Board of Supervisors Addendum - Regular Meeting

Good afternoon. Welcome to the second Board of Supervisors retreat. We are going to start it out with roll call.

Supervisor Connell? Here. Supervisor Christie? Here. Supervisor Hines?

Present.

Supervisor Scott?

Here.

Chair Allen? Here. Let the record show Supervisor Scott is participating remotely. All Board members are present.

Okay. We'll move on to the Pledge of Allegiance.

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

And for item number three, Sam Brown is reading our land acknowledge statements, our Chief Civil Deputy County Attorney.

Thank you, Chair. On behalf of Pima County residents, we honor the tribal nations who have served as caretakers of this land from time immemorial and respectfully acknowledge the ancestral homelands of the Tohono O'odham Nation and the multi millennial presence of the Pasquale Yaqui tribe within Pima County. Consistent with Pima County's commitment to diversity and inclusion, we strive to toward building equal partner relationships with Arizona's tribal nations.

Thank you. We will move on to item number four, which is the budget overview.

Okay. Thank you very much, Chair Allen, and thank you all for being here today. What we're looking for, I think, is some general guidance, perhaps guardrails of what the Board is interested in including in next year's budget. We've got we will share with you the work done to date, but nothing course is nearing finalization, and so it's good to have your input about your thoughts of tax rates, inclusion of dreams, etcetera, those sorts of thoughts. And I'll tell you, I think with the direction of this Board and the incredible work by our department directors, we are in what I would consider very good shape physically.

We come to the budget a bit conservative financially, and what we are looking at is the fact that we are not in the hole for this year. We are taking a fund balance forward, and that is helping us make next year's budget. I think what's been the concern with the staff, and we've all discussed at the Board level, in the last five years or so, we've come out of about $05,000,000,000 in additional funds, with about $150,000,000 in recovery dollars, another $350,000,000 in CARES and those were all programs provided at the county that then we have from which we have been winding down, and I think that's, as I mentioned, an extraordinary effort by the directors to come out of additional $500,000,000 and be still sitting in an okay position. What we're going to do is walk you through kind of where we are with the draft, and I'll share that at this point when we begin to look at current year, what we have been doing this year, looking at taking all of our various departments and doing a plus up in their budgets for inflation, increase in utilities, things that we know will hit everyone.

We did not expect departments to budget for that. We've provided the dollars, and we'll review that number with you. We have looked at the fact obviously, the Board has a policy that includes a $03 tax rate increase in the primary to support affordable housing. What you will see so far that we've been discussing at the staff level would include a $01 increase in the flood control district to really move forward our programs with One Pima, with work in the washes, etcetera, and a $02 increase in the library district so that

we can begin to build to ensure that

we can continue staffing and building libraries and support peaks and not have any kind of problem between the two. When we go through an overview of the budget, you'll see we will also share with you, as you know, we looked at dream requests. We asked departments to dream, and by that, we thought it was important for the Board to not only see what departments might need next year, but what they're thinking for the next three to five years so that the Board can begin to look at what's the trajectory as we go down the road, so there's no surprises, but for what might we need to build. When we look at all that together, we begin to we're looking at a pretty good budget. And then we have two buckets that we discuss with the Board today a bit.

One is, if we look at Dream Requests that staff is not at this point recommending be included, that is round numbers about $10,000,000 When you look at a compensation package that will include work continued work in class and comp to get everyone within one to two grades of where we think they ought to be, adding daycare, adding student loans, forgiveness, some of those elements, that's another $15,000,000 So we would be looking at an additional approximately $25,000,000 in some expenditures. We also have for the Board today a look at what increased revenues revenues might be. Do we look at reviewing the Board policy about 17% to 15% again? Do we look at PAYGO? How would we look at that?

But if the Board has would like to consider any of additional $25,000,000 we make that balance by either increasing revenues or decreasing expenditures, and that's what's before the Board today. But I will go back before I turn it over to Art. And when we get to the pieces, Deputy County Administrator De Bonis is going to talk through what we're doing with some of the compensation piece and the class comp. Deputy County Administrator Holmes will talk with you about some of the additional programs we've been considering and reviewing. But most of this will now be with Art Quiron and his team.

But again, because of Art, Andy, Javier and all of the team working on it, it feels it allows us all to sleep through the night a little bit more when we're coming to you with the ability to balance this budget without making some hefty or devastating cuts. That's simply the introduction in a way of saying we're in pretty good shape, and now we'll start looking at next year and welcome guidance and direction. Mr. Cuaron?

Thank you, Administrator Lesser, members of the Board, Chair Allen, thank you so much for allowing us to be here and spend this time with you today. Jan touched on, Administrator Lessard touched on this budget slide here. Overall, for FY 2025, 2026 and you'll recall last week I gave this same update. Our general fund budget is fiscally stable for this fiscal year. We have general fund revenues projected to exceed our budget at this point by about $9,000,000 Our general fund expenditures are trending lower, as I mentioned at the Board meeting last week.

Departments are doing a good job of monitoring our expenditures. And so the combination of our revenues projected to exceed budget and general expenditures trending lower leaves that projected fund balance increase as a result of those aforementioned things of about 20.8% to the period six forecast. We will obviously continue to update you as new numbers come in and those will be ready made available to the Board. Our 26%, 27 as Administrator Lesher laid out, base general fund budget demonstrates continued stability. And so what I mean by that, if you want to change the slide there, what I mean by that is just taking our base revenues and our base expenditures, we are in a financially stable position, and you'll see that in the next slide.

As we talk about our budget process and where we are in that process, this is the slide that I shared with you. I believe it was at the November financial forecast. Base budgets are due January 16, and we're in between where the gold star is. Today is the retreat. We'll go over some high level numbers.

We will also be coming back to you on February 17 to discuss the strategic plan overview as it relates and intertwines with our budget. Some of the key terms at the bottom of the page there, just high level base budget, as Administrator Lesser mentioned, is our base budget adjusted for known and measurable financial changes, utility increases, known contractual changes, increases in postage and other sort of volumetric increases and adjustments that have needed to be made in some of the departments based on the volume that they're seeing. Our revenue streams does include the implementation of the Board of Supervisor policies, including our PAYGO program, our state cost shift, BOS policy, as well as closing the gap in our affordable housing $03 Our Dream submissions, we have general fund and non general fund requests with those that don't have an identified funding source as yet. And then we have supplemental requests, which are requests that are made by non general fund departments that have dedicated revenue stream to cover those increase in supplemental requests. Next slide, please.

So this slide here demonstrates our base budget for twenty twenty six-twenty twenty seven. Again, on the left hand side, you'll see the revenues, on the right hand side, you'll see our expenditures. And just starting with that twenty twenty five -twenty six base on the left side, you'll see $802,600,000 in base revenues. And we're adding those revenue components really due to our BOS policies, at least the last three. We have a twenty one point one million dollars increase in our revenue stream due to our net assessed value, an additional $3,000,000 as a result of our PAYGO tax.

We have state cost shifts of $4,700,000 the $03 for affordable housing, 3,700,000.0, and then we are seeing additional vehicle license tax of $2,200,000 for 2027 and 14,900,000.0 in additional state shared sales tax as the economy continues to right along. Total net change from twenty twenty five, twenty twenty six as we look into 2026, 2027 is close to $50,000,000 so total revenues in '26 is 852,200,000.0 We add a little bit in transfers in to get to that $855,400,000 as far as revenues and transfers in total sources, if you were. On the right hand side, you'll see our expenditure number, dollars $722,000,000. If we take out our budget stabilization, which is really our contingency of $1,000,000 and we also have a lawyer's contingency for things that are unforeseen from a litigation standpoint, that's $1,700,000 We are adding additional $2,400,000 in retirement costs based upon projections at ASRS and PSPRS. We have a total change there of a little less than $1,000,000 at $700,000 That brings our projected FY twenty twenty six base expenditures at 7 and $22,700,000 Our total transfers out, you may note, is 132,000,000 Transfers out equates to our debt service.

We transfer out money to our debt service fund to pay our debt service on our COPS, that's 45,700,000.0 Our health department transfer to the health is $18,000,000 We have our PAYGO to CIP of 31,300,000.0 Again, that's in line with the policy. And then we have our PAYGO to DOT debt service for the bonds that we issued for road improvements of $25,000,000 That gets us to expenditures and transfers out of portal uses of $855,000,000 So there again, Administrator Lesher's opening comments about budget stability. All things being equal, we have our total uses and our total sources just about even with a slight increase in our revenues of $400,000 to the good. Next slide. Now as we get into our general fund projections with adding in our base budget adjustments, our Dream requests that have been of the Dream requests that are still alive for consideration, and then our increase in transfers out.

You can see our total expenditures there is $906,100,000 against our revenues at the bottom there of 855,400,000.0 which is the same number from the bottom slide. We are projecting available use of fund balance in this budget of $20,200,000 and you can see there the difference is the number that we're trying to solve for is just a little bit over $30,000,000 as we get into our discussions about Dream requests and base budget increases and supplemental requests. Next slide, please.

Just

a quick question for the Director. When you're saying the balance is 30, Director Cuaron, you're asking the Board to look at total sources and then the expenditures, so it's the $9.00 6,000,000 minus the $875,000,000

That's correct. The chart, down to the left, you'll see the expenditure number at $906,100,000 and the 875,600,000.0 the difference is the number that we're trying to solve for.

Got it. And Chair Allen, with your permission, permission, I I would would like like the the county administration to work on a breakdown of our PAYGO funds, historical investment and district by district breakdown, as well, please. Thank you. And that's related to transportation is what I'm thinking about.

Can I ask for a clarification on that request from Supervisor Cano? The county is responsible only for roads in the unincorporated areas. So if you're looking at districts that are largely unincorporated, such as mine, if you look at the road repair and maintenance list in any given year, a lot of those roads are going to be in District 1. There'll also be a substantial number in Districts 3 And 4 because they also have a lot of unincorporated land, which is where the 2,200 plus miles of roadway that we're responsible for are located. So I just hope that that's taken into account when we follow-up on that request.

Chair Allen? Thank you. And Supervisor Scott certainly recognized the geographical constraints that our districts face and certainly really just wanting to get a better picture to understand PAYGO a bit more.

Thank you, Supervisor.

Being on the Board at the time of PAYGO creation, theoretically was devoted primarily, if not completely to County road repair plan. Now since that time, it's morphed into other capital projects. So I think it's important that we underscore that change from taking care of our roads to a number of other projects that got thrown in there since that time.

Thank you for that question, Supervisor Garneau. We'll get to work on that. This slide demonstrates our assumptions as we move through working with the departments. Again, this is a working draft. The revenues on

the left

all are the same from the prior two slides with addition of the use of fund balance that we're programming in as of this point to our twenty twenty six-twenty twenty seven budget discussions, twenty point two. So you see our total sources there of 875.6 that corresponds to snippet of the chart on the previous slide. On the right hand side are our expenditures. You can see our 2627 base of 722,700,000.0 If we add in our base budget adjustments, again, are things to account for inflation, utility cost increases, postage increases, known contractual changes, those total

that.

Flexibility do And into what those ring requests are. And And then we we have have $15,600,000 earmarked for our compensation strategy. As Ms. Fleisher pointed out earlier, these are things for childcare, student loan repayments. We have the below grade and benchmarking costs that are included in that number as well.

And Deputy Accounting Administrator DeVonis will take you through those numbers a little bit later in the presentation. We add in our transfers out, again, transfers out of $132,300,000 that corresponds to the number on the prior slides. We have an increase to PAYGO, that's $3,000,000 so that's just a net in and net out. And then we have additional health support for $1,400,000 as a transfer out to our health department for those are a portion of that is a base budget adjustment and a portion of that is a drain request for heat related programs. Next slide, please.

We did include a slide here to further define what a transfer in and a transfer out is. Transfer into the general fund is money that the general fund receives from another fund within the county. As examples, we have indirect cost recoveries on grants that come in to the general fund from our grants fund, and then we have things like vehicle revenues that are collected from the sheriff's department. They move from the special revenue fund to our general fund. Again, this number is $3,200,000 that we're projecting in twenty twenty six-twenty twenty seven.

