Town Council - Regular Meeting

Yeah, gotcha.

I just don't think they're protecting the water very well. Are you on the water? for me Yeah.

Well, good evening, and welcome to your town hall. Having reached the hour of 610, I hereby call to order the meeting of the Salaried Town Council. Also remind everybody that tonight's meeting will be broadcast live. After the pledge, I will suspend the regular meeting just for two quick community facility districts meeting to approve their budgets. And for all the men, dad in the audience, I hope you had a nice Father's Day yesterday. we don't usually get recognized so I figured I'd throw that out there tonight's invocation will be given by Diana hamburger our permit technician and then Diana if you want to just continue and lead us in the pledge right afterwards because we don't have a youth here being in the summer just just start off with the Pledge of Allegiance once the invocation is done if not I'll go ahead and lead us that's okay Are you okay doing that afterwards? Okay. Didn't want to throw a loop on you, which I did.

Hello. Good night. Let us take a moment before we start this meeting to address important issues and service for the town of Saurita. We pray for our mayor and all the council members tonight. May their discussions be thoughtful and guide their decisions in order to take them under wisdom and fairness in order to promote the well-being of the Sahuarita community. Patience, understanding, and unity shall guide our work tonight. Amen.

Amen. Thank you.

I'm sorry, I'm not gonna do it. Thank you. Thank you. I hereby suspend the town council meeting.

and commence with our Rancho Cerrito Community Facilities District meeting. I hereby call that meeting of the Rancho Cerrito Community Facilities District to order. Madam Clerk, may I have a roll?

Board Member Gillespie, absent. Board Member Lisk? Here. Board Member Lytle, absent. Board Member Morales? Here. Board Member Priolo?

Here.

Vice Chair Egbert? Here. Chair Murphy?

Here.

Quorum present.

Thank you. Next is call to the public, but that's just for the CFD. At this time, any member of the public is invited to address the district board on any issue which is on tonight's consent agenda or any issue which the district board can lawfully act upon at a future meeting. Pursuant to Arizona open meeting laws, the district board may not discuss the items, but individual members of the district board may respond to criticism made by those who have addressed the district board, may ask staff to review the matter, or may ask the matter to be placed on a future agenda. I don't have any cards for the Rancho Sarita CFD. Anybody like to address the board on that? Seeing no movement, I will close the call public and go to item number four, which is the consent agenda and entertain a motion at this time. We have a motion and a second. All those in favor, signify by aye.

Aye.

Aye. Aye. Any opposed? Motion carries. Next is item number five, Madam Clerk, 5A.

Discussion and possible action regarding resolution number 20260037, the adoption of the final budget.

Thank you, AC Mariotti. Our district treasurer will present this item. We're gonna hear from him three times tonight, two CFDs and the regular budget. Welcome.

Thank you, Mr. Chairman, members of the board. So this is the last of several budget meetings that have been scheduled for the Rancho Cerrito Community Facilities District. At your last meeting, you adopted the tentative budget for fiscal year 2027, and the fiscal year commences on July 1st, which is this upcoming Tuesday. So tonight, after holding a public hearing, you'll have an opportunity to make changes to the budget. The only limitation to that is you cannot adopt a budget that's higher than the tentative budget that was adopted at the end of May. So with that, we'll go ahead and jump right in. So the 2027 fiscal year budget is set at $1,949,100. The budget is balanced in that our financing sources are equivalent to our financing uses. This budget is lower than the current year budget by 7.3 million dollars so that's a 79% reduction and it's lower because in the current year budget our resources included unspent bond proceeds that will all be spent by the end of this fiscal year so they won't be available next year hence a lower overall budget. This slide provides information on where our resources come from. So the district levies a property tax that will provide 92% or nearly $1.8 million of its resources. The tax has two components to it, and the combined tax rate is $4.99 per $100 of net taxable assessed valuation of all the property that's within the district boundaries. Of that amount, $4.69 is used to pay debt service on the bonds that have been issued, and 30 cents goes for operations and maintenance. The $4.99 tax rate is unchanged from the current fiscal year. And it's actually been the same since bonds were issued back in 2018. So the next pie wedge would be developer contributions totaling $147,000. And that is the developer having to subsidize the debt service payments that are owed during the year. Property tax collections will not be sufficient to make all the debt payments. And so the developer, pursuant to an agreement we have with him, has to make up the difference. We've also programmed $11,000 for investment income. This slide provides information on how we will spend our resources, and as you can see, 97% is used for debt service, so that would include debt principle, debt interest, as well as some banking fees related to our bonds that were issued. Operational costs total $51,000, and that will be used for general administration costs in the district and outsource district engineer and as well as street maintenance costs for infrastructure that was built with those bonds. There are no ending fund balances as the district is expected to spend all of its resources during the year. So with that, we will open up a public hearing. Once the public hearing is closed, the board will have an opportunity to make adjustments to the budget. You can reallocate it, amounts within it. You can lower the overall amount, but you cannot increase it above what was adopted at the end of May. Then if the resolution that's before you is approved, it would adopt the fiscal year 2027 budget, and it also establishes that aforementioned property tax levy. So with that, Mr. Chairman.

Thank you. You have any questions before I open up the public hearing? No? I'll open the public hearing on this particular item. Would anybody like to address the board, district board? Seeing no movement, I'll close the public hearing, and at this time entertain a motion. Mr. Mayor? Yes. We have a motion and a second. Any further discussion? All those in favor, signify by aye. Aye. Aye. Any opposed? Motion carries unanimously. Having no more further business for the Rancho Cerrito Community Facilities District, I'll adjourn that meeting and then hereby call to order the meeting of the Quail Creek Community Facilities District meeting. And Madam Clerk, I'll ask for a roll.

Board Member Gillespie, absent. Board Member Lisk. Here. Board Member Lytle, absent. Board Member Morales. Here. Board Member Priolo. Here. Chair Egberts. Here. Oh, Vice Chair. I was like, wow. Vice Chair, you got a promotion. I could tell. Vice Chair Egberts. Here. Chair Murphy.

Here.

Quorum present.

Thank you. Next is call to the public on the Quail Creek Community Facilities District. At this time, any member of the public is invited to address the district board on any issue which is on tonight's consent agenda or any issue which the district board can lawfully act upon at a future meeting. Pursuant to Arizona open meeting laws, the district board may not discuss the items But individual members of the district board may respond to criticism made by those who address the district board, may ask staff to review the matter, may ask the matter to be placed on a future agenda. I don't have any speaker cards for the Quail Creek Community Facilities District. Seeing no movement, I will close the call to the public and move to item number four, which is our consent agenda. Mr. Mayor? Yes.

I move to approve the consent agenda as presented.

I have a motion.

I second.

We have a motion and a second. All those in favor, signify by aye.

Aye.

Any opposed? Motion carries. Madam Clerk, item number 5A.

Discussion and possible action regarding the adoption of resolution number 52 for the Quail Creek CFT final budget.

And we have a return visit from Mr. Mariotti, who's our District Treasurer of this board. Please present.

Thank you, Mr. Chairman, members of the board. Like the last district, this is the last of several budget meetings that have been scheduled that have been held in a public venue. At your last meeting, you adopted the tentative budget for fiscal year 2027. And the fiscal year for this district also commences on July 1. Tonight, after holding a public hearing, you'll have an opportunity to make changes to the budget and adopt it finally for the year ahead. So with that, the fiscal year 2027 budget is set at $1,129,840. And it is balanced in that our financing sources are equivalent to our financing uses. This budget is slightly higher than the current year budget. It's pretty much the same, but slightly higher at $22,000 more or 0.2% higher. And that's because there really are no significant changes in the district compared to the current fiscal year. This slide provides information on where our resources come from. So the district levies a property tax, which provides 89% of its resources for the year, totaling a little bit more than $1 million. There are two components to that tax, and that is a debt service component and an operations and maintenance component. The total combined tax rate for this district is $1.82 per $100 of net taxable assessed valuation. The debt service component of this is $1.52, and the operation and maintenance component of the total is $0.30. The combined tax rate is lower by $0.44 per $100 of net taxable assessed valuation. So that works out to be about a 20% reduction in the overall tax rate next year. Beginning fund balances are programmed at $115,000. And the reason why we have beginning fund balances is because our collection rate is higher than what we anticipated in the current year budget. And it also includes some residual amounts from prior fiscal years. And that's actually helping to drive the tax rate down lower than it otherwise would have been. And then rounding out our resources, we've programmed in $7,000 for investment income. This slide provides information on how we're going to use those resources. And as you can see, 84% are related to debt service, which would be to make our principal and interest payments, as well as to pay our trustees for just managing the debt service obligations that come with the bonds. And then operations makes up 16% of our costs. And that would go to pay for general administration, roadway maintenance, and a portion of the maintenance at the Quail Creek Veterans Municipal Park. Here again, there are no ending fund balances because the district is expected to consume all of its resources during the year. So the final steps in the budget adoption process would be to hold a public hearing. After the public hearing is closed, the board has an opportunity to make reductions to the budget or other reallocations within the budget. And then if the resolution before you is approved, it would adopt the 2027 budget and establish the aforementioned property tax levy. Mr. Chairman.

Thank you. Any questions for the district treasurer? Having none, I'll open the public hearing. Anybody like to address the district board on the Quail Creek CFD? Seeing no movement, I will close the public hearing and entertain a motion at this time.

Mr. Mayor?

Yes.

I move to adopt resolution number 52. I second. I second.

We have a motion and a couple seconds. Any further discussion? All those in favor signify by aye. Aye.

Aye.

Any opposed? Motion carries. Having no more further business for the Quail Creek CFD, I'll adjourn that meeting. And Madam Clerk, may I have a roll for our regular meeting?

Council Member Gillespie? Absent. Council Member Lisk? Here. Council Member Lytle, absent. Council Member Morales. Here. Council Member Priolo.

Here.

Vice Mayor Egbert. Still here. Mayor Murphy.

Here.

Quorum President.

Thank you. And we have one presentation tonight. I'll be presenting a proclamation declaring the month of July 2026 as Park and Recreation Month. Would all of the park and rec staff that are in attendance and park and rec commissioners please join me at the podium.

Thank you.

Whereas the park and recreation is an integral part of communities throughout the country, including the town of Salarita, and whereas park and recreation promotes health and wellness, improving the physical, mental health of people who live near parks, and whereas parks and recreation promotes time spent in nature, which positively impacts mental health by increasing cognitive performance and well-being, and helping alleviate illnesses such as depression, attention deficit disorders, and Alzheimer's, whereas park and recreation encourages physical activities by providing space for popular sports, hiking trails, and many other activities designed to promote active lifestyles. And whereas park and recreation programming and educational activities such as out of school time programming, youth sports, and environmental education are critical to childhood development and whereas parks and recreation increases the community's economic prosperity through increased property values expansion of local sales tax base increased tourism the attraction and retention of businesses and crime reduction whereas parks and recreation is fundamental to the environmental well-being of our community and whereas parks and recreation is essential to the adaptable infrastructure that makes our communities resilient in the face of natural disasters and climate change whereas our parks and natural recreation areas ensure the ecological beauty of our community and provides a place for children and adults to connect with nature and recreate outdoors whereas the U.S. House of Representatives has designated July as Park and Recreation Month, and whereas the Salarita Pima County recognizes the benefits derived from parks and recreational resources, now therefore it be resolved that I, Tom Murphy, the Mayor of the Town of Salarita, on behalf of the Town Council, do hereby proclaim July 2026 as Park and Recreation Month, in testimony whereof I have hereunto set my hand and cause to be affixed the seal of the Town of Salarita on this 22nd day of June, 2026. And I have a proclamation and we'll get a picture. Does anybody, Devin, would you like to say a few words for us and then we'll grab a picture?

Well, thank you, Mayor Murphy, members of the council. I did not expect such a large crowd for Parks and Rec Month tonight. So we're appreciative of it. So we just wanted to say thank you to the council, to the community. We thoroughly enjoy serving this community. It's beautiful in the town of Saurita. We have members of our staff here. I'd also like to call out specifically two members of our Parks and Rec Commission, Chelle Zatkin and Sherry Lau. We're so generous to spare their time tonight to join us. Big picture, National Recreation and Parks Association helps with working through the House of Representatives to distinguish July as Parks and Recreation Month. To my knowledge, this is the first time that the town of Saurita is participating. So it's appreciated. Our staff feels it. We feel the support every single day. And so we thank you, council, and the community and our commission. So thank you.

Thank you.

Alright, perfect. One more? Thank you. Thank you.

And next we come to our call to the public. It is now open. Individuals may speak for three minutes. Spokespersons speak for ten. Please note that the advocacy of candidates or ballot measures are prohibited by law because you can't use public resources to promote that and our town facility is that. However, Council cannot discuss matters not on the agenda. However, at the end of the call to public, Council members may respond to criticism, request staff to review the issue, or add to a topic to a future agenda. So just some folks are new. So there's, you saw maybe on the bottom right or the top right of the, the toggle switch brings the podium up and down and you can adjust the mic a little bit. There's three lights. The green light is you have three minutes The yellow light will come on when you have one minute. And then the red light, I'll politely interrupt and ask you to wrap up your comments, because we have a lot. So I have to kind of stick to the three minutes. First is Mel Selway. And if you're coming from the back, your time doesn't start until you get up here. I don't want anybody tripping like I almost did.

By the way, this is the switch that he's talking about?

Yes. Thanks, Mel. Appreciate that.

Mayor, council, town of Sarita staff members, I assume that most, if not each of you, reside in the greater Sarita community. I realize that the council cannot respond to any questions that I ask in the call to public, so my question is a rhetorical one. If the Copper World Project is permitted to proceed and the four planned open-pit copper mines destroy the Santa Rita Mountains, will you continue to reside in the greater Suarita community? For all in the audience who are here against the copper mine, please stand and raise your hand. Thank you. Thank you, residents, United Against Copper World. And thank you for considering my question.

Thank you, Mel. Steve Brown. And then April Mitchell is on deck. And April, thank you for printing so nicely. I can read your name. That's not always the case.

So where, let's see.

Put your right hand down on the podium. Now move it down and to the left. Yeah, there you go. Yep, he's showing you.

Okay.

