Town Council - Regular Meeting

Well, good afternoon, everybody. The meeting is now called to order. Will the clerk please call the roll? Mayor Stanton? Here. Vice mayor LaBelle?

Here. Council member Han Dean Keller? Here. Council member Liepman?

Here.

Council member Moore? Here. Council member Pace? Council member Thomason? Here. We have a quorum.

Thank you. As a reminder, this meeting is being streamlined live on the Internet and will be archived in the town's website for future viewing. The first item on the agenda is a study session. These items are scheduled for discussion among the council staff or their designees. Votes will not be taken on any of these items at this time but may be scheduled for 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 begin shortly after 6PM. Public comments will also be invited when the future agenda for action. There are two study session items tonight. The first is a receiving of a legislative update from Doug Cole and Amy Revenar from our lobbying team.

Yes, sir? Okay. Thank you, mayor. Good afternoon, mayor and council. For the record, Doug Cole with, High Ground Public Affairs, your contract lobbyist. It's good to be here, and, I'll I'll be going through I'm not gonna go through all 15 pages of of this document. I know you have other things to do, but, we'll, take any questions on any item that that you or the council may have. Also have for the public that's here in the room, there's copies on the table if they would like like a copy of of this also. So we'll be going through it electronically. But anyway, today is the sixtieth day of the session.

It seems like it's the two hundredth. I as you can see there, that's a number we've never seen in the history of Arizona. 1,966 bills have been introduced. Wow. It's never happened before.

And and having this is my thirty fifth year of due of being down to the state legislature and it, is not I I don't think that's a good thing. It's it's, it's a lot of a lot of bills, like, the overwhelming majority will not be heard even and they won't be even assigned to committee until the final day of session. So it's it's, takes a lot of money and a lot of staff time to create all these bills, and it's a shame that the number just keeps going up, up, up, and up, and up. So just wanted to point that out. And also in the House of Representatives for the first time in the history of the state of Arizona, we moved out of the 2,000 series because as you know, all house bills start with with a two, all senate bills starts with a one, we moved into the four thousands.

So as you will see here on this list, you'll see house bill 4,000, etcetera, for the first time ever. Again, they had to reprogram the computers and everything else and I you know, it's it's a shame that we're dealing with so many so many pieces of legislation. So I just wanna to level set that. As you know, our governor has, in the three years this is her fourth session and her previous three years has set has set records for vetoes. Legislature has only sent her 15 bills so far, and she's already vetoed 12 of those.

And two of those bills are are the the first two bills that you see there on page one, which was the conformity to, the federal h r one, the big beautiful bill to conform our state revenue department revenue tax code with the federal IRS tax codes. And so we still have not conformed. This normally is a administrative perfunctory exercise that we do in the first month and a half of of session to conform every year with the feds and now it's turning into a complete political football. And I don't think it has anything to do with it. This is a an even number year with a general election happening in November.

I'm joking. Probably has everything to do with that. But so taxpayers, your constituents and and have are facing the prospect of filing their state taxes and having to file amendments if they itemized, and this really only affects people that itemize. If they itemize finding themselves having to spend more money for your accountant or your tax preparer preparer and after April 15, do your taxes over again for the state because we haven't conformed yet. So, yeah, it's it's good.

I see a lot of shaking heads here at the table. It's kinda like that's how we are too. So with that, if there's any questions on those things, I'll move on to city specific issues. And you know, we can't have it can't be a a legislative update in the town of Paradise Valley without going to first short term rentals. I I say with all affection.

Yesterday, and it's it's kinda nice. There's there's a lot of things that have happened in the last forty eight hours. So there's really only one STR bill that's moving, and this was representative Bliss. She's from Prescott. As you know, the her district, which which covers Prescott, Sedona, Prescott Valley, etcetera, all of her mayors have been working with her over the interim to try to put some put some more guardrails because the the this town has been the forefront of leading those efforts since the the original 2016 law was passed under the Ducey administration to put even more guardrails around STRs.

And her her original bill was a lot more expensive which limited the numbers in the town, which limited where in the in the municipality they could go. I'm I know it's shocking that Airbnb didn't like that and neither did neither did the realtors, Arizona Associated Realtors. So the bill that was introduced that was heard on the floor yesterday in third red, really kinda rolls back a lot of that stuff, but it does do some substantial, things such as it allows for a maximum overnight occupancy. As you can see, there are two adults per sleeping area plus up to two additional persons, not including minors. So what that does is really puts a puts a trying to stop overnight party houses, bachelorette, bachelor parties that go on all weekend that disrupt neighborhoods.

So and then and then it also changes the violation, the three violations from twelve months over twelve months to it doubles it to twenty four months. So I really do think that this is a good some good legislation moving forward. They didn't get everything they wanted. That's not how the process works. And maybe, you know and those of you that were at the league conference last in back in August, you know that this was a resolution for the league and the league was working with representative Bliss to get this done.

So the leagues you know, we all know that it takes compromise. So the league agreed to this compromise. It was passed just yesterday. And as you can see, it it passed with both republican and democrat support. So as this moves over to the senate now, and if it continues to have bipartisan support, I'm pretty certain that the governor will sign this bill. Any questions on this one? Alright. Oh, we have one question. Yes. Yes. Councilman Lehman.

Thank you. If this passes, will we need or want to do any changes to our STR statute or do we already cover these things? It seems to me that I know we have a pretty stringent as stringent as we can STR regulation. I wonder if we would then consider taking up making it more stringent. Like, don't know if we now requires, we require sex offender background checks.

Councilmember Leitman, mayor, if this does passes, we'll be working with Christy Hillibert. She's our STR compliance officer to make sure that anything that's not currently incorporated is updated for council to review and approve to make sure that we are enforcing every area that we are able to to make sure that we maintain our strong record of STR management here in the town.

Wonderful. Thank you.

Another question. Councilmember Pace.

Alright. Thank you, mayor. Thank you, Amy. Thank you, Doug, as always for all the hard work you guys do. Following up on councilmember Leitman's good questions on how do we strengthen more. When you bring it back to us, there is one area of the state law we're not using right now, which was notification of neighbors when short term rental comes in. We've had a number of complaints in the last six months about that from residents that are unhappy with not being notified because they weren't watching what was being built or what was being implemented. And so there's complaints to the town right now about things being built, pickleball courts, and things being built right on the property line, not following the setbacks because they weren't watching it like that. They thought the town was watching it. So I would like to add.

So we are actually, enforcing and strengthening and using all the available tools for our residents, and that's the one we we did not include in the Paradise Valley, legislation that we did or our our code. So I would like to see us as a council look at that when we ever we get back to these, you know, presentations because that actually has not been adopted in Paradise Valley and Scottsdale did and others. But we did we missed that one. And I think we wait it's an experiment. It's a look back, but we've just had some recent issues with that again. And people wanna know if it's gonna be a short term rental next to them. So I would, for one, would like to see that discussed whenever we have this discussion. So thank you.

Thank you, council member Pace Mayor. I can make sure that that's included in the upcoming discussions if this legislation gets passed. If it does not get passed, we can take a look at working with our, STR compliance officer as well on those updates. Thank you.

Thank you, Amy. Go ahead. Please continue.

And moving on to Paradise Valley favorites, all time favorites, photo radar and LPRs. So I I think you've all, have seen I think it was, covered widely in the media, and working with many of you sitting here at the table from the manager staff to legal counsel to mayor and and many of you, council members, we have worked, to effectuate a compromise, as we have been faced with over the last decade or more of a complete ban of photo enforcement usage by anybody in the state of Arizona. As you know, last year, we were faced with an with an SCR that almost got passed. It it it came within two votes of of being enacted and would have been put to the ballot to completely eliminate the use of photo enforcement technology in the state. So recognizing that and that we have an election coming up, here and some some folks in the legislative process that are part of leadership wanted this done, that we needed to come to the table and sharpen our pencils and come up with some good ideas.

And so I'm pleased to say that HCR 2,004 and its its senate, mere sister bill s c r 1,004, are the exact same bills and they will do the following. And they will, I'm very certain that that will make the list that will make it to the ballot here in November 2026. So statewide voters in November 2026 would be faced with a question that if a municipality, has photo enforcement, a contract for photo enforcement in place at 12/31/2006, that they must go to the ballot in 2008 to their local voters asking if they want that local entity to continue using photo enforcement in that jurisdiction. So what that means is if the voters pat what does that mean for Paradise Valley? So if the voters in this November passed SCR 1,004, that's the one that will go up to to to the Secretary of State's office to be put on the ballot and be assigned a proposition number.

That proposition passes in November. Then you all in 2008, because you do two I mean, 2028. Thank you. Sorry. Yeah. Wait. I I don't wanna go back 2008.

Thank you.

Thank you. In 2028, you all the future council then will have to make a decision because you you will have a contract unless you plan on canceling your contract for photo enforcement between now and the end of this year. You will have a contract in place and you will need to make the option as account as a mayor and council, you will need to make make make the decision whether you want to put on the November 2028 ballot the question of shall shall the town continue to use photo enforcement? Yes or no? And then if the voters in November 2028 say yes here in the town of Paradise Valley, then you can continue to use photo enforcement as you do now for another ten years.

And then as that ten year tolls, then that council then will can make the decision whether whether they wanna put it on the ballot again. If they decide not to, then they can no longer do it. If they wanna continue on, they'd have to put it on the ballot. If the voters say yes, then they get another ten years. So what does this mean for the town?

This means that we have if it passes, we will and and fails in in 2028, you you will have photo enforcement at least through roughly February, 2029. So that gives you quite the runway to plan for life after photo enforcement if you so choose. If it passes, as I said, and get you get ten years. If the if the proposition would happen to fails here in November statewide, then I think that we, those of us that use this this technology, the six municipalities right now that have contracts, they can make a good argument. There was a ballot measure on in November 2026 that that basically would have very much limited and and added a, you know, each local entity gets to choose and the voters of the state decided to keep things as it is, which is a de facto.

You can make a very, very logical argument as de facto support of that technology for for traffic enforcement and safety. So that's where we are. I'm happy to take any questions on that.

Doug, I have a question. It's it seems like it's pretty obvious but I just want clarity on it. If a municipality has a contract with photo radar company and they wanna change companies, they can do that at any time as long as they have a contract.

Correct? Correct. There just needs to be an active contract for photo enforcement as of 12/31/2026. Thank you. Other questions?

I must say that I want to thank, again, staff, legal staff. It was quite a lot of work there for quite a while. And I also wanna thank our five fellow municipalities. And just for the record, that's Phoenix, Mesa, Chandler, Tempe, and Scottsdale for standing by and everyone stuck together. And then the league also, I think, got a win too because those that have been sitting on the fence that may want photo enforcement, they have until the end of the year to enter into contract for this technology if they wanna continue on.

Because if you don't have a contract, let's say let's say, you know, Mayberry, there is no Mayberry, Arizona, but let's say there is a Mayberry, Arizona and they decide that they don't that that they don't wanna have it. They could just stay where they are right now. But if a future council say next year wants to have it, well, they're out of luck because they don't have a contract. So think we'll see a lot of municipalities maybe just go ahead and do a contract, to keep their options open moving forward. Hope that answers your question there.

Just a quick point of note, the town was supported strongly in this legislation by senator Karen Warner as well.

I did say apologies.

Oh, apologies. This legislation was also assisted with our l d four senator Karen Warner. She definitely helped us get this moved along.

Yes. I would like thank you, Amy, for bringing that up. This would not have happened without the tenacity of of senator Karen Warner. She worked with senator Rogers who's been the the chief advocate for banning this technology, and she has a good relationship with senator Rogers. And senator Warner along with three of her colleagues were solid no's for a statewide ban if there was an option for local control.