And then our transfers out, I've alluded to this a little bit in the presentation thus far, we have money going out of the general fund to other funds within the county. So general fund provides monies to our debt service fund to make our debt service payments on our tops, and then we have the aforementioned subsidy to the health fund to sustain health department operations.

Question on the transfers out, the general fund monies for debt service, what about past bonds?

Chair Allen, Supervisor Christie, that's included in debt service payments. So anything that the general fund issued that we transfer out to the debt service funds are from prior bond issuances.

What would you estimate is the balance on those bonds? Just the bonds, not the cops, but the bonds.

So, Chair Allen, Supervisor Chris, we'd to get back to you with that. I don't have that number right off the top.

But that is improved.

Next slide. So talk at a high level about what are some funding levers that the Board has available as we look to solve for that $30,000,000 that we mentioned, we can look BOS policy review with respect to the PAYGO, with respect to stake cost shifts and what we do there. We have a general fund balance policy that the Board has authorized one time use from 2017 to 2015 for this current year. Again, we're recommending that we go back to 2017 for 2026, '27, but that again is within a lever that the Board has at its disposal. And then we could also look at what we're doing with the affordable housing and the $03 fund.

On the revenue side, we can look at a property tax rate increase. Every $01 of a rate increase, a property tax rate increase, you get about $1,200,000 in revenue. As we'll see in a forthcoming slide, there are some limitations with our levy limit as well as what it might do on our primary property tax rate and the pressure that any property tax rate may put on that primary property tax rate. And then we can look at reduction of expenditures between our Dream Requests, our compensation strategy or other expenditures in the general fund.

Next slide, please.

Thank you, Chair Allen. Director Cuaron, related to the second bullet point, the property tax rate increase, this is, of course, a hypothetical, but one option to ensure that the budget recommendations are met. Can you give the Board and the public a summary of the Board's prior actions as it relates to the primary tax rate? Have we kept it neutral? If so, how long?

Chair Allen, Supervisor Bono. I would respectfully request to come back to the board with that. I do know in the current year's budget, we had a state cost shift was included in the primary property tax rate. But I would be speaking at a turn if I were to try and provide that information without it readily at my fingertips.

Thank you. And if I may, think if you look over the last ten years, I'm going to say we are down $0.30 about $0.30 from the height of when we had paying a lot of debt back. But I think we were down more than that, and we started trending back up, but happy to provide that. But when you just take us if you snap a line and look at about ten years ago, we're down, at this point, about $0.30

Madam Chair. I'm sorry, I wasn't Sorry, Chair Allen. Okay. So what I was wanting the point I was wanting to ratify is that this Board exercised a primary property taxes rate that was neutral last year, and to my knowledge, this is the second year we have done that. I could be wrong, but we'll get back with some additional information from the administration. With the additional information, Chair Allen, that I'm hearing, the administrators is letting us know that the primary property tax rate has also been at a much higher rate. You said we're zero three zero dollars down than the historical high, which is very helpful information. You. But

theoretically, over that same time period, it's never been truly revenue neutral because the assessed value is not taken into consideration with the primary property tax. So overall, the overall bottom line of the increases in tax, it has increased, it has not remained neutral. The only thing that may have been neutral was the primary property tax. But when you put that against the assessed value, actually bottom line, the whole tax issuance is brought up.

Supervisor Christie? I'm sorry, yes, Supervisor Christie, yes, over the last couple of years, even if it was if the rate was stable, the assessed valuation went up. I don't I still believe we are down from the historical, but would like to come back with that information because even though the assessed valuation has gone up, the tax rate went down so much, it might be lower today than it was, but I'd like an opportunity to come back. But yes, for the last two years, if the rate was neutral, because of assessed valuation, it has inured to the benefit of the fund.

Yes, it might have come down, but it did come down to the point where up, but there's no neutral.

It's $0.50 down, we know at one point, almost $0.50 down even with the assessed valuation. But I think the point of the last couple of years absolutely with the set valuation loan.

Director Keum, this might be a question for a follow-up, but I'm curious about how things are looking at the state legislature. I

had heard

that there was possibly some traction, but I haven't followed this around, levying up an electric vehicle tax, right, because electric vehicles don't pay into the gas tax. And so I'm just kind of curious whether there is anything that might get some shifting at the legislature?

Sharon, at this point, we have not taken any of that into account. We're hearing you're right, that there's always a valuation, I think, transportation funding, the fact that the gas tax being so significantly different, how do we increase that, what those revenue sources might look like. We're tracking it, but none of that has been accounted for in the budget at this point.

Chair Allen, members of the Board, this slide is a high level overview of our dream requests that are still alive and under consideration and the compensation elements that we mentioned at the outset. My understanding is that Deputy County Administrator De Bonis and Deputy County Administrator Holmes will discuss this in greater detail.

Good afternoon, Chair Allen and members of the Board. So Deputy County Administrator Holmes and I have both involved in both aspects here, Dreams and compensation elements. It was mentioned that I was going to cover compensation elements, but

that would be Deputy County Administrator. It's

okay. I don't want to step on his notes. So he's got good. Actually I feel comfortable that either of us can talk to either of the issues. I'm just going to touch briefly on Dream.

So as you see on this slide, there requests totaling $40,400,000 We broke them down according to the categories that we used last year in the budget when we were discussing supplementals with the Board, and those were maintain existing resources and assets that totaled about $19,000,000 expanding existing resources and assets, which was around $17,200,000 and then new programs and services, dollars 4,200,000.0. As Director Cuaron had indicated to we're

we're a a

of able we're

to to

with them. So they said, we have a sense need, we don't have an identified funding source. The county administrator and finance director and both of us, deputy county administrators, sat in meetings meetings with each department and reviewed the elected budget request and went through each of the Dream masks. And of those, what you see on the far right are the amounts that that are tentatively still alive, as you heard the dream is still alive in the various categories. So $5,300,000 in maintaining existing and then $3,200,000 in expanding and $1,700,000 in new programs and services.

I will say not every department made a Dream request. We do have the details on what was requested. Just to give you a flavor, they ran the range right from personnel requests to equipment and new programs programmatic offerings, new service deliveries. So wide range of different asks that had come in, and I can answer any questions that you may have. I don't did we bring a copy? Okay. So we have a copy the detailed breakdown of it we'll provide to you.

Alan. Thank you. If under the maintaining existing resources and assets and possibly expanding existing resources and assets, those Dream requests, could do you I don't know if you have this right away, but what if any of those were requested to replace a disappearing federal branch or something like that, that we were already expecting?

Supervisor Hines, Chair Allen and members. So there were some that related to grants, for example. So if we're looking at the sheet you have another one there. Looking at the sheet, if we go to Page two for Department of Environmental Quality. So in their request, were two items.

One was grant contingency having to do with the 105 grant for our air quality program, and then the other one was Aina and Tangerine Landfill Repair. So that 105 grant was an example of a request for green funding. There is not a determination,

a final

determination on whether or not that funding will be discontinued. So at this point in time, we're optimistic that we will see that funding. And so it's here on the Dream Request list. We did not include it in the approved category because we're not sure if that funding will be discontinued. However, if there was a need to address it, the county budget reserve could be a source, right, if that were to come up.

Another one stands out to me was under the Office of Emergency Management and Homeland Security. And so the pages aren't numbered, but it starts at bottom of the third page and then goes over to the top. And so what you see here were requests relative to personnel. And so that department is heavily grant funded. And again, similarly, those items were discussed and we accounted for it with the same approach.

My apologies. Let's see. Oh, yes, it's at the top.

What you said was right. It was just the Office of the Medical Center, not Emergency Management.

They total at the bottom. So that is Office of Emergency Management. It's at Okay.

When you say it started, though, I was okay, got it, go ahead.

It's at the top of So that fourth there has discussion about that. We had similar discussions in the health department area. And again, understanding that these grant funded programs could be impacted if that funding were significantly reduced or were to go away. We have acknowledged that and are factoring for it.

Sure, Allen. Supervisor Scott.

Thank you. Could we go back for a second to the slide that talked about reduction of expenditures at the bottom, it was during right there, yes, thank you. I would appreciate it if the Board could get some more detail on the third bullet, other expenditures. That's pretty broad, and it would be helpful if we could get some more detailed breakdown of what might be meant by other expenditures. So that would be my first request.

The second one, can we go back to the slide that Mr. De Bonis is just on? Thank you. So we're talking about requests that came in with regard to maintaining existing resources and assets, expanding existing resources and assets, and new programs and services. Mr.

Cuaron mentioned that we've got a little over $30,000,000 to resolve in terms of the difference between revenues and expenditures. And so I wanted to ask about something that I've discussed in detail with Administrator Lesher and both of the deputy county administrators, and that's the vacancy policy implementation and how it might inform budget development. We've had the vacancy policy in place for about a year and a half. I want to truly commend the county administrator and her team for how it's been implemented because the overall vacancy rate has been going down. This has led also to a more open and transparent use of what's been called for years vacancy savings, but there are several departments that continue to have high vacancy rates in the double digits.

After determining if any of those positions are hard to fill or other issues are not in play, I'm interested in knowing more about how those continued high vacancy rates in several of our departments inform budget discussions with directors or elected officials between Ms. Lesher and the deputy county administrators. The bottom line for me has always been that we only need as many PCNs in any department to ensure the effective delivery of services and supports to the constituents that we serve. If a department continues to have high vacancy rates and the delivery of effective services and supports is happening, doesn't that warrant looking at the requested number of PCNs as we're looking at maintaining existing resources or expanding them. To that end, I'd like to request that the Board get a breakdown of PCNs by department over the last five fiscal years.

Thank you. And if I'm Chair Allen and Supervisor Scott, I hear you look at that breakdown. A couple of things I want to go back. The other expenditures is broad because it's that broad. I think should the Board wish to look at other areas where it thinks that we could cut expenditures, that's a policy of the Board, and that's why we left it that broad.

If a request is for staff to go back and provide you with a list of what we might recommend the next level of cuts. We could do that, but we just really put it in as a statement to be that open for board policy and direction, but we could we'll give you a swipe at it if that's desired. I'll tell you the vacancy policy, as you and I have discussed, we get down to the point where if you take out of the equation some of the elected officials, and that we will provide you the five year even for those departments as well. Where you see vacancies that remain over two forty days is where we have really identified those as departments where we need a structural fix in the allocation of funding for the PCN. You're going to start seeing those positions popping up in our need to look at moving within grades.

I think facilities is one of the departments that springs to mind that we have continued high vacancy rate. We simply aren't able to keep employees at the rates we pay. Once we got through the first year or two of eliminating positions that had been open for two thousand days and things like that, we have been doing this long enough, as we mentioned, that when we really get down and we look at positions that have been open for two forty days or more, we're really looking at identifying them as a management tool to find a better way to fund and to fill those positions. But we hear you about the request for PCN by department, elected and appointed for the last five years.

Appreciate that, Ms. Lesher. Just to expand on the point, if a department historically has high vacancy rates, I'm curious as to how those high vacancy rates factor into the discussions that you and Mr. DeBonis and Mr. Holmes have with them about their PCN requests.

Perhaps if I may, Chair Allen and Supervisor Scott, when we talk about what we're looking at for the class and comp to really do some of the adjustments to hit the hard to fill positions, I think we can let's see if that if it gets answered and discussed during that element. If not, we will revisit this and provide additional detail.

No, I appreciate that, and we've had some good conversations on this topic, but I thought it was important to bring it up again, given that you're asking for direction on budget development from the Board. And to that point, I'm glad that you mentioned the elected officials, but I think one of the other departments that I see with continual high vacancy rates over the last certainly since the policy has been in place is within the courts. And I realize that that requires some discussion with the presiding judge and the court administrator, but one of those departments that always has a high vacancy rate is within that realm. And then to go back to your first point with regard to other expenditures, I would appreciate what you and your a list for the Board of what you and your team are looking at, because if the Board is going to, as you said, take a swipe at something, we need to know what might be reasonable to consider. That's why I asked for a little bit more detail in that area.