So good evening, and thank you for the opportunity to speak. My name is Steve Brown. I'm what you would call a desert rat. I was born here in the Sonoran Desert, came home to the Santa Rita Ranch three or four days after I was born, and grew up in the Santa Rita Mountains. Last week, my wife and I celebrated the arrival of what we hope will be a good monsoon season, driving out onto the Santa Rita Experimental Range to watch the washes run. It was peaceful there. The sweet aroma of the desert after rain and the soft murmur of the running water restored my hope for the future. I'm here tonight because protecting the Santa Ritas from future open pit mining is my priority. You, the elected officials of Sarita, hold the key to that future. How will you use that key? Will you support the industrialization of these mountains? Or will you enable them to continue to be the sacred space that they have been known to be for millennia? Now, you've undoubtedly been inundated by promises from big, rich, powerful, unelected corporations claiming that the copper world mines are inevitable. That's simply not the case. One of my favorite quotations comes from Mark Twain, who said, it ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so. You've heard in public meetings, and also we are all discovering in some communications off the record, promises from these big corporations about American copper for America's future. Now, you're all smart people. Don't be fooled. Do your own research. Check out the history of open pit mining in arid ecosystems. Check out the promises that big foreign mining companies and private utilities made over the last century right here in the Sonoran Desert. You'll discover that what these companies promised just didn't turn out the way they said it would. I'm old enough to remember, before the open pit mines came to the west side of the Santa Cruz Valley, mining companies threw a big party for us ranchers and farmers and tribal folk and told us, in 50 years you'll never know there was a mine there. That just ain't so. Today, other big companies are setting their sights on the east side of the valley. 50 years from now, will the Santa Rita Mountains and the Santa Rita Experimental Range still be beautiful? Will Sarita be known as a popular, world-renowned gateway to the unique, biodiverse Sky Islands? Or will your city just be another slag heap? Will my grandchildren, your grandchildren, thank you for stopping the desecration of the Santa Rita Mountains while you still have the chance Or if they're still here, will they struggle with the long-term effects of living in an ecological sacrifice zone? Just another cancer alley.

Thank you.

Thank you. April Mitchell and then Shanna Sellers.

Good evening everyone. It's good to see you Mayor and all others that are here. My name is April Mitchell and I'm a resident of Rancho Cerrito. My husband and I are retired for the last couple of years. So we were busy with our girls, raising them, high school, college, et cetera, et cetera. And just trying to stay on top of taxes and all of our other obligations our association and other community obligations so i have enjoyed living here and um i've noticed that it has grown exponentially the good things this young man talked about excuse me about the budget and about the deficit well the deficit doesn't it's not there because everything is balanced. That's what he said. So I wanted to commend him for bringing that to our attention. That's important. But the real question I have is pertaining to the leaders and the leadership and real estate and building and all the up and coming communities and all the revenue that it brings and all the issues that it brings. So in terms of water, resources and how these mines, which I do not know, how they will or will not affect us. If everyone is looking for water and we are at a shortage of water because we're in a drought and every year is somewhat unpredictable and we have corporations and other people coming in that need a large amount of water to run their operations I have no idea how you're going to pull that magic trick off but I thought I would address that Then my second part of the question, or I want to thank the Rancho Cerrito, the Green Valley community. I know various people. I participated. My husband likes golfing. There's so many wonderful things. The Parks and Recs, we have lots of the swimming. We have a lot of great things. However, I think what's really bothering people that I listen to tonight is how are we going to keep this magic trick going? We're all going to be happy. Somebody's going to not be too happy. But I just also wanted to address in relationship to all the additional bonds that we always vote for, and when he talked about things being balanced and how well we're doing, those bonds and so forth, will they be allocated for additional services that we might need for some families that have troubled kids? Is it always on the parents? to utilize our insurance and so on and so forth? Or will we have any additional centers, additional to parks, exercise, fresh air, getting out and enjoying yourself? Because we have kids with various issues, bipolar, We have autism, we have ADHD, we have all kinds of issues. There are some families that are very involved with, my time's up. They're very involved with Down Syndrome. So that being said, how will we keep this whole thing running so smoothly? Will we be able to use bonds for additional community needs? Thank you. Thank you.

Thank you.

Shanna Sellers and then Terry Roth.

Good evening. I'm here to speak in opposition of the Town Code amendment to add and raise the park schedule fees coming up.

Well, if you'd like to speak to that issue, you can either speak now or anything. Oh, yes. We can't respond, call to the public. I totally understand. If you'd like to wait, or if you can't stick around.

Well, it's better because my 11-year-old is actually practicing at Animax, and I've got to get out of here. That's OK.

I just want to make sure you knew. OK, no, no, that's fine. Thank you.

Thank you. In the general plan update residents will be voting on in the upcoming election, it promotes parts of recreation within its pages. It identifies the goal of collaboration to explore innovative funding opportunities and promises to coordinate organizations to support enhancement of the parks and the recreation facilities. That all sounds great in theory, but I'm not seeing it being followed in practice. The current and future families are going to focus on the realities of the day when it comes to their children and organized local sports. The reality in Saurita is that the local school board unanimously voted to exclude all ESA students from participating in its sports and extracurricular activities. As a result, the only source of sports these kids are is the recreational and competitive private options. Within a year, I have paid a local football organization $947 for two players. I have paid a local soccer league $1,180 in registration fees for three players. But Copper Hills Little League? Only $260 for three players. This baseball league is one of the most affordable non-profit organizations in this town. The proposed raised rates for the parks will price kids and their families out of youth sports entirely, as many see Copper Hills as the only price point within their reach. I implore you to reconsider increasing fees on these kids for just wanting to learn a sport and play a game. I ask that you follow the guidance of your own general plan and collaborate with the leagues on how best to navigate the rising costs. And I beg you not to place the burden of putting the bill of the park updates on the backs of our children. Because these aren't just fees on paper, they can mean the loss of the only sport so anxiety for families can afford. Thank you.

Thank you.

Terry Roth. And then Mike Profumi.

Good evening and thank you for this opportunity. My name is Terri Roth and I've lived, my husband and I have lived in this beautiful valley and town of Quail Creek and Sarita for the past 15 months. I was here at the last council meeting and I listened to many passionate community members speak about the impact that Copper World would have for all of us that live here. They also spoke about you, the council, and how you've hidden pertinent information about HUD-BAY and TEP, or given misinformation. You have all lied, but so has HUD-BAY and TEP. Our environment will be impacted significantly, air quality, water, our health, that's just to name a few. What baffles me as elected officials that you have shown a lack of respect and compassion for your community members, but also for your own families. Regarding water, the number of trucks that will be going up the roads will also add more water to keep the dust down. I would like to ask the council members to adopt council member Liske's solution to delay approval of CEC application until TEP fully discloses the full nature and extent of its relation with HUD Bay Minerals and any plans to copper, to supply Copper World and how it will affect the residents.

Mike. And then Dave Babson.

Again, I'd like to thank the board for serving. I know you guys have a hard job. I'd never want to do it. And you for your hard work on the budgets. In terms of the budgets, I'm going to be emailing you as I'm taking a little more interest in things lately. It should be an interesting conversation later. In terms of the Copper World Mine, I already stated that we do need commercial properties because that's how you balance a budget. And I believe that we should have commercial properties. But in the last two days, I've become aware of a lovely data center that wants to open right next to the dump, prime property. And one of the ways they want to justify their water usage is by buying up property to the west of Sarahita, which I think we, or I didn't, but people fought and got pushed back last year. And I'm hoping that you all take an interest in making sure that's pushed back again because they shouldn't be allowed to buy property in other places and then use it for its water rights to say, hey, we got more than enough water rights on our 200 acres to use almost as much water as the mine's going to use. I realize that it's difficult to put any kind of brakes on big industry, but In Arizona, if we as a town, as a county, as a state, don't start putting brakes on industries that are coming in and using tremendous amounts of water, we're going to have more of not just a problem, more of a problem with water. That's pretty much all I have to say. Thank you for your time.

Appreciate it. Dave Babson and then Jerry Bamber.

Good evening. Good evening. My name is Dave Babson and I live in Quail Creek. If I were a member of the town leadership, I would be looking at the character and integrity of Hud Bay Minerals. Are they truthful? Do they really care about the residents of Saharita and surrounding communities? There seem to be more and more red flags popping up that indicate that they do not. You've no doubt seen the June 10 edition of the Green Valley News, where HUD-Bay answers questions posed by Jan Lester, the Pima County Administrator, in a letter entitled, Unresolved Risks of the Copper Whirl Project. Answers were provided by HUD Bay's Senior Vice President, Javier Del Rio. One answer that became a red flag for me referenced Copper Whirl's air quality permit issued in 2024 stating that the facility operates under a class two air quality permit, which is more stringent than a class one permit. Mr. Del Rio is completely wrong. In fact, class one is more stringent than class two, and based on the mine plan of operations, air quality experts felt Copperwell's air quality parameters should be raised from class two to class one. I was at both of the ADAC meetings in 2024 and I got the feeling that HUD-BAE was intimidating ADAC into assigning a class two designation. Save the Stainless Center readers, the Center for Biodiversity and others have filed suit in Pima Superior Court challenging ADAC's decision and the case is still pending. To all town leaders, we ask that you please take a look at what you've built over the last 20 years. Rancho Sarita has become one of the most successful planned communities in the United States, and it helped to spawn the growth of other area communities, and the growth continues. There was an article in last Wednesday's Green Valley News that spoke of a bright future for the housing market. You have a responsibility to protect the health, safety, and the well-being of Sajarita residents, to protect them from the devastation of the Santa Rita Mountains, protect our groundwater supply, protect our way of life. Stand up to Hud Bay. Time to say no to Copper World. put an end to the red flags. In closing, I would like to provide you with a copy of an economic impact report on Copper World, prepared for, say, the scenic Santa Rita's. It'll give you the full story of the economic disaster that could occur if Copper World is allowed to go forward. Thank you.

Thank you. Jerry Bamber. And then Suzette Roescher.

Good evening. Unfortunately I was unaware of how the rules worked here and I mostly wanted to come here tonight to get more information about what we've been hearing anecdotally about the data center that might some be placed somewhere within the Salrida community. And I realize you can't comment on it, but I did want to make it known that I know I come from Rancho Resort. There's over 500 community members there that are very concerned about the fact that if a data center comes in anywhere close to our community, most likely our property values will go down. There could be noise issues. There could be pollution issues. And hopefully you can be transparent and forthcoming with information as is appropriate when data centers come up into your docket. So thank you very much. Thank you.

Thank you.

Yep. Noah Sundberg.

Do you just want me to go now or wait? Yeah, you can go. Okay, I didn't know what the order was. Yeah, Suzette's going to wait because she wants to go after Pastor Randy. Pastor Randy.

Yeah.

Okay. Pastor Randy.

Well, Reverend, I think. I'm mostly talking about Tennessee, but, you know, I stray from the topic. So that's why I'm going to call to the public and say the other part. The main thing was like, no, we shouldn't be raising the rates on kids' sports. It's a $5 an hour rate for one field, $2.50 an hour rate, and $3 for lights. And maybe you can justify the lights if you can demonstrate that cost. But we've spent a lot of money in parks and recs. And we've misspent a lot of money in parks and recs. We went and we did. We've never been willing to do a joint firework show with Rancho, even though it increases our costs. We refuse to do it, even though they've been willing to do it. We spent $2.4 million in 2003 by bailing out a church that we really didn't need and we really haven't utilized. I went in there just to see how it worked. And they charge $5 per morning or afternoon for pickleball. They were on a pretty busy day, and there were five people there, which means that that facility will pay itself off in pickleball play in well over 380 years. And I know you say you're using it for office space. And I'm thinking, what have you really put in? You put in the man in the maze. And you put in the pickup, of course, but really haven't much growth. But you've sure had staff growth. And I talked to two wonderfully nice people. They were very pleasant and explained to me what it was and let me tour the facility and stuff. But I wonder, how many people do we really need? How many things that are really justifying all these other expenses? We know that in the past the fields haven't been taken care of. We all remember when you guys glassed and metaled the field and made them unusable. We know that other cases have been an issue. But when I drove by the fields today, they looked really good. I'm going to tell you guys, you guys did a good job in your field. I checked them out. See how they looked? They looked like they were decently managed. But kids should be able to play. We should be able to ride e-bikes around the neighborhoods without the police going after all the kids. I understand if there's unsafe behavior, but they're basically harassing kids, just trying to drive around on their e-bikes and have fun and get from place to place. You don't want kids to be able to play in local sports, and you want to raise the rates on them. And you're probably saying, well, what? It's $2.55. But that gets, per hour, gets spread among all kids. And you're talking... a reasonable increase in all the rates. You can eat it. There's plenty of room to eat that cost. Obviously, your officer, Medina, pleaded guilty to his two misdemeanor reckless endangerments to avoid a felony. So you asked for due process. You got it, Mayor. But you never needed it for whether he works here or not. He's had decades of experience. I don't know if he'll change his behavior. You still haven't given me the 10 names of who were there that participated in it. I want to know cops that are reckless with firearms and shoot a playground. And I want to know who were involved that were instructors. It's not much to ask. I'd like to know that information. I also would point out that our police department just had non-guilty verdict from a jury because they said that our detectives mismanaged the case to where someone is going to be a murderer on the streets because we mismanaged it. We need better police. We don't have it. We don't have it from our leadership at the top. I expect better police. I expect us to care about kids. That's both whether they're riding their bikes or whether they're going to parks. Vote no against raising the rates on the kids. Thanks. Thanks.

Reverend Randy?

You didn't put Reverend down but I knew you were one.

It's good to see you mayor and vice mayor and council members and staff. My name is Randy Mayer and for the past twenty eight years I have served as the senior minister of the Good Shepherd United Church of Christ. My family's lived here in this community and it has been a great place for us. But there are concerns I'm here tonight to invite all council members, staff, and community residents to a public forum on the potential data centers development in Sahuarita. We know that there's possibly one on La Cañada, but there could be others that we don't know about. The forum will take place this Wednesday, June 24th from 5.30 to 7 p.m. at the Good Shepherd. The purpose is simple, to provide information, ask questions, and encourage thoughtful community conversation about an issue that could have significant long-term impact on our town. Whether someone supports data centers, opposes them, or is still undecided, I believe we can all agree that meaningful public Engagement matters. Decisions involving major industrial developments that may affect water resources, energy use, infrastructure, public safety, noise, and quality of life deserve a broader community discussion before positions become entrenched. I would also encourage the town of Sawarita to consider adopting policies similar to those recently approved by the Pima County Board of Supervisors. Their enhanced due diligence policies require detailed review of infrastructure capacity, environmental impact, water and energy demands, public health considerations, and community compatibility before projects move forward. Their non-disclosure agreement policy also ensures that key information including water use, power demand, acreage, and project characteristics cannot be hidden from public review indefinitely and must be disclosed well before any public vote. Transparency builds trust community engagement builds confidence and both are essential at this point in time in sawarita if sawarita is going to navigate potential data center development wisely and so i thank you for your time and i hope to see many of you, including those in the audience, at the Good Shepherd Wednesday night at 5.30. And I can guarantee it will be over at 7, because I'm going to the Bob Dylan concert at 8.