Now if that wasn't on the table, those four votes would would, as they have in the past, voted for the ban. But since we had a viable option that everybody agreed to, they were noes on on the ban ban. Okay? And that allowed senator Warner to negotiate this this agreement that I just explained to here here. And senator Rogers realized that this was a good compromise.

Also, representative Grass and and representative Carter were were kept in the loop and represent representative Grass was the one that was advocating for the ten year renewal, which everybody thought was a good idea. So so I'm really proud and and, of our l d four, delegation. I don't think we wouldn't be sitting here with this. We we we would be faced with a outright ban on the ballot had they not stood up and stood for the town. And you all have worked with them on this issue over the years, so thank you very much.

Thank you, Amy, for bringing that up. And also representative Theresa Martinez, she also agreed whatever senator Rogers negotiated with the senate that she would do in the house and she kept her word and has done the same. Okay? So this will be in committee next week, the SCR in the house transportation committee as you can see and we will be there. I it'll it'll just sell through because they've already heard it. At this point, it's procedural. Alright. I guess the shortest photo enforcement budget discussion we've had a long time. LPRs, I think we need to go back up up to LPRs. Yeah.

There it is right there. Alright. Let me make clear that the the the photo enforcement issue does not affect LPRs. It's separate. The bills have been written to keep them separate.

So senate bill eleven eleven was run through committee with the strike everything amendment that that the the Arizona Chiefs Association working with our chief and other chiefs supported. It just put some guidelines around LPRs right now. There are no guidelines and statutes around LPRs. Was a compromise. Law enforcement supported, league supported, everybody supported, and then the the wheels came off in committee of the whole.

Senator Hoffman, was was the chief opponent to this to this, bill. I mean, it was amended in Cal, but right now there's not the votes to pass this compromise. And it'll probably work through the process a bit more, but because of all the controversy now related to this bill that has been that has been created starting with senator Hoffman's floor speech. I don't know if we're gonna see an LPR bill go through, which net effect for the town is just like things are right now. So it's there's no no harm, no foul.

Where where there would be harm is is eliminating LPRs or putting putting a statute in that would be so harmful that that we couldn't use it. So I think that this one's just it's a shame because senator Payne really worked hard and really listened to to the chiefs and listened to the league and and our concerns and amended the bill to make it usable for us. And so it's kind of in limbo right now. Any questions on that one? And I wanna thank the the chief and his department for being so helpful along along with our legal team.

Alright. Zoning. Mayor, I should be done here in time. So unless we get bogged down. I know you got a lot of other things going on.

Doing fine, mister Cole. Okay. Thank you.

Zoning is things that we watch pretty closely as you know. Oh, I'm sorry. Councilman Levin.

Thank you. Did I I'm curious to hear about senate bill sixteen twenty four photo radar enforcement civil penalty where that's going.

Oh, thank you.

I think you got skipped.

Yes. Yeah. Yes, ma'am. Thank you. That was good.

That that makes that's a senator Gowan bill that makes photo enforcement tickets to be civil penalties with no points. This is a bill, you know, this this bill literally comes around in some form or another almost every session of late. It's made it out of the senate. It'll be in the house transportation this week. This is a hard one because for us with our focus on keeping the technology and trying to drive home that we do this for safety and this is not a revenue generator for the town which it really isn't.

Being proactive being really active in in opposition to that when we were trying to come to a compromise is kinda sending a little bit of mixed messages. Others have been engaged on this. Obviously, it's not our favorite bill, but our focus was keeping that that technology on and it remains for the session for that because remember the session is far from over. We'll continue to watch this. This may be a situation where it goes through and may receive a gubernatorial veto.

But, you know, if any one of you or or the town wants to take an an official position at this time on this bill, we can do that. But that's kind of kind of where the six photo enforcement entities, it's kind of where where we've landed with it right now because our focus has been preservation of the technology. Because if this is just a regular bill, always can, one, be changed in the future or again, we have a long way to go with it even though it's it's crossed over. So I hope that that I'm just a lot of this stuff is strategy. Thank you.

Very good question. Alright. Zoning. Oh, joy. Let's just start with the one that dealt probably more directly with the town, is 1473, the assisted living. I sent all of you an update on that a couple weeks ago. This is an issue that we worked with town council on getting amended. Again, this this process is is made for compromise. You don't win everything. I think we won two out of the three on this one.

And I think we're we're in the best spot we can be right now and I would turn it over to Amy, the town manager or the town attorney if you wanna comment any further on this.

Yeah. Thank you, Doug. This bill in particular was a little bit tricky for us because we had just had the recent vote here at council in January that was a unanimous vote on changing the capacity for assisted living homes. This bill was run-in direct response to that action taken here in Paradise Valley. So the state gave us the ability to reduce that capacity and when we took advantage of that opportunity as a council and reduced capacity, they then turned around and said, well, we want to take that back.

We changed our mind. Unfortunately, the way that the legislation was written would be quite harmful for Paradise Valley in a number of different areas including impacting our zoning. So we had to go back and renegotiate that and one of the items that we were not able to preserve was that capacity, reduction that we had approved in January as a council. Unfortunately, had to give that up but we were able to protect the town zoning and eliminate preemption there as well as along with some health and safety standards that would be impacted for the town if this were to have passed in its original form. So we were thankfully able to work with council and work with high ground to negotiate some of those changes to protect two out of the three areas that the town was gonna face impacts on.

One of the things that we had to consider throughout these negotiations is that our governor has a social service background and it was extremely unlikely that we would have been successful in securing a veto for the legislation in its original form given her background in her priority areas. We also did not have significant support from other municipalities of the league in order to pursue a straight veto from the governor. So we unfortunately had to enter some negotiations, but I think we did come out ahead on this one in two out of three areas.

Any questions on that? Thank you. That was a good recap of of what happened. Again, a lot of work and and a lot of support by the town staff and and many members sitting around the table. So thank you.

Lee, these are tough ones especially when they're directed at at you specifically And and you're not it's not a league wide issue, so we're kinda out there by ourselves. But the the two issues that we did preserve turned into a turned into an issues that that affected everybody. So at the end of the day, we we enjoyed, our fellow municipalities support on this. And as you can see, the vote count was sixteen eleven on it. We'll we'll see how it proceeds in the house, and it'll be we're waiting for it to get on a house government committee agenda.

I would also like to point out, I should have done this at the top. We only have two weeks left of committee hearings. So a lot of these bills that you see, like and this one signed to house government back on March 2. That was ten days ago, and it's still not on a house government committee agenda. They only have two more government and and the house government committee agenda is already out for next week. So they only have one more week, one more agenda to get on. And then for all intents and purposes, that bill would be dead unless unless they they happen to get it assigned to the appropriations committee which meets the following week. So, we're kinda running down running out of runway here for a lot of these bills. Alright. Is there anything else?

There's numerous, probably about four other ones here. If anybody has any question, I I would like to move on to to an issue that is of great concern for us unless there's anything more in zoning.

I think we have a question, council member, Andy Keller.

Thank you, mayor. Thank you for your presentation, both of you. Just a question on the h b forty thirty with the rates, fees, taxes

increase. Yeah. That's the one I was getting gonna get to next.

Perfect. Because we have something on the agenda in

study session. Yes.

Yeah. Okay.

Thank you. Yeah. That's that's then in the we're moving into the taxation category.

I think we have a question from the vice

mayor. Okay. Sorry. Yes. Vice mayor.

Thank you for all that. It I know it doesn't directly affect Paradise Valley at the moment, but just as a defense against state preemptions and because we were specifically asked by our l d four rep, Matt Gress, to support this officially, house bill twenty three seventy five housing zoning historic district. It's it's huge in my, overall, you know, what I'm keeping my eyes on as far as, you know, government overreach and and local control. Is there any update you can give me on that, or are we officially supporting them in their work there? That's it. Thanks.

Thank you, mayor vice mayor. This this issue, we we have not, on behalf of the town, signed in on in support because we don't have any classifications of that in the town. But if you want, I can I can engage on that if if that's your your will? Individually, you also can I do? Yeah.

Yeah. But I think there is a lot of support kinda especially coming out of the the city of Tucson, Glendale that have historic districts, and historic neighborhoods, along with city Of Phoenix. Tempe really would like to to see this bill go forward. It still has a chance. I mean, it's it's it's ready it's on it's ready for third read.

So, for some reason, the house and senate decided to take today off. Today was a workday and so they gave themselves a four day weekend. So that's really pushing things off. So if it's not on a third week calendar early next week, it's gonna be in trouble because then it's gotta go over the senate and get assigned and then and then get on a senate calendar for the following week because all the agendas are already out for next week unless unless they amend their agenda. So I think, mayor, the town attorney would like to talk about 12:41. Is that correct? Oh,

boy.

Okay. Thank you, town attorney. Alright. Let me I'll I'll explain what this bill does if I may really quick or do

you wanna do it?

No. I was just gonna tell Duncan if he had to change the screen.

Oh, okay. We're on page five. Top of page five. So this is a bill that was the genesis of this bill was was brought out by by, the homebuilders. There is an issue going on that cities and some cities and towns aren't going through the building permit approval process fast enough.

And there's some been some discrepancies according to to the proponents of this bill, that that maybe we had to do what other states have done and allow private permitting on an on on a limited basis to help move properties along, mainly stick built houses, site built houses in the process. And this has turned out to be quite a controversial bill between the cities and the home builders and and the and there is an industry of private permitting firms about whose best interest is this. As your building inspectors are here in the town, they they work for you and they work for the citizens of the town of Paradise Valley. So their best interest is of of the people that live here in the town of Paradise Valley. The the league in their testimony brought up whose whose is this private permitting's best interest.

Who's paying their bill or public safety? So that's kind of the argument going on here. What what the league has felt is going is going on is is a lot of the builders are facing labor shortages because of things going on on the national level. And it's making it more difficult to to keep product moving it along. And inspectors are finding things aren't aren't being done correctly.

So it's not so much they're not getting to it. It's just that they're getting more red tags or whatever color tags that municipality uses, and saying, no. This wasn't done to code. So that argument's being played out in public. So as you can see, it came out of the RAGE committee. We like to call it that, regulatory affairs and government efficiency. It's just it's a good acronym. The out the RAGE committee, five to two, lot of spirited debate by the league and industry. Came out of committee the whole back on February 24 and has not moved because I don't think it has the votes. So I hope that and a long explanation. It's interesting bill. A lot of people are talking about it.

Any questions? I think council member Moore.

Thank you, mayor.

Doug, is that are they talking about, plan review or they is is it actually inspections as well?

Inspections as well. I And

plan review?

Yes. I think so. I'm I'm

trying Yes. Remember. Do you

It would include both plan review and inspection.

It's all the way through the process.

Okay. Thank you.

Other questions for the team right now?

And I'm sorry. My hesitation was I was trying to remember if it was amended on the floor, and I don't think it was. Alright. Now back to councilman and Dean's question. There are two bills here that that, are of are of concern, to the town that are new. That's house bill. Here we go. Our first $4,041.30 and HCR $20.52. They are exactly the same bills. And because you are are so used to photo radar prohibition, as you know, they would run the the the statutory version and then they run a referral version.

This is the exact same thing that's going on here. So this is a bill that has been introduced by representative Justin Olson, who's chairman of the House Ways and Means Committee, also used to be on the corporation commission. East Valley legislator does a lot of work in the tax realm historically. This is being promoted by the Free Enterprise Club and others, and it is a very problematic bill for municipalities. The obviously, the one we're more concerned about, having this governor in the up on the 9th Floor is the HCR.

Both these bills moved. We've been on your behalf and we've been working hard with the league. As Amy can tell you, there's been a lot of lot of lot of meetings and Zoom calls, etcetera, on on these two bills, all hands on deck. It was amended yesterday in committee of the whole, mainly addressing, some of the bond issues. Now the amendment yesterday at allows the ad valorem tax to be new ad tax to be, an ad valorem tax to be raised to service bonds.