Thank you, Chair Allen.

You, Chair Allen. Administrator Lesher, I am looking at the economic development dream requests, and I just want to make sure that I'm reading between the lines correctly. This Dream request is telling us that you are considering for the Board's final adoption two additional FTEs. Is that accurate since they would be in the yes category on the far right?

You. Chair and Supervisor Cano, yes, sir. It's two additional FTEs and two is it consultant supplemental dollars around to support the FTEs and programs.

Supervisor Cano, two items. One is business retention and expansion FTE and then there's funding associated with programming associated with small businesses. So those go in tandem. Similarly, there is the FDI focused individual and then there is programmatic dollars associated with doing foreign direct investment business services. I'll just go down the list also since you may be touching on those.

We had heard an interest in funding others of the regional chambers of commerce. And so under that line item, that's advertising, sponsorships and promotional, 200,000 in there that would go towards those efforts. And then there were smaller items included one for small business advertising and sponsorships that would enable the small business commission to do outreach that they've discussed and expressed the desire on being able to do and then a plus up in some travel and economic development that's the $30,000 item. And that all is separate from the programming for small business support related to homelessness that was included in One Pima.

Thank you, Chair Allen, Administrator Lesher and Mr. De Bonis. I am looking

the of

the

Board Board

Pima dollars being included as well. The Board adopted this plan in November. I don't see the Superior Court and the attorneys accounting attorneys allocations in this particular budget for the one Pima, which increase to the STEPS program and an increase to DTaP. Can you just walk us through how we're handling those requests, please? And if that's not clear, I can expand upon a bit. Yes.

Sure, Alan, Supervisor Conno, those two specifically and correct me if I'm wrong, but I think it was 100,000 additional over and above what we were current what we're currently doing for those two programs. Those have programmed in our base budget. So they're in the base budget, dollars 20,900,000.0 as opposed to the Dream.

Sharon Allen, Supervisor Conno, one of the things we're looking to do, there are elements of One scattered within the budget, some in economic development in the courts, etcetera. What we've been discussing is when you see the tentative budget pulling that together so that it's very clear what is the One Pima program and what is targeted for that even though it's pulling from a variety of departments.

Thank you, Chair Owen. And Administrator Leschen?

Okay. Thank you, Chair Allen.

And Board members, I'll turn it over

to Deputy County Administrator Holmes. Sure.

Chair Allen, Board members, at the second half of that same compensation elements. Just to break down further, you saw what was equivalent to a 5% increase in salaries at about $15,000,000 which was a starting place. We used that number because last year in our first year of actually having implemented the Phase one and Phase two of the Class and Comp study, we got into actually what how we move the whole salary schedule. Last year, as you recall, we did this in two chunks, right, the first a 3.6% increase in the beginning of the fiscal year, followed by a 1.4% increase in January, that totaled the 5%. So it was our starting place.

One of the things that help inform kind of how we look at our increases for employees is that every year we do get from our consultants that helped us with the class and comp end market look at what's the trends, like what is moving. Last year we had closer to five, this year we're closer to three, right? And so that's kind of we still kept the five in there starting place because we have other needs and other wishes that I know our Board of Supervisors have had, particularly as we look at class compensation for our employees. Noted here is that we are taking a strong look at this idea of a childcare stipends and student loan forgiveness. Question is when we'll start it.

There's still some exploratory data that we're trying to get in terms of who actually is in the repayment of student loans, how much will we put forth along with childcare stipends and what's available in the process by which we'd go about doing that. We set aside about $1,000,000 for each one of those two categories, at least in this current iteration for your feedback. As we looked at off the top looking at a 3% increase across the board. Please recall that part of the reason we do this across the board is we want to maintain integrity to our salary schedule to make sure that we're moving it according to what market is saying and what our consultants are saying, so we do not fall behind what the market is considering movement given the current market conditions and job vacancies. Included in here as well is the benchmarking in demand and below grade adjustments.

What that means is that this past year, we took about half of our job classification and compared them to market. That's something that we committed to do as part of our class and comp study. As a result of that particular analysis, we have jobs that we discovered are below market and some of them at least three grades below market. So to adjust for those that are below market and bringing them back up to market along with in demand jobs that we have agreed that we should compensate more for because it matches what market is saying. We've set aside close to $1,000,000 there.

And as we did similar benchmarking for our deputies and sergeants, moving them up to market is about $3,500,000 to move our deputies and our sergeants as well, and that was an analysis we did here statewide. So total, you still see equivalent of 5% in a $15,000,000 allocation, but you see how we're breaking that down into actually over across the board raises and what we're doing with the other funds to make sure that we're meeting the needs and expectations of our board and our CLASS and COMM study.

Director Holmes, does the benchmarking for the deputies and sergeants, does that also include the corrections officers? Is that a separate category or are they

built within deputies? Sure, Allen. We took a look at that. We did some significant adjustments in the last market. And according to market right now, we're not seeing them stand out. It really was the sergeants and the deputies that stood out as being below market in our analysis.

Cheryl, I understand it's a little catch-twenty two of wondering what can we spend until we know what the revenue might be, but just for conversations, what we have been looking at internally is, if we looked at that percent, we look at the 15.6%, what we've been chatting about is, if we end up using a ZED, if you will, as the guardrails, what makes that work? Do we start the loan program in July, perhaps spend a little more time getting ready to start childcare in January? Do we split, as we did this year, the salary increases? If you recall, we did, I believe, 3.6 in July, 1.4 in January, so that there's continued sort of a drumbeat of increase, but not have the full boat starting July 1 of expenditures. So, we've been just looking at what's the whole net looking at this way and then how do we make any of those allocations.

Supervisor Connolly?

Thank you, Chair Allen. Administrator Lesher and Mr. Holmes perhaps, can you just walk us through the numbers again for the deputies and the sergeants? How far behind are we and how much more do we have to catch up?

Sure, Allen. Supervisor Connell. That $3,500,000 will bring the deputies to our market analysis. So that $3,500,000 is I'm trying to remember exactly what the actual percentage increase, and I apologize, I don't have it in front of me, but there were two percentages. I know the deputies were looking originally came to the Board asking for a significant increase that did not actually align with our analysis, our market analysis. So what you see before you is our analysis to bring them to market. So that would be the one time. And if we maintain our salary schedule, they should stay within market unless there are significant shortages over the course of time where market adjustments end up changing that number.

And Mr. Holmes, can you walk us through the how that works on paper? Do these particular PCNs also get the additional 3% that the non sheriff employees are getting?

That's a great question. We walk that through in our own discussion. Chair Allen, Supervisor Connolly, yes, they would. So we would bring them to market as a first step, and then to keep up with market, we would then they would get that same increase that all employees would get.

Thank you. And Chair Allen, if I might it might be helpful to just get a breakdown of how many positions that's going to be supporting. I think I kind of can see it on the spreadsheet for the Dream request, but it might be good to just have that clarified. The Board is considering supporting X amount of deputies and sergeants. Do.

You. Chair Allen? We'll go to Supervisor Himes and then Supervisor Scott.

Thank you. Thank you, Cher. Just I mean, guess a little background on the childcare stipend program and student loan repayment. Are we finding in your analysis, are you finding that competing entities already have these kinds of programs and that's where we're either losing people to or where people maybe go instead of coming to us?

Sure, Alan. Vice Chair, it's Heinz. The we had to go back to our employees. We just submitted another ask them to complete another survey. We had very poor responses the first time around, so we're going to try to do another analysis. I do believe these two continue

to clarify, mean poor responses like a negative evaluation or just not enough people responded?

Thank you for the clarification, Chair Allen, Vice Chairs Hynes. We didn't get enough responses, So we're hoping to get more, so we can actually dive deeper into the analysis to make that determination whether it's something that our employees really want. I do know at our initial conversations that we had a couple of years ago, we found this across county that it was a compelling, I guess, incentive or benefit to a lot of folks who had younger children. I do know the market is fairly competitive in that space. So hopefully, we get that data announced, we'll know how many really still need it and how many, have actually found elsewhere or their children have aged out by the time we've actually implemented.

Great, thank you. Supervisor Scott?

Thank you, Chair Allen. Just a housekeeping request. I think there's been a couple of references during the meeting to copies of documents that may be available there in the Copper Conference Room, but that aren't attached to the item on the agenda. If I could just ask, it doesn't have to be until after the meeting, of course, that those items could be forwarded to me.

Was there anything else, Supervisor Scott?

No, ma'am, just that request. I think there is there's a spreadsheet that's been referenced a few times that I don't believe I have.

And Supervisor Scott, my apologies. We're sending that to you right now.

Thank you, Ms. Lusher.

Chair Allen, the spreadsheet says do not share with District one on a waterline.

I knew it. I knew it.

I was going to note that the administrator has brought out her binders. So rest assured, we are in good hands now.

All right.

I had a question as well, I think about the childcare and student loan repayment. Based on what you know now and does the $1,000,000 seem like it is a comfortable with that number, it's not going to exceed that, that's a high number, or what degree, I guess, of comfort do we have around that number?

Sure, Alan. I think we're very comfortable as a starting place with that number. I do believe in the student loan repayment, we're working through some of that analysis right now. I think we're close with that number. The childcare is a little bit more elusive for us because until we really get good clarity and costs associated with that, we feel it was a good starting point. This is why I think potentially even starting half the year gives us a little bit more of a runway to make sure that we're getting it right. But they seemed in the ballpark of what we were looking at at least initially.

Sure, Alan. I think that number is going to grow. I think what we have heard from our employees as we began surveys and it's some of our team is serving on the NACO, the national committee that is looking at this, it is really moving into being a way we can hire people is the provision of childcare and daycare. So I think it's the way that we think we can get started. I don't believe it will ever be that low again if it is a program that this Board chooses to adopt. It's a very popular benefit across the nation. Supervisor Heinrich? Thank you, Chair Allen.

I think it's important when we're talking about those two programs, specifically the childcare as well as student loan repayment incorporating know it might be hard to do this, but there is a significant expense associated with looking for these people and also just not having them there, other people having to do that job until we find them and all sorts of other maybe not totally obvious expenses that come with not having those two programs. I think it's important to for framing purposes, hey, this will cost us 2,000,000 or 4,000,000 or 5,000,000 or whatever million a year, but not doing it might cost us twice that. I don't know, sounds like you're just having making sure to have that context, I think would be really helpful as we discuss this in the future.

Chair Allen? Supervisor Scott?

Thank you. To expand on the point that Supervisor Hines just made in terms of that kind of cost benefit analysis. On the previous board, we expanded maternity parental leave to make ourselves more competitive with other employers, specifically the city of Tucson. Maybe if we could get some data as to salutary effects of that expansion of our parental leave policy, it might provide a foundational argument for some of these additional compensation elements that we're talking about. I don't know the best way to get that data, Ms.

Lesher, but I think you know what I'm asking about is, have we seen increases in the amount of people taking advantage of parental leave? Have we heard people say that it's a reason that they chose to stay with the county or come to the county? I just think that might be reflecting on our successes with that might be a way of looking at the potential for a childcare stipend or student loan repayment program.

Got it. Thank you.

Thank you. Thank you, Chair Allen.

Madam Chair, just curious, in the last couple of Board meetings, we presented certificates of appreciation for retiring employees. Seems like at each Board meeting and at least at the last one, we had several employees that have been here since the Garden Of Nevada and Medieval, it seems. And I think it's important. None of these benefits were around then, yet we have a significant amount of people who are willing to stay unemployed, do we talk to them and ask them why they save so long?

Do I'm sorry, Cherilyn, Supervisor Christy. We do exit interviews, and we do with employees who are leaving for various reasons, whether retiring, they quit, different information. And I'm happy to let's do we provide the Board a summary of what that looks like. We ask this guy every day, why is he here thirty five years? It's to come to the Board meeting.