Thank you. Suzette? And then Rick Corrado?

Thank you for allowing me to talk. My name is Suzette Roescher. I'm a resident here for now over two years. You've seen my photograph by the bathroom for the last year. I thank you for that. But my concern is my health, the health of my community, the resources that we are very, very low on. and also our cost of living. This proposed data center and how I found out was April 2nd in coffee with the council when I raised my hand and asked a question about, are there data centers being proposed? And I was told by one of the members, oh yes, and it's been approved and it's La Cunada and Salarita Road. And I went, what? There's been no public output. I was told it's because it's on public land and the permit to allow a data center, please hear I do not state that there is a data center, but there is a rezoning that was approved for a data center to be included on the 200 acre property is surrounded by residents, schools, churches, the food bank, and many other people. We are not taking in consideration the emissions of chemicals that are emitted, the light that is 24-7, the depletion of water, the raising of electricity, which it will be. And now Trico has redone that area to include electricity services. Oh, I'm getting close.

That was somebody's phone.

So I want to bring this to the public. It has not been brought up to us for any kind of consideration or input. I believe that is an absolute I don't want to say crime. Crime is a bad word here, but it is, thank you, a travesty because you are here living in the same community that we are. I am a cancer patient. I don't need another kind of cancer to be on top of the one I already have. We really need to be very clear about the resources that we are using, and I know that the, I'm getting close, I know that Target has pulled out, so now that property is up for a developer to come in and to do it. We need you to be our guardians, not our destroyers. Thank you very much.

mr. mayor I just wanted to clarify thank you Suzette she mentioned that her picture is by the bathroom it's not a like it's photography artwork for a contest so please go check it out

Mayor Murphy, Town Council, and Town Staff. Since this is our last town meeting prior to summer break, I took the time to review all the information, requests, and warnings I have provided this Council since September of 2025 regarding the Copper World Mining Project. And here are the bullet points I found most concerning. Number one, I have repeatedly requested that a hydrological study be performed as the only way to accurately assess environmental impact and water use and nothing has been done. Two, I requested a traffic study to evaluate the number of trucks, their payload weight, subcontractor and driver compliance, the transport of hazardous chemicals and the frequency with which these trucks will traverse all our roads in the middle of town at all hours of the day past our schools and nothing's been done. Three, I asked and warned They're about the need for resolutions to voice our displeasure and to monitor, mitigate, and guide the environmental damage. And nothing's been done. Four, I have alluded to the stark comparison of what has happened and continues to happen in Bisbee with geological sinkholes. And nothing's been done. Both residents and organizations have exposed the lack of transparency over apparent collusion between HUD Bay, Tucson Electric and Power, and the town using taxpayer dollars to subsidize electricity for Copper World. A resolution should be forthcoming to the Arizona Corporation Commission opposing the approval of TEP's Certificate of Environmental Capability application, and nothing's been done. And last but not least, I warn of what I perceive to be a concerted effort by this town council to industrialize this community. People move here to appreciate the beauty, the peacefulness, and the charm of a small town atmosphere, yet nothing's being done. There is a repeating pattern here. Nothing is getting done. Now let's turn our focus to the alarming increase in animal sightings throughout the backyards in our community. Does anyone think this is a coincidence? If you ponder the cause, it's quite simple. Ecological migration is occurring due to disruption of the ecosystem by Copper World in the Santa Rita Mountains. These animals are disoriented. They're scared, thirsty, and hungry. Hunger worries me the most. Many are starving. This is your canary in the coal mine. What do you think is going to happen when Copper World starts blowing the tops of these mountains? Sarita will become a damn zoo without cages, fences, or moats to protect us. Sardines of scraggly mountain lions, bears, bobcats, coyotes, snakes, and Gila monsters will become commonplace. Wildlife interaction will become frequent and dangerous. Mother Nature is already warning you. You need to pay attention. It's quite apparent that there will be no timely hydrological study, no timely traffic study, no monitoring, no mitigation, no guidance. Critical issues are being ignored and not properly addressed. You hear, but you do not listen. I warn this community. Mother Nature is warning this community. And you need to pay attention to these early warning signs, because this is your canary in the coal mine.

Thank you, Rick. Thank you.

When you get to the microphone, pronounce it for me.

Mayor, Council, Chuck Belisle. I live out in Madera Highlands, and we've been there about three years now. I had a very great statement put together, persuasive and everything else, and it has to do with traffic and mainly with parking in the area out there. We've had a vehicle in our neighborhood for just short of three years, and it's been loaded up as a pickup, has never been moved, loaded with trash in the back, looks like heck. And I checked with a local police officer who lives in her neighborhood a year ago on it. She was very helpful and checked on it and says nothing can be done because it is currently registered. And then after another year, I went by and I said, this is ridiculous, something has to be done. And so what I did is I came down and talked to community development and they passed some information on at my request to the town attorney and didn't hear back from that. So I went in and I spoke with an officer at the Savarita police station. He followed up with a person there. And as far as I knew, nothing had gotten done. But two years and ten months of the vehicle parked in exactly the same spot on the street loaded with trash, Saturday this past week, it was moved away. Yeah. Three years. I understand, and I got an email from Chief Nolan just shortly before I got here this evening, and he assured me that there is a 48-hour parking restriction, whether or not it is a registered or a non-registered vehicle. And I... Don't know who took care of it, if he got this or whatever happened, but thank you for getting it done. And the reason I just wanted to talk now is to make sure that that keeps happening. It's not just one vehicle in my neighborhood. You read the local social media things and it's all over the place. People have got cars parked in their neighborhoods and nothing gets done. I've heard that here someplace tonight before. So I want to just say thank you for this opportunity to present this, and hopefully this will be the beginning of taking care of that 48-hour thing for everybody. Thank you.

Appreciate it. Lorraine Shaw. Mr. Mayor?

Yes. Shane, can we make sure staff reaches out to, I didn't get your last name, Charles, about how he can, when they see something, to say something so that we're aware of the situations? Thank you.

And then Phyllis Buchanan after Lorraine.

Good evening, Mayor. Good evening. And members of the council. My name is Lorraine Green, and I am a Green Valley resident. I stand before you because we share the same exact electrical grid and draw water from the same aquifer. Yet I have no voice at your ballot box for Sararita's upcoming Proposition 420. On August of last year, your planning department issued an administrative determination. By reinterpreting your zoning code, staff quietly cleared, by right, a legal pathway for a massive 200 acre industrial data center. Now, I appreciate that the administration emailed me contacts for this decision today. The director admitted this 200-acre approval relied on a grandfather code from 1995, and that the town is hiring a consultant this fall because the current data center rules are inadequate. But no amount of internal changes changes the fact that this 1995 language was written for small office buildings. It was never meant to fast track modern utility draining data centers behind closed doors with zero public notices or community input. These modern facilities require millions of gallons of water daily and place unprecedented strain on our power grid. When utility companies scale up infrastructure to meet this demand, these capital costs are passed straight down to regular customers. Green Valley residents will see their utility bills spike to find a facility they never wanted in a town where we cannot vote. On January 21st, Sararita residents will vote on Proposition 420 to ratify the town's new general plan. voters are being asked to decide on our region's future completely blindfolded. Now I urge this council to intervene, district staff to issue an official public informational notice explicitly stating what this code reinterpretation allows, publish it, Publish it in local newspapers and physically post it at our libraries and community centers across the valley and give the voters the full truth before the July 21st vote.

Thank you for being here. Phyllis Buchanan and then Alan Jennings.

Good evening, Mayor and Council. Thank you for this chance to speak tonight. My name's Phyllis Buchanan, and I'm also a Green Valley resident. And I'm here to address the dangerous lack of transparency surrounding the administrative reinterpretation of your zoning code. On August 12, 2025, a decision was made behind closed doors to allow massive industrial data centers to be built by right on a 200-acre site. By bypassing the planning commission in public notice, this town has shut out the very people who will bear the consequences. Data centers are notorious water guzzlers. They require millions of gallons of water every single day just to keep their equipment cool. We are drawing from a single shared aquifer that does not care about municipal boundary lines. Evaporating our precious groundwater to cool industrial servers is a direct threat to the long-term water security of every home in this valley. July 21st, Saharita voters are being asked to ratify a new general plan under Proposition 420. How can anyone cast an honest vote when massive utility draining charges are being hidden in the fine print? We demand that this council direct staff to issue a clear, widespread public notice in our newspapers and libraries before the July election. Tell the voters the truth about what this zoning reinterpretation allows. Do not let our shared water security disappear in the shadows. Thank you.

Allen Jennings and then Peter Gallegos.

Allen Jennings, Sarita resident. In 2024, Terry Parker was killed in Sarita. The trial was recently concluded with an acquittal. The principal argument was that Sarita police detectives failed to address credible alternative suspects. And the result, as we've heard, is that there's a murderer, manslaughter-y-er, or whatever that noun is, walking free. This is a failure of justice that's pointing back to our police department. It points to a lack of credibility that the jurors had with our police department. People are inclined to believe authority. It takes a lot of work to erode that trust. And that ties back to gross lacks of judgment. I want the police to have less rules and regulations. I want them to use their judgment, but hand in hand with that is their proven track record of showing good judgment. We know why he has rules. It's because of experience of showing bad judgment in the past. When we see the police chief, Nolan, use that gross lack of judgment When you chose to go in, escalate a scenario, throwing someone down last year, it's completely appropriate for the police to use force when they're using good judgment, when they're using it to keep the public safe. when they're using it against people that are resisting arrest. But this is the police chief going in, grabbing someone, and throwing them to the floor. It's him showing intent to damage that person's property. And when we live with that in our community, a police chief teaching his trainees and his force that the police do not have to show respect for people's property. then that's a huge erosion of trust. And we'll see more and more issues like this in the future. When they have lack of good judgment, when they show unfairness in their policing, it erodes convictions. It doesn't matter who the subject is. It's how the police are conducting themselves. When they are fair, then that leads to better convictions. We can see that in trials. When clops are more interested in body slams and property damage, it gets in the way of safety. Can I say this?

Thank you. Peter Gallegos and then Diane Chipton.

Thank you.

We live in Green Valley. We've been here a couple of years. Just speaking to the mic so that everybody can hear. Okay. Thank you very much for the opportunity. Firstly, we've been here a couple of years. We live in Green Valley. But one of the things that strikes me, it's almost baffling how everyone seems to look at not this group. But the state as a whole looks upon its resources as if we live in 1870. It's nothing but exploitation. And nobody lives here. And there's nothing but cactus. And it is a totally different world today. And I walked in this evening, and I saw your your photograph there of the lake and the mountains beautiful setting and read your mission statement to the town see your mural back there it's all about the beauty and the mountains and the natural just sort of reverence of this area and Things are on the cusp of total destruction of that. Whatever plans you may have had for Sarita, that's going to be history as soon as the mine was there. You're going to have nothing but slag and pollution and runoff. And then you can look back and say, that was the legacy that we created. If money is the only thing that matters, if that's the god that this community wants to worship, then why stop at this? Why stop at just the destruction of the mountains? Why not invite other states to dump their containers of plastic that we can bury, or radioactive waste material? Why don't we become the junk pile of other communities? uh you know it's it's it's horrifying really just the the potential of this and i would ask the council to very deeply and reverently consider just what might happen and the consequences of that thank you thank you

Diane Tipton, and then the remaining cards will be for the agenda items coming up.

Good evening. It's me again. First of all, I'd like to thank Shane for having a meeting with me. He threw a lot of information at me. My brain processes stuff slowly. But thank you, Shane.

I thought you handled that really, really well.

Well, thank you. Anyway, he explained to me the town's decision on the water pipeline to the mine. But things have changed for this state. The drought has changed the whole picture of water in this state. And the whole picture now is everything's drying up. You can stop the water going to the mine. I can see this with all the things going on with the Department of Interior. They stopped. They lessened the amount of water going to Lake Mead. Lake Mead is what brings water to Arizona, eastern Arizona. Tucson stopped 20% of the water going to Ajo. This mine is going to go into our aquifer. But if you stop the water now, I do firmly believe that the Bureau of Reclamation and Department of Interior is going to put a moratorium on mines, pit mines that have not been dug yet. And so forcing, closing the water, making Copper World find a new way to get that water to them, I do really firmly believe by the end of next year that there will be a moratorium on petting mines. And I'm asking you, please, Fix it before it's a problem. If you let it be a problem, an ounce of prevention is worth more than a pound of cure. And now going on to the data center. Yesterday, Elon Musk said he's going to put data centers up in space. Look at what he did with Starlink, because he can get sunlight to power the data centers. We don't need them on Earth anymore. then this this summer and new companies come now with data centers that'll be generated by the movement of the ocean, we won't need data centers on the land anymore. And we don't have the water. We don't live in an oasis. We live in a desert. We live in a desert that's drying out. You guys, not only are you responsible for our water, you're responsible for the water for all the communities around us. And you're hurting people's lives. You know, people's wells are going to be drying up. They're already drying up. The aquifer is drying up. It's crumbling. You know, aquifer is just a big sponge. It's not like rotting. Anyway, it collapses like any sponge when it dries out. Please, please, we're all begging you, please just turn the water off and let the Department of Interior take care of it.

Thank you. That's all the speaker cards I had for call the public. I do have other cards when we get to the agenda item. So I'll close the call to public and go to a brief summary of current events. Council Member Morales? Diane?

So I had the pleasure of...

Bring the mic a little bit closer to it, if you would.

I had the pleasure of participating in the Ripple Fiber Ribbon Cutting event. Shoveled my pile of dirt along with the rest of the council and the dignitaries that were there, and we are welcoming a new fiber optic company beginning in Northern Rancho that will eventually spread throughout the town.

Should we take a recess for it?

We're going to take a five-minute recess to let the people leave that want to leave. So now you can chat for five minutes. Thank you. I appreciate that. Please, thank you. Yeah. Seats won't be as tight now. We're on to the brief summary of current events and Councilmember Priello, I'll have you continue.

