environment, of course. One of the things that we're really starting to do is extend duration ever so slightly. So we're at about a 100% of where benchmarks are at in portfolio. So having that extra little allocation in that two to three year duration, I think, makes sense especially as the front part of the curve is coming down.

We know that we are mitigating some of that reinvestment risk and have the ability to be invested longer term. Now with that, one of the things I'm just going to jump on to page two here. One of the things that I I want to also just highlight is, you know, what is the makeup of the securities currently in the portfolio? So largest allocation, of course, is treasuries. About 70% of the portfolio is invested in US treasuries.

We've got an allocation to corporates as well as negotiable CDs. So I feel very well allocated, you know, across those permitted sectors. And I think about, you know, the objectives of the town overall being safety, liquidity, and then return. So safety and liquidity are first and foremost. So once those are met, we start to really focus on how can we continue to drive return while still adhering to those first two key objectives of safety and liquidity.

So we see that really through the diversification, through the duration, but also making sure that we are maintaining very high credit quality within all of those. And then on the top right hand corner also for just fourth quarter alone, 302,000 or just shy of $303,000 in earnings. So some nice earnings for the overall portfolio for just the last quarter alone. For the year that exceeds over $1,000,000 in earnings but for the fourth quarter I just kind of earmarked of what we have thus far. Now I'm not going to spend too much time on this page.

I always just like to include it more as just additional information to get an idea of we talked about the portfolio is invested in 70% in treasuries but then also an allocation into corporates. So what does that allocation look like if we drill down a little bit more? So one of the things I really like to see is we are well diversified across those permitted sectors. The other thing that I'm I'm keeping an eye on is how well are we diversified within that that sector when it comes to corporates. So very well diversified.

If we look at just some of those names we've got there, you know, some we've got financials. There's industrials. We've got utilities. We've got health care. So I think the other important component if we think about it is how are we diversified within that sector? So very well diversified. And the one thing I just wanna point out in that column, the the last one to the right, it says percent of portfolio. Each of these is, about 1% or less. I will tell you per per the town's policy, there's a 5% per issuer limit. We our own internal limit hovers around 2%.

So we're a bit more conservative, but I always recommend keeping it at 5% in the event that there is an instance where maybe we go over that 2%. That's our own internal limit but all of those again just to highlight where that diversification is and that per issuer limit is. I just

want Did to you touch have a question?

Oh, go ahead. Yes. Thank

you very much. In regards to the allocations, if you go back up to like page two, I noticed when looking at prior investment statements that we were in the U. S. Treasuries are at 70% now but they were at 59%. So I was curious why the increase of 11% remixing it

to have the treasuries that high? Yeah. Absolutely. Great question. Thank you. So one of the things that we do especially as we went into a little bit more of the environment where the Fed actually started to cut rates, Before that, we had a heavier allocation to corporates. Corporate notes, those spreads came in those spreads narrowed quite a bit. So there was just less value out there in the corporate space. As a result of that, we did take some of those gains. We reallocated into treasuries.

And treasuries is one of those those sectors that we really look at, I'll say, from a portfolio management standpoint a bit is dry powder. There is they're the safest, most liquid asset class. We had excellent yields still in treasuries. So we took our our our foot off the gas in the corporate space. As we start the year, we start to see more new issuance, and that's important.

If we're gonna be adding corporates to the portfolio, we wanna add them not just because we have the space or because they're allowable, but because it makes sense and we're getting a a decent spread pickup over that of treasuries. If not in the instance in fourth quarter where we saw spreads narrow, we're gonna get a better yield pickup in treasuries knowing that we can probably redeploy the the that cash maybe within this quarter with some nicer spreads. So that'll probably balance out a little bit more. Yeah. Thank you for the question. That was wonderful.

I think another question. Council Member Leibman. Thank

you. I'm going to indulge myself and ask something that I consider a very dumb question, but I'm the newest member on the council and I could not figure this out. You are we are talking here about a $26,000,000 account. Correct. But we have about $150,000,000 in our portfolio. Yes. And I looked and looked over this and I couldn't figure out where the other money is.

Absolutely. Yes. Yeah. So currently, we are holding, well, items in Wells Fargo cash, and that gets in our swept a certain amount, about 95,000,000. We have Wells Fargo securities of about 17,000,000. We have LGIP of about 12,000,000, and then we have the 26,000,000 with PFM. So we have different investment class, and we're mostly talking about PFM, but we will be talking about the portfolio on whole as well.

So this is only looking at the portion that you particularly oversee, and there's all this other money that we have invested elsewhere. Now how much was in cash? I didn't quite hear you.

So we have a 95,000,000 with Wells Fargo in cash. And it gets swept into investment overnight. That is one of the things that, this is a preclude to Yep. Talking about redeploying some of that into some of the other, areas of investment. But this is just to get you everybody caught up on where the portfolio is today.

And so we went from in 2026, we went from a cash position of about 37,000,000 to today at 150,000,000. And we've been increasing that significantly in the last couple years, but we haven't redeployed that liquidity, anywhere else yet. So this is just kind of a preliminary discussion on where we're at now, and then we're gonna come back and make recommendations on what we're gonna do with

Understood. I think I I think I got that point later on. Two other quick questions. When I look at the security type and issuers and our list on page I think it's it's 11 of the entire yeah. That one. Is there any thought to concentrating on Arizona based securities or also any value not financial value but town value in how we choose what we invest in?

Thank you. Great questions. Yes. So as far as your first question and concentrating on Arizona securities, the one thing where we could look are more most of the issuance that we see within Arizona is from other cities and towns, so municipals, and there isn't necessarily always a need for additional municipals within a government portfolio. On occasion, there are and we have added some as there's been issuance. So that is something we can absolutely

I I was focusing on Arizona corporations. Oh, corporations. Yeah. I understand the municipal part. We we have a number of of public companies here, and I was just looking through here. And I think I saw maybe none or one, maybe Hormel. Anyway, so that I'm not sure about that one, but I was just wondering more about are we supporting local

corporations at all? Wonderful question. That is something I can absolutely bring to the trading desk. So what's interesting, the way with the securities that we have within portfolios, we put together a an approved issuer list of issuers that are have been vetted, researched. We do additional due diligence above that of the credit rating agencies to make sure that they fit within the parameters of our public clients and their portfolios because there are so many certain needs that we wanna make sure are met.

So I can ask if there is one specifically of interest that is on our approved issuer list at this time with our investment committee. They're the ones that really dive a little bit deeper into some of those fundamentals before they they approve any of those issuers. And our I will say post pandemic, our issuer list narrowed and we were very selective with reopening it on making sure that those fundamentals were met. So that is absolutely something I would love to bring back to them.

Thank you. I am not advocating for a specific corporation. I'm just saying if there are Arizona corporations on the list that meet all the criteria and would be a good fit, it would be nice to honor them.

Agreed. Oh, I I welcome that. A 100%. Thank you. Wonderful suggestion.

Any more questions at this point in the presentation? Councilmember Pace?

No questions at this time. Thank you. Good presentation.

All right. Please continue.

Okay. Thank you. All right. I'm just gonna do a quick little summary here, because I know we have a couple of other little things that I wanna take time for us to to dive into. But just can included a few current market themes, you know, a little bit of what we we spoke about at the outset of the meeting.

You know, we we came off of the heels of four rate cuts. The expectation going into this next year is potentially one or two. So as we're thinking about what are potential headwinds from a strategy standpoint, there's a bit of cooling in the labor market. Inflation has definitely come down into a a better threshold of where we've wanted to see that. So I think for us, that is a big reason as to why we are now at a 100% of benchmarks whereas prior to that, we were at about 95 to 98% until we were a little more certain that the Fed was gonna continue on this path, and that's the expectation going forward.

So I think for us continuing to maintain to a long term disciplined strategy has bode very well and that's our plan going forward. I just want to show you just a little comparison. I included the two year treasury yield. We look at this as more of the shorter duration comparison to yields. So, of course, you know, the Fed controls the very front part of the curve.

As they cut rates, we see that front part come down. That moves in lockstep with your LGIP, your money market funds. Those things you'll see reflected very quickly. You know, the the other side of that is they hike rates. It is a lot takes a lot more time to reflect in a lot of those yields.

But I just wanted to give you an idea for the last year what that that two year treasury has looked like and kinda where we're at now. So, again, right, a 100 basis point rate cut at the end of next at the end of last year with the expectation of two more being priced into the market. So this was as of December 31. We're hovering right around that 3.5%, a little bit more three point five three point seven five percent range. But I wanted to show you what it's looked like through the last few years.

So a little bit more of a dramatic picture where you can see the run up in yields, Of course this was where we had those the rate increases. We've tapered off and then we're back to those rate cuts. So I just kind of wanted to show you both of those side by side just the last year snapshot, but also as we talk about that environment really shifting, what does that look like? And the two year treasuries is one of those markers that we use to reflect that. So I'm just gonna pause there.

I'm going to switch gears to you know, we talked about the portfolio. This is the the long term portfolio. There is quite a bit of liquidity. We'll we'll dive into what the liquidity picture looks like, but I wanted to just switch gears and talk about the investment policy for the town. But before I did, were there any other questions on the actual portfolio?

Okay. Councilmember Leitman.

Thank you, mayor. My only question which I think I asked before but it got overshadowed by the Arizona company question is do we use any values based analysis to decide what companies to invest in or ethics or Yeah.

So based on as far as value or what we follow, I mean, per Arizona state statute, they have which is a great segue because we're gonna look at the policy. So Arizona state statute oversees what is allowable per public entities within the state. So there is a full list of what's permitted investments, but also per Arizona state, we're only allowed to invest out to five years. So in addition to that, our own credit research team, we have dedicated analysts that are very specific in what we are allowed to invest in in addition to our investment committee. So that's really where a lot of that additional due diligence is in conjunction with state statute.

Please.

Thank you. I just know when I worked at ASU in the office of general counsel, there were certain types of companies that we did not do business with such as cigarette companies or there was a whole list of them. I'm talking that kind of value. We also had the five year limit there too so that I totally understand.

Yes. So more like a sustainability or ESG type of mandate that might be in as far as environmental, social and governance.

Okay. Yes.

Is what

I'm asking

you about.

Some clients do not always. I think if there is maybe a restriction, if there's a specific company that the town feels that they would rather not do business with, we can always look to implement something like that if that's a wish of of the town and something like that. But as of right now, there's no ESG mandate in place other than Arizona state statute and, the policy within the framework of the policy. Yeah. Great question. Thank you.

Other questions at this point? Councilmember Repayce?

No questions. Thank you. Good dialogue.

Please continue. Wonderful.

Great. So, you know, the the one thing I also wanted to take a moment for us to just dive into is the town's investment policy. Leslie and I went through. We did a deep dive into the policy. And while there is nothing mandatory that needs to be changed, it was more just diving in, seeing if there's any cleanup that needs to happen, seeing if state statutes change, and this is something that we do annually.

And I will say we're very fortunate within Arizona. It we have a very flexible state statute that allows a a broader permissible investment universe. And so what we did is went into the policy, just wanted to do an overview at a very high level. The policy was last adopted and approved in 2016 and I will say state statute hasn't changed much, but it's changed some. So as far as what the overview is, I I just put together a little bit of a memo and wanted to just dive into that.

Now for the town, all of the current permitted investments are allowable. It's coded within our system. So based on whatever's within the policy framework, we code that within our system so that we are not able to invest in anything outside the scope of what is allowable. Additionally, a little bit of cleanup. One of those items was, government sponsored entities referred to as GSEs. Those fall under federal agencies. They're the difference between those, we think about treasuries. Those are the gold standard. There is an explicit guarantee when it comes to treasuries. With federal agencies, there is an implicit guarantee or backing if you will.

And within the the federal agency framework, GSEs can fall under what we refer to as commercial mortgage backed securities, mortgage backed securities, supranationals, things of that nature which are still backed by federal agencies, but they are maybe a different form of federal agency. So cleaned up that language. Additionally, the other item here, LGIPs. So within the town's policy, there is a restriction for a limit and the recommendation is maybe to consider removing that limit of 7 and a half million. I think that is a fairly low figure, but it could be whatever is best for the town.

However, I think that might be one to just consider as far as maybe updating it or changing the limit if you would like one. And then the last item that I reviewed was just municipals. So muni bonds, that language has expanded quite a bit in state statute. It's already referenced in the policy and again there it doesn't it's not a requirement. It needs to be changed. It just brings it more in line with state statute and that change that took place a couple years ago.

And then the last

thing Pardon me just a moment. Have a question from Councilman Thank

you, Mayor. The LGIP, I've always thought that we should have more money in the LGIP than we do. But which series are we in? Are we in the five seven? We're in five? Okay. I was just curious. And have we thought about going into seven or moving back and forth or anything like that?

It really hasn't been looked at very, deeply, but that's something that I'm going to be taking a look at is Yeah. We're going to be looking at the different, series to invest in in the LGIP. We want to raise the limit that we can invest in there, and we're also gonna be looking at expanding potentially with the PFM and with Wells Fargo Securities.

Okay. And the the Wells Fargo account that is holding cash, that's for our general fund. Is that correct?

It's just all of our

Our services.

Yes. And

then there's a sweep when, at night.

So at Wells Fargo, we have, pulled off some of it and it is in security, so it's more actively managed. And then anything that's not is just swept every day.

Yeah. Okay. All right. Thank you.

I'm seeing any other questions. Please continue. Wonderful.

And the last thing is I just included a little bit of a table here. I know that there are some limitations as far as aggregate policy limits or sector limits. So I I wanted to continue to keep those in place. But overall, the policy, it's well written. It has the ability to explore broadening some of the permitted sectors that aren't already being utilized within the current long term portfolio.

So I think that would be another consideration is looking at what are those opportunities that we can explore continuing to really optimize the overall long term portfolio with the policy already being in place to do that. Any other questions on the policy itself? The last thing I had was the cash flow and I thought for the sake of time I wanted to make sure just to touch on it, give you a little bit of a high level overview of what that looks like as well. Okay. Wonderful.