Thank you, Chair Allen. I commend county administration for looking at child care stipends and a student loan repayment program. In conversations with our employees, these are ways for us to lower costs for our county employees and to also mitigate the Board's limited ability to increase compensation, right? We're going to try to do both, but where we can't, this supports working families. And I've particularly seen the second student loan repayment program be really useful in target industries, things like nurses, attorneys who do all the right things, they go to school and are left with a student loan bill in public service that ultimately be mitigated by a program like this.

So, thank you for looking into it, and I hope our county employees respond to the surveys.

Supervisor Hine?

Thank you, Chair Allen. And one other thing for staff on student loan repayment. As I recall, there is I don't know if it's IRS or some other federal there's like some limitation as to what that can be, right? Can you just remind us what that is?

$52.5 per year. Chair Allen, Supervisor Heinz, 5,250 per year.

All right, moving back to the presentation. This slide here, Slide 10, I mentioned it briefly in one of the earlier slides. This is just taking a look at our primary property tax levy limit projection. And you can see the chart does start in FY twenty twenty three, twenty twenty four, so you can see how much room we have between the levy limit and what we are actually levying in twenty twenty three, twenty four. The black line on the chart represents the levy limit as per Arizona revised statute.

The green line represents what we have levied in the past, what Pima County has levied in the past, and incorporates the Board of Supervisors policies in our projection moving forward. You can see that in FY twenty twenty eight, twenty nine, we reach an inflection point where we do actually reach that levy limit in accordance with ASR Arizona revised statute, not ASRS, excuse me. And so I I want to note here that this just takes into account the policies, so the state cost shifts to $03 any Board or Supervisor policy that deals with sort of where we're going to increase the primary property tax rate because of stay cautious or because of the affordable housing Board of Supervisor policy. It does not contemplate any increase in the primary property tax for reasons that don't include a Board of Supervisory policy. And so moving that primary property tax rate, increasing it in any given year, pushes that red diamond further to the left.

So there were some questions asked earlier this weekend for TNT rate projection for twenty six-twenty seven, that dollar amount is $4.5 Again, rate is what the board could levy without a public hearing. And then the question was what our max tax rate we could levy in 2026, 2027, and that dollar amount is 4.6163. Again, not necessarily contemplating that, but that's the information that yes, so our current tax rate for twenty fivetwenty six primary tax rate is 4.1943. Again, and the primary property tax levy is limited to 2% growth over the maximum allowable from the prior year plus the percentage of growth attributable to new construction. That comes directly out we can probably change the slide.

That comes directly out of the revised statute. And historically, the new construction has added somewhere between 12%, and the county's levy has increased somewhere between 34% per year in accordance with the statute. We cite the levy limit here. So again, it's just a headwind for us to monitor as we look at the five year forecast and seeing what our primary property tax rate could do and is projected to do with just the Board of Supervisor policies. Next slide, please.

Mr. Supervisor Hunt.

Thank you. So the statute, I mean, this levy limits just arbitrary stuff the legislature did, right? Is there any this is a part of the statute of the legislature, I'm assuming, put it there. Like why is it 2% and not 3% or 1%? I don't know. This is an arbitrary thing that they did, correct?

Chair Allen, Vice Chair Hines. My understanding is this particular statute was imposed at the same time the expenditure limit was in 1980, and so I don't have any context for why the percentages are 2% year over year. We could do some research and get back to you on that, but I do know that it was adopted in 1980 along with

I think it was three.

So I guess, and there's

one follow-up. The override, so we can as a county, we can ask the voters to override that levy limit, but it creates a new secondary tax, it doesn't just let us go up on the primary, I guess I was a little perplexed. And also, do we have to override it every single year that it's going to be going up or do you just do it one time and then we're good?

Chair Allen, Vice Chair Hines, that's a good question. I can tell you that definitively it is an increase in the secondary property tax rate, not the primary property tax rate. And with respect to if you have to do it every year, I don't know the answer, so I will get back to you on that. My presumption is that you do for every year that you are going to exceed the limit, but we will get back back to you on that.

So like potentially we would have to have an expenditure limit whatever every single year? Yes. One of

my my

bad. Got it. Okay.

Have a question that I'm just maybe it's really obvious, but I'm trying to reconcile as we have committed to $03 for ten years for affordable housing. A part of the extension is so that increases our primary property tax levy, and then part of that is investing in the construction, right, new development, and so that also factors into the equation. Are those both pushing are those upward pushes, both upward pushes or do they balance one another out? One is increasingly levy and then the new construction that is consequent from that investment in affordable housing, is that driving it down? Does that do they balance one another out? Do you understand my question?

I believe that I understand, Chair Skypi, yes. Part of the equation to I increase the construction have a notebook. Part is to increase with construction costs. So if you are using the 3% to increase affordable housing, it should in fact increase construction costs, the amount that is spent in construction. So we would be seeing that 1% or 2% going up as your tax rate went up. I think I don't know that they're going they're moving upward at the same rate, but they are both on the same they're both headed up, I just don't know what the trajectory is of that. So we can do more research on that, but yes.

Administrator Legislature, if I may add a little bit there, Chair Allen, they wouldn't go up necessarily at the same time because by the time the new construction takes to get on the tax rolls wouldn't necessarily correspond with each annual $03 increase in the property tax rate. There would be a lag. Okay.

Thank you.

Okay. As we've been focused on FY twenty twenty six, twenty seven for majority of the conversation. As we move out and take a look at what our five year general fund forecast is, which we'll demonstrate on the next couple of slides, we wanted to show the board here what our revenue assumptions are and what our expenditure assumptions are and our fund balance assumptions are as we take a look at that five year forecast over the forthcoming five years. So So revenue assumptions include an average annual change in our NAV of 5.2%. The increase in PAYGO is per board policy, So as debt service amount changes and our primary property tax changes, those increases will be per board policy.

We do have in the five year forecast again that increase in $03 for affordable housing. We're assuming a 3% average annual change in our state shared sales tax and a 3.2% in our vehicle license tax on the revenue assumptions. On the expenditure side, we have projected a 7% increase in health insurance premiums, 5% in retirement costs, 3% in internal service rates, and then 5% each in our wage strategy and utility costs across the board. On the fund balance assumption side, we are assuming the available use of fund balance, which is per board policy, so that would be required 17%. We do have built in our five year forecast operational adjustments of about $10,000,000 that's favorable.

These are things like operational savings from departments monitoring their expenditures and or increase in revenues. I mentioned last week and earlier in my presentation, we are seeing an increase in our state shared sales tax as a result of a healthy economy. So we're factoring in a portion of that as favorable adjustments to our overall numbers. And then we are programming in just the board policies again on PAYGO, affordable housing and then factoring in our debt service as we look out over the five year period from a debt service schedule perspective.

Chair Allen? Supervisor Hattie.

Thank you. Director Cordon, is the $10,000,000 favorable, that's $10,000,000 over the five years or is that like the other two categories that's an annualized number?

Good question. Chair Allen by Chair Hines, it is annual. Next slide, please. And so this chart is a high level summary of what our five year projection looks like. Again, the red expenditures red line indicates expenditures and transfers out, so total uses.

The solid green line represents our revenues and transfers represents our use of fund balance. So you can see that over the long term, there is a delta that we would need to account for on the prospective five year basis. Again, taking a look at those assumptions or the assumption set that we identified on the last chart or the last slide, we do note here in twenty eight-twenty nine, again, that primary property tax levy limit that would be reached here denoted with the gold star. So you can see over the long term, the delta in our revenues and fund balance and our expenditures gets closer and closer together as we get to 2,031. Now if we change the slide, we take a look at what it would look like if we do reach that levy limit and in terms of what we would be able to bring in revenue if we do reach that levy limit trigger.

So you can see the gold line represents revised projection if we did reach that levy limit, and we would only be bringing in at that point the difference between the 2% growth and what our NAV is growing at, so roughly 3%. So you can see how it levels off there moving into 2031.

Next slide, please. So as we take a

look at our general fund key takeaways, overall, we're stable environment for 2025, 2026. And as we look at 2026, 2027 on a base level, we are fiscally stable. We are monitoring those future financial headwinds in terms of the primary property tax levy limit restriction, and then as you'll hear in a later presentation, our annual expenditure limitation. On the right, we give a projected or initial primary property tax rate for twenty six-twenty seven, you can see our primary rate in this fiscal year is again that 4.1943 and you add in what we know today of PAYGO of a little over a cent, state cost shifts at a little over 3.5%, and then the affordable housing. So our initial primary rate is 4.2733%, things all all other things being equal.

Next slide, please. Did include a couple of slides here about general fund budget update in terms of the number of Dreams that were Dream requests for non general fund that were submitted and those that are under consideration and then those that in the supplemental category for those funds that have identified funding streams and what was submitted versus what was initially approved and under consideration as we move towards the administrator's recommended budget later this spring. Next slide, please. As Administrator Lesher mentioned, our non general fund takeaways at the outset, we do have at least initially included a $02 increase in the secondary property tax for library, that $01 for flood control, And we're looking at fund balance reserve policies that will be forthcoming to the Board at the 2017 meeting with the library, the regional flood control district and wastewater reclamation fund. On the right here, you see the secondary rate and the changes to the secondary tax rates for the library that we mentioned, the flood control, we're going to see a slight decrease in our debt service.

And then we add the state cost shifts for both library and flood to get to that secondary rate of just over Combine that with our primary property tax rate of 4.27 from the prior slide and you get your estimated combined rate of $5.28 Our 26 combined rate is $5 so a little over $5.19 so the increase in the tax rate would be just over $08 all in.

Madam Chair?

Supervisor Christy? We

have a number that equates to the average taxpayer's requirement based on the 5.19 tax rate average taxpayer bill?

UNIDENTIFIED Chair Allen, Supervisor Christie, let us get that to you. We're looking at what the median house is, and we've been figuring out, but we can, by the end of the week, get you something on that. Thank you.

Next slide, please. With that, Chair Allen, members of the Board, that concludes my prepared remarks today. I'd be happy to answer any additional questions that you may have.

Supervisor Kane.

Thank you, Chair Allen, Administrative Lesher and Director Cuadone. I want to make sure I understand this math correctly. So what I hearing from you, Director let me just get these page numbers right. On Page 15 of the slideshow, so we would go back, Who's controlling the

Andres and so on?

So we're going to Page 15. You. Director, you're telling us that right now with the numbers that we are considering, we're at this $4.2733 And did I hear correctly that with the 2% number, our max would be 4.616340.6163, that's our

That's a We

go fair mandated cap of 2%. That's our high.

That's our max levy limit for FY 2017 projected.

Got it.

And right now right now, we're at 4.9%. This last page on Page 17 would get us to 4.2733.

Is that the right

thing? Okay.

That's correct.

All right. I just wanted to make sure I was tracking this correctly. To my colleagues and to the administrator, related to the library recommendation

of a

$02 property tax increase, in secondary property taxes, we don't have limitations as we do on the primary. It would be very hard for me to support a budget that would not match the level of investment proposed here for PEEPS with the rest of our library branches. From the District 5 perspective, I am comfortable with $04 increase to support both programs, and I believe that they're vitally they're equally important. But that is just one district's position, and I certainly appreciate the flood control adjustment as well, given that so many of the so much of the work that our men and women in our flood control department are doing right now are related to cleanup efforts that is costly and is going to certainly I'm looking forward to seeing your report on the progress that we've made with limited dollars in our current budget.

And can you remind me what an additional $01 increase, what does that tend to result in monetarily?

Sure, Chair Allen. A $01 increase in the property tax rate for 2627 is projected to bring in $1,200,000 in additional revenue.

Chair Allen?

Supervisor Heinz.

Thank you. In my notes here, have that for every additional $0.1 increase in the property tax rate, the median homeowner will pay approximately an additional $2.5 over the course of one year.

Sure, Scott, and thank you. And I think what we heard from Supervisor Kano and others is simply that sort of sense from each of the supervisors what how people are feeling about what they're seeing so far, moving in the right direction, wrong direction, is there an interest in reviewing in greater depth. We've already captured a group of questions to which we can respond quickly. So I don't think it needs to be a vote on anything, but simply make sure we're moving in the right direction.