So that made it a little bit better, but this is a huge preemption. And it's really getting into what you guys are gonna do after I'm quiet here in a few minutes, gets into your budgeting. And this is all hands on deck for all 92 municipalities in the state and all 15 counties. We are aligned with the counties in this. We are optimist optimistically confident if if the minority party holds.

We think that we have enough of the majority party members to stop this on the floor, but we'll know that next week if it is put up. These are this is one of those bills where mayors, where county supervisors are talking to to leadership, etcetera on. And this has all really come into a a huge food fight just in the last week or two. And I think we're making good headway, but I would recommend, mayor, that the town that all I would ask that all of you send emails and and, sign in on RTS, in opposition to these two bills. I have already obviously done that, because this is a this is an easy one.

It's it's a huge preemption and makes it very difficult for you all to budget. So with that, I'll turn it over to Steph because I'm sure you all have a lot to say about this also.

Yeah. So we were waiting to see the outcome of the amendment yesterday. We were hopeful, that they would take into consideration a lot of the things that were negotiated with them, with the league. At the end of those conversations, it sounded as though the sponsor was much more receptive to some of those changes and then the amendment as presented did not include those. So despite the fact that it was amended, it is still so significantly problematic that we will be asking counsel to sign in as opposed to both of these pieces of legislation.

We will also be sending out talking points that you can use in communication with legislators, LD four and others, so that we can continue to push against these two pieces of legislation because they are significant preemptions to the town's ability, to govern our own budgets essentially.

And mayor council, I 100% support what Amy just said. This is something that I would that I would really particularly like to focus on our l our l d four house members at this point, because our goal is to kill this in in the house so it doesn't even make it wobble itself over to the senate at this point. So this is the timing of our legislative update and where this is right now, it's perfect. So thank you thank you for all your help.

Councilmember Lee?

Thank you. I have a question. I'm confused. You talk about the minority party and the majority party, and I see that this is sponsored by a republican. So I'm confused as to who's in favor and who's against, And I I know I'm against.

Thank thank you, mayor.

Thank you.

Thank you. Council member Liebman. Typically, on these horrible preemption bills, we see we see the the minority party, the democrats at this point in the state legislature. They usually stick together and support the cities and and and counties. And they usually oppose these things almost unanimously within their caucus. And so with with the one two vote majorities of the Republican party in both chambers, all you need to do is bring over a handful of Republicans. And if if if if the Democrats hold together and don't don't see any leakage, then we can kill that. And that that's what I was referring to. And I'm sorry. I probably could've just said that a little more eloquently than I did.

Okay.

Other questions? Council member Pace.

Thank you, mayor. So, Amy, you'll have those talking points to us by tomorrow maybe. Is it too soon or Monday? Just wondering.

I can have those pushed out by tomorrow morning.

And we should go talk to residents and try to get them to connect with legislators and start

using it.

Okay. We'll be on it.

Yes. Council mayor, council member Pace. And I would recommend that that, your emails be sent well, for the phone calls immediately, but emails go on Monday morning because if they they come tomorrow, they they'll get lost in the avalanche of other emails all over the over the weekend. And since they're on a four day break, they're probably really disconnecting and not reading their emails right now.

And we have a question from the vice mayor.

Thank you. Just out of curiosity on that bill, which definitely I'm opposed to, would that also include our enterprise fund, like our fire services? Is that is that something different? It would. Yeah.

Wow. Okay.

It's very mayor, vice mayor. It's very rare we see such a broad preemption. And no one can figure out why it's only through 06/30/2030. Why now? No one's been able to answer that question. It's it's again, it is it it it's stunning to me, what this does to counties and municipalities in the state of Arizona.

Council member Pace, did you have think I'm gonna

say is there's so many good things we have in the state of Arizona. And, you know, we're lucky with our utilities, and we don't have Texas here for that, which has been not good for Texas on their utilities. And we have such great design, and people come here for a quality of life and and their areas that they choose to live in throughout the state, whether it's rural or city and the HOAs or non HOA. I just don't know why people wanna blow it up, and I don't know what the, you know, it's hard for me. My family's been here since the eighteen hundreds, named Lee's Ferry.

I mean, I just don't get it. You know? And so I think it's good for all of us to reach out and remind people and and thank those that are willing to stand up together to oppose such drastic changes to a state that's run very well and doing quite well. So it doesn't make sense to me. And I'm not I'm not sure I'm understanding the other side of this equation. So

And I believe the county town attorney has a comment.

Mister mayor, members of the council, it the breadth of this thing is is pretty astounding because, you know, one of the things that I think has carried a lot of municipalities through recently is, the Wayfair tax changes to your your codes. Mhmm. This would prevent that. So, I mean, I think when people are talking about it, it's not just increases. It's, you know, when something comes along like that that no one could have anticipated, this would prevent you from taking advantage of that, and your revenues would just keep declining for no particular purpose, when it was allowed as a revenue source because brick and mortar went away and people started ordering everything at home.

So and the crossovers to things like development fees, they have an odd carve out for only certain development fees. Thankfully, that's the one the town charges. So we'll take our tiny little glass half full there. But you really it's written so poorly that I don't know what's outside of it, honestly.

Thank you. Any other questions at this

point or comments? So, again, I think we we have anywhere from five to eight members we feel of the majority party right now that are told us or no or leaning hard no. But it's really all hands on deck and appreciate anything that all of you can do would be great.

And we'll At this point, though pardon me, Doug. At this point, signing in an opposition, making phone calls, sending emails is what you need. You're not asking anyone to attend a hearing at this point? Okay.

No. No. Because it's this is floor now. It's a third reading issue. Mayor, we'd been hoped it had would not get this far, but mister Olsen's a very good bill sponsor, and has really been twisting arms. So, really need to activate any any, of your neighborhood groups, and you have many here in the town and they're very active and they're great at lobbying. So this is one of the ones I'm pushing the red button. Pushing the red button. Thank you very much.

Alright.

There is many other pages of of bills and I know I'm overtime by fifteen minutes and I apologize, mayor council. If there's anything else that you want to bring up on the general government, all kinds of other issues that that touch on municipalities in their in their operations. I want do wanna bring up the TIA bill because I know that's important to to our friends at to Rachel Satkow and her organization. That's the TIA bill. That bill actually is moving again, and that's on page 12.

And that's, house bill twenty nine fifty. This is something that's very important to Experian Scottsdale and that they have been working on for many years. And as you can see, it passed Cal day for yesterday. I mean, Monday. It needs it needs to be scheduled for a third read, but it is moving again because it kinda stalled out there for a while.

So we'll see. It's something that the town has representative Wilma has been working really hard on it and working with Scottsdale, experienced Scottsdale, and other other tourism groups across the state to get this done. Will it make it? It's got further and it has in a while, so we'll we'll we'll see.

Councilmember Pace.

Thank you, mayor. And thank you, Doug, for helping on this issue for everybody and and Amy. It's an important bill. Hopefully, everybody signed in on it on HB twenty nine fifty. I think over the years, from experience Scottsdale, they've tried with all the all the the groups together and the allies.

There was some misunderstanding in the past, people not understanding in the rural areas in particular. I think they've done a great job in helping people understand it's their own choice. It's their own community choice, Scottsdale's choice, Paris Valley choice. And it's a it's just a tool to add to the toolbox to help with tourism in their areas if they want to pull monies together and choose to do that to market. And with the planning ahead, we always believe in more tools than less tools to help an area and let them choose for themselves.

It's kind of like our local control. It's for them to choose. But, you know, we're we're seeing some downside on international tourism. So these kind of tools are really important for the future of our our state and economies, on the tourism side. So we hope we can get more people there. And it is getting further and they are doing a great job with their talking points and all the things. So so ask everyone to support it and keep spreading the word. It's a choice.

Well, mayor council, again, thank you. And I I and I know I've said it many times in this presentation today, but I our firm is not successful with without my colleagues helping me help you, and I'm not successful without you guys helping us be successful for the for the people of the town of Paradise Valley. So thank you all. And that includes

And, Doug, I think there's a question from council no. Council member Thomason?

Yes. Council member Thomason.

It's actually a question for staff and it takes us back to the short term rental issue. So mister town manager, have we had complaints from residents that they have not been notified of neighbor short term rentals? Are you familiar with any complaints that have reached your office or town staff?

Off the top of my head, I don't I can't recall a specific complaint of that nature.

Jen Blaire

smart base. Go ahead. Go ahead, mister Chang.

Yeah. I'm I'm I apologize. I'm just you know, I'm I'm thinking I we do don't get as many as we used to overall complaints. The ones that we do typically are handled by police because of parties or noise. As far as notification or complaint about not being notified specifically, I I mean, I I'll put it this way. If there was, it'd be more aspirational. I wish you could have as opposed to you didn't because to my knowledge, I don't think we have the authority under the under the code to do so. So

But Yeah. Question was something. So very specific. Have you heard from a resident who wished they had been noticed about a short term rental? No.

I'm Again, without going back and looking through emails, nothing jumps out of my head right now. I can't I can't think of one.

None none that you recall?

Not that I recall right now.

Thank you. And council member Pace, comment question.

Yeah. Sixty days, Jen Polera has made two or three written complaints to the town about the failure to be notified for short term rentals. It's in the Paradise Valley email accounts, and it's distressing to me that our council chose not to let residents be notified. We had a lot of them asked to be notified. They built allegedly it's a major company that was advertising weddings, parties, and events and they're advertising and the town has had to take action to try to get them to stop advertising that. They also allegedly built on the setback within where they're not supposed to on the setback lines to not get permits. She's raised all this a couple times and is happy to raise it again. She's just having a baby right now. But it's all in writing. It's all there.

So I would hope council member Thomson would believe that and support our residents and not restrict them from hearing Excuse me, mayor.

Would ask, pardon me, I would ask I think this subject is important, but I would ask the town manager to please check with code enforcement, check with Christie, and report back out to this body on if there have been complaints and how many there have been and what action has been taken from staff. That would be the way to take it to the next step. Council member Andy Keller.

Thank you, mayor, and thank you, Doug. I just had a question on the prohibition of cities, towns, and counties for regulating unmanned aircraft. And

can you just help me what page that's on in the

11.

Page 11. Thank you. That just helped me. And Duncan, scroll up to the right. Yeah.

There has been as as we have seen with the pro the broader use, let me just say, of of aircraft by many and the, you know, the availability of drones, etcetera, that this we usually get one of these drone bills a session, and and this is the latest one. And it it's really hard because of the balancing of of various first amendment rights and such that, you know, in operations. This is one that we've been watching. As you can see, it passed it passed out. It was kind of a weird vote, and I need to go back and see, what exactly remains in this bill and and beyond that.

I'm sorry, council member, Indian Keller. I'll have to get back with you on the details of this. Okay. My it is it escapes me. My mind gets a little little bit overwrought this time of year with Yeah. Legislative session. And we've been so focused on the bills that we have that we previously but I I can get back with you on more more details on this bill.

That'd be great. Like and also the air taxis, which I am

Oh, the air taxis bill is is something that is the senate appropriations chair, David Farnsworth, is really, really a proponent of. In fact, he's he's had demonstrations down at the capital. He has videos showing it. It's it's all very George Judson. It's pretty cool. Yeah.

We saw it at Barrett Jackson. Yeah.

It's really cool.

I don't know. I don't wanna see us lose our rights to regulate that, though.

Correct.

And he also the other thing is with the drones and the unmanned aircraft, it it seems like it's a privacy thing. I had someone that was operating a drone just this past weekend. It was sitting, like, right above me in my backyard.

Correct. And many events that you will see that people are flying them around. And it really is becomes into this bigger question that we get with LPRs, with photo enforcement, where's the careful balance for the public good. Law enforcement, is that law enforcement or not? And then, you know, we have a conflict now going on in overseas in The Ukraine and and in The Middle East.