This one? Thank you. So

if you review, the memo attached If you review the memo, I would like to come back with a resolution with updates to that policy. If you have any recommendations or changes, different from what's in the memo, if you would please let me know. I am thinking about bringing forward an updated resolution in the next couple of council meetings.

Wonderful. So diving into the cash flow. Now the cash flow, we just took all of the town's balances for the last three years. So that includes the Wells Fargo, the Wells Fargo Securities, LGIP, plus the PFM. So we just looked at all the balances for the last three years and we looked at the liquidity, of course, which is a lot of the the Wells Fargo, the LGIP, everything not in the long term portfolio would be part of that liquidity.

Now out of that came a couple of things. One of the things we always like to look at is what is the seasonal the seasonality of a lot of these balances? When do we see some of those peak months, and how can we plan for some of those leaner months? So here, that average balance just shy of about 103,000,000 on average. Now we see those peak months being May and June where those balances are a bit higher with those leaner months being September and October.

So over here just looks at really the overall growth of the portfolio. So I know there were quite a few questions about what the cash position looks like, what the liquidity, and I think this helps just give a little bit of a picture of where those balances have kind of hovered around and then also what they've looked like really over the last five years of growth. Now the historical analysis. Again, this takes into account all of the balances. This down here, I'm gonna start down here with the historical core.

This is that core balance. This is the PFM portfolio. It has been essentially right around that that same amount. There have been no withdrawals, no additions, but just very very much rolled over, reinvested for the last few years. I will say I've I've worked with the town now for going on eight years. So I've had the pleasure of getting to be part of the the portfolio and and some of the cash flow analysis. And I've seen it grow quite a bit as well. And now, you know, we see where this is very steady. This just shows us all of the liquidity. So what we saw on the prior page, we look at and all of this growth in aggregate.

Now this line right here is a liquidity cushion. So I'm just gonna I'm gonna toggle to the next page but I'll explain what that that yellow dotted line represents. That is if we were to add a cushion here. So what I did is I took all of the balances. In the middle here is the town's core. That's that long term portfolio. To the left, I've got all of the cushions broken out. If we were to consider a 15% cushion, a 20, or a 25. And in addition to that, what that would bring that core balance to. So at a 15% cushion with a core of of about 25,000,000, let's call it, we've got excess liquidity of about 83,000,000.

So on the prior page, that gives us an idea of what that modeled core would look like with all of those. I will say many of the conversations I have with clients when we're looking at cash flow, when we're looking at what is that right liquidity threshold, you know, I think it's different for everybody based on if they have a large cash balance, what's your LGIP look like? But usually we start with about a 25% cushion give or take and then from there decide, you know, do we want to deploy more longer term? Do we want to allow some of that to mature, etcetera? But usually a starting point is they'll hover right around 25% just for a comfort level.

But that is all that I have. I just wanted to be able to kind of dive into a little bit more cash flow and I'm just gonna pause and see what questions you may have as well.

Thank you. And the yes. Here, anybody questions? Councilmember Pace, do you have any questions at this point?

No. I do not. Thank you.

So I I just wanna ask Leslie, in terms of next steps then, we're that is gonna be you coming back to us with some suggestions for resolution on the policy.

Right. So there's a couple next steps. One of them is going to be an updated financial policy, which will come back as a resolution. In addition to that, I'm currently collecting some historical data on the returns of the various types of investments that we have. And then I'm going to come back with a recommendation of what we should keep in a very liquid position and then what we should move into various types of investment portfolio. So but I'm still gathering information for that.

Anything else for the presentation? I have, go ahead.

No. Thank you. One more question. I personally have a huge issue with having $95,000,000 held in cash and then swept every night, and that's getting to the core. Is that going to be part of your recommendation

to Yes. Absolutely.

Decrease that number?

Yes. Absolutely. So, we've seen just an incredible growth in the last three years of our fund balance, and we just haven't really kept up with, updating the investment to match that kind of a growth. It's like I said, we went from 2016 of having 37,000,000 to now today having 150,000,000, and, the majority of that growth has been in the last four years.

So what number approximate are you looking at? I mean, even with these numbers down with the below with the 15% cushion and the 20% cushion, what what are you thinking of, or is it too early to tell us?

It's a little bit too early to tell because we have to, make sure that we have enough liquidity to manage all of our operations, and we have to also follow all of the state legislative restrictions on what we can and cannot do with how much we invest and how we invest. So, it it just needs a little

bit more time. Because it seems to me that doing it based on a flat percentage of what we have doesn't make much sense when we have so so very much money sitting in that account. Anyway, I'm

Thank you. Councilmember Andy Keller.

Thank you, mayor. Yeah. I've always, advocated to have, more financing sources. I don't like to have all our eggs in one basket with all that money with Wells. It just makes me uncomfortable. So I think that was one of the things that when I was first on council, we had discussed, but they ended up all getting consolidated into Wells. So something to look at. I think it's a lot of money to have in one place. Yeah. Also, I had a question for you.

I was going through our archives. I know Duncan will be very proud of me. And I know that we extended your contract in January 2021. And so when is the next contract renewal period? And I know there aren't many companies that do this kind of work, so I'm not concerned about that. I'm just curious what that looks like.

I will double check but if I'm not mistaken I want to say it may run through 06/30/2026. Okay. And there may be a one year extension that's allowed or two one year extensions, but I can confirm and I can get that information to you just so I don't misspeak, but I'll confirm when the contract Okay. Runs through.

I like it when we because on occasion we get emailed the statements and I like getting those statements to look at them. The investment statements we'll get quarterly. I did get them a couple times.

Is it the quarterly report or is it the the statement? Maybe.

It's probably a quarterly I don't know what it is, but it's just showing where we're at, where we were, just exactly what you

showed us.

Wonderful. Okay.

I know exactly. Perfect. But I like getting those. So let's continue Awesome. Doing that. That's all I have. Thank you, mayor.

Thank you. Councilmember Moore.

Thank you, mayor. Town manager Chang, since you've been granted the authority to administer this, do you have any suggestions on what upcoming policies that you wanna look at and review and change with your staff? Have you give us an idea of where where you think we're at today and

Sure. I you know, in preparing for today and understanding some of the changes that are in your packet, the suggested language changes to the investment policy, I think those are good. I would defer and allow Leslie and her staff to do some additional looking at other potential options and then kind of rightsizing the amount of liquidity that we wanna keep before I I fully would understand what level of sort of safety of not getting too far into certain types of investments that we want versus versus the, keeping that that amount liquid. Because as you know, some of that a lot of that liquidity is so that we draw from that same amount for payroll for all expenses. It all sits in there, some of which obviously can be spent, some of it can't, but it all comes from the same pot.

So, know, if we're gonna start pulling from that, I wanna make sure that we do so with an eye towards being, you know, conservative and but at the same time not to be leave opportunities, you know, that might present itself for better investment opportunities. But, But, again, I would defer to Leslie and her team to be able to look at that more for more closely. But I support the recommendations to the changes to the policy that you've already seen today.

Thank you. Welcome. Council member.

Go ahead.

Thank you, mayor. Relative to our investment policy, I will admit to being a little surprised that we have a 100,000,000 in cash and it's been three years since we've really revisited our investment policy. So the question I would ask or the suggestion I would make is that in our policy, we put in some kind of trigger that if assets increase by x dollars or assets increase by x percent that we are required to revisit the policy or take a look at the investment mix. It is a good problem to have that our assets have grown so quickly, But I'm a little surprised that we're responding probably a little later than I would have

thought we would. Thank you. Thank you. Councilmember Pace?

Yes, thank you. I think the only I'll just follow-up on Councilmember Thomason's comment. I mean, I think that's up to Council, too. We have a responsibility, so it's not a staff only issue. We all get these reports. We see what they are all the time, and we knew this was $95,000,000 in cash. So that would be Councilmember Thomason bringing it up in a meeting or any of us. So we kind of take responsibility for that as well. But I think it's a good idea that we as Council pay attention to the numbers. And if we think something should be brought up and addressed, we should do it.

And I like the idea that Councilmember Andy Keller said about diversifying assets. I was also a believer in that before. I think we were on the losing end of that decision at the time among council, but I still support having a little more diversification. And I just think we all need to pay attention because we have to keep remembering it's the council that is the policymakers. And the council has responsibilities, so we can't just throw staff under the bus as though it's all their fault. So thank you. I yield.

Thank you, Councilmember. Vice mayor.

Thank you, mayor. Thank you for the presentation. I appreciate it. I did just a couple of quick questions. Leslie, you said the last four years we saw a good amount of growth and our liquidity has grown. You you've been here two years? Okay. So you came on onboarded, tried to look at the big picture, clean things up, and we're now getting to the point where we're looking at our liquidity and what we, you know, where we can possibly reinvest into into other things. Would you say the last four years growth is a reflection of the market or good management or a combination of of all of it? Just curious to hear your take on that.

Yeah. So it is definitely, a couple different things. One, investment returns have been very good. The interest rates have been very high, which for the type of investments that we do, that really benefits us. But our fund balance has also been increasing significantly each year, and that allows us to invest more money. So it's a combination of both of those things.

Thank you. And then last, point I was gonna make or question, you know, the the objectives for the PFM. Number one is maintain sufficient liquidity. So we've done that, I guess. Right? So there there we are. But that was the number one objective and having having checked that box, we can discuss further. So, yeah. Thank you. I yield.

Thank you, vice mayor. I I just have more of a procedural question about how we work together between your company and and our CFO and our staff. How often are you meeting and how often are you getting updates and how does that play out?

Yes. So we usually try to meet on a quarterly basis if possible and just review the overall portfolio, where it's at, and then getting the opportunity to come meet with you all. This has been my first time in a few years, but the hope going forward maybe once a year at least give an update just to let you know where it's at or what the strategy has been, etcetera. But, yeah, we usually meet about quarterly more frequently.

Great. Thank you. If there's no other questions, I would thank you council member or town clerk.

Mister mayor, I have an answer to council member Andy Keller's question. The the contract does expire June 30, but there is a month to month extensions.

Thank you, Duncan, because that's exactly what I've I've pulled up too to look at. It's tied to the underlying agreement that it piggybacked off of, which is City of Mesa. That has a two year renewal option at Mesa's option as long as agrees. And we ours rolls with it unless well, we have the ability to roll with it if we want to. So beginning this this year, thirty days before the end of this fiscal year, we'll make the call on whether or not to roll with Mesa if Mesa has decided to roll over. So it's the result of our piggyback. Yes.

The the cooperative purchasing agreement with with City of Mesa? Yep. Yes. You're absolutely right.

Thank you. Good updates. Thank you for your presentation. Greatly appreciate it. I look forward to, Leslie, the further discussions about policy and where we may go with that. Thank you very much. Alright. We have our second study session item. This is 26039. And this is a discussion of the permanent base adjustment and capital projects accumulation fund ballot measures. And I would see we've got about sixty minutes, slated for this, so let's keep our eye on that. And, I would ask if our town manager would like to lead out the discussion.

Thank you, mister mayor, members of council. As you know, we've had previous study sessions on this item. We are scheduled to have this, resolutions, to be voted on later during the regular meeting. This is an opportunity to discuss the contents of the resolution to go over any other questions that, counsel may have at this time. So I'll go ahead and turn it over at this point to Leslie Duresh.

I think they took a quick break. We we could Okay. Wait for for a few minutes here. Sure.

You can do that if you like. Georgetown, Texas. Did you ever see that clip from Georgetown, Texas?

All right. I think it's time to move into the next discussion point. Yeah, absolutely. Leslie, thank you.

Alright. So, we are gonna talk about the alternative expenditure limitation adjustment tonight and also a capital accumulation fund. Just for the public, the Arizona expenditure limitation law was set in, '28 1980, and it puts a cap on the amount that towns and cities are allowed to spend each year based on the population and the spend that they had in 1979 and 1980. Now most, communities have, used different methods to increase or change that since then, including the town of Paradise Valley. So, again, the expenditure limitation, by raising the expenditure limitation, we are not necessarily raising what we're spending.

It's not the budget. It's just saying we cannot it's a cap. We cannot go above that amount. So it gives the town the flexibility, the council the flexibility to choose to spend or not spend up to that amount. Some things are excluded from, the expenditure limitation, including debt service, excess HEERF revenues, investment income.

They are not subject to the expenditure limitation law, and so, those sources of revenue do not have can be spent outside of the expenditure limitation. So the town has done several permanent base adjustments in the past about every ten years or so. And we oh, here they are in 2000, 2006, 2016. And so we have set up the resolution tonight to raise it in current day dollars at 20,000,000. And if I'll just open up to any discussion or questions about the resolution.

I would, ask before we kinda open up to the questions, I ask the mister town clerk if you can kinda walk us through, how this process will work providing we decide to take it to the voters.

Mister mayor, unless the town attorney okay. So if the the council adopts the resolution tonight on the permanent base adjustment, calls the election and, for July 21. So the next step would be, we'll submit the ballot language, to the county. We'll invite pro con ballot arguments from the public. That'll be a $25 fee.

It has to be notarized. There's a deadline to submit the ballot arguments of its, what is it? I thought I had it on here. It's, April 22 is the the deadline to submit, arguments in favor or in opposition to the permit based adjustment, and it'll be on the we'll we'll produce a publicity pamphlet. It will have the the resolution.

It'll have the ballot language. It'll have a a detailed analysis and a summary analysis that it has to be reviewed and approved by the auditor general. It will have the the proposed increase in $19.79 $80 and the the current value in the in the summary and detailed analysis. And then, we'll go through the normal election process of, early ballots will go out, and then the election will be on the July 21. I'm not sure I answered your question.

Yeah. I just wanted to get a view of where we are looking forward at what we may or may not do. Leslie, is there anything else to continue? Open for questions?

Yeah. I would open it for questions or discussion. Alright.

I'd open it up to the my colleagues for questions regarding the expenditure limitation. Council member Thomason.