Supervisor Scott, just because you're online and it's hard to grab our attention, I just wanted to check and see if you had any comments or questions.

Teri, Allen, that's very kind of you. I have made comments and asked questions as we've gone through the presentations, but I really appreciate you circling back to

I have a sort of a macro level question just around budget and then as it relates to I think Supervisor Scott has kind of put out the concept around priority based budgeting. And then we also on boat there, right, we had there's a checkbox for the prosperity initiative. And I guess as we think about both the general fund and the non general fund dream requests and thinking about secondary tax increases, all of that sort of like my gut goes towards having some of the analysis at the macro level that ties us down into what that gets us clear on what our priorities are, and then from those priorities, right, then the budget reflects that, right? So I think that budgets are always sort of the numeric representations of our values and our priorities. And I think I'm feeling the need to get clarity up at that higher level and articulating what it is, like what is the moment that we are trying to it's the moment and then the reality and the projection over the next five years of what are we trying to do with our budget.

They should reflect the priorities that we see, priorities we want to address, and I also feel like they should reflect our commitment to the prosperity initiative. We have seen, I think in most of our agendas, the contracts, money going out, departments are checking off, how they're advancing the prosperity initiative. I would love to see some analysis then of what that has done. So as a result of some of the expenditures, what have folks said that we have invested in over the past year, whether in fact those are spatially accurate attributable to the Prosperity Initiative, and then how have we moved the needle. And then thinking from that, learn what do from what we did this past year in investments in the Prosperity Initiative, and then think about the coming year and how do we want to move the needle on the Prosperity Initiative at least through our operations and through our budget.

Need a little more. So I think it's just it's a long winded way of saying, I need some sort of higher level what are we trying to accomplish this year, but I think that identifying priorities and utilizing the prosperity initiative, and I know we have the strategic plan and how those things are informing some of the decisions that we make around investments in our money.

Thank you. And if I may cheer, Alan, if you remember, I think it was last year's budget. Two years ago, I think we started with each line item of the budget, then indicated which of the strategic plan elements that line item addressed. I think what we can do this year is not only provide that same breakdown by the strategic plan, but as it relates to the Prosperity Initiative as well. So we can see how it the same way as I said, while we have all the various elements of the budget, there's a story to tell about One Pima.

There's a story to tell about how it lines up with the strategic plan, how it lines up with the Prosperity initiative that we need to recut in various ways, the same budget and provide that information, we can do that. Where I think is the challenge that I'm not that is going to be a year, I think, away from us is the concern and how we figure out prosperity initiatives, as an example, is made to address intergenerational poverty. Have we begun to turn around intergenerational poverty? Have we moved the needle that we started to try to move? And we have more work to do on that and can bring that back to you.

But I think in terms of looking at priority based budgeting, every element of what we do now lines up either in the budget or in a boat share coming to the Board to show how it relates to the foundational elements of what you do. And I think that's going to be a critical element. That next step of looking out in the world and saying, and now has it had an impact? Are we building more homes? Are people living in homes? Are we increasing poverty, It's going to take some tools that I don't believe we have right at our fingertips today.

Chair Allen? Supervisor Scott?

Just to follow-up on your inquiry and the response you got from Administrator Lesher. Administrator Lesher, were you saying that long term aligned with what we're doing with strategic planning and further implementation of the Prosperity Initiative, that you're looking for some performance measurement metrics that we can use to determine the success of priority based budgeting that we're doing aligned with that strategic planning process?

Oh, good. The microphone was off. Didn't say Chair Scott. Chair Allen, Supervisor Scott, yes, I think and that's what I think we all need to. At some point, sometimes data is scary, but we've got to have it. If what you've done is a budget and you've developed priorities and strategic elements and the Prosperity Initiative Initiative to change the community, we need to be able to see a way to measure and to evaluate whether there has been real success. I think of the MAC dashboard and things like that where we're actually looking at what the data looks like. And if there are those elements about number of people living in homes and number of people not living in poverty, those are numbers we can start tracking and aligning each year as you move the budget forward.

Is that potentially where and I'm not sure where this stands, maybe the Board could get a report from Doctor. Schafer on this, but is that where our partnership with the Urban Institute might offer us some direction in terms of what other communities have been doing?

Absolutely. Let me get back to, as you say, Doctor. Shafer and others working with the Prosperity Initiative and see what that what all of that looks like and how we can provide you updates and real data to show how you move the needle.

Thank you, Chair Allen. Thank you, Ms. Lesch.

Thank you. Supervisor Connoe?

Thank you, Chair Allen. You made me think a bit, and I'm just I'm looking at Page nine of the material that we just got, and I don't know where staff can go with this, but what I'm trying the story that I'm trying to paint is that investment in our county employees, our 7,000 county employees is always going to be our greatest ability to influence people. Really, if you look at three line items, the childcare stipend, the student loan and the benchmarking for a total of $2,900,000 that investment is the third if you were

to

first impact of COVID-nineteen the we

we

of see up with a 2.9 number. For parity and equity's sake, I do believe that we ought to be looking to figure out a way, I always call it spreadsheet gymnastics, to figure out how that 2.9 can be the same as the 3.5, if possible, because I do think that while I firmly believe that we need additional resources to our deputies and sergeants, and I will vote as such, we have to not do that at the expense of the entire system. So I would be looking for a 3.5% in a similar bucket somewhere in there. But now you've got Board members really going into the granular administrator, Leshie. That's a bad thing when you give us spreadsheets.

All right. Are we moving on to item number five? Here we are. All right. So this is a discussion on bonds.

And if I may, Chair, Ellen, we have had conversations in the past about whether or not we wanted to go back out for bonds, and we have provided information to the Board over a period of time about how we might do that. I think that you have information in front of you about what we can do, what a timeline might be for 26 bonds or for 27 bonds. We're actually really looking at if you wanted to go out in '26, what that timeline might look like. I think my recommendation on say at this point would be to look at I think we are getting dangerously close to running out of runway for any kind of ability to take a package to the voters, understanding that this Board would have to create the Citizens Advisory Committee, put some things together to get feedback, etcetera. If the Board wanted to move in the direction of, say, the PAC bond in 2014 where there was one item pardon me, dollars 22,000,000, one item, very simple.

We know that where the community stood on an issue like this and take something like that forward, we could move forward with that easily. We can ramp up the entire citizen advisory committee and get everyone convened to begin to look at overall bond election, either in 2026 or 2027, again, runway a little bit short for what some might think of as a robust opportunity to deal with community, but still plenty of time simply to take an item or two to the voters. We have provided some background reminder, we have 2004, 2006 were the last really successful bonds other than 2014 with the PAC bonds, when going out in my recollection 2015 and 2038 on GO bonds and then out in road bonds and not being at all successful. We've delineated how we might do that again and what you need to go forward. So just we're here looking for discussion amongst the Board and some feedback and direction about whether you'd like us to begin to convene the committees, when you'd like to go to the voters, or you'd like just getting some direction from the Board to staff of next steps related to bonds.

Supervisor Haim?

Thank you. I think that it's important that we seat the Fund Advisory Committee now or at least soon to provide them to really to achieve the best process with the most community engagement, listening, all that kind of stuff that needs to be done. I think getting that done for anything more than a very small, highly targeted, dedicated, tiny amount of money in 2026 could be problem. I think we've seen the electorate is, I think, still potentially willing to support these kinds of efforts, but having more time to hear from the voters and our residents and to kind of explain the options of what we need to be doing with this, I think that would give us the highest chance of success and also the highest chance to align our residents' priorities with what we present to them most ideally, I think, in November 2027, because we don't want to see any repeat bond election failures as we have in the past. I think it's also important to, just for context, know that other entities, seeing future.

And the

And

have to go in for the expenditure limit thing, right, that's this year. So having too much on the ballot could be could, I don't know, could spook some folks. And I think therefore, especially need to put in the necessary amount of time and listen really carefully to our residents over the next sixteen to eighteen months and then present something to them in 2027 for a more robust bond package then.

We're going to be discussing this later in the alternative revenue sources in special taxing districts, but this is a general obligation bond subject and it states that the Board of Supervisors action requires majority approval by the Board of a resolution to call the election, including one or more bond propositions. So that would require a motion by the Board, a majority approval to go to the voters. And how soon after let's assume that it was approved by the Board to go to the voters, how soon is the time period between that action and the actual placement of the ballot of the bond issue?

Sure, Alan. And Supervisor Christie, if you were looking to go to the voters this November, you would have to approve the bond implementation ordinance in July or August year. We would be looking to get you I beg your pardon, the Board would call the bond election in June. So you would have to begin the conversation, we'd have to make a recommendation to you probably May for your consideration in public feedback in May and June and then finalize it in June to go to the voters with the publicity pamphlet.

So we have a pretty narrow window.

I

would suggest also just as a point of information from my perspective and my constituent perspective, I think there is a taxationbond exhaustion by the general populace, by the residents, by the taxpayers, given the very short notice or the very short time span to come up with anything that would be of representative or a pertinent manner to the community. I think that the timeframe is much too narrow. And quite frankly, given the recent affections in the city, elections on the past bonds, general obligation bonds, and the fact that we have elections coming up, I think that this if we did any action of asking for bonds, we would get the same response that we got with these other taxation bond election events in recent history. So, I would say that we should prioritize our efforts into other areas than creating a bonding package. In my estimation, it's doomed to fail.

And why go through the whole process and create the animosity that that type of

thing does with the community. And Supervisor Christie, is that for 2026 and 2027 or just 2026 to clarify?

I would say at least for 2026 and potentially for 2027 depending on what comes up in that timeframe.

Supervisor Pena?

Thank you, Chair Allen. I am really appreciative of the county administrator for circling with the district offices about what timeline makes most sense. This board needs to also exercise its connection to its constituency by starting with the message that investment in ourselves is always always a good thing, and that's what bonds do. They allow us to have a greater reach. They allow us to stretch our dollars and to invest in significant capital improvement projects, facilities, programs that our community can benefit from.

And I do believe that, that community driven process is going to be done through the Bond Advisory Committee. And I am in support of asking the Bond Advisory Committee to come back as soon as possible with the goal of having a recommendation for voter consideration on the 27 ballot. I do believe to to

get

summer lull

to there, which means you really won't get the opportunity to get the the full advisory committee back until August or September. That timeline still works from the District 5 perspective, but I want us to be able to have a robust conversation, not about what our constituency will say no to, but what they will say yes to. It is so important for us to look at why we've failed in years past and what the voter sentiment is going to be moving forward. I believe that the approach this year that I believe I'm hearing from county administration, which is ask for the expenditure limit on the ballot this year, is something that I am supportive of and have the Bond Advisory Committee do its due diligence between now and April year to come back with the Board for its recommendations. With that, I will also say that I am much more in favor of larger asks than smaller ones.

A ten year plan versus a twenty year plan is something that I'm going to be paying close attention to because I believe we have to not shortchange the asks in front of us. For instance, if our parks folks need $200,000,000 to be able to make use of a strong bond program, let's not give them a quarter of that or half of that, and that can be for any of the various fields that we are going to be paying close attention to. Since the Board has adopted reinvestment as a top priority for this Board, which benefits the entire region, investment in sidewalks, playgrounds, infrastructure, traffic mitigation, and that will be the top issue of the District five office for the Board's consideration and the Bond Advisory Committee's consideration. I hope that makes sense. Thanks.

Chair Allen?

Supervisor Scott.

Thank you very much. I appreciated everything that both Supervisors Heinz and Conno said about the need for to have time for a robust public discussion, first on the bond advisory committee and then within the community. And I'm comfortable with the timeline of that was discussed by both of them in terms of moving towards a general election vote in 2027. But to follow-up on some of the concerns that Supervisor Christie raised, especially given the number of revenue packages that the public's the electorates in Pima County have been asked to consider. One of the chief reason that we're being asked to consider a bond package is because capital improvements costs are excessively competing with operational costs.

