Common Council - Regular Meeting

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

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

Here.

Council Member Grenwalt?

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

It's all yours, man.

All right. Well, thank you, Mayor, Council. So we are here, I think a little over a month ago, talking about the budget. And we presented sort of the preliminary numbers where we were at. And we did talk about that we would get that budget down, which we did. So we're going to walk through that. So I'm going to hit some of the highlights. Some of these slides we already covered last time we were here. So I will kind of skip over them quickly. But I did want to touch on a few things. Again, just to reiterate the budget philosophy and putting this together. We are looking to move closer to a balanced budget We've been getting closer every year I know a few years ago. We were pretty far from that, but we're we're getting closer to that point In putting together the budget we have to make some projections on what our expectations are as far as some of the state shared revenues you know what our State town sales taxes are going to look like some of the local revenues that we have and then we put estimates in there for grants as we go through there we've got some grants that we know uh we're putting in for we've got others that are annual type grants that we plug in a budget for uh but really uh we try to drive our expenditure budget based on what we're projecting for revenues and that that's where we're looking to get the balanced budget some of the things that we do look at in putting together some of our projections for revenues is some of the things that we know that are out there as far as you know changes that might be coming up you know obviously they're in the past there were some increases in water rates so we take those into account also we look at you know like building activity for some of the local revenues as far as license and permits and buildings and permits And then grants that are out there. But we also go back and we do a three to four year look back just to true up some of the revenues on the budget side of it. If we're seeing a trend that some of those revenues have leveled off or they're generally increasing or decreasing, we take that into account as well. far as on the expenditure side we do look at some of the infrastructure needs so I'm gonna go through a list of some of the capital projects that we have and Steve's here and he can speak to some of those as well that are included in the budget because that's obviously a need that we look at going forward the other need that we look at is how you know we reward the staff that's here as well so that's those are probably our two biggest costs that go into what what the town does here We want to be able to continue providing some of the highest quality public service to our You know, when we looked at a lot of the capital, especially for those one-time purchases, I say one time because it's one time over the next five or ten years that we're looking at when we're doing capital purchases. We are looking for grant assistance on those, obviously giving the highest priority to anything that's 100% funded because that's, I don't want to say free. There's a lot of work going into getting those grants, but we're not using our own funding sources in order to fund some of those. You know, the next priority would be, probably equal to anything that affects the public health and welfare but also grants that have a level of contribution from the town so we sort of prioritize those based on what type of contribution that we're looking at obviously the more that we have to contribute the more we have to scrutinize that type of grant as well So we do have challenges in our fund balance. We mentioned this last time in the general fund. We do need to look at building that fund balance. The highway user revenue fund is really carrying the cash for our town. And so we've got to look at what we can do. What we did last year for the 2026 year, we looked at the reallocation of some of the salaries. and Steve and I had sat down and spent some time looking at how to reallocate some of those salaries, where we were legitimately able to charge some of those salaries over to the highway and street fund. Doesn't make a huge dent in the general fund fund balance, but every little bit helps. So those are things that we're continuing to look at, also looking at some of the infrastructure as far as wants versus needs, and prioritizing some of the needs over wants. And then as I mentioned previously, some of the grants. Salary adjustments. I know that we included within there a Bonus as that was paid to to employees as it was done this year. So that's included in the budget and then you know one of the things that we really need to focus on is the aging of facilities buildings and equipment and and Focus forward on doing an inventory of all of that and coming up with a capital plan for those because that will impact not only the you know upcoming budgets, but future budgets down the line as well and As I mentioned capital we prioritize some of those projects will go through the projects that we have in the capital budget And then we did we were able to reduce that subsidy for the home delivered meals Which helps the general fund quite a bit because that was that was funding Basically coming out of the general fund 100% from the town of Parker and we were able to reduce that substantially and thank you to Nora for for the work that she did on that and So generally, as far as the revenues, as I mentioned, we started with projections through 2026, and then we did a three- to four-year look back on sort of what the trends look like and then some of the economic factors that we know could potentially impact some of the revenue that we're seeing so we put together a conservative but realistic forecast for the revenues we want to be a little bit conservative because again we really want to drive our budget based on what our revenues look like our expenditure budget far as the general fund the largest funding source for the town is the general fund sales tax and state shared revenues and I the next slide that I'll show will show you the percent that's coming from that again budgeting conservatively you know expecting a pretty flat or decrease in the state shared revenues just because I had mentioned previously or Kyle had at the last meeting with the incorporation of Santan that sort of cuts into some of that funding. Now, obviously, Santan is bringing its own tax revenue as well, but they are taking a share of that state-shared sales tax, so it does impact really every municipality within the state of Arizona. So this is the slide I was referring to as far as the general fund revenue. So you'll see town sales tax and the state shared revenues make up about 82% of the revenue source. So when we talk about, well, let me go to sort of the smaller pie chart there first. So that smaller pie chart is sort of a breakdown of that 82%. 