Thank you, mayor. Questions about timing. I'm concerned about taking this to the voters in the summer. Mister Tuncler, could you review for us the typical vote voter turnout for a summer election compared to the typical voter turnout for a November election, and then let us know what the timing would be if we didn't put it on the primary ballot but instead put it on the general election ballot allowing more voters to vote.

Mister mayor, council member Thomason, voter turnout in Paradise Valley for the summer elections typically around 35 to 40%. I think it was 40% in 2024. Voter turnout in Paradise Valley for November elections, at least in 2024, was a shocking 90%. It's usually around mid eighties, but, it was it was really high in 2024. So that's the the voter turnout. If the council decided that they wanted to hold the ballot measure elections in November, the deadline is June 8. So we the council would need to to make a a decision and adopt the resolutions probably at the last meeting in May.

Thank you. So we have an opportunity to put this on a ballot where in effect twice as many town residents would have a choice to vote on it if we made this decision by June 8. If we make this decision tonight, it would go on the summer ballot and about half the residents would have a chance to vote on it. Everyone would have a chance, but in practicality, a prop less than half the voters would have a chance to to vote on this. Is that am I understanding correctly?

Mister mayor, council member Thomason, yes. Effectively, yes. 40%.

Thank you. I have another question if I may. Please. This question, I think is for mister for two questions actually. In the permanent base adjustment summary analysis, we talk about what funds can be used for.

It says the town will utilize, additional expenditure authority, any local budgetary purposes including public safety and street improvements. My question, and maybe this is a question for you, mister town manager. Of the street improvements, some are street maintenance and some would be considered capital. Could you identify for us which projects in street improvements could be considered capital projects and might be eligible for the capital accumulation fund as an alternative source for funding this?

For capital projects, usually maintenance style projects are excluded. So for instance, like microceiling, things like that. Included could be in our is streetscape projects, like the one that is currently, you know, being moving through the system up at on Mockingbird between Invergordon and and 56th Street, which is more comprehensive. Actually, you know, you're building new features within the street, things like that that are not just maintenance, but the addition of new infrastructure within the street. Sort of a question that I would defer to to mister McGuire about things like how far down you take the pavement until it becomes more than just maintenance and actually becomes new construction.

So at some point, you could argue that mill and overlay, if it in fact takes the street down far enough, could in fact fall under capital. And and that would be sort of the the fine distinction I would make between maintenance and new construction.

So to clarify for a non public works person, Isaac, our public works director is going to make a presentation to us where he's going to request approximately $3,000,000 a year for the next five years for street improvement. As I review the materials that includes mill and overlay as well as chip seal and cosmetic cleanup. So it's possible, we can have that discussion later on. It's possible that of that $3,000,000 ask for street improvements, some of it could be moved over to the capital projects fund. Capital could be considered a capital project so the $3,000,000 ask would not necessarily have to come out of the general fund.

Am I making sense with my question?

Mr. Mayor, council member, you're making perfect sense and I think that's where the I'll put on the bond lawyer half for a moment because we usually try and make that distinction when we're deciding what is capital and what is maintenance for the purpose of what you can use bond proceeds for. It's basically the same question. Mill and overlay is one of those ones that causes us to have those moments of, is this really one or the other? And it all really depends upon how how far it is.

If it's a pretty simple mill and overlay, those generally are maintenance, and we generally don't advise using bond proceeds on just because we take a very conservative view. But there are some that are darn nearly reconstruction. I mean, they are very serious, you know, fairly deep that we would put in the other category, but it's, you know, it's we know it when we see it. So it I think, yes, you definitely have have hit on a distinction that we can make. I just don't know if there's a good black and white answer on, you know, what the dividing line is just based upon how we might treat if it was bond proceeds.

But there's potentially some room in an additional discussion about that.

Absolutely.

Thank you. Another question. In the permanent base adjustment detailed analysis, I was struck by the last paragraph that says in the last ten years, state revenue has increased on average 5.8% and local revenue has increased by 10%. The expectation is that that level of increased state revenue will continue. So do we believe that we will get five plus percent more from the state every year?

The reason I ask that question is as I understand state shared revenues, first of all, it comes from two sources. It comes from the available funds that the state gives the municipality in effect how big is the pie. The other factor is what percentage is Paradise Valley population of the state of Arizona population. I think the third factor is the state budget crisis that we're in. So I have not run the numbers, but as I sit here today, I would be surprised that we would get 5% more every year from the state. And I was just wondering what staff's opinion was on that.

So generally speaking, over time, historically, we have made at least that much in growth on average. And so we do expect that to continue, but state revenue is always at risk. There are always challenges to, and legislation that goes forward that could impact it. So it is always a risk. But in general, historically, barring any kind of legislation or something that would change it, we would we would expect some kind of a growth in that area. But do keep in mind that our state shared revenue is a very small portion of our overall revenue.

It's about five and a half million. It's it's not very large. I was just surprised that we were so confident that it would continue at that level. That's it for my questions for now, mayor.

Thank you. Additional questions? Council member Pace?

Yes. A quick question. Thank you. I'm wondering, when we go back to the number the page that talked about the last three expenditure limitation votes yeah. And at the bottom where it said election result, it was always in the general election, and there was about an 86% turnout, an odd low turnout in the May, it says, and then an 84%, which is good. I mean, that's a high turnout. It's very helpful. We wanted to it's one of the questions I had tonight when I was looking at the numbers. I was the one who was advocating to do it at the primary. But when I looked at these numbers, was like, Oh, maybe it's more helpful to go general.

So I'd like to hear a discussion on that. But we still can vote on it tonight if we want to do the general. We just change the date on it to be in November. Because I'm concerned on these turnouts, it seems to pass very readily with these high turnouts. So I would like to go for the best option to have the success of it and the most opportunity to have people vote on it.

But if we change that on that date from the primary to the general, maybe the town clerk can add some comments here too, because why would it well, let me just ask. We can just change it in the resolution if we're going let me ask that first. Let me back up. So if we want to change the date from July 21 to November, can we just do that in the resolution as an amendment tonight and still proceed to vote on the resolution?

Mister mayor, council member Pace, the town clerk is staring at me intently, so I think I'll I'll field this one. Yeah. Has his glasses on too, so he's a little intimidating.

There you go.

Alright. The It's the same subject matter, so I don't think that moving it backwards to a different election would change the material materially change the the agenda language or the subject. So I I think it's probably an appropriate amendment. If it were going the other direction and we're backing it up to an earlier date, I would not be as comfortable, but this one moves it out to a period of time that's several months later. So I'm comfortable that it could be acted on that way if it were amended.

Okay. And, I mean, I'm just open minded to that just because of these numbers. When I got the prepared information from staff. It did seem like these are very successful at the general election. And then the only other question I had was on the stated purpose being limited to street improvements and where is that one at?

Yeah, it was the public safety and street improvements. My question there, that is a good one to discuss because I had the same on maintenance and new construction. But when we're talking about roads, most of our roads are not new construction. They're maintenance level because that's why we have the testing done. We had some that got behind, and we know the reasons for that because Public Works prior to Isaac Shivera was not being taken care of in the right way. But we're now catching up on that, and that's the goal. But once we have that, isn't most of those if we're at 70 some percent on the testing for all of our roads, and we always if our goal is to maintain that, none of that would be new construction if it's at that rating. Correct?

Mr. Mayor, Councilmember Pace, the thing to keep in mind too is that language is not limiting. That language is as an example. So

Got it.

It would be permissible for any public works thing that the council decided was in that that range. Those are just examples of the types of things because the the model that we're given, from this the, the league, we generally try and follow that so that everybody's elections look about the same. And that usually has a reference for people. The publicity pamphlet will also have the types of things listed in there that are, allowable, because your town does not do as many, doesn't do as many things as other communities do. You don't have, you know, sewer. You don't have water. You don't have some of the really expensive stuff. The focus is on the things that the town actually does.

Okay. And public safety then is fire and police. We're just not saying police and fire. Is that really what we're saying on public safety?

Yes. The town does provide fire services through a contract. Right.

And with that expense It's expensive

It does have capital requirements as well that would be allowed Correct. As part of your capital plan.

Okay. Good. Because I know we have to buy fire trucks and things like that, so it's expensive too. And then the only those are the only two areas that I had questions about. It's just the categories and the the date of the election. Thank you.

Thank you, council member. Other comments or questions from my colleagues? Council member Leipman.

Thank you, mayor. I just have a clarifying question. If we do not spend the full amount that we have budgeted or the full amount up to the cap, any forget the cap. Any money that we put in the budget, say for public works, and we don't spend it, can we roll that money over next year or does it do we start at zero every year?

Yeah. So we start at zero every year. Every year, we have expenditure limitation that we have to be capped at. However, if we were to, put in place a capital accumulation fund, that would be separate and that would roll forward.

Thank you. But today, if we don't spend, say, the capital improvements budget, any money we don't spend goes into the fund that we then are limited on how we spend it in the future. Exactly. Thank you.

Councilmember Randi Keller.

Thank you, mayor. So I remembered, vividly sitting across from former town manager Jill Kymak, and her talking about, the fact that we need to go back to the voters, to get a permanent base adjustment, and this was in 2023. And so I did a little bit of searching, this week and found that, council meeting where she talked about it and said that we needed to do it in 2024 to go back and get a permanent base adjustment because we wouldn't be able to pay for our CIPs. And so here we are at 2026, and I'm disappointed in myself that I didn't bring this up sooner, that we need to do this for our town to to, continue the CIP funding. It's it's important for our residents that we have this.

It's important that we take care of our infrastructure, and I I am apologizing to our residents that we have not done this sooner, and we will be working on this as fast as we can and I yield.

Thank you. Are there questions or comments for Leslie? Vice mayor?

Thank you.

Yeah. Couple of couple of questions. So I'm looking at presentation. My page isn't coming up on here. The history of the permanent base adjustment elections. Oh, there. Yeah. So I'm looking at 2000. It was a 120% increase. Is that correct? Yeah. And in 2006, it was twenty six point eight. 2016, fifty three point two. I don't, unless I'm missing it, I might be missing it, don't see the number calculated here with voter approval in twenty twenty seven, twenty eight. Town's expenditure limitation will increase by $2,020,000,000.

But I did a little math, and anybody else should check me. That's fine. Is it, like, a 41% increase? So it's certainly not anywhere near the 120. It's greater than 2,006, but it's also less than 2,016 also. Correct? Does anyone else have that number? Somebody wanna do the math for me? I did it, but 41% increase. Yeah. I mean, I'm just putting it out there for the record. So it's not an obscene increase based on 2,000 or what happened in 02/2006. It's more than 2006 percentage wise, but it's not more than 2000 or 2016. Yeah. And we can circle back.

That's how I'm seeing it. So I did like the question about I'm totally open to doing it at the general election. I think at one of our meetings, I had, you know, wondered why we wouldn't. I don't care either way really depending on, you know, what the arguments are. But I do like the idea of we've had this is our third meeting on it, third study session.

We're kind of, you know, gamed up on it. We understand what's going on rather than revisit it later where we maybe have some other things going on agenda before we, are done in June. I'd I'd I'd like to continue it tonight, even if we're able to have, you know, an amendment to, bring it to the general. I did notice that the other ones were in the general. I also was wondering, this might be a question for either our town manager or, Duncan.

In 2000, the mayor was Ed Lowry. Council members were Schweiker, Barry, Simpson, Winkler, Clark, and Benson. Was that unanimous? Everybody voted were you are you able I think we had you had indicated it was unanimous at that election. Correct?

Mister mayor, vice mayor, yes.

Okay. In 2006, Ed Winkler was the mayor, Mary Hamway, Clark, Cooney, Lamar, Schweiker, and Simpson, all also unanimous. Unanimous.

Yes. Okay.

And in 2016, Michael Collins was the mayor and it was Sherf and Wilner, Dembo, Hamway, Sims, and Stanton all also voted unanimous. So this in the past hasn't controversial. It's been standard procedure from what I'm from what I'm able to glean because I am trying to do deep dive on here and be really fair to any objections and understand what that might be. So I I guess I just wouldn't understand why we wouldn't be looking at this if it's been done. There hasn't been issue in the past.

I do recall my first year on council twenty twenty three, that conversation, and I was asking what it was. I wanted to know. It seemed curious to me. I do remember both the mayor and our town manager at the time advocating for it. So I wasn't I I I'm open to hear why we shouldn't be doing it at this time. But if it's historically always been done, I'm truly genuinely curious as to what would be the downside risk of it. And and and I'm open to hearing. Yeah. So I yield.

And is that directed at the Yes. Chief financial officer?

Yes. What would be the downside? Sorry. Or anyone.

The downside to, allowing the approving it? I don't see a downside. Sorry.

I'm trying

to understand.

Other comments or questions? Council member Leibman.

Thank you, mayor. First, I I agree with my colleagues that this should be done in the ordinary course, and I believe it is past time to do it. The only downside I can think of to doing this is somehow it gives the council more discretion to spend more money because there is not a cap on it. And, again, my concern with that though is that who is to make the decision as to how we handle our money especially when we have a $150,000,000. Some a lot of it sitting in cash.

So that is the only argument I can think of is, gosh, if we're allowed to spend it, we're supposed to be fiscally conservative. But if we're allowed to spend it, of course, why wouldn't we? And to that, I would like to say that I firmly believe in local control. I also believe, as one of you said a few weeks ago, that this town is a unicorn. We are different. And to have the state tell us how we can and can't spend our money, I would much rather put that trust into the local elected council. So I don't see a reason also. I'm I'm with you on that. So thank you.

Alright. I don't see any other questions or comments. I would weigh in on a couple of thoughts. One, I completely see now that how the the time would work that moving into the fall would maximize the voter engagement, which is ultimately what this is for is to have the voters make their decision for them to to decide. And so I I think that's a a supportive and accepting of that.