Is that accurate, Ms. Leisher?

Yes, sure. Yes, sir.

So with that point in mind, I think it's going to be important for the Bond Advisory Committee and the Board Supervisors to be able to demonstrate how any bond package could have a positive effect on what we're asking for in terms of not just the primary property tax rate, but the regional flood control and library district secondary taxes as well. This was a point that I made when Ms. D'Arrazzo and Ms. Fife came into our office to talk with us, is that we need to be able to talk holistically to our public about how a bond package is not something where we're just asking for a way to fund capital improvement projects over a certain period of time, but it's also something where we can demonstrate the potential salutary impact on the overall property tax rate. So I hope that's something that we're mindful of moving forward.

Thank you. And if I make sure, Alan, even back, I think when you the county went out for bonds every few years. Think 'ninety seven, they went out in May pardon me, May for GO bonds November for HEERF bonds totaling about $740,000,000 in $97 But I think the other element of that, when you look the county went out in 2004 and 2006, elements of those bond elections built upon each other as expanded what's now the Behavioral Health Pavilion and the Crisis Response Center, the emergency rooms, we added $100,000,000 for the Pima County Wireless Integrated Network, recognizing that there was a long multiyear plan that was responded to with bond elections over a period of time, and that's what I hope we're beginning to look at. We've started looking at a five year what's our financial projection, and then to sit today and look at our the integrated infrastructure program, what does ten years look like? And then what where do you need to go out for bonds to provide that critical infrastructure?

Since we have not been successful since 2006, we are now at the twenty year mark, where we have not been able to provide dollars for the critical infrastructure. And we're seeing that in some of our infrastructure, and I see looking at that long term plan is going to be critical.

I had Sure, a Alan. Oh, yes.

I'm sorry. Just follow-up on the points that Ms. Lesher just made. Yeah, I think it's going to be very important that we talk to the voters about a long term plan, and I appreciated the administrator's comments because I think that long term plan needs to show how bonds and to take up a lot of what we're currently asking of the general fund, how bonds can have a positive effect on what we're looking at for the general fund. In other words, I just hope that we're going to be making a big picture argument in terms of our long term strategic plan to the voters, not just in terms of our bond strategy, but how that bond strategy influences what we want to do with overall budgetary policy.

Thank you, Chair Ellen.

So my 2¢ on the bond is that I also think it makes sense to form the committee as soon as possible to start a robust community process with an eye towards getting on the ballot for 27 general elections, that anything shorter than that is just too short and

too quick.

I think where the way that I tend to think about the bond now is that and I think maybe it's comparable to not put words in Supervisor Scott's mouth, but perhaps comparable around a bond that can articulate a vision, rather than hodgepodge of different projects, but indeed is a vision for where we want to move forward, where the county sees both county operations, but how through the bond we are investing in the betterment of Pima County. And the thing that I look at is that in fact, I was going back through the list of the integrated infrastructure plan and looking at the projects that are within there with a lens of how do they potentially, again knowing that it's just a phrase, but the degree to which they might align with the prosperity initiative, because I do think framing up the bond in terms of and I will say to not go off, is that there is a whole lot of projects in there that on the surface they look like they would be advancing prosperity. But if we can articulate a bond, a prosperity bond that shows both how we are strengthening the infrastructure of the county and investing in infrastructure that will be improving, I think, pieces of One Pima, which I think is integrated and is part of prosperity, and that it includes decreasing crime.

We're investing in bonds that will help us be more resilient in the face of climate change. Health and education, workforce, economic development, all of these pieces are part of Prosperity, and I think through a bond we could help be part of expanding that vision. I think the thing that's excellent about Prosperity and the Prosperity vision is that it's not only the bond, right? We have municipalities throughout the region who are supporting Prosperity Initiative and working towards it in their own ways through their own general funds and other programs, so it's a piece that we are continuing to make progress on in other ways, so it is not entirely bond dependent. So I think it enables us to tell a much bigger story of what we are doing, what we could advance and the vision that we can work towards through investment in this bond.

So that's kind of my 2¢ on frame for moving a bond forward that I think speaks to the realities and the needs both of the county as well as King County residents and families. Chair Allen? Supervisor Scott?

To go back to what you said at the beginning of your remarks, you are definitely not putting words in my mouth. I think you were doing a far better job of articulating what I was saying about the need for argument to come from both the Bond Advisory Committee and the Board with regard to the arguments we make from voters. But I think you probably did a better job than me because I'm sick. Give So me some grace on that.

Grace given. Supervisor Heim.

Thank you. So what I heard was Districts 123 And 5 say in panel, I think get the bond advisory committee going and then an eye toward 27 and District 4, maybe 27 or never.

Sure. If I may, if you can, we'll make sure that the Board has the most recent the Pima County Code that describes that advisory committee. Each of you, I believe, have two or three appointees to that committee as do other jurisdictions. So we'll be, start thinking about that and we'll get that out to you right away and get that formed and moving quickly. Thank you.

Sure, Allen.

Sure, Scott.

With regard to those appointments, could we get some general guidelines, Ms. Lescher, as far as the type of individual, their professional or other backgrounds that might make them a good candidate for appointment to the Bond Advisory Committee?

Sure.

I'm putting the chair. Right behind.

Thank you. Does this work if it's far away from me? Okay, but I was told it didn't the last time, that's why I keep holding. So

where

do they have to live? Like we can't have I mean, we can't be pulling people probably from Cochise County or Coconino, it seems weird. I say that because I've been trying to figure out this whole trial court multilayered committee that appoints a committee that selects a person that appoints anyway. Like somewhere in all that mess, I believe the District 2 people have to literally physically live and vote in District 2 for certain things. But then for other stuff, we can appoint people in Houston. So I'm just curious if we could know, do the three people that we have to appoint need to physically live and vote in like each of our districts? Or can I appoint a bunch of people from District 4 And 3 And 1?

Think I've got the code with me, so give me a second.

There's a binder for that. Should we move on? The eternal debate. Supervisor Cano.

Thank you. While staff looks at the binders, I will buy some time happily.

The

agenda material for prior bond elections tells us that we have in successful general obligation bonds asked for as much as $730,000,000 I think some of the scenarios that we've been given have been $100,000,000 cap rate. And so I just ask staff to be mindful of whatever the average is from 1974 on up of the buckets that have been sent to voters and have been authorized, there should be a delta there, right? Obviously, we're going to do our best to figure out why these proposals at that amount failed in 2015 and 2018. But I do believe that there is a delta here to suggest that a bond package upwards of 300 or $400,000,000 is certainly doable based on historical precedents.

Thank you. And if I may, Chair Allen, it's three point zero six point zero four zero, three appointed by each member of the Board of Supervisors, and that is all it says related to your appointments. And just for 15 members, three appointed by each member of the Board five members, one appointed by each of the incorporated cities and towns two, one from the nation and one appointed by the tribe three members appointed by the county administrator. And they serve for a term of six years. So if you recall, the Bond Advisory Committee then continues to review updates and evaluations to ensure that all the bond dollars are spent in accordance with the bond plan.

But it indicates the committee shall review and make recommendations to the Board on the proposed amendments and meet as often as deemed necessary to put the plan together.

Bond advisory committee has been dissolvable.

That's and Chair Allen and Supervisor Christie, yes, this is to recreate the bond advisory committee, but it is defined in code. So if you wanted to make changes to this, you'd have to amend the county code, Not today.

Sure. Saf. What was the total number? I missed

there was 15, but then there was five for like the city of June.

25 total.

And then two from the tribes and three from the county administrators of 25 total? Correct. Okay.

So no, they don't have to live in our district, but preferably not in Houston.

It's

not included in this code. There are other sections of the code that deal with our committees and commissions, and it has not specified. Again, some boards or committees or commissions specify that, some do not. I believe we had a member of the redistricting commission that was from outside of the county.

Anything else on discussion with the bond? No. All right. We'll move over to Item six, and this is a discussion on the expenditure limit report.

Thank you, Administrator Lesher, Chair Allen, members of the Board. I have a brief presentation for you this afternoon. It was centered materials, I believe on Friday, related to the expenditure limit, what we'll call a base level increase. We'll wait for the slides to get pulled up here. All So if you want to move on to the next slide, we'll talk a little bit about what give you an overview of what the expenditure limit is and how it's calculated.

The expenditure limit it's was a state constitutional amendment that was passed by the voters in 1980 really to limit the growth of government. Again, as I mentioned in the budget presentation, it was accompanied by that levy limit amendment as well. This is something that affects all counties, community college districts, cities, towns, and it limits the growth of expenditures because of the calculation, which we'll get to in a minute. One important note as we talk about the timeline and the calling of a potential election, the expenditure limit does not set the county's taxing authority. So this does not raise property taxes or sales taxes.

What the expenditure limit allows the county to do is to spend the revenues that we are currently receiving in any given fiscal years. The expenditure limit does not raise property taxes or sales taxes. What it allows the county to do is spend the revenues that are currently coming in, okay? So that's distinction. And as far as how is it calculated, every year the state economic estimates commission provides each of the counties with the expenditure limit for the forthcoming year.

So for this fiscal year, the expenditure limit is, as you can see on the screen there, $762,000,000. And it's a calculation that takes our base limit in 1980, multiplies it by a population factor and an inflation factor that dates back to 1978 actually. And so the calculation that's represented on the screen there is representative of the EEC's well, it's now the twenty sixth expenditure limit as $762,000,007 $3.01 $60 Next slide. So historically, how has Pima County utilized its expenditure limitation? You can see here that the totality of this chart is the bars on the chart represent the total amount of expenditures that were subject to the limit.

And the gold bars at the top of each chart represent the carryforward balances that the county has used to get beneath the expenditure limit in each of the given years. So you can see the anomaly in 2022 is because of large carry forward that resulted in the pension obligation bond proceeds being received in FY 2021, but we didn't actually expend those until 2022 as the county had expenditure authority constraints in that given fiscal year, which is the significant balance there. I do want to note that there are certain exclusions to the limit, the expenditure limit in terms of what's included, and you may be familiar with some of these as we've talked about it in terms of debt proceeds and debt service payments aren't subject to the expenditure limit. The expenditures of separate legal entities, I. E, the flood control district and

the library are

not subject to. All techs and access expenditures are not subject to. Federal, state and private grant revenue are not subject to the expenditure limitation. Any IGA revenue that the county may receive as well as investment income and interest is not subject to the limit either. And so each year, the county does a good job of ensuring that we've come underneath the limit, but it is becoming increasingly more difficult as that forward balance fluctuates from year to year.

Next slide please. So how does the county compare to other counties and when what other counties have had a permanent base adjustment in what year? So you can see the box that's highlighted there represents Pima County in terms of meeting our permanent base or our expenditure limit, I'm sorry. There are a total of seven other counties that have adopted or have passed a permanent base limit, the most recently being in 2024, we had Yavapai and Coconino County adjust their base limit in 2024, Mar Icopa, in 1998, that was an 11% adjustment. And you have some other counties there of La Paz, Navajo, Greenlee and Apache.

Apache, I think the longest tenure is 1984, had a 55% increase in their base limit adjustment. I do know that Yuma County is also planning on going out with permanent election later this fall in November. Next

slide, please.

So as we talk about what does the future look like from an expenditure limit perspective and our current revenue growth. The green dotted line represents our revenue projections on this chart where the black line represents the current projection of our expenditure limit. I want to note that for fiscal years '27 through '31, these revenues are the same as the five year forecast that we showed during the budget presentation and then beyond 2031, we are assuming an annual average growth rate of 4% for our revenues. The purple line at the top of the screen represents what it could look like if the voters passed permanent base limit adjustment. This is demonstrating a $70,000,000 base limit or 75 percent increase in our base.

But as we'll see in a slide or two, this is completely up to the county as far as what we ask the voters for. It could be something less or it could be something more. But we just used about $70,000,000 which represents a 75% increase on our permanent basis limits for illustration purposes. Next slide please. So what are the implications if the county did exceed our expenditure limit in any given year?