So there were three things. The first was the ribbon cutting event for Ripple Fiber. The second was that the mayor and myself had lunch with Les Presmick, who is the Arizona Mine Inspector, and we raised with him concerns that have been expressed by our residents. And the Mine Inspector's sole role with the Hud Bay Copper World is in the reclamation plan. and we are having ongoing discussions, and we are digging deep. And you are heard, we see you, we hear you. We are listening and we are acting. This is an example of it. This will be ongoing. The third thing that I did was that I had a great conversation with the Pima County Justice of Peace, Ray Carroll, who invited me to come and observe his DUI treatment court. for cases that are being adjudicated for folks accused of driving under the influence, and this has a direct correlation to an agenda item that we will be discussing. And then there was a fourth thing. I had a conversation with one of the Arizona commissioners, with Kevin Thompson. also sharing concerns expressed in this room and learning the parameters of how the Arizona Corporation Commission approaches things like the concerns about the TEP line and also if they had anything to do at all with HUD-BATE. So you are being heard, we're listening, we're acting, we're exploring. It is not falling on deaf ears or an inactive council.

Thank you. Vice Mayor?

I've actually been out of town for work for several things, so I have not gone to any events, but I will say I love, I hope you're celebrating and cheering on your favorite soccer team for the World Cup. And I will be team Brazil, team Argentina, and definitely team USA.

Thank you. I also attended the, well, council member list before I forget. I always go last, so do you have anything you'd like to report?

Yes, I just want to report that I think at the last meeting I mentioned that the civic craft was having their last session. So 10 months we've been in this leadership program. And this past Thursday, we had our last session in Avondale. And I just want to say anyone that's thinking about being part of the civic craft, please do. It has been immensely important meeting people from around the state and just Talking to your peers, it's been really a super experience. So thank you, that's all I have to report on.

Thank you, appreciate that. And as Council Member Priolo said, a number of us attended the Ripple groundbreaking. Also our local Rotary just had their installation of new officers. They're always looking for new members, along with all the other service organizations. And also, on Wednesday at 8 o'clock, the Walden, excuse me, the SHS, the SHS band is holding a send-off thank you concert at the district hall. No, not the auditorium, the field.

Oh, stadium.

Stadium, thank you. That was the word. Yeah, 8 p.m. Yeah, 8 p.m. on Wednesday night. Again, a standoff going. They're the only band being represented in Arizona for the 250th celebration in Philadelphia. And they really appreciate everybody's efforts to raise the money. They're pushing about $220,000 that they raised to get the kids here. almost 100 of them, out to Philadelphia. And as has been mentioned many times, our summer break starts tomorrow, and we'll meet again on August 10th. And with that, Madam Clerk, item number eight.

Item number eight is the Town Manager's Report, highlighting employee and department accomplishments, milestones, capital improvement projects, development projects, and town events.

Thank you. Thank you, Mr. Mayor. Normally at our second council meeting of the month, I usually present a little presentation on the manager's report for that month. Given what we have on the agenda tonight, I'm foregoing that, but I do want to acknowledge we had eight new seasonal employees hit Parks and Rec. this past reporting period. So we welcome them wholeheartedly to our team, our family. I also want to recognize Gregory Moreno, he's with the court, he's a security for our court. He just passed his five year mark with the town and so we're grateful for his commitment and dedication to our town and the courts and keeping them safe over there. I also want to acknowledge that we've got our Stars and Stripes event right around the corner here, July 4th. It's 5 p.m. to 9 p.m. at the Animax Park. Fireworks go off at 9 o'clock at the end of the celebration for the event. Also, our next council meeting following tonight's meeting is scheduled for August 10th. Enjoy your summer break. And of course, we'll be in touch if anything comes up. I know that you've all generously offered to meet if we have to, but as we've done in years past, you have your summer break and we'll reconvene on August 10th. That's it for tonight. Thank you, Mayor.

Appreciate that. I'm item number nine is the consent agenda and I've been asked to pull one of the items 9f off of that so at this point I would ask for a motion to approve the consent agenda minus 9f and then I'll take that up right after the consent agenda has been noted on mr. mayor so move with those changes I second We have a motion and a second. All those in favor signify by aye. Aye. Aye. Aye. Any opposed? The motion carries unanimously. And Madam Clerk, 9F please.

9F is adoption of a resolution 20260881, a license agreement with the Pima County Recorder's Office for the installation, operation, and maintenance of a ballot drop box at Town Hall.

Thank you. Council Member Priolo, did you want to make a comment on that?

Yes, I did. I am in opposition to this resolution. I am concerned about election integrity and having a ballot drop box at Town Hall.

Thank you. Shane, would you like to expand on that?

Yeah, normally when an item is pulled, staff is offered an opportunity to introduce the item so that the public is made aware of that. So I'll turn the time over to our clerk, Lisa, and she'll walk the council through what this item is and the agreement that's in front of you for consideration tonight. Thank you.

So the agreement in front of you this evening grants Pima County the permission to install and operate a secure ballot drop box on town property. We're proposing that the drop box be placed in the courtyard, mid courtyard. It would be a drive up drop box as well as a walk up drop box. The box itself will maintain the property and ensure unobstructed public access. We'll also follow standard indemnification and compliance requirements. The license follows the town council's direction at the April budget retreat, authorizing staff to move forward with the installation of the ballot drop box. So we'll be coordinating with the Pima County recorder to ensure that rules and regulations are followed as required by law.

Thank you. Can you just touch on a little bit about cameras or the installation process, security-wise, the type of, anything you could enlighten?

Certainly. So we'll have two cameras. One will be installed above the drop box in the trees. That'll be a trail-type camera, but we also have our camera... that operates 24 hours a day that is attached to the outside of our building that also records in the courtyard area. If anything happens, we will be sharing data and images from the cameras as needed with Pima County Recorder's Office. When the ballot boxes are emptied, Pima County does have a procedure where their staff will wear vests that identify who they are. They also will send, you know, members of the opposite parties to empty those boxes and it will always be done in members of two. The ballots that are pulled from the ballot box will all be secured while they're transported to the Pima County Quarters Office for further processing.

Thank you. Shane?

Yeah, thank you, Mayor. Thank you, Lisa. I just wanted to provide a little context. This kind of came to head for us when we had the special election in March, and it was identified that the only drop-off locations for our public was there were three locations up in Tucson right and so nobody had an option down here to drop off their ballots and that was we we heard that from a number of from a number of people and so we that's that's what spurred a county you need to have a you need to have a place here whether it's whether it's here with us or it's at Fry's or someplace someplace for our our voters to have an option to come and drop off here. So that was the context behind this. And then again, that was presented to council during your retreat and we were directed to move forward and here we are tonight. Thanks. Thank you.

Yes. Go on, speaker. Your turn.

Mayor, can I ask Diane a question? Council Member Parola? Yeah. What is your reason for opposing it?

Election integrity.

Mr. Mayor, I'd like to ask a question to Lisa. If we vote no, this resolution does not pass, is Pima County still going to put a drop box in our community, just in a different location?

That I'm unsure of, whether or not they will go in and look for another location. The location was chosen here just for voter convenience. We do have, during the election cycle, many voters who come in and ask where the nearest drop box is.

Right.

Well, I think it's a little more than that. The bottom line is staff doesn't know what the county will do if this doesn't pass. It's kind of a county issue. But we clearly heard that there was frustration by not having a place here locally for our voters to participate. Now, how big that frustration was, that's probably better for the council to determine what you guys heard and felt out there, but staff certainly felt it a little bit, and so we brought that forward to the council for consideration during your budget retreat. What's making this possible is because we have surveillance already here built in, and because we felt like this is something that the community was in support of and wanted, We're kind of partnering with the county. We're providing the spot and then we're helping with the installation, making sure it's secured. And I don't know if the county would be able to find those types of accommodations somewhere else. So it would be up to the county to figure out if this didn't pass, if they would do something here or not. Probably don't have time for this election to do something like that.

Yeah, I know when I heard about it, because it was the RTA election, and not only did I hear about it from Salarita, because we had a lot of people who worked and couldn't get up to Tucson in the hours, if you remember, they were pretty condensed. And, of course, I heard a lot of it from Green Valley that a lot of them don't want to go north of Pima Mine Road or go down into downtown Tucson to try to figure out where to drop it off, which I think spurred at least a little bit of the one half day of the mobile, the RV that parked over at La Vida Community Center. You know, it was like 10 to 2 or something like that. But it was, you know, an effort because a lot of people were pushing back on, you know, why are there only three locations and all of them in downtown Tucson from that perspective. So, you know, I understand the concern about voter integrity, but I think at least what I've learned about the anti-phishing mechanism within the box and then obviously having it in a secure location, I think it does serve as a service to our community. So, yeah. I'm going to have to find that one. Okay, thank you.

Mr. Mayor, I move to adopt resolution number 2026-0881. I'll second that.

Any other comments before going to the vote? All in favor signify by aye. Aye.

Aye.

All opposed by nay.

Nay.

Nay. Four to one. Four to one, thank you. Appreciate everybody's input on that. Madam Clerk, item 10A.

Discussion and possible action regarding the Tucson Electric Power Santa Rita Connection project.

And Ms. Cassidy, Anna, will be introducing this item and introducing representatives or, no, representatives, plural, from TEP on this item. Anna?

Actually, Mayor, I'm going to grab it real quick.

Absolutely.

So Anna will do the introductions, but I'm going to kick this off. We've had a series of meetings. We had a meeting on January 26th. We also had a meeting on May 11th. And at those meetings and stemming from those meetings continued to be a lot of public criticism on transparency. From that criticism, from the discussions that happened on those two dates, and given, Mayor, your comment and direct question of TEP and their direct response, we were asked by, I believe it was Councilmember Lisk, to see about getting TEP back to the table. and to essentially do a redo of your May 11th meeting. Now, some things have transpired with the ACC in that process and hopefully TEP can explain what's transpired since your May meeting today with that process with ACC. But that was the spirit and intent of the ask and staff has followed up with that to agendize this meeting, this item tonight at that request and basically go over that information again, the options, What bearing that has on this process, I'll leave that to TEP to explain. But the idea and the spirit was to kind of do a redo of your May 11th meeting. Perhaps ask different questions and probe wherever you guys need to probe as a council.

So that's what this is. So what I'm planning on doing is representatives from TEP will present after Anna does some comments. If we have questions, then we can ask those, my colleagues. Then I'll open up call to the public to ask further questions. When I close call to the public, then it'll be back to the council. So if my colleagues during call to the public if there are questions that are new or maybe haven't been covered please write those down because after I close the call to the public then it'll be back to a conversation between staff TEP and the council everybody okay on that thank you Anna

Thank you, Shane. Thank you, Mayor Murphy, members of the council. Tonight we have two speakers here from TEP. At the microphone we have Steven Eddy, Director of Public Affairs, and with him is Clark Briner, the Manager of Siting Outreach and Engagement.

Thank you. Good evening, Stephen.

Excellent. Honorable Mayor, council members, Mr. Dilley, thank you so much for having us here this evening. For the record, my name is Stephen Eddy. I am the Director of Public Affairs for Tucson Electric Power, and the address there is 88 East Broadway, Tucson, Arizona. First and foremost, I want to express my appreciation for the town's continued engagement on the Santa Rita Connection project. I'd like to provide a few brief overview comments and clarify a few points before my colleague Clark takes over and walks through a few details on the projects themselves. Let me start with what I think is the most important message. There is no secret plan, there is no backroom deal. The Santa Rita connection project is a needed publicly reviewed infrastructure project designed to address real and growing reliability needs in the Santa Rita and Green Valley area. Through our planning process we've identified Multiple circuits serving thousands of customers that are already at or approaching their preferred operating limits with continued residential and commercial growth expected. This project is designed to improve redundancy, reduce the risk of outages, and ensure we can continue to serve the community as it grows and today. So let me talk about the engagement with the town and the public process. We've appreciated the town's engagement throughout this process, including the opportunity for TEP representatives to brief mayor and council on two separate occasions, as mentioned by Anna. That dialogue has been valuable in ensuring the community has access to accurate information and a clear understanding of the project. In addition, it has provided the town to express input as part of the siting process. The Santa Rita Connection Project has been developed through a very transparent and well-established regulatory process. This has included public outreach, community meetings, and formal testimony before the Arizona Power Plant and Transmission Line Sighting Committee. Following that process, the siting committee unanimously approved both routes one and three, and those recommendations have now been forwarded to the Arizona Corporation Commission for their consideration. And we expect their decision sometime later this summer, as early as next month. So let me address the connection between this project and Copper World. These are two very separate and distinct projects. There has been a narrative suggesting that the Santa Rita Connection project is part of a coordinated or backdoor effort to serve the mine. That is simply not true. These are two separate projects. The Rosemont 138 transmission line was approved in 2012 to serve a potential mining operation. This line will be built only if HUD-Bay, the operator, agrees to take service from TEP and pay for the line's construction.

The Santa Rita- Would that be all the costs?

That is correct. And I can provide a little bit more detail as part of the comments here, Mr. Mayor. The Santa Rita Connection project and the Santa Rita substation were identified independently through TEP's planning process to address regional reliability and growth needs, as I had mentioned earlier. They will move forward regardless of the mining project, that is the Santa Rita Connection project and the substation. While these projects are being built in the same area, they are not the same project and one is not being built for the other. There's been talk about co-location, and Mr. Dilley brought this up earlier and has been discussed. So you'll hear that facilities are being co-located in this presentation between myself and Mr. Briner. And I want to explain what that means in utility practice. Co-location is a standard and widely accepted utility practice. It allows us to reduce land disturbance, minimize environmental impacts, avoid duplicative infrastructure, and lower total project costs. A portion of the Santa Rita Connection project, which is Route 3, and again, we'll bring this up on the maps here, is being designed to co-locate with the Santa Cruz Reliability Project. This is a new project. I know this is new news, but that is a part of our sister company, Unisource Electric, that serves Santa Cruz County. That project was recently awarded $75 million from the Department of Energy. And again, we'll talk on the co-location benefits between that line and the proposed Santa Rita Connection project. By coordinating infrastructure between these projects, we reduce capital costs, make more efficient use of existing corridors, and minimize impacts to the surrounding environment. Importantly, each project pays its proportional share for these shared facilities, ensuring proper cost allocation while still capturing those efficiencies. So let me talk about the cost responsibility in addressing those concerns. There has also been concern that TEP customers could subsidize infrastructure for the mining project. That is not the case. The Rosemont transmission line approval explicitly requires that the cost of constructing and operating that line be fully borne by the mining project. These are conditions in that 2012 siting case that Mr. Dilley has raised previously. Similarly, any infrastructure that would be required specifically to serve the mine would be paid for by that customer, not TEP customers. We understand fully that these are very complex projects. That is the world of utility infrastructure. And that when multiple projects are discussed together, there can be confusion. And so that is why we are here tonight to ensure that we are addressing any confusion between any of these projects. We appreciate the town's continued engagement and the opportunity to be part of this conversation. And with that, I'll turn it over to my colleague, Clark, to run through the different projects.