Most certainly, I do look back historically on this process and see that there this isn't a a blank check. This is, this is gonna go through the same process of all our other programs that whatever CIP item is prioritized will be approved and it would be approved individually by the council and before it was actually allocated and committed to. So that's accurate that it's not just a blank check and telling people to go and spend. There's accountability to it. There's definitely a process.

It's difficult in looking at the state, mandate on this because, it's it's a little frustrating knowing how the state, negotiated this back in the eighties, I think it was, and that, and that it's it's it's definitely encumbers us in a number of ways. So I I appreciate this process and I I think if there's any other comments from my colleagues at this level, I think if I'm clear that tonight if there is a motion, it can be with an amendment for the timing of this election, but it could still move forward as a potential decision point this evening. Is that correct? That's correct. Alright. With that, please continue.

Okay. We're gonna move on to the next item on here. It is for the capital projects accumulation fund. We previously did have a capital accumulation fund back in 1993, but it did have an end date, and so it expired in 2004. Now the capital accumulation fund is different than the permanent base increase in that it allows the town to designate, like, revenues or net, revenue for a year to be excluded from the cap or from the expenditure limitation in future years.

So if we had a increase of $10,000,000 in one year, the council could say, take a portion of that and apply it towards capital projects, and that would not be counted towards the expenditure limitation. It just allows the ability to do it. It does not force you to do it. It just allows you to do that if you so choose. And so we are also, offering up a resolution to put in place the capital accumulation fund without an expiration date. And I'll open it up to questions and discussion.

I would, like to lead off, Leslie. And I I did ask you about this. Maybe you can clarify to to the team here and to the public. So these are two separate resolutions that we're considering. We could consider both of them. Can you give a little light on the idea of municipalities doing both of these concurrently, advantages and disadvantages, and, and just giving a little bit of a vision of of the public of how and why that would be useful and if other municipalities have been successful with this plan. Plan?

Sure. I know, the city of

Scottsdale has a capital accumulation fund and also the town of Gilbert, I believe, has just recently passed one. The difference between the two is a permanent base increase, allows you to live within that expenditure limitation, but it just raises the cap. And you can put any kind of expenditure to it, whether it's operating or capital, whereas a capital accumulation fund is only relevant to capital projects. So you cannot use that if you wanted to do something on an operating level or, like, pay the pension fund or do something like that. That would not work with a capital accumulation.

So they have separate purposes, and they you can do one, you can do both, or you can do, you know, either one. So, they just are different tools in the toolbox for the town to use because capital projects are generally lumpy in nature. When we have a big project, it could be quite high in one year. It would be nice to be able to go ahead and spend that outside of the expenditure limitation. And that allows us to, keep a nice contingency, which we like to see, and, to not disrupt the boat, so our regular operating expenditures.

Thank you. And I'll open up for additional questions, but I I would also can you remind us of the date when we last when the town last did this type of program?

Yeah. I think it was, yeah. It was approved in 1993 and it expired in 2004.

So they put a a termination on it?

Yes. Alright.

Open it up for questions. Councilmember Pace?

Yes. Thank you, mayor, and thanks for that question, to Leslie. And so I assume to our town attorney the same, amendment would be okay if this was changed for the 2026 dash o '2 to 11/03/2026. That means we could go ahead and vote on it tonight, and it wouldn't delay anything, and it would still be valid?

Mister member Councilmember Pace, yes. That's correct.

Okay. I mean, think we should I agree with what some of the colleagues said. I think it's better to get both of these voted on and approved tonight so that we can move forward as we have so many other issues. And I think it's really the right thing to get it to the voters and let them decide. And I think that helps us in November with the most individuals who would vote on it. I reflected on Councilmember Andean Keller's comments tonight. And I do have to agree. I listened to the tape that was sent to us by the town manager the 03/23/2023 council meeting where we all sat and talked about it. We're told then by our staff at the time and our town manager we needed to do it if we wanted to do capital improvement projects. It is a mistake.

I mean, I think we get a D minus as a council during that time period for having failed our voters and residents for not having put it on the expenditure limitation. Now we're in a bind because we're trying to do capital improvement projects, and we tried to approve one that we don't even have the money to pay for, that's 20 some million dollars of our budget. And I think if our town manager had been a little louder on it and clearer, you know, maybe we would have gotten there. But it's a mistake on all of our part who served at that time. And it is a mistake to our residents. So I do think we need to do this. I don't think we should be blaming staff and making accusations, as one of our council members did in the paper. We never talked about a property tax. We're all kind of shocked at

If was what written by we could please keep focused on questions for

Ms. Duresh. I

will. But I just think we need to get it done and move forward. And we deserve, you know, our residents deserve the quality level of what this town needs and is expecting with all these projects that are sitting there. So I yield.

Thank you, councilmember. Other questions or comments? Councilmember Thomason.

I just wanted to make a clarifying comment, and perhaps miss Duresh can confirm this. In each of the last four years, our budgeted capital expenditures that came out of the general fund that's part of the expenditure limitation were 8,000,007.36 and 7.8. So for each of the last four years, we have had the capacity to budget around $7,000,000 a year. In each of those last four years, we have under spent our budget between 6 and $7,000,000. So for the last four years, we have had sufficient budget, cash, and capital expenditure ability, yet we have not spent it.

So I'm confused by any comments that would suggest the expenditure limitation is the reason we have not completed capital projects. So am I wrong, Mr. Resch?

No, I wouldn't say you're wrong. I think there was some delay in certain capital projects and even though we budgeted for them, we were not able to complete them, and those got moved forward to a future date. This last budget session, we did bring forward a quite expensive capital project, and and we didn't have the expenditure limitation we needed to do the whole thing. So we had to go back to the drawing board and break it up into, multiple years in order to, fit it within the expenditure limitation. I think that's for one project.

And and most a project of the magnitude of Mockingbird, for example, is typically spread out over a couple years because it takes a couple years to do the project. So as I understand it, it's not unusual to take one large project and budget it over a couple capital budgets. Is that correct or not?

That is

very correct. It is not unusual at all. A large project like that could take multiple years. Originally, I believe it was originally scheduled to be done in two years and we broke it up into three years in order to

make it fit. So our expenditure limitation is not the reason we have not completed capital projects. We have had sufficient cash and capacity to complete our capital projects. They have been not completed for other reasons.

So historically, yes. I believe we did not complete all the projects that we budgeted for and we had capacity for it. I can only speak to the budget that we did, last year as far as, we we had to adjust to fit within the limitation that was there. And certainly, we could always adjust to do that, but sometimes those things come at a cost.

Okay. And one last question if I may for ultimate clarity for our residents. So of our total town budget, right now we're funding our capital projects out of the general fund that's subject to the expenditure limitation. If we approve the capital project accumulation fund and we take our expected $8.07 or $8,000,000 a year that we've been budgeting in that bucket and we move it over to the capital project accumulation fund bucket. We would have an additional 7 to $8,000,000 a year of capacity because we've taken capital projects out of that which is subject to the expenditure limit and moved it out.

So we could give ourselves an extra 8,000,000, 7 to $8,000,000 a year simply by removing the capital projects burden from that expense. Is that correct? That is correct. Thank you. And just one other clarifying point and this is back to the expenditure limitation so you can gavel me down if you want.

But the interest income that we get from our strategic reserves is excluded from the capital expenditure limitation. So right now we are making $6,000,000 a year in interest income which is greater than our state shared revenues. So if just for fun, our strategic reserves were double that and we made $12,000,000 a year in interest income from our strategic reserves, that incremental amount would also be accepted from the expenditure limitations.

Right. The interest income is not considered the primary revenue source, so expenditures could be excluded based on that. However, yes, our investment income was $6,000,000 over $6,000,000 this year, but three years ago, we were negative seven and thirty one. So it's not consistent, and it's really subject to the market. And although our fund balance has gone up and we expect to see higher revenues than we did ten years ago, it's still not something that we could rely on on a regular basis. So I would hate to put complete reliance on that.

Certainly understand. Thank you. That's all, mayor.

Thank you. Councilman Andean Keller.

Thank you, mayor. I just wanted to clarify that we were talking about one CIP project that we had to allocate for two years and we have 17 or 18 CIP projects. Correct? So one CIP project we is taking up all of the CIP projects.

So I wouldn't For those two years. It could. Right? If if if we didn't raise the expenditure limitation and we really wanted to do that project on that original, we would have to push other projects out. Yes.

Yeah. So in 2024, when we were told in 2023, we needed to go back to the voters and get our expenditure limitation raised because we could not pay for our CIP projects. Then in 2024, we went and approved an $11,000,000, that's now $21,000,000, CIP project that we don't have the resources to fund.

We absolutely have the resources.

We just don't have

the ability to use them.

We don't have the ability to.

Yeah. Exactly. Okay. That's all I have.

Thank you. Other questions or comments? Council member Moore. Thank you, mayor.

Just a clarification on the '17 CIP projects, mister Chang, are how many

of those are council approved? I was thinking about that number too, council member Moore. I think the council approval for budgetary purposes is only for expenditures in the first year or five years EIP. There are certainly projects that are listed in the approved five year plan that are not funded in the current budget year. So I don't know if assuming 17 is the number, I assume what that means is that 17 that are mapped out over the course of a five year plan.

And of that, years two through five are not funded, year one is funded. So I think last time I I think that the total number of capital projects in this year one, I wanna say is closer to, like, seven or eight, I believe. So so that would mean that nine or 10 of them would be projected but not funded.

But for clarification for our public, the the capital improvement projects come before the council for approval, each one of them, to move forward within your budgetary year. Correct. So we see those as we come forward. It isn't an approved CIP five year plan that we have. These are projects that are listed on there that may or may not get done in the town of Paradise Valley. They haven't even gone through any vetting process That's correct. Until they get to us during that budgetary year.

That's correct. But but let me with the caveat that on an annual basis, council does two things. One, it approves the budget on an annual basis, and the budget includes all the funded projects that are capital projects in the capital five year plan for that year one funding. At the same time, council also approves the five year plan. The approval of the five year plan as a road map is not the same as what you're saying, council member Moore, which is the actual vetting and and funding of projects in the out years.

So they're both true. You're right. We don't fund and we don't fully vet year two through five projects typically because they are, in some cases, especially years four and five, they could just be concept. They could be placeholders. They could be things that are aspirational. But as long as it makes it in there, there's no funding for those unless and until it makes it into the budget. And at the time it makes in the budget, then, like you said, the assumption is and there and the expectation would be that those would be vetted. Council would see it. Council would understand the reason for the project, why the funding is what it is, funding sources, outside partners, other other considerations, and there'd be a full vetting. So yes.

Again, they're they're approved as to be slotted in there. They're not approved to be moved forward as CIP projects until they get into the the year that they are slated to be worked on. Correct. No But also No funding

encumbered until it's in the budget and until council approves the contract.

Just for expectation, and, what we've seen with prior town managers and we've discussed in this meeting as well, and I don't have the meeting minutes in front of me or the history in front of me. But, you were you were to bring those capital improvement projects forward to us in detail and show us what exactly they are before they they're they're not just automatically approved in the budgetary year. They're they're brought forward and and actually vetted and and explained why they're needed and what they are, then we make a policy decision whether or not to move forward with them. Is that correct?

I agree with that.

Thank you. I'll reserve my other comments for the public meeting since it's gonna be probably an important meeting.

Thank you. Other questions or comments?

Mayor, I have a couple questions if it's the right time.

Yep. Please go ahead.

Okay. Thank you. I guess we can follow-up on the capital improvement projects. So for ten years that I've sat on council, we always had the capital improvement projects vetted by the staff. They had put the information together for us. And when we look at the budget, we approve them as a council as to be in the five year plan. Is that correct, Town Manager Chang?

I am not as familiar with processes that occurred prior to my tenure, but but as I generally understand it as these things generally work, yes, we would we would come to counsel kind of to the same point that council member Moore is making at the point where, a, there's been sort of a generalized notion and an approval to move forward to begin to spend money on a project, maybe design, perhaps architecture scoping, and then at some point, then assuming that the money's been been, been, allocated in the budget process, then, you know, it'd be it would continue to be vetted and would ultimately be approved when the contract to do the work is approved. And I think that's

And then

that has been true as far as I know here and in Correct. Pretty much every jurisdiction that I'm aware of.

And I think at our last council meeting when we had a deep dive on this discussion during our study session from three to 5PM, which I'd highly recommend any voter look at, we were clear about the capital improvement projects, that we've got projects sitting there since 2017 and 'eighteen and 'nineteen and 'twenty because we haven't had the money to fund them. And they've been being kicked down the road over and over again because we don't have the money in a budget to fund it. Isn't that right? That's why they're still there?

I want to try to answer your question as best as I can, but I can If if I'm the one who's being asked to answer it, I'll I'll answer it to the best of my ability. There's a lot of projects that are in the out years of a capital plan. There are a lot of reasons why things get moved around. For instance, there was and there is, I think one that we talked about a few weeks ago was the potential for a training facility or a shooting range. There was a concept that was discussed by this council several years before I began to work here.

That concept involves sort of enclosing a patio at the police station that was done during a previous chief and a previous town manager. A certain amount of money was allocated to it to study and to come up with concepts in the out years. But that got moved because as I as I came on board and spoke to the chief of police and had conversations about whether or not that would actually meet the needs, the needs, at least my staff point, changed. So we did not feel like we could move forward in any one year because the project and the scope of it internally was being discussed. So I wouldn't say in that instance that that was because of a lack of funding because we never actually asked for funding for the project because the project was not fully vetted.

Okay.

That makes sense. That's why it makes perfect sense. I'd have to sort of go piece by piece and understand. But as a general rule and as just the way the operation of budget works, if something makes it into our budget in year one, the expectation would be that it would get funded, that contracts would come forward in that fiscal year, that we would that council would approve them, and then we would have us and our contractors make sure that that gets done. By way of example, in fiscal year twenty twenty six, the year that we're in, we are projected to spend 86% of our budget, which is great.