And, you know, this technology that goes more to the flight systems, not what it's recording, but just how mobile these things are and how fast they are now. And it's it's an issue that's gonna continue to to be at the legislature. What you know, in law enforcement purposes, public safety, and just they have such good use, but where where's the line? Mhmm. And where's your you know, the one hanging over your over your house, you know

Yeah.

Watching what you're doing. And you don't know where they're looking at. They could be, you know, they could be looking way off in the distance, but they're right over you and you think they're looking at you.

So Yeah.

Alright. Well, thank you very

much. Yes. Well,

with that, vice mayor, did you have a comment?

A quick comment. I think to to your point, thank you, council member Randian. The the overlying concern for me in all of these, just to wrap it up, is is the preemption Yeah. Situation Yep. And local control. So regardless of subject matter, as we know, that's on our on our legislative agenda. Is that local control, local control, local control. So that's, yeah, where I wanna thanks. Very

good point, mister mayor.

Greatly appreciate this. Amy, thank you for all your hard work and the staff that's worked on this. Doug, thank you and the team at High Ground for continuing to have us as a priority and making sure we're updated. And you're doing a very good job with that. I think what I heard today would be great to have an update. He's saying about two weeks we should be better settled. So perhaps that's in writing to us. And then if there are questions, we can direct them to you or convene another study session if it's appropriate for whatever action you think this council should be aware of or potential action we should be taking.

Absolutely, mayor. Always happy to come. Always good to see you. And anything that comes up that any of you individually, Amy and I are we speak in the town manager and your town attorney, we're all good friends this time of the year.

Well, up

the great ones.

Thank you. Well, thank you.

Thank you all.

Alright. Thank you.

Good rest of your session.

Next up, we'll be discussing the fiscal year twenty twenty seven budget overview and capital improvement program and welcome our Chief Financial Officer, Leslie Duresh. Think we're taking a little little TV time out. Two minute two minute break here. Two minutes. Humble now. And, Ms. Dresch, please lead off the presentation.

Alright. Thank you. Tonight we're gonna talk about this is our first study session on the fiscal year twenty seven budget. We're gonna talk about user fees, oops, preliminary budget overview, and capital improvement programs. We have several more study sessions coming up to discuss other parts of the budget.

And I just wanna talk about how we determine what goes in which session. We do it based on, the availability of information. So tonight, we're doing capital improvement projects because we have that information now. We're I'm also gonna do kind of a preliminary budget overview, which I haven't done in the past during this session, because I want you to have an overall picture before you start thinking, yes, I'm gonna approve the capital budget or, yes, I'm gonna approve all the department budgets, but we'll get to that. We're gonna start with user fees.

So, actually, at this time, we don't have any proposed changes to our user fees. And, hopefully, we won't lose the ability to change our user fees because we are doing, more research on certain fees. And, if it we determine that we do need to make changes, we may bring them up in between outside of the budget cycle, so within the next fiscal year prior to the next budget cycle. But at this time, we don't have any to the master fee schedule. However, Fire Service Fund, which I'm gonna bring up every year, is not on the master fee schedule, but I just wanna remind everybody where we stand on the fire service fund.

So the fire service fees have been in place for a very long time. We have never increased the rates for the fire service fees, but the expenses increase every year. And the fund is no longer being covered by the current revenues. And so the town every year is subsidizing the fire service fees, and that subsidy will increase every year as costs increase. So I'm just bringing it forward in case you want to make any kind of decision on any changes that you might have for the fire service fund.

So, yeah, I think last year it was about one do I have it in there? About $1,200,000 that we subsidized the fire service fees, and it's just gonna continue to go up. So we have several options. We can do nothing and just continue to subsidize it. We currently collect about 3,000,000 in revenues, and the expenditures are about 4 over $4,000,000.

So, we can do nothing and just continue as we are. That's, we can raise the rates to cover the full cost because, an enterprise fund is supposed to be cost recovery. And we could do it in multiple ways. We could do it as a one time increase or we could do it, in steps to kind of soften the impact. And then, of course, it's up to counsel, but we could just eliminate the fees altogether and absorb the entire cost in the general fund.

So just to remind you what the fees look like right now, the current fees are an annual amount of anywhere between 360 to $600. And if we wanted to be full cost recovery, we would have to raise those fees to be between 600 and $1,000 a year. So they're not super high fees, but, you know, it depends on who you are, whether you can afford those fees. So I just want to bring this to your attention. And if you would like for us to move forward with a cost study or if you have any direction that you would like to give me, I would be more than happy to do more research on this or to do any take any kind of actions that you would like to see happen.

Thank you, miss Drescia. I think there are a couple of questions or comments. Councilman Pace.

Thank you, mayor. Thank you, Leslie, for bringing this up. Good charts, good tables. You do an excellent job. Question. So when we look at PowerPoint five and it shows us that our fire services fee is now in 2025 will be short $4,100,000 Is that what

I'm reading here? No, that's cumulative. Cumulative. Cumulative you're adding Right. So the over short was one point It's

$12,000,002 not just 1,200,000.0 And when this is being taken so when we use that, it's from the general fund, correct? Yes. So we're using it right from our revenue fund. So count, so if we have an increase in the expenditure limitation, if residents vote for it, we'll have more available to make sure we can cover the shortage.

Yes. And we're currently covering it within the expenditure limitation.

Okay. But we're getting close on the cap on expenditure limitation. Correct? We're going to cover that too. And when we get to this $1,200,000 it says inflation it's gone up with inflation. Is that right? Yes. That part of it? And that's been going up for a few years on inflation? Right. Okay. And then when is our contract to have to buy a new fire department truck? We always have to buy, I know, every few if you guys know any

Off the top of my head, I wanna say we buy every we buy a fire truck every two years, but we only have to do it every other time. So for us, it would be every four years. And I think we just recently purchased one, so we're good for a couple years.

Yeah.

But if we do, want to cover it, it is would be baked into that increased rate to cover those capital expenditures as well.

Right. And it's isn't our fire truck about 500 or 1,000,000 or something? It's a very high cost, seems to be. Yes. Is it $500,000,000? Okay. So when we're figuring we're getting close to the cap on expenditure, we've got this expenditure here. The question you're kind of presenting for options is do we just keep going like this and pay it out of general fund, which is what we promised the residents because it was always promised a long time ago that we would use, the bed tax and other things that we receive to help cover that for residents? Or do we make a policy choice and increase the fee? I personally feel like we should be paying it.

It's a service of the town. I think it should come under the, general fund and the increase for the expenditure limitation. We've talked about this for years. Something that started under Michael Collins and others that had promised that one day, and I think Jenny Simpson's brought it up, and others, Pam Kirby, that one day we're supposed to be paying it back for the residents. There's a lot of people who feel strongly about that, but I you know, I'm opposed to an increase. I mean, I know that's not what you wanna hear, but I think when we increase the expenditure limitation, it's fairly covered within that cap by to pay for for our residents. So those are my thoughts on that. Thank you.

Thank you, council member. Other comments at this point or questions? Council member Andy and Keller.

Thank you, mayor, and thank you. Questions. Is the purchase because I noticed that we're rapidly that we stepped up between '22 and '23, about a half million in loss. Is that from the purchase of the fire truck?

I believe we did purchase the fire truck truck around then, but we do have a contract with the city of Phoenix. And, basically, we're subject to whatever increases they have, and most of it is personnel costs. Yeah. And personnel costs have gone up significantly.

Right. Right. Right. Just don't have enough information to make a decision on this. I would need to see more info on the expenses and the revenues. What's our AR like? Is everybody on time paying? Do we is are we fully paid?

The most part, yes. I think we do we have fairly consistent collections.

Okay. Yeah. And then the old the old fire truck that we were replacing, what happens to that?

I would have to check, but usually those go off to auction and those would would be the recovery, the salvage value would stay in the fund.

It would stay in the fund. Because, yeah, I would need to know a whole bunch more information to make a decision on a 67% increase in fire service fees. Generally, I'm opposed to increases. So I just need I just need more information. Bless you.

Okay. So I'm thinking maybe a summary of the types of costs that we do every year and by, like, historical, maybe five years or something to show you what it is over time. Yeah.

And this this operates it's it's an enterprise fund, it operates as a business.

That was the intention of the enterprise fund. Yeah.

Yeah. So, I mean, I don't know anybody that would continue doing business with someone that raises their price 67%. But we live here, so it's kind of you're stuck.

Generally, businesses do raise prices with inflation, and we have never raised prices.

Yeah. That's true. That's very true. Well, I I don't know. I'm just thinking outside the box kind of ideas of, like, could the general service fund loan the money to the fire service fee enterprise fund? Yeah. And then we can collect interest, and then that could be expenditure limitation

free.

I have to check-in on that. Generally, we loan and it would be interest, but I don't think that's excluded from that's

not the

of that, so it's not it's internal, so it's not considered exclusion.

Yeah. I'm just you know, I've been I've been harping on this idea that we have so much technology at our disposal these days, and and sometimes what was the way we did it all the way in the past maybe could be modified and and and brought, you know, made quicker, made less expensive, that kind of thing. And maybe there's ways that we can figure out that we can eliminate the fire service fee and either absorb it or eliminate it. And I don't know. I need no more information than what I have here.

Okay.

Yeah. So

Thank you, council member. Council member Liebman.

Thank you, mayor. Following up on two comments so far, I would request that any summary of the that that council member and Dean Keller requested include the town's cost of collection as well as the cost of the unpaid uncollected. I mean, if we're netting, say, 90%, that 10%, you know, because people aren't paying. I'd like to see the cost of collection that we maybe could get rid of if we did something else. Another question I have is just generically, rather than set a specific fee, are we authorized because I'm concerned that we haven't raised the fee since 2013.

That means, literally, we're losing money as inflation goes up. Is there any way that we could, when we approve a fee, put in an automatic inflation escalator? And then to get really tricky and and what would happen if we put that escalator in and then this bill, whatever the number was,

passed. Right. Yes. I I believe that is an option to do, to raise fees with inflation factor in it. Again, we are subject to any legislation that passes to whether or not we can raise fees.

Because it it seems crazy in my opinion to have a flat fee. And I have one more point, and then I'd love to hear your answer. Lastly, thirty five years ago, I represented Rural Metro. And yeah. And back then, they were billing and collecting and before we they were billing and collecting directly from residents.

And I lived here for two years even though I was outside counsel, and nobody came and told me about it or put me on the bill. But which could have been a real problem because back then, if the residents didn't pay their fire service fee, either what usually happened is the fire company would come put the fire out anyway and then send exorbitant bills to residents. So first of all, we don't do that anymore, do we? We we put the fire out. Thank you.

Yeah. It would and then it ended up in litigation. But I'm curious about this promise of the mayor the prior mayor. To to residents to always cover the fire service fee, through the town budget, because I remember time when residents were paying it entirely on our own and the contracts were directly between us and rural metro. So I don't history is interesting. Anyway, so that's my comment and question.

And I do believe that town attorney has something to add.

Mister mayor, council member Leipman, one of the things that we would do, as opposed to a basic index, we would probably need to figure out the some sort of indexed amount based upon the IGA with Phoenix to see what the the cost increases have been, because they have not been cost of living or any published index. They're considerably higher than that, because they're personnel based and because, about two years ago, there was a shift from an average price per person so that a firefighter used to cost an average of whatever their whole system was. And now it's directly tied to the firefighters who are in our buildings. Okay. And those firefighters tend to be more senior and a little more expensive.

And so that type of shift, would have to whatever study we would do, and that's what statute requires that we do some sort of a study or report to match whatever the fee increase is. It would definitely need to take that into consideration. But you're right. If that bill were to go through

Yeah.

None of that would matter.