Essentially, the county would be required to reduce its levy limit in the following fiscal year by the amount that we exceeded. So we gave two examples here. In fiscal year 2023, tax year 2022, our expenditure limit was $654,000,000 and we had subject expenditure for $741,000,000 So if we would have not had $87,000,000 in carry forward balance to meet the expenditure limit, the county would have had to subtract that amount from the levy in 2024. So that would have been an $87,000,000 reduction in the following fiscal year of $87,000,000 So what would that have looked like in fiscal year 2025? That levy limit of $531,000,000 in fiscal year twenty twenty five would have been reduced to $444,000,000 The actual tax levy for that year was $461,000,000 which means we would have been $17,000,000 short in our limit.

Madam Chair, quick question. It seems like it's a credit you're taking on the next year to utilize it as a current year, and then you have to pay back what you take.

Chair Allen, Supervisor Christie, don't know that I would look at it as credit as much. What the county is able to do depending on how we manage the expenditure limit, I. E, wastewater bonds, tops, those elements help us reduce our limit. And so it's not a credit every year. I would think about it as more of a

it's

not an IOU either. It's just the way we manage the limit, and we do that really through the issuance of debt is the county's largest lever in utilizing those carry forward balances from any given year. So there is prudence that we take from the financial perspective to make sure that we can stay under that limit. That limit is just getting narrower and narrower as we look out to the five year picture.

Sure, Alan. When we met last year, as we do each year with ATRA, which is the Arizona Tax Research Association, which is a rather conservative organization that does not necessarily support tax increases, One of their questions for us is why we've not gone out to increase our expenditure limit, saying that we were then, at times historically, looking at comp certificates participation, and there may be ways that caused the county to incur debt rather than to be able to spend monies that we brought in. So I took it as a good sign that when ACTRA is saying, why don't you go out and increase your limit, we did ask if they would be willing to sign on in favor of the initiative, know that this was not seen seen by ACTRA as a way that we were going to be increasing taxes, but simply having the ability to spend some of the money that had already come into our coffers, if you will. Thank

you. For and I don't know if any staff would know this, but for the counties that have more recently successfully passed the permanent base limit adjustment looking at LaFaz in 2018, Green in 2022, and then the two most recent ones, Yavapai and Coconino Counties in 2024, what did those elections look like? Like what were the results? I'm just because it's like you have a Coconino tends to be more left leaning, Yavapai more right, Greenlee as well as La Paz kind of more right. So you have I'm just curious, did these counties overwhelmingly approve these, no big deal?

Or was it like nail whiter? I'm just kind of curious from a historical perspective what the Okay, that's fine. Thank you.

And then if I could just ask about why this is in place? I'm assuming intended as a to kind of temper growth and ensure the counties are sort of having modest growth rates. What is

the rationale behind having an expenditure limit? Yes, sure, Alan. As I understand it, it's really set to limit the growth of government. And it's not just counties, cities and towns and community college districts are also subject to the expenditure limit, and it's really done to limit the growth.

Sure, Alan. Supervisor Scott?

Just to follow-up on what Mr. Cuaron just said, correct me if I'm wrong, but given that this was passed back 1980, I think it was a direct outgrowth of the Proposition 13 fervor that came out of the State of California led by Howard Jarvis, because that was around the same time. And the fact that so many of our sister counties, counties that are more blue and counties that are more red, have already acted a long time ago to raise their expenditure limits speaks to the problems that this voter approved initiative caused back in 1980. But then I just wanted to ask clarification question. Didn't Pima Community College act to raise their expenditure limit, I think, a couple of years ago?

Chair Allen, Supervisor Scott, it was closer to like between five and seven years ago. I know that they went out and did that already. So they that was probably the most recent request that we had on the ballot.

And

if I remember, Mr. Holmes, the Pima Community College measure passed by a rather sizable margin.

I believe so. I know it was I'd be guessing, but I know it was it passed you fairly strong.

We'll add that into the event.

I appreciate it. Did I have my history right, Ms. Lesher, as far as this being connected with the Howard Jarvis thing?

1980 is what I was looking at. It was the constitutional amendment was passed here in Arizona, and that was for both the levy and the expenditure limits. Sure,

Alan. I'm getting real time information. I'm told Coconino County was 73% in favor, Yavapai County was 63% in favor in those representative elections. Change the slide, please. So what are Pima County's options?

The state the statute does allow a mechanism to increase this in two ways. We can do a single year override, which is a specified amount and purpose, and the override is only effective for a specified fiscal year that we include in the publicity pamphlets. The permanent base limit adjustment, which is what we're discussing in-depth here, it permanently raises the expenditure limit, so you don't have to go out each and every year for an override. There's no statutory limit on the amount of the adjustment, so we could set the adjustment such that it meets the needs of Teenah County for the foreseeable future. Again, I'll reference this, the approval does not raise taxes or grant the governing body additional authority to levy any taxes.

It just allows us to spend the money money that we are scheduled to receive. Again, the list of counties that have approved permanent based limit adjustments are Maricopa, Coconino, Yalapai, Navajo, Greenlee, La Paz and Apache and Tucson, Marana and Oro Valley have also done PBLA adjustments and we'll include those results as well on the follow-up to the Board's inquiry there. I do want to know either of these options requires voter approval, and so we can change the slide. And so permanent base limit adjustment look like? As I said, it can county can request from voters any dollar limit increase to the base.

It is a dollar amount limit, so I do want to note that. And for references, a $10,000,000 base limit would increase the expenditure limit by about $80,000,000 or 11%. A $70,000,000 base limit would increase the expenditure limit by about $590,000,000 Again, if we went out in November '26, this wouldn't be become it wouldn't be included in our calculations until FY 2028, but it would be a 75% increase over that base limit. And the purple line, this is a snippet of the chart that I showed a couple of slides ago, the purple line does represent that 75% increase or $70,000,000 base limit adjustment. So what does it look like from a timeline perspective if the Board did want to send this to the voters in November?

We can change the slide. Sometime between March and June, we would have to hold two public hearings requiring the appropriate notice and the paper of record. The Board would vote to refer the measure to the voters June at the latest, but the vote would have to come immediately following the second hearing and pass with a two thirds majority. In July, revenue and expenditure limit analysis would be submitted to the Attorney General's Office for review. Auditor General, I'm sorry, Auditor General.

In August, we would submit the publicity pamphlet for the auditor general review. And then in October, that publicity pamphlet would be mailed to voters in time for the general election on 11/03/2026. So that's a high level overview of the expenditure limit, what it is, what it isn't, and what the implications are. So that concludes my prepared remarks. Be have any questions the Board has. Vice

Chair Hines.

Thank you. So just back to that last slide real quick, and this comes from the TAG RTA side of things. As I recall, we as a Board have to refer things five months before the November. So would that not be the last meeting in May, not actually a meeting in June that we would be required to do that? Or am I doing that math wrong?

Vice Chair, we will confirm that these are under the statutes related to expenditure limits, and they do the tick tock of everything related to the election, and they are slightly different than others. But we will just confirm do the crosswalk with others and make sure that we have the right date. I'll come back to you, but these are what's clearly specified in the statutes related to these kinds of elections. Let us know. Thank you.

So potentially, I guess, Chair Allen and staff folks, that's crazy. It shouldn't be the same for all of it. So like referring this versus referring the RTA package versus referring like a taxing district or something like those could potentially have different all different timelines. Okay,

thank you. So is there something that we need to do today at this meeting in terms of moving this forward?

Thank you, Chair. If we could, our agenda is to be able to take action. If the Board would like us to move forward with preparing the expenditure limit election, we will do so and begin with the process of scheduling public hearings in March.

I will move that we direct staff to prepare to send to the ballot a permanent base limit adjustment proposal for the voters to approve in twenty twenty six November.

Second. Seconded by Supervisor Conno. Discussion?

I would say I need to have more time this.

From the surface of it, it has its attributes, but I would respectfully request that I have the opportunity to study this. So, I'm maybe having some

of agenda for the next board meeting. That's the role of this board, but if we're going vote for the end of the meeting.

And, Sharon, if I may, to clarify, this is just a direct step to get it going, not this is not the referral to the ballot itself, just to clarify that.

Yes, if the motion before you is to move forward with the first steps in scheduling the public hearing, and as if we you would not be actually voting to send this to the ballot until a later date. But this could easily simply be begin the process as if we were to be going to the ballot and schedule confirm the dates and schedule the public hearings.

Starting the process.

Yes, sir. Okay.

Any other discussion? All those in favor?

Aye.

Those opposed? Same.

Same. The motion passes for in support, 1F pension. Believe per the agenda, it is now time for a break. We will resume in ten minutes. All right.

I think we are all back. And we are moving on to item number eight, special taxing districts.

Thank you, Chair Allen. This is the first time today. Information, there have been conversations in the past about what the Board might want to do, what's possible related to the establishment of revenue sources in special taxing districts. You have a list in front of you in the memo of possible actually, it was from we just recirculated a memo from March 2025 that show what all the different districts are, what the requirements are from the board, etcetera, just to provide these as some background should the board wish to at any time begin the conversation about special taxing districts.

Madam Chair?

Supervisor Chris? Two questions.

Who oversees these taxing districts? Like fire districts?

Sure, Alan and Supervisor Chrisy, it depends on the district. Some get created like a health district, as an example, same as a library district or a flood control district where you would all be sitting as the board of that entity. Become different there's some different governance related to fire boards and things. Most of these, as my recollection, I believe that you sit as the if you create the district and it's a taxing authority within the county, you sit as that board.

Yes, other than than the district is not already created, we would be the overseers of it. But if there are some districts that have different overseers,

Yes, yes. But something like a health district, which is one of the ones that we've been hearing about the most, you would be sitting as the board of that public health district.

Madam Chair, just out that on the Page three that shows the voting of the Board of Supervisors, I think pretty much of them require a unanimous vote. Just wanted to point that out. Page three of the memo, Board of Supervisors action requires unanimous approval of the Board, requires the unanimous approval of the Board.

Just some food for thought.

And Chair Allen and Supervisor Christie, as you noticed in some of these, some you create, some is response to a petition from the community, some there are different that's what we've tried to again, I look at some of them they're quite different in some, but you're right, many require it unanimous.

Chair

Allen? Vice Chair Allen.

Thank you. I guess for the awareness of my colleagues, one district that is being looked into, contemplated by a subcommittee, a working group of the Southern Arizona Chamber at this moment would be a public health services district. This working group was, I think, impaneled over a year ago by the Southern Arizona Chamber to address the worsening healthcare workforce, specifically physician shortage issue. And that group has representatives from all of our Pima County's major health systems to two of our community health centers as well as, of course, Northwest Medical Center, TMC and Banner. So in terms of so they're looking at the feasibility of that potentially for later this year to address the what I also believe is a degree is a huge healthcare workforce issue and could potentially become a competitive disadvantage for this region if people can't get in to see a doctor or frankly any kind of primary care person or they have to drive up to some specialists, that kind of stuff.

So I do know that that's one special district. That would be a majority vote of the Board to send it to the ballot for voters to approve, not a unanimous vote. But it would work like a library district if that's something that comes forward.

So it does not require unanimous votes to create the public health district?

Correct. Sure, Alan. It would simply be referred to the voters just like the library district was whenever that happens. And then the voters would vote and a simple majority would establish that district. We would then become actually for Public Health Services District, we would become the Board of Health would go away, we would become Board of the Public Health Services District.

But it does not require unanimous vote of the Board to call for the election, that's a simple majority? Correct. I'm wondering if somebody could explain the scope of a public health services district. What all could be contained within that? I heard about the interest in the initiative behind physician shortage, right? It's been a driving factor towards some interest in this, but I am interested in what else can be covered within that district.