I think that that's commendable that our staff is is catching up and getting to a place where a lot of contracts are gonna be coming to you. But in each one of those, to the question that you asked council member Pace, each one of those was vetted. Each one of those, you've had presentations on. Each one of those, you've seen on more than one occasion, and each one will have to come to council for approval. So all of them are funded because we don't put unfunded projects in a budget. If it's in the budget, it's funded. I wanna make sure we understand That's

that's important. So thank you. And how many stormwater drainage projects do we have approximately that are on the list? I can't remember those.

And I would ask Councilmember Pace, in light of respect for the staff and the time, perhaps project specific could come up at a separate point because I think right now we're looking at the general resolution for tonight's consideration.

Right.

Valid questions, but I think we're doing a little bit of deep dive on specific projects. And I know that all respect to the town manager, know, he he he's got he's on the spot right now, but he he's fully capable of researching something in another venue at another time. So

No. That's okay. I think it's just a couple quick questions. But I what I'm my point is we have a number of CIP projects. We have a number of stormwater drainage projects, and we can't budget another $20,000,000 capital improvement project. I think that's why the mockingbird between McDonald and Invergordon needs to be done those residents are asking and it didn't get done And that's we can't use all our budget for one project

guess council member base. I have to kind of step in here I think it's again those are sort of situations that are a little more of a deeper dive. I think they're valid but I think we would better to address those in another study session perhaps or in an offline conversation with the town manager and perhaps the chief financial officer.

Well, I'll say that it supports the fact that we need to do the expenditure limitation and this resolution on the capital accumulation fund so we quit kicking things down the road and not solve things for our residents. So it's just there's a I think sometimes when some of the questions are being asked, they're narrowing it down too narrow and not giving our residents the proper transparent view of what's really out there. So I'll yield with that, and I support going forward tonight by changing it to 11/03/2026 in both resolutions.

Thank you, Councilmember. And with that, I would say, unless Vice Mayor, you have anything in addition? No. Alright. Alright. Mister Resch, I think you've gotten some feedback. Again, we're considering both of these this evening with or without amendments for the timing for consideration to take these to the voters. That's the discussion. Alright. Well, thank you. Good discussion. Alright. Next item on our study session this evening is 26 dash zero four zero discussion with fiscal year 2526 pavement preservation program with Isaac Shivera. And we have thirty minutes named for this.

Good evening, mayor, members of council. Isaac Shavira, for the record public works director. And with me, this evening who will be doing the presentation for the most part is Chris Martinez, our superintendent in pavement preservation. First and foremost, I really do want to give some kudos and a shout out to the gentleman here to my left, Chris Martinez. He does some amazing work as we go through year to year in the pavement preservation world.

It takes a lot to handle the pavement preservation, not only the budgeting portion of it, also the vendors that are out there doing the work. And, as as we go through this presentation, I you're gonna hear a couple of common words that he's going to be going through and and utilize and that is the coordination and, commitment that that he works with as part of this program. And as as he works with these vendors, he he and not only externally with these vendors but also internally in terms of making sure that we're coordinating with our internal vendors like the I call them vendors but they're really our staff and and our utility companies, our engineering team. There's a lot of coordination efforts that happens in order for us to deliver this pavement preservation. If you recall last year, we came to you, in about a yeah.

February of of last year, we came to you and we were going to make sure that we kept you abreast of the PCI within the town knowing and understanding that that's one of our largest assets of our town. And so with that, before I turn it over to Chris, I just wanted to make sure that we all understand at the table that this is not a budgetary ask. It really is just more of an update of our pavement preservation, where we've been, where we are, and where we're going. So with that, I'll go ahead and turn it over to Chris.

Thank you, Isaac. Good afternoon, mayor, members of council. Like Isaac mentioned, the purpose of this presentation is to go over some improvements we've made, in our pavement preservation program as well as give an update as far as what maintenance and preservation we've done up to this point and what is left to do for the rest of the fiscal year. We'll also give a snapshot to counsel of work plan for fiscal year twenty seven as well as a a quick look at a a budget scenario of fiscal year twenty seven. So one of the things we've improved on, after having the conversation with town council last year was outreach.

One of the the number one item on the list is a street cut coordination, which I worked with Taylor Hunter and and community development, Charice Fulbright, to notify permit applicants of any street maintenance within their within a certain area. A note a notification will go out to a permit applicant letting them know, hey. We're gonna mill and overlay a certain area of streets. We advise that you get ahead of that with any street work, utility tie ins, anything like that. Obviously, this is just a notification.

There's scenarios where we can't we have no control. We'll mill an overlay, and then, you know, six months later or a year later, they'll cut. Know, that's just out of our out of our control. This is one of the items that we've improved on from last year's payment pro program. With continuing with outreach, we send out brochures, to all the residents and businesses within an affected area. It's just a double sided brochure. It's something simple that they can look at. It gives dates, phone numbers, and areas of maintenance. So that's something that, you know, we're continuing to do. We also bug Duncan, you know, our our town clerk for the social media posts.

So we try to put blasts out as much as we can if there's an area that's being closed or affected with that social media post. We try to, you know, hit hit all all avenues of of outreach. And then recently, we started talking about, pavement preservation in the HOA forums, which we're gonna continue doing, you know, throughout the year. So other areas of improvement are engineer the engineering department quarterly updates, quarterly meetings, coordination meetings. We talk about any planned work between what they're overseeing and then any planned work that that we have from our public works end.

And this involves everything from the CIP project at Mockingbird to any miscellaneous road repairs and miscellaneous drainage improvements. So this is an opportunity for internal staff to communicate and coordinate all of that work. And then the stakeholder coordination is through all the utility companies and then the neighboring municipality, City of Phoenix, city Of Scottsdale. We send the notices. Sometimes they, you know, they respond. Sometimes we we don't get a response, but we're providing them with an update of our maintenance plan.

Just a minute. Mister Martinez. Council member Wiegmann.

Thank you, mayor. I have a comment slash complaint. I live on Mountain View Road close to Tatum, and the Phoenix Water is doing major major work along there along Tatum, Mountain View, and a few other streets. The note of my road has been closed many times and it's closed in different parts of the day. The signage is terrible.

There is no consistent notification to us, and I expect a lot of that has to do with the fact that it's the city of Phoenix. But I do wish that Paradise Valley would do a much better job in letting people know. I mean, I've gone up to the end of my street and it's closed and I had no idea. So and the frankly, the street signs make absolutely no sense and some of the detours make no sense. So there needs to be I I'm delighted delighted that you are working on coordination, but it's a real mess. So thank you.

Appreciate that. Again, you know, focusing on not one specific project, but appreciate that. Please continue, mister Martinez. Okay.

And then moving on to some improvements. In the pavement preservation world for us is utilizing geotech or professional services, something that we really haven't done in the pavement press world here in Paradise Valley, which includes geotechnical engineering where they'll we'll contract with the geotechnical consultant that we already have on contract here with the town, and they'll take core samples of the areas that we're looking to maintain. And what that does is then they can analyze what the structure of the pavement looks like. So it'll give us insight on what the pavement structure is, how much mill and overlay we need to do. Is it an inch and a half to two inch?

Scottsdale Road, we had that the cores done, they told us three inches is what we needed to do. So by contracting with a geotechnical engineer, it'll help us identify what the existing condition is and recommended maintenance for that instead of just walking out to the street and eyeballing, you know, what we think it should be. We'll have some data behind those decisions. And then quality assurance and quality control, again, through consultant that's already contracted with the town. They already do this in the CIP projects where they'll the engineering department will bring on quality assurance inspectors and testing labs to test the material prior to it going into the streets of Paradise Valley, but then also, with quality control, they'll be inspecting, product going into the ground.

They'll inspect for, any deficiencies that occurred during construction. So we can we we can also use that, service to help us ensure that the product and and the work that's being done is of the highest standard. So those are two new general professional services that we want to add to our pavement preservation program. So then shifting gears to work that we've already done or that we've done up to this point. This is, again, just an update to council letting you folks know what we've done.

Work completed. Number one was Scottsdale Road. The map on the right shows all of the planned areas of maintenance. So Scottsdale Road is that little highlighted stretch on the bottom right of the map. That's been completed with the mill and overlay with concrete improvements and with ADA improvements. Tatum Boulevard is a stretch next to Section 10 And 9. Everybody knows where Tatum is. We completed the mill and or the micro seal of that road. What we have left is striping on both Scottsdale and and Tatum. Right now, it has temporary striping.

We'll we'll follow through with final thermal striping, in the spring. District 2 is the portion of communities on the bottom left of the screen. We finished that with the crack seal and a and a polymer modified master seal. And then we had some small local repairs in District 11 And 15. These are just neighborhood roads that they weren't in our pavement preservation program, but they needed work.

And we couldn't wait until, you know, two or three years before their district falls within that program. So with the funds of this year, we we went ahead and and, fixed some localized, streets or local streets. And then the planned work for the rest of the fiscal year is District 6, the big area in the middle of the map. We're doing half the mill and overlay this fiscal year, and then we propose through the budget and through pavement preservation program later on in the in the spring or summer to mill and overlay the other half of that section. So the recommendation for continued pavement preservation program is trying to get that average spend to that $3,050,000 per our pavement condition assessment report.

And that's goal based trying to reach the 77 PCI, pavement condition index rating. A recommendation that we're gonna propose is to instead of doing that pavement condition analysis every five years, we move it to every three years so that we kinda keep our eyes on the pavement condition. And then it also allows us to develop a five year plan at year three rather than at year five. And then if we stall or if the project goes longer, then we're in the year six or seven where we're trying to figure out a five year maintenance plan. And then, again, for the update is is utilizing contracted services for quality assurance, quality control, and geotechnical resources.

So some of the photos of the work that's been accomplished so far. This is Scottsdale Road. This is the, the intersection of Vista in in Scottsdale. This is showing the ADA improvements, the two ramps, and then also the valley gutter that was very undersized. You can see along the edge of pavement, the water has just eroded out that pavement, so we we increased the size of that valley gutter.

And then Scottsdale Road continues. You can see just the basic condition of what the road used

to look

like with utility trench work, alligator cracking, potholes, and now the photo to the right shows the work that's been completed and and what the condition is today.

Just really quick on this picture. Wanna note that, last year we talked about that PCI number being a 28. This is the 28 that we were dealing with. It's now, noted at about about nineties, 9094 ish. So I just wanted to make that note. And also one last thing that, for for the public is to again give kudos to Chris because he's working really close with the vendor to make sure that we that the right ability on this road even though it looks nice after the payment preservation, but the right ability needs to be on point. And I've asked Chris and he's working with the vendor to make sure that we get that. Just wanted to make that note.

Alright. So moving on. This photo shows a general idea of what District 2 look like. The portion on the right, obviously, you can see oxidized pavement. It's gray. There was cracks. We sealed the cracks, we applied the polymer modified surface seal to the entire district. And then this photo is of Tatum Boulevard. The photo on the left shows the condition prior to the Microceal. What you see there is the pavement in of a raveling state where the binders have dislodged, and you're starting to expose some of the the larger rock in the pavement.

With the Microcele, it locks in that that pavement surface and provides a new wear course. You know, it's about an eighth of an inch of of a new surface to Tatum that'll protect that that underlayment of of asphalt. We can expect this product to last, you know, anywhere from five to seven years. I also wanna emphasize when we put a product like this in, it's not a set it and forget it type of application. We put the product in and then we just monitor it.

You know, there cracks will come back. We'll continue crack sealing and applying oils as needed, but, I just wanna emphasize that point, you know, moving forward with pavement preservation. Any type of treatment we do, we have to continue watching. You know, we don't wanna put the Microcele in and then just leave it for ten years, and all of a sudden, now we're milling and overlaying, Tatum again. So then some of the planned work for the remainder of the year.

This map shows District 6 and that coordination effort. I mean, even to this day, I just received an updated map from our from our contractor because of the mockingbird work that's taking place. We've been coordinating with engineering and we've they've had meetings with our contractor. So even some of these roads as of today are being shuffled around to make sure that we're not interfering with their work. We're not causing too much of a headache to our residents.

So but this shows half the district is going to be milled and overlaid this fiscal year, and then the remainder will be for next fiscal year. And then this stretch of Doubletree, this is something you guys will actually see tonight on the consent. Public work staff, we've identified some areas of Doubletree between Invergordon and Scottsdale Road that that are failing. And what I mean by that, well, I have a picture in a future slide, but there's alligator cracking. There's rutting.

There's areas that really can't wait until we touch Doubletree in a couple years. So using the funds of this fiscal year, we're gonna, you know, utilize that one governmental procurement alliance, one GPA cooperative contract to go through and and fix those areas of concern. And then this is a photo of Doubletree. This is in front of the business there. You can see the rutting that's taking place.

So, again, the the goal is to utilize that contract. It's a cooperative contract for agencies. The cost was like 100 and it's 131,000. So we'll utilize that and and repair areas like this on Doubletree. Other areas that have been completed up to this point, there's a neighborhood road off of Barrel or off of Tatum up at up at the Northwest portion of town off of entering Barrel.

We've been maintaining that road for five to six years, and it was time to mill an overlay. So there's a small section that was repaired, 70th Street cul de sac that's up at the Northeast portion of town. Residents were calling, complaining the road was was in poor condition, and we we utilize the funds of this year to repair those areas. There's a couple of emergency sinkholes that that we had repaired also. So the recommendation for this budget is to continue working with our engineering group to prioritize those small roads that need to be fixed today rather than wait two to three years for them to fall within the the maintenance district and then continue budgeting for those emergency repairs.

This is this is a road that we're that we're gonna continue. You know, it was one of the poor conditions of when we received our our pavement condition assessment. This is Barrel Avenue up North side of town, South of Shea. There's seven homes on this on this this road, but it is in poor condition and it can't wait until that maintenance district that it that it falls within gets maintained. So we're gonna crack seal some of the cracks in December and we're gonna move forward through that similar one GPA contract with Roadrunner Paving for that dollar amount, 14,000, almost $15,000 to provide a micro seal.

