City - Special Meeting

good morning special session mayor and city council meeting 10 a.m wednesday july 8th 2026 city hall council chambers call this meeting to order please rise for the pledge of allegiance Okay, this is a public hearing. Number one extension of the alternative expenditures limitation for home rule. We have a presentation. Go ahead.

Please introduce yourself.

Before that, I want to introduce, we have our newly assisting city manager, Mr. Pontes. Welcome to the city.

Thank you, Mayor, members of the Council. I'm glad to be here. It's only for a few months and that's what it will be. I retired as a city manager from many years in California with my privilege to lead the city for a total of about seven years here. I'm glad to see a lot of the staff that I worked with before and it's my privilege to assist the City manager with operations and we're going to work together as a team to ensure a smooth transition during this period in which you are undergoing a lot of changes. The item today is obviously the debt limitation home rule. That's a very important function. If I may add just. 30 seconds of commentary. There's 90 some cities in Arizona, about 95 and about 20 percent are home rule, also known as charter cities. The rest are towns. It's very important because Article 8. of the state constitution allows this format. It's what you have. It's what gives you freedom. It's what allows you to set your own vision. That is why Tucson, Phoenix, Mesa, and the big cities maintain this. the public at times you vote for it and they forget how important this is in establishing your vision, Nogales' vision, instead of having the state do it for you. So I urge the public to support this council in this very important endeavor. Thank you, Mayor, members of the council. Thank you, sir.

Good morning, Mayor and council. My name is Sergio Correa. I'm the interim finance director. And as you see, we have the presentation here for the. Alternate expenditure limitation next place. What is state imposed limitations initially excuse me initially approved June 3rd in 1980. the purpose is to control expenditures of local revenues and limit future increases in spending to adjustments to inflation and population growth. Expenditures are calculated based through an adjusted base limit, changes in population and inflation since the base year. The base year is 1978 through 1980, and it's at 3,245,375. The population at the time was 11,740. The municipalities continue to collect revenues, however, the law places restriction on spending.

Next, please.

What is a home rule election? Allows the city to adopt an alternative expenditure limitation with voter approval at a regular scheduled election. Is in effect for four years, succeeding fiscal years. Voters must approve a home rule prior to the first fiscal year in which applies, which will be for 27, 28 fiscal years. State law applied to all cities, Arizona cities and towns. It's approved by the Nogales voters every four years since 1998. Two public hearings held before elections with city council and mayor's support. 49 cities have passed home rule, and if home rule does not pass, issue cannot be placed on ballot for at least two years following. Allowed exclusions are HEERF and overweight fees, principal and interest payments, grant funds, and Nogales Housing Authority. The meaning of a yes vote. Existing city services continue no impact and current services provided to the residents and businesses Local budget control continues and not a tax increase revenues currently collected will continue to be collected to pay for existing city services The meaning of a no vote I If the home rule does not pass, existing city services essentially cut or might be eliminated, such as police, fire and building inspections, parks, recreations and libraries, water, sewer and trash services. The local budget control replaced by the state budget control. Same revenues collected and expenditures reduced to state-imposed limitations. As you can see in front of you, you have the numbers for the total expenditures under the state-imposed would be, for 27-28 would be $36,531,278. Under Home Rule, we'll be at $64,564,510. That's a difference of $28,033,232 that we would have to reduce our expenditures. For 2029, it's $37,781,626 under the state imposed. Under home rule, it will be $67,252,913, difference of $29,471,287. For fiscal year 2930, it will be $38,371,233 under the state imposed. Under home rule, it will be $70,099,661, a difference of $31,728,428. For fiscal years 30 and 31, under the state imposed, will be $38,862,366. Under home rule, we're at 73,110,862, which is a difference of 34,248,497. Currently for our current budget, the general fund is 51,812,769. Sewer is 4,851,510. For water is 4,582,168 and for sanitation is 3,943,306. Total of those funds is 65,189,753. A yes vote again is continuing the existence of level of the city services, local budgetary control and not a tax increase. A no vote means we'll have to cut about 28 million, about approximately 43% of our city budget. A significant reduction may affect public safety, parks and recs, and libraries, the water, sewer, and trash services. And that's just in Spanish.

Go ahead.

Go ahead. Good morning, everybody.

Yeah, Mr. Estes basically answered my question. So today we're not like we're spending. We're proving spending the money that is already in the budget. Okay, so so we're just continuing. It's a continuation. of what we, the voters approved back when they voted for the home rule.

Correct. Okay. And once this gets up, if it passes in this election, then it continues again from the calendar year 27 forward.

Which would be on the November ballot?

It will be in the November ballot.

Of this year?

Correct.

Okay. Okay. Mm-hmm.

Go ahead.

Mr. Estes, since the election is in November and this will be on the ballot, is this on a calendar fiscal year end or, I mean, on a calendar year or a fiscal year end? So, you know, we would have until December with the current home rule, right? Yes.

Thank you. Any other comments? Go ahead, Mr. Doyle.

Since legal is here, just kind of you can maybe freshen up to what extent we can, I guess, promote or or try to get information to the public to vote for the home rule? What are the steps we need to take in order to get the public informed so they can support this measure?

Go ahead. Mr. Mayor, what we've done in the past, we've placed information on the website pertaining to home rule and voting yes or no. So we could do that this year as well.

Okay, anybody else? I think we have a second meeting on this, right?

Mayor, the next public hearing is on the 15th.

Okay. We hold off to voting until then, Mr. Estes? Okay. Okay. And I'll ask anybody in the public wish to talk about it, make a comment on this item. Ms. Montiel, you have one more question, go ahead.

Mr. Estes, if I could ask you, so do we already know what amount we will be asking the public to approve? I guess what limitation in terms of expenditures? Thank you, Sergio. Wow. Okay. Okay. So it's right there on the very end. Okay. Thank you.

It's a big difference. It is a big difference. On the comparison, you know, Going to the permanent and the home growth. What would be the difference?

The difference will be if it doesn't passes, you still collect the revenues that you normally would. But you cannot spend more than what the in state limitations are. By passing it, then it just continues, you know, you normally. You know, I explained when we were doing the budget is that it's a difference between having a budget and amount of the actual expenditures. The numbers above are actually made from the actual expenditures. Even though, as you can see in the budget, it looks like it's 65Million for those funds. About 58 to 60% is basically what we end up spending out of that. But. you know by having to cut it 28 million 29 million the following year so i mean those are the numbers that you would have to look into it if it if the voters don't pass the home rule um

Okay.

Thank you, sir. But I think it's a win-win if we got to go for it. Okay. With that said, anything else, council or legal? Go ahead. Please, yeah. Okay, thank you. Any other comments? Then I move to adjourn this meeting.

Second.

All in favor? Aye. All opposed? Meeting adjourned. Thank you. You too.