Welcome, Clark. Can you take a couple of questions first before you go to Clark?

Sure, absolutely.

Thank you. Could you please explain to us what co-location is?

Absolutely honorable mayor councilmember priolo So we'll actually touch on the benefits of co-location in this project But right you see this every day when you drive by and see a utility line You'll see our conductors on a line. You'll also see Communications equipment that is attached to those pole facilities. That's co-location For electric utilities specifically, and again, we'll point out a picture, that is co-locating two sets of conductors, two lines on a shared pole. And in this instance, it could be Unisource Energy for that line down to Santa Cruz County, or for the Rosemont line that was approved in 2012. And I will make clear that there are benefits to co-location for what I had just described. But as it relates to our customer or our potential customer, those costs will be fully borne by that customer. And again, is unique because it is ordered in those conditions for that line approval. I hope that addressed your question.

It did, but I have some more.

Please.

Okay. I heard you say, and you did address the elephant in the room, that this town council's been accused of lying and being in collusion and in cahoots with you and Hudbay. Is it accurate if I was to say, based on what you just shared, that HudBay, if HudBay opens and begins drawing electricity from you, that they would be solely responsible for paying for their electricity and it would not spill over into rate increases for any of the constituents in this town? Is that accurate?

Honorable Mayor, Council Member Priolo, so won't get into the large complex area of rate design, but for any customer, right, we assign a tariff, right? And that could be a residential customer, it could be a small business, it could be a large load customer. And so while we are still in conversations with that prospective customer, they will be assigned a rate to ensure that they are paying their full share of utilizing the grid, which again has been addressed in the conditions in the line siting agreement. But in addition to the service that they will be provided as a potential customer.

Can I piggyback off of you before you continue? So just to be clear, sorry, Clark, you can sit down if you want to stand. He's talking, so yes, stand. If Hud Bay was being built in West Virginia, would these two lines be in front of us right now based on need, capacity, expansion? So if Hud Bay wasn't even part of this picture, Would we or would not be having the same conversation on these two lines?

Honorable Mayor, so we would be having this conversation for the Santa Cruz Reliability Project. That is a needed project that we have identified through our planning processes. So that project, whether or not A customer comes online in the future in the future We need that project to serve the current and future needs for this region, which includes the town of Sarita Thank you.

Yeah, please. Oh, yeah.

Yep, and then we'll come back to you So I kind of feel like you went around Diane's question. We don't care about the Santa Cruz project Everybody's concern is had me Are our rates gonna go up when you connect HUD-BAY to the lines here in Sahuarita?

Honorable Mayor, Council Member Morales, so again, when we speak about general rate design, so right, and again, I can't, or when we speak in generalities of large load customers, right, the way in which rate design works, you have residential users that often use electricity in various periods, inconsistent periods. So right, the cost to serve residential customers is much higher because of the way in which that customer utilizes energy. And right, that is the rate that is assigned to residential customers is dictated by the tariffs that are approved by the Arizona Corporation Commission through a rate setting process. With respect to larger customers, and again, I can only speak to the existing customer base because again, HUD Bay is a prospective customer of ours. But when we talk about current large load customers, they use the grid much differently, right? They are high load factor customers. They are using energy generally at 24 seven. And they are much cheaper to pay for in terms of a cost of service. So ultimately, with what they are paying into the rate base, there is generally a subsidization of large load users for smaller residential classes or customer classes within our service area. That's correct, yeah, yeah. And again, I will be touching on sort of the rate-making process a little bit later, but those rates are all determined by the Arizona Corporation Commission and is set through a very rigorous regulatory process that includes testimony by representatives of the company, scrutiny or testimony by other interveners in that case. but then is ultimately decided by the Arizona Corporation Commission.

So just to domify this, what I'm hearing from you is if HUD Bay did not connect to this, our rates will stay where they're at. Or I'm sure they're going to go up because of inflation. But with HUD Bay connecting, now our rates are guaranteed to go up.

No, I don't. I'm sorry. Honorable Mayor, Council Member Morales, I apologize. I did not say that. But... I think it's speculative to address what may or may not happen to rates with a particular customer. So, again, we can address the current rate case that we have before the commission.

Do you see the position you're putting us in, though? Us as council members? Because they don't believe what we're telling them. So I'm asking you to be honest with them. Because they're not coming to you. They're coming to us. And they're blaming us. And they want us to do something. And it's not in our power to do anything. So I think you need to be honest to them and let them know if their rates are going to go up or not because HUD-BAY is connecting. That's the main question. We don't want to go around the question. Just give us a direct answer. He said no.

Mayor and council. Yes, mayor and council. I just wanted to point out, we've invited TEP here to present on both the project as well as the rate. If we can allow the project information to get through and then we'll focus our attention on the rates in the next item, I think that just helps our focus with our conversation. So if we can get through the project, and ask questions about maintenance costs and get yourself geared up for the next conversation, which is the rates. I think that would help us in terms of getting through the agenda.

So Honorable Mayor, Council Member Morales, I think what I will point out is that when you look at larger load customers, based on their energy demand, they bring in much more revenue as compared to a smaller customer class. So that increased revenue actually puts downward pressure on rates. And so the need to, if we are able to recover revenue from a large amount of customers, that actually does put downward pressure on rates.

I heard a presentation by the CEO of Trico, and he made that point that if – and this was, I think, up in another jurisdiction – that if they paid the higher load – it was for a different type of project, not mining – that that could actually extend the next rate case because of that high demand –

takes care of some of lack of a better term the overhead um and putting downward pressure on not having to go for another rate case sooner at least that's the uh is that kind of similar very similar models uh models honorable mayor with respect to uh trico and tep though a little bit different there are some uh differences there right but you're absolutely correct um diane

Yeah, yeah, keeping with the project, and if it had anything to do with rates, we'll wait for the next agenda.

I don't agree with that. I don't agree with it, and I think that I'm concerned because I need you to speak in simple layman's language so it's crystal clear. Integrity, this council's integrity is being impugned. We're being called liars. for being called that we're doing backroom deals, that you can't trust us, that we're not hearing you, we're not seeing you, we're not acting, and nothing could be further than the truth. So I'm going to continue asking you questions based on what I've been doing for my due diligence for you, the constituents of this town, who have grave concerns about water, noise, traffic, health, animals, the destruction of the mountains. We hear it all. So I had a very good conversation with Kevin Thompson, one of the Arizona Corporation Commissioners, to pick his brains. Part of my deep diving, as I call it, peeling the onion and my due diligence, because you are heard, you are seen, we are listening, and we are acting. I want to lay that to rest. So he explained something to me in a very simple way, and I'd like to share here because I believe it might help and add clarity, okay? So he told me about, and I, I spoke with him specifically about, we've got this issue with our constituents. Don't trust us. Don't believe us and think that we are in cahoots with you and HUD bay and that their rates are going to be raised because we are lying to them and that we have this back room deal. So he explained to me something about a line citing committee. that it was this large multi-task group that studies requests for new power needs. Is that accurate, my notes? It studies new needs for power? New requests for power?

Honorable Mayor, Councilmember Priolo. So with respect to the, I mentioned it earlier, the line siding committee. So the line siding committee reviews new transmission and new generation projects that are being proposed throughout the state.

OK. Would HUD-BAE be one of them?

So Honorable Mayor, Councilmember Priello, so the line siding case that was approved in 2012 for the Rosemont transmission line did go in front of that line siding committee and then ultimately the Arizona Corporation Commission.

So that has been a completed 2012, a completed, for lack of a better term. That shouldn't be you. Yeah, that shouldn't be you. We'll fix it. We'll turn it back on. That's a completed process for lack of a better term, I guess.

Honorable Mayor, yes, that is correct. That project was approved in 2012. It is still a recorded order at the Arizona Corporation Commission.

So their last step is that if they want the mine to be served, right, then they'd have to come to you and write a check for all of the infrastructure needs? Or what would the next step be?

Honorable Mayor, so whenever any customer requests service, we are obligated to serve. That is a constitutionally written law. So if you don't like McDonald's, you can't say, I want McDonald's. We have to serve any customer that requests service. So with respect to this customer, they have requested service, and as part of that order in 2012 for the transmission line, there is the order for us to serve that customer. I will state, and again, I don't want to speak for the customer, but there have been facilities that have moved. It's in a very unusual area within our Certificated boundary in which we serve so right as you all know there is a portion of the town that is in Trico In a portion that is in TEP. So there are some facilities that are in TEP's service territory like the Trico Switchyard that again we can touch on in the presentation which is in TEP service territory and but there are other facilities that are in Tricos. With that, we will need to get a borderline agreement. It's an agreement that is very common between utilities throughout the state, where essentially we are agreeing to serve a customer that is outside TEP's certificated boundary. So that is still needed as part of this process to serve this potential customer.

And to piggyback off her question, so the... this, the Santa Rita connection, where is that in the process of line sighting or whatever else it might be?

You want me to just go through this? And Honorable Mayor, I'm sorry, if you could please restate the question.

Well, no, I was just saying because we just talked about the Rosemont project that's been completed outside of serving them in 2012. And I think I do agree with you that a lot of projects, especially because they're both 138 KB lines, I think there's a lot of confusion. That's correct. And maybe this is what you're getting to. So we're in the process for the Santa Rita connection. Is the choice between Route 1 and Route 3 part of the line siting, or has that even been completed and now we're to the next step in that process?

Honorable Mayor, I think this slide will clearly illustrate in terms of where we're at with the Santa Rita Connection project, as well as how it relates with the other lines that I referenced, both the Rosemont 138 line and the Unisource Santa Cruz reliability project. So Route 1.

I'm not done.

OK. Sorry. I'm sorry.

I am not done.

Continue.

Thank you. Sir. So Kevin Thompson, Arizona Corporation Commissioner, said that typically, and tell me if you agree with this, if it's accurate, if I heard him correctly as I was taking my notes, that typically the full cost of electricity for a new developer rests with them as a cost of doing business. So like what you said earlier, HUD-Bay would pay for HUD-Bay's own electricity and the cost of HUD-Bay doing business, if that mine opens, those rates, the cost of the electricity for HUD-Bay will not be passed on to other rate users. If it was clear. Just two things, because this is complex. But he said there could be a potential shared cost if the overall grid is increased for customers. So if there's some expansion, because I did watch the presentation from the May 11th meeting. I wasn't here. I was absent. But I did watch the video of it. So I'm trying to wrap my mind around a very complex situation to try to walk a mile in your moccasin so I understand what you're saying and to put it in layman's language to make it simple so that folks' anxiety can diminish because they're in fear. And I hate seeing this. I don't like being called a liar. I don't like my integrity being impinged. But I also don't like when there's fear mongering and pot stirring. And I think people need to calm down and please. That's why I'm trying to speak simply and clearly and easy to understand language to wrap our minds around it so that hopefully people's anxiety can be assuaged. That their counsel's not a bunch of crooks and liars. We're working, we're hearing, we're researching, we're peeling onions, I'm deep diving, we're doing the work we're supposed to do. So this is what was explained to me. And this is in layman's terms. And I found it helpful, so I'd like to share it with you with the goal of bringing peace to your hearts. Because I feel your pain. I see the fear. I hear it in your voice. It bothers me that that's what's being done here. So what I understood was the only way it could potentially be a shared cost is if the grid is overall, is the size of the electrical grid is increased for customers outside of the development of this new business, whether it's HUD-BAY or some other new developer. But a new developer pays the cost of their own electricity. But if you hook in with another line and it expands the grid altogether and then the larger group of people benefit from it, more juice in the system, more electricity, more services being provided in a wider range then the rate could potentially, if it's approved, be passed on to those customers that would benefit solely from that, having nothing to do with the new developer, if it was to be something like a HUD-B. Am I stating it accurately? Was my understanding correct when I was trying to wrap my mind around it with this corporation commissioner?

Honorable Mayor, Council Member Priolo, so let me be clear. This customer, again, there are various facets to how we are serving this customer. They will be paying their fair share for their service that they need.

HUD-BAY. HUD-BAY, that's correct. They will bear the sole cost of it. Is that not accurate?

Honorable Mayor, Council Member Priolo, yes, that is correct.

And there are legal safeguards to ensure that that happens.

Honorable Mayor, Council Member Priolo, we are heavily regulated by the Arizona Corporation Commission in which all accounting, including the tariffs that we set for our customers, is scrutinized every time we go in front of the commission for a rate proceeding or any other type of contract arrangement.

Is that what the 2012 agreement basically says? That's the structure that Council Member Priolo is, I think, referring to. Is that the type of document that ensures that the cost of the line, the co-location, if they're benefiting by one of the substations, that... they're going to pay their prorated share of all of that. Even though it might be built ahead of time, because I'm used to that from other water lines and things, once a new user comes on, they can claw back some of those benefits because they're going to reap the benefits of that.

Honorable Mayor, so again with respect to the infrastructure that's going to be needed to serve the mine, that has all been approved in the 2012 line siting case and those conditions are very clear that that customer will be paying the full cost for that infrastructure related to their services. We are still in talks with this potential customer. There are still service agreements that need to be agreed to as part of serving this customer. So that is, it's speculative to, we are still in those talks with that customer. So those are still ongoing.

Could you touch on what some of those conversations would be? Because if the process says you have to pay for

all of that um what would the service agreement what would be the some of the sticking points or the conversation i i may have to get honorable mayor i may need to get back with you there is customer privacy information that we just need to be very mindful of so again i know that may not help fully address the question but again we can't provide specific information on customers whether it's any customer for that matter so i just want to be very mindful and protective of that

OK.

I have another question.

Yeah, let Debbie go, and then I'll be back to you.

So on the photo there, your black and green line, it comes down to a V, and then it turns green and orange. Why isn't that black and green line just going across? Do you have that V2 benefit the cost of HUD-BAE?

Yep. Now you can stand up, Clark.