Sure, if I may share, Alan. So conveniently for public health services, there is nothing in the Arizona revised statute that presently defines exactly what that is, which means there we have quite a lot of flexibility. For example, with regard to the very early draft language that I know the Southern Arizona Chamber Working Group is looking at, it's not simply just to address healthcare workforce, but also to address pressing needs of population health such as education, screening, connecting people to care, access to care issues all surrounding the two things that kill us most, which is of course cancer and heart disease. So it wouldn't just be a healthcare workforce effort or initiative that is being contemplated, but one that also more broadly addresses pressing pressing public and population health issues affecting Pima County residents.

Sure, Alan, if I may. Looking at the information provided by the County Supervisors Association just about the overview of public health services and the general purpose is delivery of public health services within a given county, with the government being the Board of Supervisors serving as the Board of Directors. And then it's simply the Board provides for an election approved by the majority of voters. There are a variety of other information related to tax levy and such, but this is all CSA has done a very good job summarizing every different district available. That's the one line summary from CSA.

Chair Allen, should the Board there have been discussions in the past that the Board might want to move forward with creation or additional evaluation, consideration of a district. It is on for that purpose. If there is no the Board is not at this point looking for the Board to be moving forward to create a district, we don't need specific action.

Chair

Allen? Director Connolly.

Thank you. The District five office has not been approached about the proposal or the idea of a health district, therefore, cannot be supportive at this time. Thank you.

Chair Allen? Supervisor Scott?

I read with interest the materials attached to the item, but given the, I think, crucial need to move forward with a bond package, I would prefer that the Board of Supervisors not consider any kind of special district health, jail or any of the others that are mentioned in that document until we're able to move forward with a bond package.

Thank you.

Also, just to add to that, I was as our representative to the Board of Directors of the Chamber of Southern Arizona, I am somewhat aware of the work of the working group that Supervisor Hines made reference to, and I would want to hear some more not only from that group, but just as significantly the role that our area hospitals and healthcare organizations would take in terms of being at the vanguard of any such proposal. Thank you, Cheryl.

I think I would be interested in hearing how or learning how a health district might help create a net for those who are being pushed off the roles from the Affordable Care Act because of the increased premium of people who might no longer be getting coverage or have pushed out some increased obstacles for staying enrolled in through Medicaid. Just as people are struggling with healthcare, my question is, is the creation of a health district a way to help compensate for folks losing access to healthcare and the lack of affordability of healthcare on the near horizon. And I also, to I think echo Supervisor Scott's comment, be interested in kind of hearing from folks in the community who are working on this idea and kind of invested in this concept and to kind of learn a little bit more about what they're thinking and why they support it. Any further comments on this item? We have on the agenda item number nine, county administrator search process, but I think we've already solved this, right, that we've just come up with another one year contract.

So we could just move on.

Right. And Gerriel, the only information that we would need today, the contract ends in January 2017, in the last year, there is no need to take action at this time unless the Board believes it would like to hire a search firm to work through the process. Chair Allen and I have looked at a timeline and think this can easily wait until spring, summer to begin. The concern is if you would like to hire a search firm, our procurement process can take from ninety to and twenty days. And we wanted to add that to the beginning of this, so that if there is a search that would require a firm that we can start to procure that to assist the Board.

So that's your timeline. Today. Thank you. I'm sorry, Chair Allen and Supervisor Christie, to start a process this summer, in the late spring, early summer is fine. If you would like that process to be informed, it would be driven by a consulting company, we need another ninety to one hundred and twenty days to hire that company to go through the procurement process. So that's why we're coming to you today to say, what's your direction? Did you want to go to a national firm? How would you like us to handle that so that we can ensure that we're developing the timeline that allows you to hire that company or to procure it?

Madam Chair, I would like to offer that I should be in complete control of the appointment of the next.

I'll

put on the table that my opinion is that we can do a national search without necessarily hiring a firm and convene a representative committee that can be part of this process and drive it forward without the additional layer of a firm. And looking around at other municipalities, folks have done well doing with national hiring without the addition of a firm, but just kind of getting the word out. And there's some tools and I think that people have had some success with to reach folks better at this level.

I would agree, but I think we're fully capable at our level and local level to come up with a proper vetting committee or our own search, and it's not necessary to hire outside consultants who have to take so much time to work themselves up to speed. I think what we should talk about in relation to what you are offering and what I'm agreeing with is the makeup of this committee. Is it going to be purely Board of Supervisors? Is it going to be community members? Is it going to be employee representatives?

I think those things need to be considered. I would also think that as much transparency in the process would be better than how it has been perceived in the past, rightly or wrongly, but it should be done in the public and the public view with public participation as far as the extent of perhaps including general members of the public from each of our districts to participate in the committee as well. I don't know how to word it in the sense that we need to start the steps, but based on those criteria I just outlined.

Thank you.

Supervisor Cano?

Thank you, Chair Allen. Of course, it goes without saying that all of us on the board dream of the administrator offering a one year extension, but we know that that is not the case, and we've got to move in a judicious manner to make sure that we have another top tier candidate leading our county. I do believe that we need to expedite the timeline for a new administrator. I am more comfortable with an October or November '1 hiring date. I believe that that timeline allows us to be able to ensure that there is an administrator elect who will be able to hold hands with our current administrator throughout that process.

It's also right before the budget request. So actually, let me backtrack here, Helen. If we were to do this with a status quo time frame, meaning January higher, I'm worried that the same time line that we've reviewed today, for instance, where departments are just submitting their budgets, is not going to be conducive to the long term strategy because that new administrator would be jumping right into budgetary recommendations and decisions. And so I do think some kind of overlap and some kind of training with the current administrator is going to be paramount to that. That would put us at a selection review probably throughout June or July with the time frame that we've just heard of, although I do want to give some voice to the fact that I or to the District five perspective that I don't know that we need to lock in a national firm either.

I believe we can hire locally and we can have a third party candidate firm, I should say, be able to oversee this process and to have a little bit of independence on behalf of the Board since technically this is our decision, right? But the timeline that I'm more comfortable with is not us figuring this out in January, it's in the fall.

Thank you.

Chair Allen?

Supervisor Scott.

I think it's very important that we have a fulsome search process. I don't think it necessarily has to involve a national search firm, but the reality is that we're looking at somebody other than someone with the last name Huckleberry or Lesher serving as the county administrator for the first time since 1993. And the community is going to expect us to have a fulsome, robust, detailed search process. And frankly, I would like some guidance from our human resources department as to timelines and structures that the Board might consider. I absolutely agree with Supervisor Cano that having an administrator elect, if you will, in place is in October, November, perhaps even September, would give time for that person to have ample opportunity to work with Administrator Lescher.

I also think there might be value since ground for the county, but it's not new ground for Pima Community College or many of our local school districts that perhaps we could ask our human resources department to also be in touch with some of those other large organizations that have hired a superintendent or a chancellor in recent years because this is, as I keep saying, new ground for us. But I think we can ask Ms. Lescher to ask Ms. Boland to follow-up with us in terms of some structures, time lines, overall guidance that we might follow. But I agree with my colleagues that we don't necessarily need some high powered national firm.

We just need more guidance and direction for something this county hasn't done in many, many years.

Thank you.

Thank you, Cheryl.

Sounds good. Go for that one. All right. Well, there's nothing oh, no, we have an addendum. Almost missed it. So we'll move to addendum item number one. This is the twenty twenty twenty six Regional Transportation Authority special election. It's the early ballot drop off sites and the replacement locations. I will move the item. Seconded by Vice Chair Hines. Discussion?

Madam Chair. Yes. I would ask that we approve the locations as presented. However, there is an item that I would request be pulled for future consideration by the Board, which will allow for plenty of time for discussion and certainly. And that item that I wish to have pulled on this agenda item is the mobile voting unit. This is the first I've heard of it. I'm not familiar with its makeup, direction, its staffing, where its location is to

the

Board Board in the formal Board Board of of Directors Supervisors meeting and to approve the ballot off sites and replacement locations.

Just to clarify, you're making a motion that excludes the mobile voting unit from the drop off sites and replacement locations?

Yes. And that would be for this Tuesday's Board of Supervisors meeting.

Excuse me, Chair. Is that related to the item, the addendum item?

My understanding is this was referred to this issue was brought up in relation to deciding that there would be a mobile voting unit involved.

Is there a second to this motion? So I don't hear a second, so the motion dies.

It talks about what the drop off sites are and attachment does include the multiple. It was there. Okay.

So the motion died to remove it, so we'll return to the original motion, seconded. Any further discussion? Sure, Alan. Supervisor Scott.

We cover so many items on board agendas. I have a vague memory of there being reference made to this mobile unit, either in a report from the recorder or the elections director, perhaps we could ask and I may be incorrect in that memory, but perhaps we could ask administrator to ask the recorder's office and or the elections office to get us some more information about this unit that Supervisor Christie requested.

So I do know that it was they had received a grant, the recorder's office received a grant from the Tonawatom Nation, one of the 12% grants, and then I believe received a second grant because in the time that the first one was received and then the cost of getting the unit together had gone up, so they received another grant, and there's been resources then that have come from revenue coming then from the nation to help support this.

I'm old enough to remember the first RTA and there was a pretty good cloud controversy over the voting results of that. I don't think this community could go through another one of that nature. And I think when we bring in the subject of a mobile voting unit, we need more clarity on what that means, where it's going, who is going to be the beneficiary of, who is operating it, who is staffing it, are there political parties witnessing inside this. Once again, would ask my colleagues to if they want to go ahead and if we want to go ahead and approve the gist of this item, that's fine with me, but I would again request that we have a full disclosure discussion at the next board meeting on the mobile voting unit.

Chairman?

Supervisor Scott.

Thank you. Just to reiterate something about this election, which is that it is an all mail in election, and the vast majority, significant percentage of ballots that come in are going to come in by We're being asked to approve this item because we have to do it with every election. But when it comes to the voice of the people with regard to propositions four eighteen and four nineteen, most of those ballots are going to be coming in by mail. So I don't know that I have the concerns that my colleague from District 4 does, but I do agree with him that it would be nice to get more information, but it's not going to preclude me from supporting the item, especially for the reasons I just cited.

Sure.

Allen? Vice Chair Hines.

Thank you. Does staff have any additional description, explanation, anything about this mobile unit, how it's going to work, some of the questions? Not right now. Okay. All right. Thank you.

Madam Chair, and to Supervisor Heinz's point, this item is first I don't want to say devolved, but manifested itself at the last election integrity meeting by the deputy recorder. And this was basically the first time that entity had ever heard of it. And I daresay that no one in Pima County, no resident has any idea what it is. And I really understand what Supervisor Scott is saying, but every little bit of controversy or element of unknown transparency just adds to the general disgruntlement of the community. And it really, I think, needs to be explained in those terms that I've laid out before what this is all about.

I'm trying to figure out the end game here because I firmly believe and have confidence in our elections workers and our recorder staff who follow ARS every single day or ARS, excuse me. And the result is no different with a ballot being reviewed, signature verified. I mean, there are checks and balances in place for any kind of abuse to be flagged immediately. I don't believe that it is prudent for us to halt a very defined early drop off site list and replacement locations here that the recorder and our election team have asked for us over hypotheticals what could happen in this instance when I have full confidence that our county staff are following the law and doing everything possible to ensure that this election is safe and secure.

And I will also just add, again, that the intention behind a mobile unit is useful for question. That's So, great a that's opportunities for rural communities to have as equal access to some of the services and resources that those that live close to Tucson have, I'm in full support and I appreciate the leadership of our county recorder in thinking about and addressing the needs of rural communities. With that, I will bring the item to a vote. All those in favor? Aye.

Those opposed? Aye. Item passes four-one. And that would actually be our final item for the retreat. We'll thank everybody for all their work and Chair Allen. Supervisor Scott.

Thank you very much. Could I just thank our IT staff moving pretty quickly to set up my ability to participate in this retreat remotely? They didn't know that they needed to do that until probably when they walked in the door this morning. And I also want to thank Ms. Manriquez, our clerk and Ms. Perez, the Chief of Staff to the county administrator, because they also played some role in making it possible for me to participate remotely. I'm very grateful. So thank you all very much.

Thank you. We are adjourned.