And that'll provide, you know it'll it'll allow us to buy some time with that road so it's not just falling apart and the residents, you know, have to live with the with the poor road. These photos show some of the examples of the general professional services we're requesting. The photo on the left is a core sample. We actually took 12 core samples today with that that vendor looking forward to next year. But, basically, take you know, takes a section of asphalt, and it can analyze the the thickness of asphalt, figure out, do the cracks go all the way through?

Is there two different mix designs that that we should account for? And then it can also analyze the subgrade to see if there's issues at the subgrade level. And then the photo on the right is a nuclear gauge test. So that basically measures density and compaction. So when a street is paved and and a roller, rolls and and compacts the street, we have these services to provide that quality assurance to make sure that it's meeting the the compaction rates of Maricopa what is it? Maricopa government's MAG.

MAG.

And then here's a snapshot of the budgets for these three areas, pavement maintenance and preservation, general professional services, and then the miscellaneous road repairs. So currently, we're at that $4,500,000 budget and with a goal of trying to get down to 3,050,000.00 on average. We're gonna reduce that this year so that and and it's under review. Obviously, we'll you'll you'll hear more about it at the budget meetings next month. General professional services, currently, our budgeted amount is 94,000.

And with adding QAQC and geotechnical services, it'll increase that budget to about 180,000. And then miscellaneous road repairs, we're gonna leave the same. This line item may change from year to year. It depends on what roads we decide on scoping for the next year that we're not doing the full blown pavement preservation. So this number may change, but for next fiscal year, we don't we don't anticipate that.

And then this map shows areas of planned work for next year. So District 6, we'll complete that. District 3, we have plans on doing a surface treatment. Keep in mind, this is just for informational only. We'll come forward to you folks with a bigger presentation on these specified areas.

And then the collector roads are Invergordon from Lincoln South to Chaparral and then Chaparral from Invergordon East to our town limit. And then to summarize what we, you know, just talked about, some of the improvements made was that outreach, trying to notify everybody and keeping that at our forefront, with public outreach, stakeholder outreach, and then using general professional services to help us ensure that the best product and and the best workmanship is completed. And then we reviewed some of the work completed and then some of the work that that is to remain as well as our future pavement preservation programs budget. And that sums up the

Well, thank you, mister Martinez. And, mister Shavira, thank you for putting that together, and we'll open up for questions, but I just wanna compliment, the update and the report. Thank you very much for that. And I know mister Shivera, you've made this a priority, I, for one, very much appreciate that and appreciate the presentation. With that, I'd open it up for comments from my colleagues. Councilmember Thomason.

Thank you, mayor. Thank you both for your presentation. Beautiful a beautiful town deserves beautiful streets. I don't think I have any quarrel with the work we're doing. I wanna understand the story of pavement preservation as I understand it just to make sure I get it.

So I remember Brent and Jerry talking about a really high PCI and we were all excited and proud and how cool. We were the best in the state or the best in the county and I remember that. As I think about it, that was probably five plus years ago and we were going along and I thought we had beautiful streets. And then last year, we had the extra $3,000,000 budget increase for street preservation And I was shocked and I thought our streets were fine, but apparently they needed more. So is what happened, let's say five, six years ago, our streets were indeed at that high level and then they disintegrated a little bit over time and then bam Isaac you wanted to jump in and kind of get us back.

And now we're on a cadence of increased expenditure for the next whatever five years, four and a half, and then trying to get it back down to that $3,000,000 level. So is that the story? It was great. We neglected it for a while. We had the big catch up and now we're on a catch up plan. Is that the story?

I'll take it if you want. You want me to take it? I'll take it. Okay. Mister mayor, council, this that that question is is a great question and we touched on it a little bit the last year. And I just wanna remind council that as we got through the process during the Brent and Jerry days in 2018, 2019, there were some times where I think there was expenditure of about $555,000 on actual expenditure. So so, yes, in in theory, we we are playing catch up. The other thing that we saw this last fiscal year is we did a a micro seal on Lincoln. We're working on a micro seal on Tatum. Those are expensive projects.

Part of the reason and and as you saw some of the pictures that Chris showed up on the screen is there's a lot of, you saw a lot of, wear and so if we don't address that wear early on, it's gonna cost us a lot more through a mill and overlay as opposed to a micro seal. There was another large project that kind of floated to the top which is Section 6, one of our largest sections in Paradise Valley. That of course also took a huge ask from mayor and council to make sure that we got that project done as well. So in short, yes, we are playing catch up and we are trying to get to that 3.05 goal in terms of yearly average expenditures. But keep in mind also that that expenditure is all variables being equal.

We know that the cost of oils is increasing and so we have to also account for that. And so really our goal is to do two things. One is as part of our performance measures is to get that PCI back up to 77 where it should be and the other one is to make sure that our budgetary expenditures are not only expended in that fiscal year as we talked about in the previous discussion as well as making sure that we have that average expenditure at about $3.03 and a half million dollars. I hope that answers your question.

It does. Thank you. Thank you, mayor.

Absolutely. Additional questions. Council member Randine Keller.

Thank you, mayor. And I too was curious about the pavement preservation, so I started going back through the different meetings like I've been doing talking about all study session. And I was looking at the twenty sixteen, twenty seventeen fiscal year pavement preservation program. We have it was unanimously approved for 3,300,000.0. So I kind of put it in my cute little financial calculator, my HP 12 c, and used a 3% growth rate and came up with 4.5 and that's kind of what we're looking at today ten years later.

So I I think this is important. Safety is important. Our roadways are beautiful and your numbers are to me. I mean, we know that inflation was not 3% in the last few years. I think it was more around 8%. So, I think you're doing a great job. Thank you, Isaac and Chris.

Thank you, council member. Additional questions. Council member Levin.

Thank you, mayor. Just a a quick question. Again, focusing on that 3,050,000.00 per year is your goal going forward for the next five years. Is that going to be adjusted by inflation and the costs of any cost increase? Like, I know recently some of the costs to do these projects has skyrocketed.

So actually is that going to increase at least by inflation or are you hoping to keep that flat at 3.05? And my second part of that question is if you're keeping it flat, is that if cost were no object, would you keep it flat or are you doing that specifically to try to be fiscally conservative or keep costs down?

Mayor, council, that's a great question. And really, the question is and I don't mean to, you know, put it back on you all, but it really depends on the goals that, mayor and council agree with. Our goal as staff is to come to you with a recommendation and staying on that goal of reaching that 77 PCI. If we were lucky, we could stay at that 3.05 expenditure. But again, we know and understand that there are cost increases and so we have to keep up with those cost increases.

Now having said that, we will come to you, as part of a later discussion from a budget perspective and say, look, here's where we're at. Here's what we're looking at from a cost perspective and expenditure standpoint and we really will let the council decide what that expenditure looks like. Whether you wanna stay on track and get to that 77 PCI and or if you wanna look at it from a conservative standpoint and look at spending less, we may not reach that 77 at 2029. Does that answer your question, I hope?

Yes. It does. And I know that we are a fiscally conservative town, but it does trouble me that we have expressed a clear goal of 77% seven PCI. And if we are not reaching that because we have set a set number, that doesn't make sense to me. I would rather get to the 77 in a prudent and careful way.

Thank you.

I I'd like to add too. I think, you know, in our roles here, I think it would be a disservice to the council and the residents if we didn't kinda maintain that and and watch for inflationary, you know, cost of oil or material or labor. So that's something that we can definitely keep an eye on. And if we feel there's a need to increase it because of, the cost increase inflation, then we definitely bring it to your attention.

Thank you. I just don't like to set a hard number unless there's a really good reason to do that. Thank you.

Thank you. Council member Pace.

Thank you, mayor. Great presentation. Love the details and the breakdown even with the photos. It's all very helpful. I know we had a lot of questions on whether to fund that. Some people had some questions on the Scottsdale Road, so it really helped show how deteriorated it was at 22 pci. Now it's back up. Yeah, I think it's a good point to say the goals are back on council. And if we want to keep it at 77 PCI, and I do, that's been the last, you know, almost decade's goal. I think things got behind before you guys, and I appreciate you bringing it to our attention.

But I support getting this five year plan going again. And, yeah, I agree with what Councilmember Leitman said as well. I mean, if we need to increase and what Councilmember Randine Keller said, I liked her numbers and her breakdown quickly on the finances, on the inflation factor. But we need to get it done, and this is the one thing that we should be doing for our residents and to keep the quality and brand of our town high and plus the safety aspects. So I support it.

I think it's great work, and I like the detail and everything for us and our residents. And I know you're right about you guys will always take less money to do it, but it just reduces the quality of our town roads. And I appreciate your flexibility with that, but our goal is to keep them high in my opinion. So thank you for what you bring to us.

Thank you, Councilmember. Councilmember Moore.

Thank you, Mayor. Great presentation, guys, and thanks for, all the information. When I when you were discussing that you did a a really good job about reaching out and meeting with all the utilities and everybody else when it comes to before you go in and you do any mill and overlay or slurry or any of the other work. What's your written policy when it comes to you you you mentioned that people come back within six months and they tear it up and other municipalities are it's pretty common to have a five year moratorium on anybody coming in and cutting up the streets. They generally require them to either bore underneath them or to repave the half street or something like that.

So where's our written policy on that? Could you go over that for us, please?

Yeah.

So we utilize that moratorium on Lincoln And Tatum when it was milled and overlaid. There is the emergency cut allowance. Obviously, if there's an emergency gas leak, then they gotta cut it. Right. Our coordination with our engineering department, I know that they've upped the rehabilitation or or, when a utility company cuts the road, the requirements for restoration of that has increased to match other municipalities, and that that is basically a micro seal of about a 100 feet, 50 feet on each side of the cut. So we do have that. But as far

as a

moratorium, the last time I know that it was used was was Lincoln when they milled and overlaid it in 2020.

Have you had the discussion about requiring people to bore underneath so you don't saw cut all the way through to the sub base and

beyond? We I mean.

Mayor, council member, that's certainly an engineering process that would be a requirement that would come from our engineering team in terms of the requirements as as we issue permits from the engineering side. We wouldn't do that on the operation side, but that's something that we can certainly discuss in our coordination efforts and bring to the table with Shar and her team.

So you don't know if you even have had the discussion in the past?

We've had it at, like, our development team meetings as far as that goes. So mister Chad, I guess.

So so the short answer is no. We haven't had the discussion about trying to prevent utilities from getting in there and doing work. What we've done is, as Isaac mentioned, we've increased the standard that they have to put the damage back to. We used to do these little patchwork pieces, and we've gone away from that in doing a seal. We do kind of proportionate with the amount of work they're doing.

We had them do a seal down the street here in Lincoln over most of the entire intersection when they were cutting into that, and they would have had a patchwork previously. So we we haven't had any call at this point to discuss a different policy. We're happy to let the guidance of the council work with Isaac and then create something new. My my past experience says it's pretty tough to prevent that from happening. If you have a big project like Lincoln and and and lay it out there to all the utilities, you can have some success, but then you just have a lot of, quote unquote, emergencies that pop up.

So it's one of the more difficult things, and this business is trying to coordinate with, you know, what we've got fifteen, twenty utilities now, operating in town in various capacities, but we're happy to discuss that or bring that back. But, no, we've not considered making that more challenging at this point other than increasing the standard of the the pavement after the fact.

Thank you for that. The question on Lincoln was the work that's being done on there now. Is that an emergency that was the underground work that's being done?

The work that Chad was mentioning?

The the on Tatum right now?

Is there

are you talking about utility work being done right now, I'm thinking? You

mean North Tatum? North North West Tatum? Yeah. That's the Phoenix Water.

It's was it all in north of the town of Paradise Valley? Okay.

Yeah. North of town limits, and then it runs

through No.

It was also

Mountain View.

And a few was it only Mountain View? Yes. 14. Did it get to your street? I think it got to fifty second. Yeah.

Anyways, back back to staff. Is that was that a what's what's the requirement? And as far as the town of Paradise Valley portion, what what are they required to do for restoration after they're done with the work?

Yeah. Talking to engineering, they were gonna have the full width of the road.

Great. That's good. And when it comes to the agenda item tonight on Doubletree with the work that's being proposed on the entryway, I noticed in your exhibit that you held back from Scottsdale Road. Is that the reason why you you did that is because of the potential work that may happen there?

Correct.

So you're not doubling up work? Correct. Okay. Thank you.

Thank you, council member. Other questions or comments? Vice mayor?

Thank you, mayor. Great presentation. Thanks. Just a lot. I'll try to keep this really brief. These are probably just more technical questions. That geotechnical engineering for the pavement, you're talking about the pictures you showed at the core, like the biopsy, the street basically. Is that the same technology you guys used when you did the pavement condition analysis, or was that something different? Because it sounds like it's new.

Yeah. It's something different. So when they core, they they go in and they disturb the road and they pull out these core samples. With the pavement condition assessment, they drive a van that's loaded with lasers and cameras and technology to measure cracks, measure roughness, measure variables of the pavement. So they're two different

So this is a better process?

This is a more in-depth precise process.

And it already falls under our contract or or that we already have Correct. Agreement. Okay. Correct. This second question would be permeable pavement. Are we ever gonna circle back to that? Did it prove to be not something that would really work for us? But because I really like that idea and if it's in small areas, but I was just wondering you don't have to get to it right away. I didn't see it in the presentation, so I didn't know if you guys were if it was still on the table at all, The sustainability factor that's in our general plan. Yeah.

Mister mayor, vice mayor, that's a great question. That is certainly something that development services and capital projects are still looking at. If you want my honest opinion, I'm not a big pavement permeable pavement person.

Okay.

Part of the reason and I'll share with you right now is is that permeable pavement requires constant maintenance.

Okay.

If you can imagine the pavement having permeability and it getting full of dust, sand and things and and over time it's gonna get, you know, clogged. So there's a maintenance behind that. So we have to be very careful and we are coordinating with our development team to make sure that we are strategic about it. Mhmm. I'm not completely against it. In my previous life, we did some permeable pavement on on parking lots and to that end.