Mayor Murphy, members of the council, I wish I didn't get to speak. So the whole purpose of that is it's actually not to benefit the mine, it's actually to benefit our customers. So that maximizes our ability to co-locate these facilities. So the line you're seeing that's in the orange and black checked, that's the facility that Steven spoke about that would be shared with our sister company, UNS Electric. So on that portion, UNS Electric would pay essentially for half of that facility. TEP would pay for half of that facility. So both companies.

So why isn't it just going straight across instead of making that V?

Let me explain that. So the orange and green checked line is where this would be a shared facility with the Rosemont 138 kV transmission line. So in that case, Rosemont, the line that was approved back in 2012, is basically that photo on the left, that single circuit structure. It's capable of supporting another circuit. So Rosemount would be responsible for paying for that facility on the left, the pole and the wires. In this case, we would then go and hang three additional wires or conductors on that pole, and the only responsibility of the TEP, normal customer, would be to pay for those three wires. So by going down to that V that you're speaking of, it allows us to essentially reduce the costs of this project, the Santa Rita Connection project, which would be something that would benefit all customers. It's a reliability project. It's not for a single customer. It allows us to keep those costs to a minimum, both the capital costs as well as the long-term operations and maintenance costs.

So could I try, Debbie, so the yellow line, you know, just say it was all solid, that's all on Rosemont, right? But because they can co-locate the green and black line on it, it actually reduced the cost to the overall customer base because Rosemont's already paying for the western portion of that.

Correct. Yeah. So even though that's a longer route, it's actually less expensive for TEP customers than even the magenta route right there. That was the route three, because that's a line that would have to be rebuilt to be a double circuit line. And both of those circuits would be owned and paid for by TEP.

And only the residential rate payers by extension, correct? Residential is using it. Correct. Yep.

Mr. Mayor? Oh, yes, Kim. Yes, I'd like to ask a question. So, Clark, when we were first presented this map, the two routes on May 11th, why didn't you just distinguish those lines that you're now distinguishing that bottom where the V is? Because that would have helped a lot with us asking these questions.

I guess the short answer is you weren't here.

Yeah, Mayor Murphy, Member Lisk, I would say we do our best to try to communicate our messages clearly, but sometimes we learn from mistakes, and clearly we could have done a better job of communicating that.

And to Council Member Lisk's question, could I just ask a follow-up to that, Kim? Yes. Can you just go touch back on the grant a little bit because isn't that a secondary reason that because I had asked the question on the first meeting like why is the short line the more expensive one obviously that wasn't really touched on and I didn't remember any conversation about a grant but I think that is potentially another answer for why the green and the black one is cheaper unless I'm wrong.

So Mayor Murphy, I'll share an answer, and then Stephen might have some additional things. So basically, the grant, it's a great thing for our customers in Santa Cruz County. That would help pay for that piece of the line, the UNS electric portion of that line. but it wouldn't do anything to subsidize the TEP portion of the line. Nonetheless, still 50% is less than 100%. And so that's how it benefits TEP. Right.

Can I?

Yeah, go ahead.

She has, you know, so go ahead, Kim.

Yeah, one more question. So the line, I think it's Route 3, wouldn't it be better for the line to be going from substation to substation as opposed to going I know it all goes to the substation, but it's a more direct line as opposed to approximately or possibly that Rosemont B area could have a breakage, and then how would that affect the rest of our customers?

So all of the transmission lines, they do go from point to point. So from substation to substation. So even though you're kind of transferring from one structure that supports one circuit to another structure that supports another circuit, the circuit we would be building is continuous between the Sonoran substation that's off the screen and the Santa Rita substation. So it wouldn't affect customers and the reliability in any way.

Thank you.

Thank you. Diane?

Okay. Sir, your name is Clark?

Yes.

And your last name?

Briner.

Briner. Okay. And then it's Steven Eady or Eddie? Eddie. Eddie. Eddie. Steven Eddie. Okay. So first, I have questions for both of you. I'm going somewhere with this, so stay with me, all right? So, Mr. Eddie. Eddie. Are you aware of an ad that was in the newspaper from the Save the Santa Rita Mountains that accused TEP and that put out in the public view their position that there was a backdoor deal between this council, TEP, and HUD-BAE? Are you aware of an ad like that?

Honorable Mayor, Councilmember Prieto, yes, I am aware of that.

Okay. So would I be safe using the vernacular to say that that is fake news?

Honorable Mayor, Councilmember Prillo, as I stated earlier at the beginning of my statement, there is no backroom deal. There is no collusion. We operate in a very transparent process. Every plan, every project, every rate, proposal goes through rigorous scrutiny from an elected public body, but more importantly, as noted previously, as part of any line-citing case or any rate case, there is public comment and an opportunity for the public to provide their testimony on any matter of subjects. So we have been very transparent about this project. I will piggyback on Clark's comment earlier. There was an opportunity to provide a little bit more information to the earlier statement from earlier this year. We take credit for that, we apologize. But again, we operate in a very transparent manner in all of our dealings.

And I alert you, but I want to piggyback off. I know we're not to the rate case yet, but since we're touching on some of the things, because I've been through a couple of those. Isn't there a judge involved? And we may have to touch on it two times. That's okay. I'm going to be here until midnight probably anyways. So just touch on, you know, back to that transparency process. I know there is a huge ACC staff that has to work with your staff to prove all this stuff up. And then, can you just touch on quickly, and we can go to it later, but on how a judge, and there's real testimony and everything that goes into it.

Honorable Mayor, so speaking to rate cases, yes, that testimony is provided in front of an administrative law judge, which then provides a recommended opinion to the commission, which then votes on that opinion, that order.

And what if you testified and you lied at that?

Honorable Mayor, we are placed under oath.

Thank you.

And if I may, Honorable Mayor, with respect to the line sighting cases, and Clark may speak better to this than I, but that is in front of a public body which the chairman is appointed by the Attorney General, and it is a full court proceeding with testimony sworn testimony which is then part of a record which then goes to the commission for a vote. So it is a very rigorous transparent process and again the commission will be taking up this line citing case soon and so they will have their chance to deliberate and discuss the impacts of this line and ensure that there is clarity around this project and how it relates with other projects that have been discussed.

Thank you. Continue.

Okay. Ms. Clark. I appreciate your answer to my fellow council member, Ken Lisk, and I appreciate your saying that perhaps the last time things could have been stated more clearly so there wouldn't be confusion. We give you grace. I give you grace. Thank you. And I'm asking for everybody in this room to give grace too. Because that little, I won't even call it a mistake, it was something that could have been done differently for greater clarity. But it was misconstrued into a conspiracy that we were in cahoots with you in Hud Bay. So I'm asking for grace. There isn't anybody in this room that doesn't make a mistake, that couldn't do something differently, couldn't do something better, but to accuse a bunch of good people who are working hard to do the right thing by this town of being crooks and dishonest. Council meeting after council meeting, that's what's being hurled at us. And it's not true. And furthermore, we don't have any authority whether HUD-B opens or not. Is that true? Where is John?

He's probably taking a break.

I'm addressing the elephant in the room. I'm addressing it.

That one I think we have to be careful on because the HUD bay is not on the agenda. TEP's line sighting and rate cases.

I'll keep it to TEP, but suffice it to say, I give you grace. There's no problem. We all make mistakes. We all could do things differently. We all could be clearer in our communication, myself included. So I ask for mutual grace when that happens. But this council cares. And there has been no collusion. There have been no backdoor deals. We are not liars, crooks, and cheaters. And your rates aren't going to increase. if HUD-Bay opens up and starts drawing electricity. HUD-Bay pays for HUD-Bay's electricity. Plain and simple. And you are duty bound by all kinds of rules and regulations in your industry, just like HUD-Bay is in theirs, just like we are, sitting up here as your elected officials. We are duty bound by our oath, by the laws of Arizona, and by the ordinances of the town. Yes? And we all have to stay in our lane and do our duty within our lane.

OK, continue on that presentation.

I don't want to be too redundant, but I'm just going to back up on these slides and just, I do want to make sure that we've, does this back up? There we go. I just want to make sure that everything is crystal clear on everything we've said. So we've discussed already that there's three projects at play here. So let me just kind of just touch real fast on those three projects.

Don't even go fast. You take all the time you need. Let me touch real slow. Do 101 for us on there.

Layman's language please. Okay.

Thank you Mayor Murphy. So the Rosemont 138 KV transmission line and switchyard. So again this project more than 20 years ago Rosemont Copper at the time now Copper World approached TEP with a request for service.

And just to be redundant you cannot refuse a request from any rate. user, rate payer, whatever it might be, correct?

Correct. We don't need to agree with what they want to use the electricity for. We have an obligation to serve. That's kind of the curse and blessing of being a monopoly. So we did a study at the time. We identified that in order to serve this customer, we would need to construct a new 138 kilovolt transmission line and a substation. So we identified a location where we could tie into our existing system on an existing transmission line, and that was at the Toro Switchyard site, which is about a half a mile southwest of the Cerita Highlands neighborhood.

Could you just go, just for me, because switching site gets used a lot. I understand it's probably a substation. Of course, I understand lines. The switching station, I'm not really up on. Can you go as basic as...

Describing each you know type of those when you hit on those sure and I appreciate you bringing up that up mayor Murphy So a switch yard on a substation. Those are two terms that we throw out and we Sometimes we use them interchangeably, but they are different so a switch yard Think of it as a giant breaker panel on your house It just routes electricity from one circuit to another doesn't do anything to it a substation it changes the voltage into something more usable. So it takes it from those high voltage lines, so we typically run a 138 kilovolt transmission system, and then it steps that voltage down to a 13.8 kilovolt distribution circuit. And those are the lines that run through, generally through the home, whether it's underground or overhead, to homes and businesses.

And I might be wrong, but when you're talking about a switch yard, is that how you can differentiate the electricity, the load for a high rate user like a data center or a mine as opposed to residential or smaller users? You were describing how it's like a big circuit breaker and then it switches over. Is that an accurate description or am I off on that?

Maybe you're not off but you would need to add a metering point out there So when you have a metering point, then you can tell what electricity you're delivering to someone So just like at your house, you've got a meter plugged in that tells us how much electricity you're using We would have basically a giant meter telling us how much how much electricity are we delivering to this large customer?

Yep.

Yep. Thank you Yes

Thank you. Clark, can I get a clarification when you talked about the rate not going up? So can you guarantee rates won't increase as a result of future electricity needs from the grid?

So again, that's one of those questions where I'm not a politician. But it's so hard to say what's going to happen because of how complex rates are. Because you've got things coming on the books, things going off the books, different things happening. We really can't fairly answer that question. Stephen wants to try.

Yeah, Honorable Mayor and Council Member List. So the way again, I had expressed it earlier. So large load users that generate a lot of revenue based on their energy consumption puts downward pressure on rates. we go in front of the commission Arizona corporation commission for new rates about every three years. Uh, that's been the typical schedule. So when we go in for new rates, they open the books and they review all the costs of service that we have for our customers. And so again, uh, they are a potential customer at this point. It's speculative. We don't want to, uh, um, speculate at this time. But again, generally speaking, when you look at large users, of energy. They put downward pressure on existing rates because of the revenue that they generate and then bring back.

For the whole.

That's correct.

The entity of the whole.

So Steven, so what you're saying is the Arizona Commission has to approve like increase of rates every year. So you're not, so TEP is not asking for that to be waived in any way?

Can you repeat that, Kim? I didn't quite catch all of that.

Oh, sorry. So I just want to make sure. So the Arizona Corporation Commission is the one that approves your annual increase, I'm assuming. And so I just want to make clear that TEP is not asking for that to be waived, that they're fine with the commission adjusting their rates or reviewing the rates annually. Honorable Mayor.

Maybe just touch on a rate case that until you go in and ask for a rate case, nothing gets adjusted, correct?

Honorable Mayor, Councilmember List, that is correct. So when we go in front of the commission with new rates, they review all of our existing tariffs. Tariffs are the rates in which we set for the different customer classes and look at the total cost of service it takes to run the grid. And so then they parse out what that what the revenue requirement is for that given year in which we've identified as a test year. And then that is then how rates are set for different customer classes.

And I know I'm jumping ahead, but let's make the next agenda item really quick because we're touching on it continuously. So just to be clear, because it just came to me, you know, you don't have a Copper World customer right now, correct?

No.

So, and you haven't spent any money, or they haven't spent any money on that. So, am I accurate to say the rate case that you're in for now is all backward looking for investments that have already been made and don't have anything to do with Copperworld?

Honorable Mayor, so in our rate case before the Arizona Corporation Commission, those are for capital expenses that we've incurred from 2022 to 2024. We utilize a test year in which we collect, essentially think of it as collecting all your receipts for one year and then providing them to the commission and saying this is what it takes to run the utility for this given year. And then that is all presented to the Arizona Corporation Commission to review and decide what the proper rate should be for customers.

Right. So it's what he said.

Yeah. Honorable Mayor.

It's what the mayor said. You got it right. Yes.

Thank you.

You're welcome.

I keep forgetting a rate case is always backward looking, and we're talking about a project that hasn't put up a line, put up a pole, or connected with this particular rate case, correct?

Honorable Mayor, yes, it is all backward-looking. There are costs that we've already incurred. Right. And improvements, investments that we've already made into our system.

Which is one of the slides which we haven't got to yet. That's correct. On the right case on all the investments, the software, lines, polls, all those things. Okay. Continue, clerk.

Thank you, Mayor Murphy. So back to the whole switchyard substation discussions, the one last thing that I just wanted to make the point on is a switchyard, since it doesn't change the voltage, it's part of the transmission system. And so when we build a switchyard in conjunction with the transmission line, that is subject to the jurisdiction or the approval of the Arizona Corporation Commission. When we build a substation, it is not.

Oh, it's not.

Okay.

Is that because that's just operational to bring the voltage down as opposed to a switching station, or why would that be?

Well, I'll speculate into the law a little bit. I would say a substation is for distribution purposes, typically. You're bringing the voltage down so you can serve customers. And the whole line siting statute that requires the certificate of environmental compatibility, that's set up for transmission and generation infrastructure. I got you. Okay. All right, so I've got on the screen there that condition in that CEC that was approved that does require that Rosemont Copper or their successors, which in this case, you know, Copper World is that, would be responsible to pay for the construction and operation of this transmission line and the switchyard. Let's see, I think I'm clicking on Mayor Lisk's box.

Lisa, where does he have to point that to get it? You're good.