Okay. Thank you. I think my question I agree with you with respect to the fire services contract if we don't have any ability to push back on that. But generically, when we approve new fees, it would make a lot of sense to me that we put in an escalator. And I'm hearing that we can generically and certainly we can put in an escalator specific here to cover the increases on the contract. Because frankly, think there's a lot of waste and inefficiency in billing households, especially households who get bills monthly. I mean, and then you get calls when you haven't pay. I mean, it it it's I think we should be past that. So thank you.

Alright. Other comments or questions? Councilman Thomason. Vice mayor.

Thank you, sir. All, good points. I remember I think each year I've been here in my fourth year now, I've we've revisited this and with similar information and recommendations. My understanding over the years, everybody's explained it to me, the enterprise fund is supposed to be operating like a business.

Yes.

So this business will be out of business if it was a business. To your point, I understand the shock, but now it's passing the buck, passing the buck, passing the buck. So to make it palatable while also being fiscally responsible, which is what I'm hearing the residents call for, it doesn't make sense. You can't have it both ways is what I'm feeling my first impression looking at this. If this is not fiscally responsible to continue to subsidize unless we're agreeing to continue to subsidize and maybe there's another way to do it that's not an enterprise fund.

I'd also want if we're gonna continue doing it this way or if we can find, you know, another bucket to pull it from it, don't call it an enterprise fund and make have the residents understand it is a gift. They're not locally taxed and that's fine, but it's something positive we're doing for the community. I'm fine with that, but I'd like the transparency of calling it what it is, seeing it for what it is, and also understanding this is something, you know, for lack of a better term, nice that we're doing. Is it financially, you know, sustainable? I don't know.

I like the idea of an escalator clause, but not prohibitive. You know, if something's crazy happened like the city of Phoenix said that we're gonna double your fees, we need to be prepared for that too even if it doesn't match inflation. Another thought I have, you just said you wanted some ideas on here. I'm throwing them out now. Take it or not take it.

To me, a $33 a month increase on a home greater than 6,000 square feet, probably not gonna break the bank, you know, in my opinion. Now for the argument that seniors or people who've been in their home a long time on fixed incomes, I know there are many municipalities that have programs. You can opt out, you know, of you could have your property taxes frozen. So I think there's a lot of creative to to council member and Dean Keller's point. There's a lot of creative ways we can approach this that aren't gonna hurt people but also are responsible. So that's just a sort of a broad overview of how I'm seeing it. Not recommending recommending anything at the moment, but I I think it's a discussion that needs to be had. So

Thank you,

vice mayor.

Other comments? Councilmember Moore.

Thank you, mayor. Just a question for our town manager Chad. Do do we have a impact fee or anything that we do at new homes builds as part of our building permit that covers fire like other municipalities do?

I'll I'll grab that one. We only have sewer fee. That's the only impact fee the town charges. And that's because we have a contract with Scottsdale to provide capacity at their plant.

Okay. And who named, this fund a enterprise fund? And then decided what rules and that we follow on this enterprise fund.

I am not sure who was, here when that was opened up.

A little bit of history would probably help help me out some on that. The other question I have is most municipalities pay their fire service, ambulance, libraries, parks, all these other fees through their tax revenue. And that's how ours is paid as well. Right? We're we're paying this through tax revenue that we receive as a town. Mhmm. And It's a combination. It's a combination.

A combination of what we get from the The resident

pay Right.

Plus

You can call it a tax or you can call it

a a

fee, but it's

General fund general fund sources. Right?

Part of it. So, the rest of it is picked up from the large revenue that we maintain every year, and it seems to be not an issue to cover this. But who covers the, the loss on the ambulance that we have so that we could have better service in town. Same thing. Right? Our tax revenue covers that as well.

Right. There's no dedicated ambulance fee. It just becomes an expense that's taken out of the general fund revenues.

So I look at this myself as a as a tax revenue or a tax fee from that we provide a service to our residents and this and which is very typical with other residents. I'm not supportive of raising this to our residents who could be on fixed incomes and everything else. Not everybody in Paradise Valley can just take another bill on. So I'm I'm not supportive of this unless there's other reasonings behind it. I think it gets paid through the tax revenues that we receive just like every other municipality. That's my opinion. Thank you.

Thank you. Council member council member Thompson, any comments?

I fall in the looking forward to more information bucket. Thank you.

Well, I think, obviously, the group and I am in the same consensus. I think a historical look back and getting some details of how that occurred so we have that refreshed in our minds. I know it has come up in the past. I know we've gone through a lot of iterations negotiating with with our contracts. And, of course, we bought a number of fire trucks over the years.

I concur. I'm not supportive of raising the fees, but it would be clear from my colleague's comments that we should coalesce around some more concrete plans of what we could do and if and then what? If we do this, then what happens? What would be the timing? How would have how would we affect and and how would we how would we enroll un unfold that in front of the the community because this has come up different places for years.

I think we are clearly asking for a review and a refresh and options. I don't know if it's creative options, but I think it's definitely options that are logical, that have a long term positive impact that help settle this because it really does come up with some frequency to each of us when we're out meeting with residents, but also it has come up in the in the cycle of discussion for fees. So with that, I don't council member Leithman?

Thank you. I just wanted to clarify that I am also in favor of having the town paying this even though I asked my escalation question. Thank you.

No problem. With that, I think, council or, Leslie, if there's something else on this you wanna continue or or moving on?

No. But I will prepare more historical information for you, and I will, list out several of the options and ideas that you've presented today to see what that might look like.

Thank you. And that'll be a look back to of how we got to this location. Okay. Yes. Thank you.

Okay. So this is the part that is a little bit new. This preliminary proposed budget expenditure limitation schedule was not presented until much later in the budget cycle last time, but I did not want the council to feel blindsided by, looking at all the expenditures and maybe even in their mind approving them to find out that would be over the expenditure limitation. So even though I'm presenting this, just keep in mind that it is preliminary. We do not have a final expenditure number from the state.

This is one that they gave us. It is subject to change and it probably will change, but maybe not significantly. And the reason why I wanted to present this today is because, I believe the way we have things set up right now that we will not need to that we can cover all of our capital project fund, which will be we'll look at later on tonight, without issuing bonds or doing anything different and staying within the expenditure limitation. But I'd like to, take some time and explain the schedule for you and for maybe the public who might be listening or watching this so that they understand what we're looking at and my interpretation of what what this is, if you'll indulge me. Okay.

So I'm just gonna go line by line, and kind of tell you what I'm seeing here. The general fund is our departments. That is our operations. That's our police force, our public works, our community development, IT, all of that. It is majority personnel costs, but there are other costs involved in there.

We're only looking at a 1.8% increase in that. And that's with a raise, changes to health insurance, changes to retirement benefits. So it really is a very lean budget and a small increase for that. And tourism, which is the next line, that's the amount we pay experience Scottsdale. Because we've seen a softening of the tourism market, I'm holding that flat for the time being.

I am not seeing that increase. It's these costs are based on our bed tax revenues. And so, to be conservative, I'm just keeping that flat for right now. Now the general fund contingency, this is the amount between what we plan to spend and our expenditure limitation. So this is like an emergency fund.

So this going up by $3,000,000 is actually a good thing. It just means we have more room in case we, have unplanned expenditures or if we want to put something in public safety or if we have to cover for, any kind of change. So, you know, if you're looking at these percent changes, just keep in mind that the general fund contingency increasing is a good thing. Capital projects funds, that is also that is our biggest increase. We knew it was gonna be high this year.

This is just what is projected. This is what Shar and Sam are gonna go over with you individually, the projects tonight. This is what we're planning for fiscal year twenty seven. It is a big increase. Special revenue and enterprise funds. So special revenue funds are all of those funds where we receive revenues and they're restricted to a specific purpose. And that included in that is our HERF fund, is our highway user revenue fund. And that we get state revenue from that. And this is also where we have our pavement preservation program. And so we knew last year, we asked for an extra bump up to catch up.

And then this year, it's just kind of going back down to where we planned on it being. So you're seeing a little bit of a decrease there. And enterprise funds, those are our alarm, our sewer, and our fire services, and we are seeing an increase in those as well. So, our total planned expenditures for fiscal year twenty seven as it is right now is about $69,000,000. However, we can use exclusions to bring that down to our expenditure limitation.

And I'm just gonna explain a little bit what is included in those exclusions. That has gone up quite a bit from the prior year. So certain items are excluded from being subject to expenditure limitation, and that would be our grant money or any outside revenue sources that's not considered town revenues and also investment income. And if you recall from last year, we had a very nice return on investments. And so the most of this bump is due to last year's investment return.

So the exclusions are if we didn't use it last year, which we didn't. So if we had gone over the our plan budget, we could have used those investments to cover some of that. We didn't. So that got it carried over to the next year. Now we don't always have this, but we did this year.

So that's really what's driving that increase in those exclusions. And it's enough that I don't foresee that we're going to need to bond to cover capital projects. So, and in there also is our planned grants from the flood control district coming up this year, which is quite significant. And so, yes, our adjusted expenditure total, we always bring that up to the exact expenditure limitation with any changes going into that contingency. So if we are going down the road and we decide to add something or take something away that will directly it won't affect the bottom line.

It's gonna move that contingency bucket up or down. That's the plug. So I just wanted to explain that to everybody. And then if you have any questions about this particular schedule, I'd love to hear them.

I think council member Moore.

Thank you, mayor. Thanks. Lastly, on the capital improvement projects amounts that you have here, does that that doesn't include the credits because we paid a 100% of the cost of it and then get reimbursements from for grants like blood control districts. So have you accommodated

So it is included in there, but the offset is down there in the exclusion. So if we get 5,000,000 in grants, we're still spending it. So it's included in that 15,000,000, and we are planning on getting $5,000,000 in grants. So it's included there, but it's subtracted under the exclusion line.

Which allows us flexibility in our expenditure limitation cap.

Yes. Yeah. Thank you.

Other questions at this point? Councilmember Thomason.

Thank you, mayor. Thank you thank you, mister Resch. I very much appreciate you bringing this schedule forward at the beginning of this discussion. It gives context for the rest of discussion, so it's very helpful. I appreciate it. I know that I had asked for and you'd previously provided a year to date reconciliation on where we are expenses versus budget. And I believe we received that for the first quarter of the fiscal year. Has one been developed for the second quarter of the fiscal year and the half year to date?

Yes.

And have we seen it or is it coming?

I believe it's still coming. Okay. And I've actually done an interim one because our revenues were coming in a little bit lower than previous year. So I actually just finished one through, the February. So maybe we we'll maybe send out both of them.

Thank you. That's it, mayor.

Thank you. Other comments or questions? Councilmember Pace?

Thank you, mayor. Yeah. Good report. Good questions. Good information. When looking at this table, if I looked at fiscal year twenty six, we had a kind of a low contingency fund at 3,500,000.0.

Mhmm.

I think in the past, if if we had photo radar go away, how do do we estimate it's about 3,500,000.0 for the patrols to replace and do that?

The early estimate I received was that it would be if we wanted to do a full patrol, and I think that includes, like, 12 officers equipment, everything like that, that it would be about 3,500,000.0. That may have changed, and I don't have that, document right in front of me, but that was my recollection. Yes.

But when we're planning out, given the time frame when we're, you know, matching this to the legislative process and the votes that are coming, we have to think about that in looking at the cap that we have. Yes. Okay. And then when I look down, the debt service is what is gone and paid off. So that won't that's not in '27. Right? That is We're over with that. And do we break out the pension fund payments in here somewhere?

The pension fund payments are on the general fund departments because it's part of the personnel costs.

Oh, that's how you break it out. It might be helpful just to see what we allocate to that a little bit. But I don't want to mess up your accounting. But it is something we talk about a lot as

No. And that's fine. That will actually come out when we get to the department budgets in the next session. But I just want to may as well tell you right now that the actuarial report has come out from PSPRS.

Okay.

And we are over 100% funded now.

Oh, yeah.