So And I appreciate that. If it's not cost effective, it doesn't work for our town, that's fine. I just was curious where we where we were at it. So I appreciate you even looking at it.

Great question.

Yep. And then my third comment would be to just say that I agree with council member Leitman's description of her thoughts on where we might go with the budget. I certainly love the fact that you're trying to be fiscally conservative, if that's the term we're gonna use. But I also think that good fiscal stewardship can go hand in hand with being fiscally conservative. So, I appreciate that comment. That's it. Ayu?

Well, thank you. And to wrap up, would say, again, you've made this a priority, mister Shavira, and we appreciate that. I think my colleagues have all weighed in on their belief in the work you're doing and how important that is for our quality of life and our community. And mister Martinez, thank you for your hard work and continued insight. You make a great team, and please compliment your entire team for pulling together that presentation.

Thank you.

All right. Not seeing any other questions or comments, we have one more study session item. It's item number 26,029, discussion of statement of direction for Phoenix Country Day School, 3901 East Stanford Drive, intermediate special use permit. And I've got thirty minutes with mister George Burton.

The mayor council members. So today's goal is to go over the draft statement of direction for Phoenix Country Day School. Since it's an intermediate amendment, it does require an SOD, and the scope of requests is basically three improvements. They're looking to renovate the existing baseball field, add a new wellness center building next to the baseball field, and add two additional informational signs, one in each of the two parking lots. So I'll briefly go over the background, the scope of the request, and next steps.

And this is just a vicinity map on the left and the location of the school and on the right hand side, aerial photo of the campus. Again, it is an intermediate amendment process. They submitted application in May 2025. We're now going through the statement of direction, and then it'll continue on to commission and then back to counsel for review and action. So since it's an intermediate amendment, the code states that it shall not create or add or change a use, shall not increase the floor area by more than 40% or have a significant material effect that cannot be sufficiently mitigated.

These improvements are school uses and retains the school use. It only adds about 17.7% increase in floor area, and any impacts will be vetted during, the planning commission and town council review process. So the first part of the improvement is renovation of the existing baseball field. Basically, they're gonna replace what they have now. The field is set back 28 feet from the West property line. It currently has a dirt, fire lane, which will be covered with asphalt, and that's gonna be 20 feet wide. They're gonna replace the grass and the turf. There's an existing chain link fence that'll be replaced with a new fence. The backstop will be replaced with a new 34 foot tall chain link fence. There's currently two bleachers with canopies.

Those will be replaced, but they will add a third, bleacher and canopy, which will increase the seating capacity from 128 spectators to 165. And, also, they're gonna add two new foul ball poles, one located on the North West corner of the diamond and one located on the Southeast corner of the diamond. And these foul ball poles are collapsible. However, our STB guidelines don't have any recommended setback or height. Guidelines for associated athletic structures and fields.

So the baseball field will remain unilluminated. It's only gonna be used by the school. The typical play times are from two to 6PM with occasional Saturday games that will end by dusk. Our SEP guidelines do recommend a 40 foot wide landscape buffer. It is built in the SOD that commission should look about adding some additional landscaping on that west side, but there's only four foot space between the fire Lane and that western property, which is a utility easement.

So there may be some limited opportunity to add some landscaping in that area. And this is just a comparison of the existing aerial photo of the baseball diamond with the proposed. Again, they're pretty much replacing the existing structures in the same locations. And this is elevation that was included in the packet showing what all the improvements will look like with the new batting cage, the new, canopies, and fencing. And on top, this one shows the existing scoreboard.

What was submitted, they showed they were gonna relocate relocate it about 30 feet on the plans. The applicant has identified it's just gonna remain where it is. They're gonna keep it as is, so that's not gonna change. And then below that is, rendering elevations of the bleachers and canopies. And on this slide, on the bottom are photographs of the existing conditions, and then above that is a comparison of the photosynths, what the final product will look like. Next is the wellness center building. It is compliant with their SAP guidelines. It's set back 344 feet from the nearest property. It's 22 feet tall. It's gonna be below the open space criteria.

It's about 8,000 square foot in size. We'll increase the floor area from about 1% from 17.4 to 18.4%, and it matches the architecture on campus. And it's gonna be used as a workout facility for student and faculty, multipurpose room for dance classes and other educational programs. We'll have a concession stand during the game events. Two locker rooms, one for the home team and one for the visiting team.

And, again, it is meeting all the SEP guidelines. And this is just a comparison again of the aerial photo of the existing campus, the outline shown in red, and then the proposed site plan. And this is a copy of the renderings and elevations that were included in the packet. And the last part of their improvements are to add digital information signs, one in each of the parking lots. So the first sign is gonna be set back about a 198 feet away from Stanford Drive, and the second sign is gonna be an east parking lot set back about 200 feet from 40th Street.

It's basically a large monitor or TV that's gonna be mounted to a decorative wall that's about 12 feet tall and 11 feet wide. The screen itself or the assigned copy area will be four by eight and will be mounted at a height of about 10 foot two inches. However, our guidelines do not address digital information signs. It just addresses monument signs to be placed at entry and directional signs within the campus. So this digital signs will provide parents with information during drop off and pickup.

They'll have static pictures, messages, and graphics. They'll be illuminated Monday through Friday, 7AM to 7PM. This sign will operate during events and will be turned off by 10PM, and the same will apply for any weekend events. Again, it's not addressed in our SEP guidelines, but article twenty five and ten do talk about lighting in general. It says that the light shall source shall be hooded and shielded and shouldn't have an output of more than point seven five foot candles at property line.

The applicant will have to provide photometrics for review for the planning commission to determine if it will be in compliance to that point seven five foot candles. So on the left hand side is aerial photo. The red circles are just showing the location of each of those two signs. And on the top half, those are the elevations of what the signs will look like, and then below that on the bottom are the renderings of those signs. In terms of the statement of direction, it won't just provide general guidance for the commission on what council wants them to focus their review on.

It does not give any final, decision by council and does not create any vested rights for approval. Also, the commission can send the SOD back to council if they need additional clarification. In terms of overall, the SOD does identify that the commission shall focus a review on the visible, audible, and operational effects it may have on neighbors. The commission shall complete the review by April 21, and the SOD is broken into six sections. So I'm just gonna briefly summarize what those are.

First is use that the commission shall evaluate the design and layout of the wellness center building, the potential impacts it may have to the surrounding areas, and any operational factors. Second is noise. The commission shall evaluate the noise impacts of the baseball field and neighbors. They shall evaluate the increase in spectator seating and then look at any applicable noise mitigation factors. Third is setback in heights.

The commission shall evaluate the lighting impacts of the digital science on neighbors, which may be mitigate mitigated by location, height, additional screening measures such as landscaping, the light output. Next, commission, should look at landscaping, the possibility of creating a landscape buffer along that west property line, and also if additional landscaping should be added to the west side of the Wellness Center Building. Fifth is the commission shall evaluate the lighting, see if there should be any changes to the lighting on the building in terms of height and wash on the building. The applicant, again, has to provide more lighting information on the digital signs such as cut sheets and the photometrics and also the impacts of the signs on the neighbors and any applicable mitigation factors. That carries over to the six item signage.

Again, the applicant has to provide that additional citing lighting information and then the commission evaluate those lighting impacts on the neighbors. So the goal for tonight is for staff to receive any feedback on the draft SOD. We'll incorporate those edits and bring it back, the next business meeting on February 26. I'll be happy to answer any questions.

Thank you, mister Burton. Appreciate that and appreciate, the applicant, going through, working so closely with staff. And just one more time on the timeline. So this will go to this would go to planning.

So this will, this is scheduled for the SOB to be approved on the twenty sixth, and then it'll go to planning commission to start the review on March 17. And they'll have to complete their review by April because code states they have a ninety day period to complete the review and send a recommendation back to council.

Alright. Thank you. Questions from my colleagues? Councilmember Thomason.

Thank you, mayor. Digital signs. I don't think I'm a fan. Do we have any in town elsewhere?

Not on SUP property, but we do have them on the public schools both through Cherokee and Kiva.

Okay. But not on SUP properties?

Correct.

Alright. Thank you. No questions.

Thank you. And, I know the applicant is available too. Is there something you wanted to add? I

will if it's

possible. Yes.

Thank you, George, and for your records. I'm Jordan Rose, on behalf of PCDS. And I just, mayor and councilwoman, just so you know, the idea is right now, PCDS oh,

When There's a chair

for you.

Oh, a chair. Okay.

Thank you.

Thank you. Alright. PCDS currently, when you walk in the doors, they use sandwich boards to convey messaging like, hey, it's a special grandparents day or whatever. And when looked at when the school looked at the options, they really liked the idea of having a digital signage that says they can change every day and stop using sandwich boards. It's just kind of a goofy way to convey information in today's day.

And they don't intend at all to sell ads saying like, happy birthday, little Susie or anything like that. That's not a plan. And I know the public schools sometimes do that. I'm not denigrating that, but that's not their approach. This is just simply informational conveyance which happens every day and could be very helpful for parents and students.

Thank you. Other questions for mister Burton? Councilmember Leitman.

Thank you, mayor. This is just a follow-up question. When I hear digital signs, I I hear bright lights. So can you talk about the lighting on the signs and maybe the colors?

Sure. Absolutely, mayor and councilwoman. So first of all, it should be stated that these signs are located within the parking lot. So they are if you drive in and you're a parent and you're dropping your child off, that is when you will see the sign. So you're not going to see the sign from the street.

So I hope that nuance is not lost. And you can see on the other side on the 40th Street side, there's also that is also if you're familiar with the campus and you're walking in to go to like say a basketball game, that's where you would see that. So it's sort of interior internal to the property. The lighting on the signs will get you the cut sheets and all of that but it is not illuminated. It's not a billboard type sign. It's a sign that just needs to be read from a short distance. So but I appreciate the question and I don't have the answers on the lumens or anything like that right now but I'll certainly get that for you.

Thank you. And did I read somewhere in here? It's oh, I did. The signs will be illuminated seven a. M. To seven p. M. So they will even they will be turned off overnight even if they're not gonna be like billboards? Yes,

mayor and councilwoman. A 100%. And I I mean they're not gonna leave the signs on if the kids aren't at facility. So if there's an activity at school after 05:00 it says basketball game, maybe it would say welcome to the basketball game. But otherwise they'll go off when the school ends. There's really no reason for them to stay on.

So can we put I'm new to the SUP process on this side. This is my first point. Not SUP, SOD. Can we add something to the SOD that has the Planning Commission look at the lumens and focus on that? Would that

Thank you.

That

is in there as well if they have to evaluate it. The applicant will provide the cut sheets and the photometric for the review and then, commission will add any stipulations accordingly. It's It's in

the draft.

Yep. Would feel very comfortable that you'll feel good about this because I will say that the headmaster and the board don't want a billboard sign either. This is simply to make change of information much, much easier and be sort of caught up to the less primitive technology and it looks better. I mean having these like handmade, you know, signs that blow away is kinda not super

prolific. I would ask, councilmember Pace. Any questions or comments?

The only question I think has been addressed, and thank you, Jordan Rose and and PCDS for doing that, was just that these are both interior. They shut off at night. I know I had mentioned this before because we had a problem with the Kiva signs. That's what everybody's dating back to. If you remember, Kiva was on all night. It's a billboard. It flashed. And at that time, we didn't take enough attention to address that with the school. So these two are interior. I think that's fine.

I get the change to do something more than sandwich boards. I think it'll be good to have the Planning Commission look at it, but it's a lot different than other locations that we've had some problems and complaints about. So I'll be interested to see how the Planning Commission looks at it, but I'm optimistic that it will meet the type of standards that we would want for our town. Thank you.

Thank you, councilwoman. And I would add that at some point there was consideration of putting the signs, you know, at 40th and Stanford. This was years ago. And they pulled back after they realized that that would be more of a, like, announcement to the community. This is not that. This is just simply let's talk to our staff and students and parent population.

Thank you. Other questions or comments from council? Vice mayor?

Thank you, mayor. Thank for the presentation. Oh, I'm so sorry. Did you Would you go ahead?

No. No. No.

I I don't have any questions. I just wanna make a comment that appreciate all the work that you've done in this with the applicant and our our staff as well who's done a great job on the statement of direction. I'm sure our planning commission will do a good job of vetting us through. So thank you.

Thank you. Vice mayor.

Thanks again.

So thank you for the presentation. And I know that, I think that I'm in support of similar treatment to public schools and it sounds like you're going to be even more robust in pulling some of that back. I have no doubt. I know that, just anecdotally, talk to neighbors who say you guys have been the applicant's been always been a good neighbor, so we appreciate that. I know that what you bring to us is very thoughtful and intentional all the time. So that's it. I yield. Alright. Thank you.

Thank you. And on behalf of my colleagues, we appreciate this. Mister Burton, very strong presentation. Concur the idea of the statement direction looks good. It'd be it's gonna be a good project for the planning commission to review and the applicant. Miss Rose, thank you very much. Appreciate your time and your effort, your team, and working with our staff. And to the applicant, thank you for their investment to keep their, their school, in top condition. So we appreciate that and the thought that has gone into that. And if there's not any other further questions or anything for mister Burton?

Alright. Well, that will conclude our study session for this evening. We will re take a recess until 6PM. So thanks, everybody. Well, good evening, everybody.

Good evening. The town council meeting for, 02/12/2026 is now called to order. Would the clerk please call the roll?

Here. Vice mayor LaBelle? Here. Council member Andy and Keller?

Here.

Council member LaBelle? I'm sorry. Council member Liepman? Here. Council member Moore? Here. Council member Pace? Here. Council member Thomason? Here. We have the quorum.

Thank you. Next on the agenda is the pledge of allegiance. So we got a special guest to lead us in the pledge. I'd like to welcome Stephanie Tippett, the manager of the McCormick Stillman Railroad Park to come and join us and lead us in the pledge.