Okay, thank you. So the second project is the Santa Rita substation. So today, the majority, and I didn't go over this, but the majority of Cerita is served off of our lower voltage 46 kV sub-transmission system. We've got the Hart substation, which is located off of Old Nogales Highway. And a few years ago in 2021, we installed a mobile substation just down the street here on La Villita Road. And that's sort of a stopgap measure because we had not been able to get this new substation built. So we need additional substation capacity in order to continue to serve the growing needs of the community, the residential, the commercial growth that's occurring here in the community. And so that's why we've got that temporary substation. But that won't keep us going forever. And in fact, we identified the need for this substation back in 2016. We were able to go five years before we had to put in that mobile substation. Now the circuits that are coming out of those substations there, they're all nearly maxed out. We need to get the Santa Rita substation built. And that needs to happen with or without the Rosemont project with or without the Santa Rita Connection project.

Right, thank you.

And in fact, we can do that today by just tapping into the existing transmission line. So no new transmission lines are needed. What we do need is we need a power substation permit from Pima County. And that project, as I got on the screen there, it would be paid for, again, it's for general purpose for the benefit of all. And our growth. Correct. So we would expect that that would be paid for by all rate payers or all customers. So then that brings us to the third project, the Santa Rita Connection Project, which is the most recent project. And this project was identified just last year. So as part of our planning studies, our system planning studies, we look at what variables have changed on the system. And based on those, different things are needed. So when we did these studies last year, and these studies are mandated by the North American Electric Reliability Corporation, or NERC, just to take the jargon out of it. So these reliability studies we ran and it identified that we needed, because of things that have changed on the system, we needed to build a new transmission line so that we could avoid overload in the event of some sort of an outage on the system. And again, this is tying into the overall electric grid. So this is much bigger than one single customer. And so the project that was identified that would mitigate that concern was to build a new transmission line from the Sonoran substation located on Swan Road just south of I-10 and what we were proposing is the Santa Rita substation.

Claire, can I just stop you there? Because I know wildlife mitigation has come up for utilities in general. So is it wrong to make a nexus that you don't want to get to an overload potential? Because it's not good in general, right? But it also could be potentially dangerous from a wildfire if something goes or sparks. Or am I off base on that at all?

Let me, Mayor Murphy, let me just, so in an overload situation, basically what would happen is we're monitoring our transmission lines all the time. So if we see an overload, it's never going to get to the point where it's going to create a wildfire issue or something like that because we're going to intervene.

Okay, and what would that mean? Would that mean a brownout, rolling brownouts potentially?

Possibly in the most extreme case. Typically what that's going to mean. So in an overload, what could happen if you just let it go is the wires really heat up and they're going to sag down into an unsafe condition. And that's what you're talking about where you could potentially cause some sort of a wildfire or even just put the public in safety.

And that's why you're working on this, because we are getting somewhat to capacity, correct?

Correct. Yeah, so when we hit a certain threshold on our lines, that identifies, hey, something's got to go. We need to do something so that we want to make sure we can continue to serve our existing and future customers in a reliable and safe manner.

Right. Proactive as opposed to reactive.

We sure try to be that way. And so, yes, this project is needed so that we can do that reliably because, yeah, in the event of an overload situation, we would take lines out of service. We would do different things to make sure that we don't have that. And, yeah, in an extreme case, that would mean, and depending on the time of year, that would mean customers might be out of power for a period of time. Right.

Not good in July, correct? Mm-mm.

No, not ideal. So as we've already talked, this project just last month went to the Arizona Power Plant and Transmission Line Sighting Committee. We had a hearing for a couple of days where we had sworn testimony under oath. And as a result of that, we did receive or that Group made a recommendation to grant the CEC And now that's pending final approval by the Arizona Corporation Commission.

What's a CEC?

certificate of environmental compatibility could you yes can you just touch on like what they look at for whether they're gonna approve it or not what do you have to show or prove sure so if you're interested in where this was written in the Arizona statutes it's a ARS 40-360 but there's certain factors that have to be considered so you look at at biological factors, so what are the impacts on threatened and endangered species, things like that. You also look at general wildlife as well, including plant life. You've gotta look at the impact on cultural and historic resources. You look at the impact on visual resources. Are there areas that are managed for their scenic integrity? Are there just areas, I know many members of the public have talked about the views of the Santa Rita Mountains. And that's something that we heard loud and clear as we met with members of the public. is, hey, don't put these lines between us and our views of the Santa Rita Mountains. So we understood that was something that was important. So we looked at the impacts on that. You look at impacts on existing and planned land uses. So we consider the general plans of the county and local jurisdictions. You look at potential noise and communications interference impacts. And this statute is written both for generation as well as transmission lines. So transmission lines, at least of this voltage, don't generally make a lot of noise. You do get into the higher voltages where you get a lot of corona, that kind of snap, crackle, pop. But that's more in there for generation stations. And I'm forgetting something. What was that?

Purposes.

Sure, you do need to have a purpose in need. Why are we doing this? We need to demonstrate that it's needed. So that's included in there. Oh, recreation, that's the one I'm forgetting. So we look at all those factors and we make that case. Hey, look, we've done this exhaustive study to try to understand where can we put these lines and minimize those impacts. And in this case, on this project, Whether we went with route one, the green line, or route three, the magenta line, we're almost exclusively Utilizing existing infrastructure and just co-locating so putting those wires on existing poles And so what better way can we minimize? Disturbance to the environment disturbance to land use or the values of the community Then putting it on things that are already disturbed The green line is the co-located line.

I

The green... Just the, from the bottom of the V left to the magenta line. Just that piece of, yeah.

Let me skip to this slide here because this shows everywhere where it's green and black checked or orange and green checked is co-located. And the magenta line is also co-located. That's just, again, co-located with

other tep facilities i'm going to say be clear repeat that if you would because co-location can be yellow i see it as yellow is that dress thing i guess yellow and green is the co-location with hud bay but the green and the black is co-location with the santa cruz project correct yep okay yeah so i would say it's like going out to dinner with your family and you're responsible for the whole cost or going with your buddies and you're splitting the cost okay And again, to be repetitive on purpose, that's why the Magenta line was more expensive even though it's shorter because you have other people helping pay for dinner on the other line, correct? Correct.

Correct. So in this case, the last thing that we really haven't touched on is the Santa Rita substation and the Toro switchyard. So those are geographically adjacent to each other. So the Toro switchyard was sited in one spot and land was purchased from the Arizona State Land Department When we needed to build our Santa Rita substation, we looked for a site. We were actually trying to purchase a site from state land to the west of there in kind of that triangular area, if you can see that right below the word switch. But that was unavailable from the state for us to purchase or lease. And the land that they offered us was immediately adjacent to the tourist switch yard. Again, they're independent projects. We did not want to have our Santa Rita substation being held up by a project That was tied to the mine that has not been built after after 20 years we need to build that substation and so we were able to lease that land from from state land and like I mentioned before, a switchyard has a certain purpose and a substation has a certain purpose. A substation can also serve the purpose of a switchyard. You can still interconnect a line into a substation and not change the voltage. So it's an opportunity where instead of building two facilities adjacent to one another, we could put those into one place. So after we build that substation, you could tie the transmission line that would serve the mine into that same substation. And that would again, just like on the transmission lines, that would be an opportunity to co-locate or share that purpose. And like we saw in the condition of the approval in 2012, Rosemont or Copper World would be responsible for those costs and so that would bring the costs of that substation that would otherwise be borne solely by TEP's customers and they would pay for a part of that for their piece. So again, lowering the cost to our overall customers and minimizing the impact on the environment.

I think that's really all the points I wanted to make. Okay. Well, you know last time we made the recommendation for line one, even without... probably having all the additional knowledge of the grant and cost savings. If we did nothing, if we stayed with line one or we went to line three, how would that affect the committee from your perspective, from the perspective of the rate payers? Because I'm getting caught up on this, right? We have the grant, we have the co-location on there. what would be the preferred line and do the pros and cons. I mean, that's fine. The green and the black line as opposed to the magenta line. Because it sounds like they're going to pick one of the lines, correct?

So what we requested, and typically we'll request that they approve a single line. Right. In this case, we actually requested that they approve both.

Okay.

And the reason we requested that was because we were unsure if the terms of the grant from the Department of Energy might preclude us from being able to co-locate with them. And so we just wanted to make sure we could move forward with this project regardless of that. Okay. Now, but for that, we had identified, and we had identified through public input, we had several community meetings with this before we ever made application. We had identified the green areas the checkered line as our preferred route.

Right, and that was with public input, view shed, biological, animals, all the things that you touched on earlier went into that thought process and recommendation?

Correct, it had the lowest environmental impact, had the lowest land use impact, it had the lowest cost. It kind of met all of the criteria for being the better route. Did you want to add anything to that, Steven?

Was that the green one? The green one, yes. The green one. Yes. The green and black one.

Yeah, the one we approved previously.

Honorable Mayor, what I may add, and again, we understand that this is new information that we're coming to you with, but that grant, we were under an embargo from DOE to make any sort of announcement with that $75 million grant. It is fantastic news for our customers in Santa Cruz County, but also as it relates to this project, and again, we are still working out the terms and conditions with DOE, but it would provide overall cost savings to TEP customers as well as Unisource customers because of that colocation ability.

Right. Thank you. Does that complete both of your presentation on this one agenda item? Yes. Anything else? Other questions? Kim, so I don't forget you, do you want any other questions for you on this particular item?

I just want to make another clarification, what you talked about earlier. So does it mean that it's possible that the revenue coming in from the mine connection will not be enough to cover the costs, thereby causing rates to go up to our residents?

I didn't hear that clearly. Yeah, can you try just a little slower, Kim?

Oh, sorry.

No, it's okay. It's just it's a little garbled.

Oh, okay. So I just wanted clarification from a statement a little back ago. So it means it's possible that the revenue coming in from the mine connection will not be enough to cover the cost, thereby causing rates to go up for our customers.

No, I don't, well, I don't think that was stated. I think it was, well, you can try, Stephen, if you want, but it was the fact of a high paying rate payer, high use rate payer, could push down the cost of the residential users because of the higher rate that they're paying on an ongoing basis. You do better than me.

honorable mayor you you got it and again associated with the conditions that are tied to this project and the rate review this customer will pay for their full service that's required to serve the mine right yeah

Thank you.

Thanks. So at this point, it's up to the pleasure of the council on this particular item because right now we have, line one is what we voted on last time. But if you don't have any other questions, let me bring up the public because we may be going back to the well. So Luann Gigginess, I'm sorry if I mispronounced, I know some people left. Okay, going, going, gone. Philip Hoffman?

Good evening.

Good evening.

Forgive me, am I allowed to ask questions of TEP?

Well, yeah, ask us because what it can't be is a debate back and forth, so let us take the questions and then we'll ask TEP to help clarify.

First of all, thank you Mr. Mayor, members of the council for letting me speak to you again. There's a lot of shared infrastructure in these diagrams. There's a lot of co-located resources. My question as a homeowner is what are TEP's service level obligations to their industrial customers as opposed to their residential customers? If there's an outage, if there's a need to reduce service, Who gets taken care of first? Do we allow a mine to keep operating while people swelter in their homes in July? What are the rules? Who takes priority here? Who takes precedence? Does profit come before health and safety? Thank you. My second question, in response to the issue that Council Member Morales raised about whether or not residential rates will go up, There's some very simple math here. TEP generates or purchases power. That kilowatt hour doesn't know where it's going. It has a cost. But if they sell it to a residential customer at a price, and they sell it to an industrial customer at a much lower price, they make a certain amount of profit. Fine. But if they purchase more power, And if they sell more of it at a lower rate, they may make more money, but their profit margin goes down. That's not a business strategy anybody in their right mind would adopt. So in response to the long-term question, does an industrial customer make residential rates go up? I think they have to. One guy's point of view based on seventh grade mathematics. Thank you for your attention. Thank you. I appreciate that.

Got a lot of paper up here. John Doherty.

Well, thanks everybody for staying. It's been a long night.

Mayor, members of the council, Representative Council Member Lisk. It's very interesting that on January 26th, there was no connection to Hud Bay. Rosemont was not discussed. It didn't exist. TEP stood up here and said there was no connection. And I'll play it for you just in case you might not remember.

Just because I know there's some concerns, this is really just connected to having future capacity and growth. This is not connected to HUD-BAY in any way, is it? No, it is not. Okay, yeah.

No, it is not. Speak to us, John. No, it is not, Ted. No, it is not. So let's step back for a second. First of all, Save the Scenic Santa Rita's has never brought up at one second who's gonna pay for the Rosemont line. That's not been an issue. That was passed in 2012. We recognize that they're obligated to pay for that. That's not an issue. What the issue is, You look up here on this map where it says Santa Rita substation Toro switchyard. Okay, so I heard they bought that, or Augusta, years ago. They put that switchyard in, and then you get the line from 138 going out to the mine approved in 2012. That's a stranded switchyard. It's not connected to anything. it does TEP it does head bay zero good because it's sitting out in the middle of nowhere right it's not connected it's not plugged in so along comes TEP and they doggone know well that they want to hook up to that site at some point so they lease land next door immediately next door to the Toros switch yard And why did they lease that land? That's where they're going to put the substation. And what are they going to bring to the substation? A 138 kilovolt line on the Santa Rita connection. No Santa Rita connection, no power to the switch yard, no power to the mine site. So the issue is how much of that 138 kilovolt line coming down, going to the Toro switchyard, is going to be shoved off on rate pairs, which it looks like all of it based on the previous graph they had over there, when in fact the primary draw for that 138 kilovolt Santa Rita connection is the mine. There is no question. It is the mine that's driving this. Now, let's put this in context of time frame, too. Now, let me speak a little bit. I got berated by your councilwoman.

Well, but then I have to give everybody else 10 minutes to speak if we go there.

We've been here for two, three hours. and we just got trashed by councilman praiello for being untruthful fake news i don't know whatever else she had to say but we are not being untruthful we are telling you the truth and we would like to have the opportunity to finish that And the situation is very clear. It's the 138 kilovolt Santa Rita connection. And if you didn't build the Santa Rita connection, HUD Bay would have no power. But you could continue to operate in this community.

We've had to cut off the food bank before at three minutes. We've had to cut people off in the conversations.