And that actually has impacted, our operating expenses because if we're fully funded, we don't have to pay a catch up in our payroll. Awesome. So that will come out in the department analysis.

We can do more capital. All right. And then the other one on here, where'd it go? What would happen? Let's say we're in '27 and we get hit with a surprise or '28, whatever we are, and we get close to our cap, which we're getting close all the time, and we have something happen, which has happened in past years where we have an expenditure come in we didn't anticipate. That's a pretty hefty one and we dealt with this as a council before. If we were short, is that where we pull from our what happens to us? Like, you go into bad doghouse or what does in the world?

So we do have the full contingency to rely on. Yes.

I mean beyond

that If it exceeded beyond the contingency, there are a couple of different things. At any time, we can pull back on certain expenditures. We can pull back on anything we're not contracted obligated to. And I think there is some kind of an emergency. You can go over the expenditure limitation in an extreme emergency.

Okay. So meaning, like, when we look at the bills that we talked about that would limit us the, you know, I don't have numbers now. I'm gonna go blank on them. Yeah. Thank you. Thank you, counsel. Don't So if those hit, then on top of it, we had photo radar. And then on top of it, we had an issue, like we experienced before, with some of our contracts with hotels and and and and development. And if we were short, there I would like to see something about this emergency clause of how do we get to a 142,000,000. Is that where you're talking about to pay it or is it someplace else in our reserves? No. Where do we get to and how does it work if we There

is state in the state statute, I believe, of the things you can use to get around the expenditure limitation are some of the things that we've discussed, capital accumulation, that kind of stuff. But there's also something in there that says, in an emergency. But I'm not sure like a piece of legislation passing would be an emergency. Got it.

Okay. No, that's good to know. I just kind of like to understand. We're coming up to an odd time, the '27 and '28, that could have real issues for the town and residents if we don't have enough money and room for it, and then what it means to us as council members who are supposed to prevent that, and what does it mean reality wise for staff on how you fund it if we don't have enough

And so here's something to think about too. What we have in the general fund contingency is kind of like a little bit of cushion or a savings account. If once we use that up, it is not it's not a recurring thing. So investments have been good, but they are getting less good as we speak because the interest rates are going down and we're secure investors. And so it's not something you can count on forever, but it should really be used for like the one it's a one time revenue source kind of thing to be used towards one time expenditure.

So it makes perfect sense to kind of draw it down if we're doing capital expenditures, but it wouldn't be good for ongoing operations because it's not guaranteed. So, just something to keep in mind.

Okay. Thank you.

Thank you. Councilmember Andy Keller.

Thank you, mayor. Thank you for your presentation. I had a question on the enter enterprise funds. The I haven't heard much about the alarm fund. Is it is it do we have anybody that's in I mean, I haven't heard about subscriptions, and I knew that a while back it wasn't covering the expenses.

The alarm fund is not out of balance, so there's enough revenues to cover the expenses in it. It's a pretty small fund, really.

But it's not

Yeah. I guess maybe I'll get with the police department and see where we're at with, like, subscriptions and things like that because Yeah. And cost.

At our next council, study session, we're gonna have presentations on departments

Okay.

Including the police department. I'll just let the chief know that he should be ready to answer questions about the alarm fund.

Okay. And the opioid.

Yes. Oh. Yep.

He will be ready. He's not here right now.

Opioid is part

of that special information. He's taking copious notes, so we'll be fine.

It's part of the special

the special because it's really specific on what you can use it for. And I'll tell you to date, we have not spent anything on that. We've just collected the funds.

Yeah. Yeah. Okay. And I like that we're we're gonna increase the general fund contingency. If there's is there a threshold of the dollar amount that we you have to bring it back to counsel to use those funds?

I think it's 50,000 more than $50.00

wow. Okay. So Alright. That's good to know. I think for now that's all the questions I have so far. I appreciate this.

Good questions. Are there questions? Councilmember Leitman.

Thank you, mayor. And this is incredibly helpful to me, and I appreciate it. I do wanna echo an earlier request. I would love to see using this format a column that shows us like year to date where we are now to see just just because that these are budgets and I'd love to actual or even a six month actual or something and then we can double it and figure it out. But since you've been requested to give the quarterly or year to date, I'd love to see it so I can match it to this chart if that makes sense. I do that. I did

add the actuals to the department presentations so that you have those. You have the actual, the budget, and

all I'd the love to see it matching up to this because this is a wonderful snapshot.

Okay.

And then I have a question. If and this goes I think Council Member Pace was getting on this. HB 4,030, the rates, fees, taxes, increase moratorium. If it passes and it says there's some exclusions in here and we pass the increase in the cap, would that allow us to how does that interact with this? And if if we I'm very concerned that somehow we will be prohibited from increasing the cap in the future Or is there any timing issue with that?

Or I mean, it seems to me there's a real argument if if legislators are looking at ways to freeze spending that we give ourselves as many options now as possible.

Mister mayor, council member Leipman, there there really isn't a connection between the expenditure limitation and the limitation on what you can raise or collect in fees. So one does not inhibit the other. I could inhibit what you can raise as fees for money to spend under your limitation, but the one would not prohibit the other.

Thank you. That that clarifies a lot. So that it we cannot count on, for example, these the the not the general fund contingency but some of the other items here from continuing to go up. We we might be prohibited from increasing those in the future.

And and one thing to keep in mind, mister Merritt, council member of one of the provisions of the bill is that you are prohibited from adopting a fee tax utility rater during the fiscal year for the primary purpose of avoiding the application of this section. Right. So there there's a specific provision that does not allow you to go into this year's fiscal year budget and say, create a framework that you could grow into this, 4030 is, you know, an absolute prohibition.

Right. Understood. But nonetheless, with it seems to me that if this to me, it's wonderful that we don't have to actually borrow to do our capital improvements on our capital projects. On the other hand, looking at the estimated exclusions of 20,000 and looking at what's going on in the economy right now seems to me Oh, that's What was flashing? Oh, somebody's mad at me.

Alright. Thank you. I'm let me just make one more. I think that's it.

Alright. Further questions? Vice mayor?

Thank you, mayor. All good questions. Great presentation. Easy to understand and, I think I just have a few questions on clarification on on some of the items. So I obviously, the contingency fund went up. That's not always the case. My understanding is only been here four years, but my guess is over the last ten years, it's, you know, from what I actually, not my guess. What I had asked is the as low as it's been as low as 1,000,000 and it's been as high as 10.

Yes. That

is correct. So it's not something we can count on. As you as you said earlier, it's an emergency fund. Right? And if I'm understanding correctly, because I wanna make sure I am, when you are setting the budget with the departments, when you guys are coming up with the budget, you're not going straight to that number of the expenditure limitation going, oh, goody. Now we can do, you know, we can we can just do all these projects and do everything we want up to this number. We're gonna spend right up to it. The fact that we have $6,591,199 in the fiscal year twenty seven budget in a contingency fund is showing that you're you're doing what you can. The departments are doing what they can to keep their budgets in check is my guess.

Yeah. Actually, the departments don't even know what the contingency is. So what the way the budgeting works is we send out the prior year budget for Okay. It's an incremental budget system to each of the departments and ask them to review line item by line item and to increase and decrease according to what their projected needs are for the new year. And this and then it comes back to me and I put this together. So they have no idea what the expenditure limitation is Okay. Or what the contingency is.

Oh, I appreciate that. Those are a great process question because I you know, I I'm not being here in your department. I don't know how the process works. So I think that's helpful for people who maybe don't understand, how it works here. So yeah, that's that's it. Thank you. Appreciate it.

So I also want to go over this slide. It's just slightly different. So basically this is just kind of on a very high level showing you what has changed and how we are covering those changes. So the top half is what's changing in the expenditures. And you can see the contingency, which is really we're not planning on spending that.

That emergency fund is going up by $3,000,000 and capital projects is going up by $5,800,000. Those are the real driving changes in in this year's budget. And in order to cover those changes, the expenditure limitation went up, but only by $1,400,000, and the exclusions went up by 6,300,000.0 mostly because of our high investment returns. So if there any more questions, right before I hand it back over to Shar to go over the capital improvement program, I do want to say that, we do not have final revenue numbers yet. Those don't come out till the March.

And so this is really just an expenditure focus at this time. And we just kind of put these pieces together as we go along. And, of course, if you have any questions, you can always contact me.

And, mister Esch, just a moment. I think we have one comment from council member Moore.

Thanks, mayor. Yeah. Just a quick question. When you said when we review the department head budgets, town manager, is that who's responsible for reviewing and approving the, department head budgets? Because do have a committee on that? A committee? Or is it you? Or is it

It's it's a collaborative between I mean, ultimately, it's the town manager's proposed budget. But we get together and before it comes to council, we talk through it as a team. The executive team goes through each of the budget. So they provide their individual departmental budgets to mister Resh. She compiles it. We come back. We look at what's been asked. We run through it, and we, you know, vet it internally before it goes external. And that'll go on March 26.

Thank you.

And, mister Esch, I would compliment you as well. I think this is a great first step going into this process of really, walking us through. And I think we're all understanding that this is snapshot for this year under these circumstances and it's not a a long term proposition. It'd be great if it was, but we know it it it is only for this this point in time. Right. And so thank you for walking us through that. And I think you heard from my colleagues and and I concur. Think the the more we have a good perspective as we go into the line by line budget. And also I think council member Leitman had a good point about adding that column over where we are to actual. I think that would be that would be helpful.

Okay.

Good job. Thank you.

Alright. Thank you. Sure.

So now we're talking about capital improvement, Char, and you're going to lead the chart on this?

It's a collaborative effort here.

Sam, you Char are going go to Yes.

Okay. Got it. Okay. Set up here. Oh, okay. Got it. I'm gonna put this in

the middle. Alright. Okay. Good evening, mayor and council. We're here. Myself, Shar Johnson, town engineer, well as Sam Kayat, who is our capital improvement project manager, to present the twenty twenty seven through thirty one CIP capital improvement plan. So Sam's gonna go through the first part, through our process, and then we're gonna tag team throughout the presentation. So you'll see a little bit of that.

Good evening, mayor and council members. Today's agenda, we will be talking about the annual CIP process, then the FY twenty six to thirty recap, then we will give an sorry. Then we will go we'll have an overview of the fiscal twenty seven to thirty one and we will then talk in more details about the fiscal twenty seven projects. So the annual CIP process is a multiyear process. We'll identify and prioritize capital capital needs.

It will include projects that are greater than a $100,000 in value and have a useful life of at least three years. The planning period is for the town is typically five years and it is presented and adopted as a separate section of the budget. There are some exclusions for expenditures that cannot be included in the CIP. Those are operations and maintenance, such as street resurfacing, small facility improvements, fleet and equipment maintenance, also furniture, fixtures and equipment such as computers, desks and chairs. This slide shows an overview of the annual planning for the CIP, the CIP process, which is six steps process.

The first step is identifying projects, then project scoping, and the third step is project scoring and ranking. Fourth step is developing financing strategies, and the fifth step is adopting a plan, adopting the plan, and the final and number six step is implementing the CIP plan. So the next few slides will be talking in more details about each one of those six steps. So project identification, we can get input from residents, council and staff Or the project could be identified in a strategic or a master plan, such as the stormwater master plan. The project can stem from other projects.

Also, project can be due to operational improvements. The next step is this project scoping. And in this step, we determine the extent of the project from physical limits to the component of the projects and the specific items that will need to be addressed in that project. We also do a cost estimate, planning level cost estimate. We'll have will tell us the current cost of the project And it also reflects the time when the project will be completed in the FY in the fiscal year in the CIP.

So there will be some adjustment to the inflation that will come with the time change for the project. And at this step here, we also look at possible outside funding such as SRP aesthetic fundings, CMEC funding and flood control funding opportunities. This is the scoring and ranking step. And in this step, you see that we have we will score the projects and we will assign a score to it from from one to 10 with 10 being the the highest. And the project that has, scored near 10, you can see it will have, that help with, protecting health and safety in the town or, help us comply with federal, state, or contractual mandate.