I pledge allegiance to the flag of The United States Of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

And I do have a pledge maker's pin to present. Thank you very much, Stephanie. Appreciate it. Thank you. Absolutely.

Alright. Next up, we are moving on to presentations, and there are three presentations tonight. The first, twenty six dash zero two two is a presentation by the Scottsdale Railroad and Mechanical Society regarding the roundhouse and splash pad project at the McCormick Stillman Railroad Park. The town is proud of our history and long history of partnering with the city of Scottsdale and the Scottsdale Railroad and Mechanical Society to enhance the in parks overall experience for the residents and the visitors there. The town shared in this cost to construct this and extend the partnership tunnel that you may have traveled through that is a there's a train passes through from its journey around the park, and the town is also instrumental in securing funds for the casting and the transportation and the installation of the Bill Keane memorial sculpture located in the park.

In 2023, the town helped to finance the roundhouse and the splash pad, and we are delighted to welcome Bill Scarborough, president of the McCormick Stillman Railroad Mechanic Society to present an update. Mister Scarborough, thank you for being here.

Thank you so much, mayor, vice mayor, and council. I'm very pleased to be here. I do wanna start off by just saying thank you very much for your support and continued partnership throughout the years. So I'm happy to present today the completed Roundhouse and Splash Pad project at the park. The first perspective I have here, I wanted to kinda do a slideshow for you,

show you sort of a

before and after version of of what we were thinking through design and what actually came to fruition. Just to give some context, this first slide that you see, the the Stillman Station is the darker red roofed building. Immediately to the left is the turntable, Tufo turntable, meant to be an entry point in a gathering area. And then to the left of that is the new Roundhouse Building, 10,000 square feet and houses a multilevel train themed play structure. Just to the left of that and a little bit down is a 5,000 square foot splash pad area.

South of that is a playground area with some shade canopies. And then closer to Indian Bend, we have two executive cars that are in alignment that are going to be turned into birthday celebration cars. See if I thank you, sir. This next perspective is just from a little different angle. Again, Stillman Station on the left, the turntable entry point in the center, and the roundhouse to the right.

Now here's an actual photo of the completed space. We have the turntable at the bottom, the roundhouse building up into the right slightly. Directly north of the turntable, you can see the 5,000 square foot splash pad. And then with the blue canopies is the new playground equipment and surfacing. So here's a perspective of the roundhouse from the turntable.

This is what we designed and we were hoping to see at the end. This is the completed project. So pretty close, I think, to the design idea. The first three arches to the right are part of the enclosing the interior of the building where the play structure is located. The left arch is an open archway that leads with tracks to the splash pad area.

This is a photo in the splash pad now looking back at the Stimmer Station through that same arch. We really try to make sure that the details were here and really looked authentic in terms of a roundhouse. Here's an aerial photo of the 5,000 square foot splash pad. We kept it train themed. It has it's laid out as track sightings, and it it has push buttons that that allow interactive play with the kids.

We'll talk about that in just a minute. You can see the playground area with the blue shade structures at the bottom of the screen and then a portion of the roundhouse at the upper right. Here's a photo from the west side of the splash pad looking east. You can see the birthday car what will be the birthday cars to the left, and then you can see the side of the roundhouse building in the background. Also, in this photo, you can see the elements of the splash pad itself.

So we have water jets that shoot water up in the air, and we have a couple of play devices that allow water to spill on the kids from above. We always wanna make things as interactive as we can with the kids. And at the end of these sightings are are bumper rails. And on those bumpers are push buttons, and that's where the kids can actually activate the different elements of the splash pad, including this up front signal for a track crossing. It actually lights up and makes sounds as well when you push the buttons.

So coming into the 10,000 square foot roundhouse building is the multilevel play structure. This is what we were designing. Here here is another perspective of that design from a different angle. You can see it's a a steam engine with a tender and then the billowing smoke of a steam engine above it. And then here's the the finished product.

We have some nice copper elements up front. We have a beautiful black train with billowing smoke above. Here's a design perspective looking towards the engine boiler and the left side wheels, those three large wheels. Wow. Here's here's a picture of the actual side. I wasn't able to always get the right photo that perfectly aligns up with the the perspective,

but I tried to get

as close as I could. So here here's an example of of the interactives. Those wheels down there are little hamster wheels. I'll talk about that in just a little bit. And another perspective from the rear of the building looking forward to the front. This is the back area, more of the toddler space. We sort of designed this area to be focused for toddlers, and we sort of geared a lot of the elements of this train structure for the older kids to be geared towards the front to kinda keep this back area dedicated to toddlers. Here's the completed project from that rear perspective. Get a little bit better insight into that rear toddler area. There's a little slide for them.

There's some interactive, some tic tac toes, some lights, some some interactive panels that they can play with. And then we also have the the tubes that allow kids to go down quickly so they can get right back in there and climb up. And in this in this photo, I'd like to take your attention to the front where those three large wheels are. We talked about them a little bit earlier. This is the other side.

Those are also interactive elements for kids where you can actually spin and turn those wheels with a little hand crank. And if you can convince two other friends to do it at the same time, there's a little Easter egg, and it'll actually provide a train theme a train themed interactive sound that happens. So it's super fun. And then on the other side, this is the hamster wheels, same thing. The kids can get inside here, move the wheels, and if they can get all three going, there's an interactive sound that happens as well.

So part of the elements we have, know, tactile, you can touch it, you can go play on it, you can see it. We have lights that light up. We also thought sound would be another way to interact with the kids, and that's why we have these elements. Here's a inside perspective between those sets of wheels. To the left are the hamster wheels with the guarded red handlebar you hold on to, so you get in.

You you can hold on to that while you're spinning the wheel. The last little Easter egg here is if you can get five of your friends and yourself to get all six going, there's an a third sequence of sound and events that are train theme that occur and will continue to to go on until you stop. And it's basically the chugging of the engine. So it sounds like the engine is actually chugging along as long as you have all six going. So it's a it's a fun way to have the kids stay engaged.

What you see here also in this picture is an example of one of the interactive play areas. This is an interactive panel where, again, the kids can go touch. They can turn knobs, push buttons, make things light up, make things needles move. It's a it's a it's a great little interactive area. It's also one of the elements on the ground level that are available to those kids that have accessible needs.

Here's another example of another interactive station. This one is actually up on the 2nd Floor, but they're they're scattered throughout the project and and makes it a real fun fun interactive toy. And the last element of this play structure I wanna give you an update on is is the billowing smoke. It's actually more than just that. The kids can go all the way up into that smoke area, and they can play.

There's open areas, and there are areas that they have to navigate through. It's a bit of a maze, and they can have fun working their way through that that structure. Here's another picture of the open area and some of the maze elements a little bit further into the photo. But I also wanted to show you this photo because another element that we did in the design was we made sure that there were windows on both sides and the backside of this building at this level, so that when kids are playing in the the smoke area, in this net area, that they can actually look out to the rest of the park and the and the neighborhood nearby. So it kinda allows them to also see the world from a little bit different perspective as well.

And so that is the completed project. We are so, again, grateful for your partnership, and we wanna say thank you. Thank you. Thank you. We deeply appreciate it. And I'm here to stay if you have any questions. And, also, we have Stephanie Tippett, who's the park manager, who is also here to answer any questions you all may have.

And she did a great job as our pledge leader tonight. Stephanie, thank you. Mister Scarborough, I'll I'll just lead off with a sincere thank you for your society members and bringing this project to fruition. It's a gem for the entire region. Paradise Valley, obviously, our residents use the park on a pretty much regular daily basis.

And we're grateful for the innovation, the commitment that you had to improve the the the park, to maintain the park, and and really bring frankly, I'm sorry we didn't do a road trip there or a field trip tonight because I would love being being in there. I wanna say thank you again to all the members of society and to the staff, Stephanie, to to the staff, to all the work that you do to keep that as a a real point of pride for the entire community. We're grateful. And I'd open up to my colleagues.

Thank you.

Councilmember Andean Keller.

Thank you, mayor. Thank you for the presentation, and I already had a walk through with you at the January. I was invited by the widow of Russ Mosser to what what was that called that we did for him? The three

Whistle call.

The three whistle call? Yeah. In the what was the building?

The Model Railroad Building.

Yeah. The Model Railroad Building, which is fantastic. If you haven't been in there, go in the Model Railroad Building. And if you go in the front doors around to the left, there's a little memorial for Russ Mosser. It's a lake and a a a like, a a national park sign that says Mosser Lake. And after we did the three whistle salute for mister Mosser, I've known him since I was five. So it was it was a lot of fun. We got to speak, and we got a tour of the of the railroad. And I got to see the new project, the new roundhouse firsthand, and I actually went up in the smoke. So I had a good time.

It's a lot of fun. I realized at 53, I probably shouldn't be that high, so I quickly descended. But former mayor Winkler was there as well, and he also went up in the smoke area as well with his wife. So it's a good memorial. It's a good remembrance of Russ Mosser, was a longtime Paradise Valley volunteer, and he had a lot to do with getting this done, and I'm just so grateful that I had him in my life and had his family in my life, and I didn't know all this stuff about his train his love of trains, but the model train area.

I'm I've gotta go back because I didn't get enough time to look at it. So but this this roundhouse is tip top. So thank you.

Thank you. Very nice.

Other comments from council? Councilmember Pace?

I love the presentation. I was so glad to hear from council member Andean Keller, her experiences there. She shared those with me. So it was very touching, and it's very great park. And they've improved it so much. And I happen to say I love the toddler area. What a creative design, and look how it keeps everybody away in their different components. So great park. I'm gonna get out there and check it out too and take my grandkids.

Thank you. Vice mayor?

Thank you, mayor. I spent many a summer and a winter and a birthday at the Redwood Park with my twins, and this came about thirteen years too late, probably. I don't know. Is there an age limit on the birthday reservation? I mean, is there I don't

think so. No.

No. This is amazing. And again, kudos to the design team. Obviously, the interactive is wonderful. Just the thoughts that went into, you know, the visuals for the kids and looking out the win it it's just amazing. I'm I'm really impressed, and I can't wait to go take a visit and bring my 23 year old twins now. Because we're gonna have a, like, a yeah.

Thank you, vice mayor. Councilmember Moore, I know you had to

come back.

Oh, thank you, mayor. Sorry you didn't see my hand earlier. Anyways, I just wanna just give my thanks to the leadership of our former mayor, Ben Wilner, who brought this forward to us quite a while ago, many of us here on the council supported contributing and supporting this gym that's part of our neighborhood. I can tell you my kids have grown up at this park, and it's it it certainly is a special place, and and I'm glad we could have been a part of it. Thank you.

Thank you.

Well, you heard from the the group, and I will be there this weekend with my three year old granddaughter, so you'll you'll hear hopefully, I'll see you out there. Thank you, mister Scarborough. Thank you very much. Appreciate it.

Thank you.

Alright. Next two items for our presentations would be the recognitions of the historic properties in the town. This time, I'd like to recognize council member Ellen Andean Keller, the liaison to the historical advisory committee to introduce these items.

Thank you, mayor. Let's see here. So the the town council created the historic recognition program in 2018 to allow residents to apply to the historical advisory committee to have their homes recognized for their unique historical or architectural character. A historic property must meet one of the following four criteria. One, be at least 50 years old or two, represents an important part of the history or architecture of the town.

This recognition does not impose any new regulations or future development restrictions on the recognized property. Tonight, the historical committee will present their recommendations to recognize two properties. Mayor, I would like to introduce historical advisory committee chair, Katherine Kaufman, to present the committee's recommendations.

Thank you, council member, Andean Keller, and thank you to the mayor, thank you to the vice mayor, and all you other council people. Especially thank you to Duncan who is my liaison, and my new liaison is Ellen and Dean Keller. And about the the railroad park, I just wherever you are, I just want you to know I have to go there every week because it's just the top thing for my grandchildren, and I babysit them twice a week. So, like, fine. We'll go to 03:00.

So they love it, so I just wanted to say that to you. Thank you. We I really appreciate it. Now on to business. On 10/15/2015, the Ginny Simpson presented her home located at 6022 North 51st Place to our committee for consideration to the historical property recognition program.

Jenny has contributed significantly to the town serving on town council, the planning commission, the Barry Goldwater Memorial Committee, and the historical advisory committee. And there may be things that I missed. Forgive me, Jenny, if I forgot anybody. The history of the Simpson home dates to the early nineteen sixties when Ginny's in laws, Adele and Fred Simpson, purchased the property with the intention of building their winter home for the family. At that time, George Christensen was actively building homes in the Paradise Valley.

In Paradise Valley, particularly several on 51st Place. Adele Simpson was drawn to Christensen's distinct architectural style and commissioned him to design and construct their winter home. Scott Simpson, Ginny's him Ginny's husband, spent much of his youth in this home and has always and always aspired to own it one day. In 1991, Ginny and Scott were able to purchase the home from Scott's mother, making Paradise Valley their permanent residence. George Christensen built the house in the territorial style, utilizing adobe brick.

In the inside, he used tongue and groove wood boards and for the ceilings and adobe bricks mat or matching wood boards on the walls. Christensen's appreciation for artisan craftsmanship is evident throughout the home. Christensen hired Mexican craftsmen to create intricate details, including carved niches for Santos and traditional corbels in the archways. The artisans even carved even hand carved a wooden Santo on the cover of the fuse box. Christianson's Christianson imported an arched window from Mexico City, and he built custom wood panel shutters for another window.

The living room fireplace features a hand carved wood mantle, while the dining room fireplace is elevated so the family could feel the warm fire while enjoying a meal. Christensen installed beautiful ironwork on the windows for protection when the home was vacant. Because the property was a has a natural royal running through it, Christensen made a bridge to across the pool across it to get to the pool area and what would later become the guesthouse. An uncommon element is the kitchen skylight added at Adele Simpson's request to improve the lighting despite Christensen's reservations regarding its modern appearance. When Ginny and Scott moved in, they made their made several enhancements in the home, including the replacement of cement floors with satillo tile, adding additional skylights and more iron work for the windows.