46% of that is the town sales tax. and then the rest of that is more coming from some of the other state-shared revenues. But nonetheless, 82% coming from town sales tax as well as state-shared revenues. There is potential legislation or legislation that was put out last year, and they continue to look to reduce some of the tax revenues going back to the municipalities, one of those being the food tax. couple years ago we had the the short-term rentals so you know I would anticipate going forward that you know that's probably a trend that's going to continue and again that's part of that 82% of your general fund revenue so that's going to have an impact on you and then you know another portion of that 82% Is your state shared revenues at your urban revenue sharing highway user revenue vehicle license tax and state shared revenues. And again, those are going to be flat or reduced a little bit just because of the incorporation of Santan as well. Okay, so let's get to the budget and I've got this title wrong. It should be twenty seven and twenty six general fund revenue budget. So I've got a comparison of the budget for twenty seven and twenty six for the revenue budget. So you'll see we've got about a hundred and eight thousand dollar decrease compared to the twenty six budget. So we're budgeting four point nine million. little over 4.9 million in the general fund for revenues about 2.4 million of that coming from taxes and 1.9 million of that coming from intergovernmental that intergovernmental It's included in there is some grant revenues that we have But that's also your vehicle license tax urban revenue sharing and state shared revenues and then your taxes that is your your town sales tax collections that you're getting and Okay, so this is, for the general fund, this is the total budgeted revenues and expenditures by fund, and then I've also got transfers in there. So you'll see the total revenues there, the 4.9 million. We have budgeted expenditures of 5.2 and transfers of 182,000. Now, that shows basically a net deficit of about $461,000. However, about 200,000 of that, which I did not label the line, but the 200,000 on that line is contingency. And that's funds that we don't anticipate using. But because we have a voter-approved expenditure limit, we do budget up to that expenditure limitation amount. And so we have that $200,000 included there in contingency with the anticipation of not using it. But it is included within the budget. So if you take that contingency out, we're at about $261,000 deficit as of right now, which is a You know, we work to get a little over, I think, $300,000 out of what we originally had brought over to council. the remaining funds you'll see are largely balanced the the water fund is showing about a hundred thirteen thousand five hundred dollar deficit however again there is included in that expenditure budget there is a hundred and seventy thousand dollars in contingency again monies we don't plan to use so if we don't use that the budget without the contingency is actually a little over fifty thousand dollars in the positive So all of our other funds are either a balanced budget where you'll see that variance is zero or without the contingency would be basically in the positive. and then just a breakdown of the transfers what funds are transferring to what so that hundred eighty two thousand dollar transfer from the general fund that is going over to congregate meals and home delivered meals so that is basically the town share of providing those two programs and And that home-delivered meals is the one that had a significant decrease in the past. That was closer to about $150,000, so that was about a $100,000 decrease in the subsidy for home-delivered meals. The $112,000 transfer from the WIFA fund, so that is a... We're applying for a WIFA grant, and so that would be a transfer over to the Water Fund in order to fund some of that capital. And then the $92,000 transfer from the Highway User Revenue Fund is to provide for the debt service on the equipment in the Highway User Revenue Fund. So this is a breakdown of some of the capital projects that reconciles back to the budget that we have in there. And so these are the projects. So in the general fund, we've got three separate projects that are included in there. And then I listed in there as far as what's included in the budget as being grant funded and what percentage it is grant funded. The one of them right now, so in the highways or revenue fund, we have the curb and gutter and sidewalk projects that's only a partial amount of the the total that we're looking in order to do that project. And so, that one is would be 95% funded. With with the future costs coming later. And then we've got several projects there in the water fund. Three of those would be funded by basically water revenues. And then the AMI antenna and software, we're looking for a grant for about $150,000 for that project as well. So these are the capital projects that are included in the budget. This doesn't include some of the vehicle purchases or that type of thing, the minor ones. These are more of some of the bigger capital-type projects that we're doing. I don't know if there's any questions on those at all. Okay. on the next few slides um it's just uh the water budget just wanted to provide just a little bit of um i guess historical data related to the uh water uh fund uh the operating revenues versus expenditures uh prior to the uh water rate increases uh you know we were pretty much mostly operating breakeven. There wasn't much of a difference between what we were getting as far as revenues and expenses. We're budgeting for more revenues over expenses from an operating standpoint. And the purpose of the water fund is not to make a profit, but we do need to build reserves for future capital. that we may need to purchase and the investment that we need to make in that infrastructure. So what we're budgeting as far as for 2027, it looks like a lot larger revenue than expenditures, but that is something that is definitely needed because we need to make investments into the future for our infrastructure as well. And then this is just a quick slide just showing the water fund, the contingency versus the capital budget. So our capital budget for this year is larger than it was for last year. Some of that, again, is grant funded. That's included in there with our contingency slightly less than it was last year, but we're still at about $170,000 in contingency for the water fund. So that is it on the budget, unless there's any questions or comments. The total budget, budgeted expenditures for the fiscal year for the town is almost 12.7. It's about $12,692,000. is what we're budgeting at. We were at $12,172,000. I'm sorry, what were we at last year? I can tell you that in just a second. Versus $12,172,000 in revenues. But again, keep in mind that $12,692,000 also includes contingencies in there as well. So I don't know if there's any questions that any of the council members have.

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

IT SHOULD ACTUALLY LEVEL OUT That's a huge cost. You can get grants to help you out with that,

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

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

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

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

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

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

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

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

Anything else anybody thanks Dennis appreciate it.

Sorry question just overall with the capital projects. You guys do have a list of capital projects. Yes.

Is that correct. Yes.

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

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

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

No, no, so. Are you saying that if we got funding for something that potentially we didn't budget for or.

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

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

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

Mayor Hartless? Here. Vice Mayor Jent?

Present.

Council Member Shantz? Here. Council Member Daniels? Absent. Council Member De Leon? Absent. Council Member Badenetsky?

Here.

Council Member Grenwell?

Here.

Okay, this item is discussion in action to approve, deny the posting and publication of bid packages for the parcels Listed at 905 desert 905 Eagle and 900 Eagle in Parker and I would make a motion to discuss this matter an executive session because we're gonna need some legal advice, right? Okay, it's been moved and seconded to do an executive session all those in favor aye Motion carries