While at the very bottom, you see the, these scores of of one is, if if a project is deferrable, due to funding, if we don't have funding or the project is not urgent. So all the identified project will be scored, ranked, and we will put them in categories such as storm water, roadway, or building. The the budget, then we will look at the available budget and we kind of measure the available budget with the project that we would like to address that fiscal year and ultimately we will do what we have enough budget for. This slide here shows the 22 project that we have in the CIP. They are scored.

You see the scores on the right column and the ranking on the left column for each project. A few things to point out here. The project that you see listed in purple, these four or five projects all came from the stormwater master plan study that we just completed. You can see that the sewer system repair and assessment along with the Mockingbird project, they all scored at number nine. And then at the very bottom, see a score of one for Whitewing Road Half Street.

And in between, you'll see the projects, about half the projects scored seven or above. The next step is the plan adoption. And this happened with the council. So the council can modify, can add, can delete project. And the adoption of the annual budget in the CIP and the approval of the design and construction, this is moving towards the implementation.

This is where we approve the design. We will select consultants to start the design and eventually contractors to construct the project. And we will bring any contract that is over $50,000 back to the council for additional approvals. It is worth mentioning that during this plan that we will have residents inputs and also notifications. This happens through open house that we hold depending on the project, Also through project initiation mailers, project signage and project updates in the managers weekly.

Okay. Thank you, Sam. So before we proceed on to our summary or updates for the fiscal year twenty seven through thirty one five year CIP, we like to give a recap of the fiscal year twenty six project status and expenditures. So, we had 22 projects. 22?

I'm sorry. 14 projects for the fiscal year, 26. Excuse me. And so as you can see in the in the second column, many of them are on track to be completed this fiscal year but some of them already completed such as the town owned facility assessment and then our refresh of the town hall campus closed circuit camera monitoring system and so on and so on. So we have, our fiscal year budget, as you can recall, is $10,532,000, and we are projecting to spend for this fiscal year by June 2026 around 8,900,000.0.

So that is an estimate of spending projection around 84 percent 84.62 percent. So we can stop here if you have any questions or we can continue on.

Let's check-in real quick. Council Member Pace?

Yeah. Thank you and thank you to both of you for putting us together and breaking it all out so it's very helpful. When you look at this particular chart on the 26 to 30 recaps, I wanted to make sure. So when it says the ones that say completed, those are completed like we're done and some roll into the '27 a little bit?

They're complete. That's correct. Is

that okay. So some of them are completely done. We've got, when it says, well, let me make sure I understand. So we have item three is done. Correct? Item four and five will be done through '27 because we voted to roll that into two years because of the cost. Does that sound right?

Yes. So some of four and five is the same project, Mockingbird Lane.

Because we

don't have enough money in

one year.

So we're only We'll start this fiscal year.

Okay. And then number six is completed. And then we have, seven we're talking about.

Eight is complete. Number six is not complete. Number six is on track to be completed.

Oh, completed in 2016.

Yeah. Yeah.

Mean, I'm just counting what's gonna be this year. Sorry. Was being a little too I'm too we could have a storm or a tornado, I know, but generally on track. Seven we're going to talk about because it's going take more time. But eight is completed. So that's the facilities. Nine is started. Will that be completed in '26, the Doubletree Ranch Road? Yes. Okay. That's another one done. And then, the refresh of the town hall number 10 is done. Is that it says sum in '27 but balance carryover. That means it's done in

the They're still same on track to be completed. So fiscal year twenty six completion, meaning that it will be completed in this fiscal year.

It says balance carryover, does that mean it was under budget and you move it to the next cycle for CAP or what does that mean?

Particular

Number one are you referring 10, just where it says it was $3.30 budgeted. It says spending by June was 209, and it says 26 balance carry over a 120,000.

That means all the all the money will not be spent. It will be complete, but they're coming in under budget.

So then you use that for other things. That's why it's carry over? Or you do whatever. Yeah. Okay. So it saved money. So when I look at that column, if they're done, they're saved. And then McDonald cuts the number 11, that's starting. Is that going to be done in '26?

That's anticipated. Yes. Okay.

I'll just let councilor that's on for tonight.

I know. I saw that later. Actually, I don't. But I'm just making sure to understand what's in '26. And then in '12, that would be also part of that. It's it'll be done in '26?

Yes. November are

November are together. Right? Okay.

Yes.

And then miscellaneous drainage, now what are those?

Remind me. Those are miscellaneous improvements that have been identified in coordination with, public work staff, just ongoing maintenance, and then it kicks over to our miscellaneous categories in the CIP. So those are just smaller, miscellaneous drainage projects. Okay.

And those will be

done this year? That is correct.

And you did them under budget where there's 100,000 carryover.

That what I would Anticipated. Yes. It's anticipated. So what you see here is a projection. We don't have the actual numbers but it's our projection.

Okay. Yeah. Okay. And then the last one is 14 and that is a

Also a miscellaneous category for street improvements.

Perfect. Okay. So we're getting so we have, like, most of these done and then that means the exciting part of my voice, we get to pick new ones for next year. That's always So for the first time, we'll have quite a few done this year And I know we had a you know, a big chunk is tied up in the number four and five. So it limited the number of projects. So you were doing littler projects, which I think is great. And then we're gonna talk about the next overview. But that's super helpful to see it this way because it shows, you know, sometimes we we look at how much things cost and we see where you're able to actually, you know, get a little savings there because that's over 1,600,000.0 in doing these. And then we see what's on the radar screen carrying over to 27 and a lot of these are just completed and the new ones will pop in. No.

Super helpful chart. Okay. Thank you. That was good to go through. Thanks.

Thank you. And I would just remind my team here that my colleagues that we we have about an hour left of this, study session. I wanna make sure we get, as much as, information as we can from staff. So think council member Levin, you had

We could continue if we need more time after this after the meeting. That's why we've got more time budgets. Yes.

Thank you, mayor. I have a question on slide 10, project scoring and ranking. I see there are one, two, three, six new five or six new projects. I don't have one eye. My question is we just approved the stormwater master plan and that had ranking of projects also. And I want to be sure that I understand how the five new projects chosen were chosen and whether here's my question are any high ranked storm water master plan projects not added here?

Excuse me. Could you

repeat your question? And I'll use an example and it happens to be my street. I thought that Area K, that's my neighborhood, Area K was I thought one of the more higher ranked ones but I don't see that as a chosen project here. And it seems to me we should start with the more pressing ones and work to the less pressing ones. And here and and I I just want I don't have my hands on that old the the stormwater master plan. I couldn't find it. And how it it meshes with which projects actually made the list for next year.

So in the slides ahead, I will explain a little bit more about how we chose the new projects out of the stormwater master plan. And you're correct. You know, it should be the top ranking ones in which we did. So your area area k is kind of special because it includes, coordination and, agreements from the city of Phoenix, residents and the city of Phoenix. So it's going to require

a little

bit more time. So although it's not in this five year CIP, it doesn't mean it's not going to be in the CIP. So we have room, you know, As I explained in the next slides, you will see why I chose the ones that were chosen out of the CIP. And they are the top

six Does anybody have the list of the projects?

But that's not the clean list.

Yeah. There was a clean list in order of

It's on page triple I, if you go to that page.

On page what?

Triple I. Triple I. Yeah. In the appendix.

Oh,

yeah. So you will see in

the Right.

It's, that's not the correct page. H c e Yeah. H

Highest nine highest ranking.

Right. So we added the top five, but we didn't add the top five.

We added the top six, but excluding Area K because of the additional coordination that needs to take place with the city Of Phoenix and their residents.

So all of the top if I can understand, all of the top six, the highest ranking here other than Area K are the ones you picked to include for

the That I have proposed, yes.

Understood. Thank you. Okay.

Other questions or comments right now? Shar, please continue.

Okay. Thank you. So we will proceed with our overview of the fiscal year twenty seven through thirty one five year CIP. We have proposed 22 projects and programs totaling an estimated $50,000,000. We will go over the budget summary. There's, sheets that we'll go over after this slide as well as the fiscal year twenty seven CIP, projects. There are 12 that we have selected. And along with that, the project budget sheets are included in the presentation with more details. Okay. So this is slide one of the overview of the five year CIP, proposed projects.

So we have them in categories, which you've seen this in the past. So the first category is our building and facilities category with the total project amount of estimated 1,475,000. And then there's the five year, outlook that should total that does total, that amount for the next five years. And then we don't have any, projects in our computer and related equipment category. Then in our roadway category, we have a number of projects for this fiscal year twenty seven, but as a overall five year, we have them listed here in an estimated amount of 15,567,000.

And for the fiscal year, 4,210,000. And I need to go back up for the building and facilities. We're estimating 250,000 for the fiscal year '27. K. Next slide.

Continuation of the overview. We have category, the SRP undergrounding in the amount total project amount of 3,800,000.0 and 1,200,000.0 for fiscal year twenty seven. And then in our stormwater category, we have those projects, that are from the stormwater master plan, which are five. And then we have our Mockingbird Lane as well as the miscellaneous drainage improvements category. So that total amount for five years is estimated of $25,516,821, and the fiscal year twenty seven estimate for that category is $10,066,002.20 $279.

In our vehicles and wheel equipment category, we do not have anything in that for this five year CIP. And then our last category is wastewater, which includes our sewer system assessment and repairs. Five year budget, $33,665,000. And then for fiscal year twenty seven, we're estimating $900,000. So our total five year CIP is is $50,023,821, and for fiscal year twenty seven, we're, estimating $16,626,279.

So we're gonna move forward with our okay. So this

I think there's a few questions here, Sean. Councilmember Andy Keller.

Thank you, mayor. The footnote you have, the project estimates in fiscal year twenty seven to thirty one updated between 01/14/2026 to 02/24/2026. That was just updating the costs. Have you did you account for inflation or the time value of money, in those estimates? Because I know that $50,000 today is different than $50,000 in five years.

Yes. Absolutely. We put that footnote in there as a reminder that we start our estimates at the beginning of every year. We we look at them all year, but the the estimate from our ENR, our engineer news record updates all the construction, inflation costs, everything. And so we make sure that we go back in there and then we apply those inflation costs across the board for all the projects. So our our inflation rates, they, typically around 3% for construction and then for engineering services around 5%. We use that.

You might this is just a consideration to put adjusted for inflation. Oh, yes. Yeah. Absolutely. In the footnote. Okay. Thank you. Alright. Yep.

Other questions at this point? Vice mayor.

Thank you. Unless you would

Go ahead.

Thank you. Just a couple of questions before we completely move on from the project identification and needs and the scoring and ranking. I too had a question about the areas and and I could most definitely be misreading the maps because I did go back to the number November 13, looked up the storm water. And and what I'm seeing is that area n is being addressed, Area a and and area o are not and area k is not. And then we're going to number five area l.

Now I could be wrong and what would be helpful in having me not have to try to do the mapping is on this particular presentation on page 10. If we go back, sorry. Page 10. And I think this would be helpful for all of us. The purple projects that are the newer projects that came from can we identify those please by area?

So we know what areas are being taken care of. And then if it's obvious that something like Area K that has a 141 structures being affected and area l who only has 35. If a question like council member Leipman had I think was pretty valid in, you know, just why. It's not you're doing it wrong. It's not it's just that I think it's important for the residents to know where where the and where it's falling in.

And I understand there's a lot of moving pieces. So identifying on page 10 and also if we go to page 17, all of these areas with the new being put in as we start taking care of the storm water drain improvements, knowing what areas are being done. That would be super helpful if it's not a heavy lift for you guys.

Yes. Absolutely. We I actually put the areas in the project sheets, but I'll add those to the overview all across the board so

it can be known. Yes.

Just at a glance so we'd have to dive for it. Absolutely. Yes. Appreciate that. Thank you.

Makes a lot of sense.

Council member Moore.

Thank you, mayor. Just questions on your budget items here. When when you who's the consultant that provided all the the budget numbers that we have here?

We do not use a consultant for budget for the CIP budget numbers?

For the budget numbers for each project. Who who put those numbers together?

So I can go through all the projects if you would like me to. But in general, so for our, Mockingbird Lane, we use a third party estimator for that from our on call. Pretty much, we'll use a third party estimator for any project that's going into construction. So

So part of our ranking and scoring on this, and these these rank really high, number nines on them. Have you gone through and done as it says in your project scoping, have you gone through and looked at the extent of the project? Because I haven't I mean, nothing in our packet here shows anything drawn up that would be a detail. Are are you basing these on lineal footage, quantities takeoffs, all all these budget numbers? How do how do they assume their numbers? I just like to put it on the record. So We haven't we haven't had a good Okay. Track record of budget numbers being accurate in the past. And I don't know how you can do that when you haven't even scoped the project or even really looked at them in detail.

Well, for as a whole, for the CIP, the projects are different different phases. So it depends on the project phase. So if a project is already, say, in construction as I explained, we will use a third party estimator, you know, to help us, you know, get the construction cost right and everything. So if a project is just leaning into their first year, you know, we haven't done anything. So that's the that's the time we do our scoping, and then our consultant will provide a preliminary engineer's estimate for us to decide how to move forward.

So other than that, we we will have to lean on our third party to do which is the same thing, you know, them coming in and doing an estimate, you know. So if a project is not active, we won't do an estimate on the project.

Understood. Yeah. So when I'm looking at your project ranking scoring list here, number one through '22, are you looking to put these ones in purple in year '26, '27?

Some 2728. Some of them, not all of them. So we can look at, actually, the screen that's open right now. So is this no. The stormwater? Yeah. This is the correct

one. Project scoring and ranking?

Yeah. So in order to understand but answer the question as far as what year they're in. So, for example, we have the Invergordon Mockingbird Lane storm drain improvement that came that's one of the purple projects that's in the scoring and ranking sheet. So we have it at one point around 1,600,000 project total at this point, but it's not in the CIP until, like, year '31, the '31, year. So for 40th Street in Stanford, we have that in this fiscal year twenty seven to start design and preliminary

preliminary in starting design, but we haven't even you haven't even scoped it out yet. And here's part of ranking is

Yeah, there is.

Is to look at outside funding sources. So have you got with anyone with grants? Is there grant money coming on? Don't see any of this detail on here.

We are working on it. So for the stormwater projects that have been selected, all of them have a 15% conceptual plan associated with them as well as an estimate. So that's in the stormwater master plan. So that's why I started out with those projects because we do have the preliminary engineering applied to them as well as an estimate from the consultant, Kimberly Horn.

Say that say that again. You have 15% Conceptual drawings.

Plan completion on them? That's correct.

Has the council approved for you to do that?

That's a part of the stormwater master plan that was adopted in November 2025.

And my understanding when I was asking those questions to our town manager was that these weren't projects that we're approving right at this moment. These are projects that are in here that we're gonna be seeing as part of our CIP project process Yes, and going forward. Because one of the policies that the council put forward was that we would see illustrations before we spent money on engineering plans so that we had an idea of what the scope of the work was and that the council got behind it and supported it.

Yes. So the I'm information unclear how

is included in that process. Works. And I may be the only one, but unclear how we get to the so far along, we haven't really seen anything in in detail to even make a decision on multimillion dollar projects.

If I may, mister mayor. The the stormwater master plan process and the deliverables from Kimley Horn included their initial engineering that was part of the description of and the identification of all of the various projects in that plan. So it happens, and again, this is why we're sort of identifying that separately, is that what they provided us as their deliverable that was adopted by council is the functional equivalent of 15% engineering design. So that was part of what we paid for. Doesn't bind the council anymore than any other action that you that you take does.

In other words, you approve the plan. And as we said at the time that you approved the plan back in November, we made it very clear that we would come back and there would be a separate conversation discussion about any plans that would then go to funding either in fiscal twenty seven or any of the out years, which is what we're doing today. So I think that that's again Understood.

So now back to my first question, which was do you have a quantities take off in in how you've come up with these budget numbers that we're looking at in here since you have a substantial amount of time put in and money put into engineering work with our consultant Right. Kimberly Horn.

So they provided budget numbers as part of the plan.

So question at the time. Right. And he said he did not have quantities takeoffs. He says he hasn't done he hasn't done that much in-depth look at them, and he was gonna come back later on when we do it in budget season to take a look at them.

Would you like me to answer that? Yeah. Go ahead. Okay. So normally at the conceptual stage, there is a preliminary estimate. Quantity takeoffs do not occur until probably around after maybe thirty, sixty, 90%, you know, during that time frame where you can identify the specific quantities for a project. We're not at that stage yet. We're at the very conceptual stage and we're bringing these projects to council through the CIP as a part of the the process. So

Thank you for that. Understood. So when you rank them at number nine, that's pretty high ranking. Like, you've gone pretty far into in-depth of what the process is, which is that you've looked at outside funding sources, that you've put together the budget numbers. Yeah. There we go. Right there. Okay. Or we can look at your project scoring and ranking. Identify all projects and and categories that are scored and ranked, assigned to the category, balance the budget, priorities based on available funding and and possible outside funding sources, current dollars, cost estimates, extent of the project.

So that's a pretty detailed list of items that I would like to see since this is work study and we're not moving it forward. I'd like to see that level of detail before I make a decision and support a multimillion dollar project to understand what it is at least and how accurate the cost will be and what the outside funding sources would be.

Would you like me to answer that?

Yeah. Okay. So

so I guess my question is to you, how do we do that without including him in the storm I mean, in in the capital improvement plan? So how do we bring the project back to council without it being a project? They haven't been identified as projects yet. They're in they're in the storm water master plan identified as areas, you know, proposed projects. So what we're doing today is proposing the projects for the c the five year CIP. So outside of that, how do we bring it these projects back to council?

I think we're saying the same thing. So I think you're bringing these forward as CIP projects. Right? Yes. Tonight. Today? Yes. Thank you, council member, for answering all the questions.

Council member. That's Shar, you have the floor. Okay.

But the quest okay. I'm sorry. I don't. Yeah. So the question is, when we go through and we look at what's in our packet for the CIP projects, is that level I didn't see that level of detail in those as we're going through and looking

at them. So for for this particular well, some of the not all well, these projects for the stormwater master plan, the details that we have is in the stormwater master plan. So we have the conceptual drawings, you know, and we have a cost estimated associated with the project. So that is what we have right now. So we wouldn't have a quantity takeoff. You know, we haven't hired a consultant, to provide design. You know, so that would get into once we these projects have been identified in the five year CIP, then we can bring them back to you and after it's approved and go through that process. That's the adopted process for major capital improvement projects.

Thank you. You're welcome.

Other questions or comments at this point? Please continue, Shar. Councilwoman Pace.

On the page of so when we look at, number really, it's number what you're asking us is on '27 to '31 is on I think it's '16 '15 and '16. Is that where and then the summary is on '17. Is that correct? That's kind of what we're looking at for '27 to '31 for overview? Yes. Okay. And so you guys have followed your you have a process you showed us earlier in the and it's the same process you've been following for a couple years? That is correct. Same thing we've seen every single year. And you go through and you identify you you get feedback from us, like, in November 2025 when we approve the storm water drainage plans or projects.

Right? Yes. And then you go out into your conceptual and get them on the list, and then you do the best you can to a point. But until we actually, as a council, look deep into it and approve it, then that's when you get to the next step for takeoffs, quantities, pricing, partner funding from McFlood or whoever. Right?

Yes. Then we'll be at that point, you know, once we get it into the five year plan, then we can bring each project back following the major capital improvement process that was adopted by council. Right. And then we can go forward. And one of the advantages right now

is on 17, we actually have new projects because of the storm water drainage that we can actually focus on that need help and assistance? Yes. Okay. And that was the beauty of how many years worked to get that storm water drainage? Ten years? I think about? Nine?

2013 was the major storms. Right. Okay.

And so and this is the same process that we follow here. It's also processed by followed by other municipalities. Correct? That is correct. I mean, that's what I saw in Mesa for years and decades. So same process. Okay. So then it's when we go through these tonight, I mean, I like some of the projects. I have questions. I know you sent it to us. We have them. All the council's been providing them many times. And it might be good to remind again for all of us, you know, popping that email. I was trying to find it right now to circulate to council. But you've sent us an email with the pictures and all the things you have and the conception.

You had some of it here tonight. That might be helpful just as a reminder. But for tonight, are we looking at are these what's the ask? So we're gonna go through it all in detail and we're going to see if these are still the six there's 16 on the list for fiscal year twenty seven. Is that what the ask is going be at the end? Are these the ones that you're still on track with all those? Keep them in, keep them out. You've done is that sort of tonight?

That is the ask. It's a proposal. You know, this is what we're proposing. And I keep, you know, talking about the stormwater master plan because that's the those are the main ones that are the new projects. So everything else has been in a CIP before. You have seen it. So that would be our goal is for input from counsel and directions on those.

Okay. Now a dumb question maybe, but on 17, when we go down to leg number 16 where it says 32nd Street Sidewalk, Stamford to Lincoln, That is on a new one. Is that because that's a water flooding area or something that not

sure if I didn't clear this slide yet. No. I'm just checking. Okay. Yes.

Project.

It's not a flood project. It just says new from storm water drainage. So that's why is it a different than

storm water? Just to for the the sake of council, it's new in the sense that this is the first year that it's actually received funding. It is not new to the five year CIP. I went back and looked at your fiscal year twenty four adopted budget, and it was in that one with a note that it had been previous to. I didn't go back to the following.

I was having little trouble pulling up some of the old budgets, but it's listed as new because this is the first year that we are recommending that funding be put towards it. This is a project that was recommended, I think, several years ago because of the lack of a sidewalk on what's considered to be a more significant street, and there's no sidewalk on the east side. There would be some scoping. And to the point that council member I believe it's council member Moore was talking about in terms of other funding, this is a project where there's some preliminary dollars, 120,000 in fiscal twenty seven. But the expectation is this is the kind of project we would put to the region for construction mitigation air quality as a project that could be funded using regional mag dollars like we've done in multiple other situations.

So even though that number is large in the in the in the outer years, we fully expect that part of going forward would be to get the approval and the ranking within the region as a regional CMEC project. So just so you know, because that's That's perfect. That's an example. We talk about McFlood. We talk about some. We also go back to the region to to deal with, you know, streetscape and sidewalk projects and things like that because they are frequently qualified under their standards, those are dollars that are available to municipalities for projects like this.

Thank you, town manager and Shar. That's very helpful. And I think, you know, one thing that might if it's pass and again, if it's a heavy lift, forget it. But I think it would help to some of the questions we're hearing from my peers is that if we could do like the last five years of just what have we gotten in grants and funds, just a quick list of how much and who's been participating. Because I know you guys always go and get it. And we have to have trust and faith that when we approve a project you're going to still go after the money. And I think it's important to have a track record to show. I think it would help residents understand that we do that regularly. It's not something we can do up front because we haven't approved the project yet, but that you guys go out and do that. And I think that might be helpful.

The only caveat I'm going to mention about fifteen and sixteen on these sidewalks, I'm always like be careful that the residents get feedback and want them, number one. And number two, you know, it invites the homeless issue. I hate to say it. So I just be talking to the residents. We're kind of a town of rural elegance and, you know, I just would be thoughtful that the residents are saying, yes. I would like that in my neighborhood and understand that. So just thinking out loud.

Hey. Council member council member Liebman.