And I understand the question, the 138 kilovolt. But we can't. We get in trouble with the state. um we would appreciate full consideration of this we don't think this is being held fairly at all but every that's why everybody has their time to speak um paige humphries and i think the other one was rape and then the tep john

Okay, I've been scratching my notes as I've been listening to everything that's been happening, so I'm gonna try to do my best to stay organized here, but I might be jumping around a little bit. I think that a big concern that I haven't heard addressed still is It's like what we just heard is that you know I understand that HUD Bay is responsible for paying for the Rosemont transmission line and the Rosemont substation and They would have been responsible for the entirety of the Toro switch yard but now that that's being co-located with the Santa Rita substation and Are they paying for the substation then? Because it is now also their facility that they need in order to have power. It's not clear to me that HUD-BAY would be paying for All of the infrastructure that they need if now the Toro switch yard is just being located on the Santa Rita substation And I just what I also don't understand is that you know these we heard that the rate cases are backwards looking so when when the Arizona Corporation Commission Hears these rate cases about should the rates go up Because it's always about them going up They're backwards looking But these studies that determine the future need and the future load on the grid, I would have to assume are forward looking, otherwise they wouldn't be building these new structures. So in the study that, or set of studies that determined that the Santa Rita substation was needed, we've heard that it's needed for like 14,000 homes and that may be true, but is it also showing you know, did that study consider the fact that there would be a mine built here or not? And I would like some clarification on that. And I think that's everything that I had for now. Thank you.

Thank you. Appreciate it. The other two are for different items. So Steven Clark, if you want to come up and we'll try to review them. I know you were writing, I was writing, everybody's writing. so I think it goes back to like if there's power back to your we're getting to a max power what's your responsibility do you pick and choose oh I don't want the you know the data center to go down whatever but it's okay to rolling blackout I don't know if you even have that ability to you know pick and choose by you know I'm turning off Tom's meter but I'm not turning off Clark's meter but please make an attempt at that

Honorable Mayor, so yes, any time we get a request from any large user, a large user of energy, we require them to produce or conduct a system impact study. So it's looking at all the factors that need to be considered in terms of essentially plugging them into our grid. So right, what's the engineering needed to serve this customer? What are the resources that are needed to serve this customer? Ultimately, in the end, if we feel as if we don't have the resources to serve that customer, we won't serve them. But if we do, we will serve that customer as to Mr. Briner's point earlier, we have an obligation to any customer to request service. But again, as it relates to these larger energy users, we require that system impact study to ensure that we are not impacting other existing customers that we serve today.

Right.

And to be clear, you can't turn off one. If you get to that overload capacity, do you even have the ability to shut service to, you know, some customers? The case was being made that you're not going to cut off to industrial. You're going to cut off to residential if you get to that.

Honorable Mayor, we are very proud of our 99.9% reliability statistic. We measure our outages in minutes, not hours, as other utilities do throughout the nation. So reliability is of utmost importance to us as a utility. So we don't pick and choose. We have to look at reliability as a whole. And that 99.9% statistic is top tier in our industry.

Thank you. And to the kilowatt rate, did you follow that? Are you benefiting one because... They're going to be making more, you'll be making more off of the high rate user at the expense. So you're going to buy cheap and then sell it cheap, I guess, to the industrial user.

Honorable Mayor, so as part of any rate case proceeding, we have to produce a cost of service study. And that looks at how we serve every class of customers. And if you look at those cost of service studies, they will point out that those higher load use customers subsidize those smaller class customers because of how the cost is required to serve that customer in comparison to other customers. So that is part of any record and any rate case proceeding, that cost of service study, and it is part of the rate case that's in front of the commission today and other past cases as well.

Yeah. The next one was, that we know that from 2012 you'll serve Copper World, but somehow if you don't build either one of the 138 in either location lines, the only reason you're building that Santa Rita connection 138 KV line is to serve Rosemont. I guess we're back to why are we building the 138 line? I know you've touched on it, but if you could reiterate if the mine wasn't here and was being built in West Virginia, would you still be doing one of those two 138 lines?

Yeah, Mayor Murphy, thanks for, I apparently wasn't crystal clear on that. So let me clarify. There's an existing transmission line that runs through there today. It goes from the northern side of Salvarita to down into Green Valley. The Toro switchyard was intended to tap into that line. The Toro switchyard does not exist today. It was approved in 2012. It has not been built. so the santa rita substation would go there as well tying into that same existing line whether we build the santa rita connection project has nothing to do with us building the santa rita substation whether we build the the line to rosemont has nothing to do with the santa rita substation it could be built and tied into a toro switch yard without that santa rita substation We're just talking about the most efficient way to build the projects that make sense.

So Clark, Merrick, can I just clarify on that? So I see a dotted hash line, black, that's heading west from the proposed substation or switch yard. So that's an existing line today? Is it an existing 138 line? And so what you're saying is, if HUD-BAY were to come online tomorrow, or say, hey, we're demanding power tomorrow, and they built that orange line, they would have something to connect to today. and you would serve them through that existing line today.

That's correct. The approvals they needed were granted in 2012.

But it's not a switch yard to nowhere. They would be connecting to an existing 138 KV line and have access to power that you would provide as a utility today.

That is correct. And again, the switchyard does not exist today.

I understood, but if tomorrow that switchyard was built and all the poles out to Hud Bay and lines strung on those poles, you would utilize that existing line today to serve them.

That's correct. Not building the Santa Rita substation, not building the Santa Rita Connection Project would not stop the mine from being served.

oh yeah thank you thank you and just to clarify whatever switching station substation is required for the mine one more time that will all be borne by the mine by Hud Bay correct correct and if we ended up doing the Santa Rita substation and interconnecting the mine there

We know we've got that condition from the CEC, the certificate of environmental compatibility that says Rosemont or Copper World would be responsible to pay for that. It's a little bit less clear cut as to how it would be versus the Toro switch yard, but that could be figured out and they would pay for their piece.

Just like sewer lines, we prorate based on others coming in.

Mayor, can I further my question then? Absolutely. So would, somebody paid for that existing line. The current ratepayers paid over the course of their rates to build that existing line. Is any of that cost shared with HUD-BAY? Do they bear any cost tied to the cost of infrastructure for the existing line that previous rate payers have already borne on their shoulders?

so uh... honorable mayor of mister dilly so uh... again we have to look at the line that is actually serving the mine so that is the rosemont mine that was approved in twenty twelve that has been condition that uh... hug bay or uh... rosemont would be paying for that connection uh... from our existing facilities we operate in the entire great i'd ideal at mister dilly so right there is a vast array of transmission lines that serve our local grid. So right, we can tap into any number of our transmission facilities that then require substations that then serve any number of customers, small businesses, residences. So right, it is all part of this interconnected grid that we operate. I think what is unique about this whole conversation and about this customer is that they are conditioned to pay for the facilities that are needed to serve from one point to another point, which is there to serve the mine. I hope that clarifies.

If I could take a stab at it.

I mean, everybody that comes here, there's a grid that already exists, right? Whether it's a small business or a large customer, the grid is here. We tap into it, and then as... we all move forward, right? And the grid has to be expanded. That goes into it, but the specific need to serve them is what falls on their shoulders specifically.

And Council Member Lisk has a question.

Oh, sorry, Kim?

Nope, thank you. Just a question, Steven or Clark. So was there a system impact study for the Santa Rita connection?

So Steven mentioned that we do a system impact study when somebody's trying to interconnect with us. So Rosemont had this need to bring in this large load. We did a system impact study so that we could identify, hey, what projects are going to be required to serve them? And then they need to agree, yeah, we'll pay for these. And so in this case, it was the transmission line. For the Santa Rita connection project, that's identified through a different channel. That was those reliability studies that we conducted. So that was internal, identifying that need for it. And so it's actually a mitigation to make sure our system is whole. So there is no system impact study to be done there because it's actually the remedy.

Thank you.

And if you could just touch back on a little bit of the backward look on the rate case. When you put in for one, how much potential future need gets factored in to whether you get reimbursed from a rate case.

Honorable Mayor, so we only look backward looking with respect to rate case proceedings. So again, we look at a test year. It is one specific time frame within that three-year period typically. And that is when we collect all the costs, capital costs, operating costs that it takes to run a utility. And that is what we then propose or provide to the commission to then set new rates.

right thank you and would you have one more question yeah go ahead kim sorry i know this is hard um so just to back up with the studies was there an environmental study done regarding this

Yeah, so both the Rosemont line as well as the Santa Rita Connection line, both of those is part of that application. I'm not sure how many pages, but there's probably close to 1,000 pages within each of those applications, and there's an exhaustive environmental study that's included in each of those.

and thank you thank you Kim and what came out of that again was I guess it's a combination of being a good neighbor to Santa Cruz right I mean if you're picking the red the green and the black line there's grant money associated with it there's co-location savings to the ratepayers right on line one where only the residential ratepayers would be paying for the magenta line is that correct

In part, it's correct. So all customers would pay for the magenta line. So that would include large customers as well as residential.

And if the commission landed on the magenta line, what would that do to helping serve the Santa Cruz folks? Would you have to build both lines then? Because the grant's attached to the green and black line. So what would happen if, for whatever reason, the magenta line was landed on what would happen to the 75 million, what would happen to the shared co-location cost, all of the above.

Thanks, Mayor Murphy. Sorry. So the line in the green and black checked, that line exists today. So as part of the grant, that would be rebuilt. It's kind of a pinch point in the system. It was underbuilt. It's underrated to serve Santa Cruz County. So it's kind of like we're serving them through a straw. So it's something that needs to be fixed. We've got three phases as part of that project. This is the second phase of it. So that line will be rebuilt no matter what. It's just whether it's rebuilt and there's a circuit that's TEP or there's a circuit that's only UNS Electric on there. And so it's a good opportunity to go and maximize that investment and minimize the cost to both companies.

And potentially minimize, because if we did the green and black line, we don't have to do the magenta line. But if we do the magenta line, you would still have to do the green and black line, correct?

Correct.

Yeah.

I don't think I got that.

So can I ask another question regarding that?

Yes, Kim.

So for maintenance for future, would the magenta line actually be more cost effective for maintenance than the green line or black line? whatever color it is. Green and black.

Thanks, Member Lisk. So the magenta line, so all maintenance costs would be borne on that line. So there's an existing line there today, one circuit. We'd be putting a second circuit on that line. But both of those circuits would be paid for by TEP. Whereas on the green and black line, you would have two circuits now, but 50% of those costs of maintenance would be paid for by UNS Electric, 50% would be paid for by TEP. So again, it's splitting the bill. It's the same cost, but two entities are paying for it. And so the green and black would actually be lower cost for long-term maintenance. And let me just throw out there, Maintenance on these lines is not a lot. They're pretty solid facilities. We inspect them. That's about what it takes. And once in a while, you've got a little bit of maintenance you've got to do.

So if we go to dinner on the magenta line, I'm paying by myself. If Kim and I go on the green and black line, we're splitting the bill? Exactly. Okay.

Thank you.

Thank you. We'll take a break after that. I'm losing all my council members here. So right now, you know, we're in a flexion. Well, if we don't even need a motion. I'm just wondering if that's where you're at. Yeah. Yes. Okay. Okay. Okay.

Yeah, I'm good. We're ready to go to the next item?

Yep. Okay. Thank you both for being here. I appreciate it.

Thank you, thank you, thank you.

I've got to find out where I am. Well, can't leave yet. We have the right case. Sorry. Were you going to take a break, though? No, everybody wants to keep powering. Item 10B, Madam Clerk.

This is the discussion and possible action and presentation of the Tucson electric power rate increase.

Thank you. Anna, would you like to reintroduce our guests? Though we're on writing terms, I think, right now.

Yes, thank you, Mayor Murphy, members of the council. Stephen Eddy with TEP is back again.

Thank you. And I know we touched a lot on the Ray case, but let's keep hovering through, backward looking, forward looking. What do we need it for? How does it, back to the judge, to the thing. What's that? Basically, is there anything that you haven't talked about?

Yeah, and I know- There's a few things that I'd like to highlight. So honorable mayor, council members, Mr. Dilley, and Anna, thank you very much for the introduction and having me here again this evening. And again, we touched on a number of these topics throughout the last item, but- I'll walk through where we are with our current rate case, why we filed it, what's driving the request, and what it means for customers in the community. Also make sure that I leave time for questions. Oops. So let's start with the big picture. Our current rates are based on costs from 2011. And as you can imagine, a lot has changed since 2011. Most importantly, inflation. From 2022 through 2024, the period in which this rate request is set, we invested about $1.7 billion into our local energy grid. These are real on-the-ground improvements, strengthening infrastructure, expanding capacity, and making sure that system keeps up with growth in communities like Saurita. As I mentioned, we're experiencing about 19% inflation since 2022, which has increased the cost of equipment, materials, and labor needed to operate and maintain the system. What's important to note, though, is that while many companies were raising prices during that period, TP actually did not. Just a little Side note that often goes unnoticed, we reduced bills in 2024 by about $10, and again in 2025 by about $4. That is driven mostly by lower energy prices, which go through a rate mechanism called the PFAC.

I don't think a lot of people know that because I heard from one person, obviously utilities never come down in price. Could you repeat for the record?

Yes, absolutely, Honorable Mayor. I will just repeat it again. We reduced bills in 2024 by $10 and again in 2025 by about $4. So when you look at our current request, which is about 13% increase based on our latest updates, it actually is well below the cumulative inflation we've experienced since 2021. We've also included proposals that aim to keep future adjustments more gradual and predictable rather than seeing larger steep changes between rate cases. So when we talk about all these investments, it really comes down to reliability and readiness. These aren't optional upgrades. They're what allow us to keep power flowing during extreme heat and peak demand, respond to continued growth in areas like Saurita and other parts of our region, and strengthen the system against outages and disruptions. Put simply these investments ensure that when our customers flip the switch the power is there consistently and safely Especially on summer days like today and throughout this week and again mayor as I had mentioned earlier We are very proud of that reliability statistic of nine point nine percent reliability One project that I do want to highlight within this graph of investments that we've made is the Roadrunner Reserve battery energy storage system that's in the Vail area, not too far from here in Sourita. That project plays a really important role. It helps protect customers from fuel cost volatility because you are storing energy and utilizing it during peak periods of usage. It also allows us to utilize cleaner, low-cost energy more efficiently. So when we have solar being produced during the day, we can store that energy in the grid through these batteries and then utilize it during peak periods.

And usually, typically, people that are environmentally sensitive like to see those things, correct?

Absolutely. Honorable Mayor, these are real investments that we are making with respect to our clean energy and advancement and battery storage is just one piece of that overall puzzle. So let me touch on a few key items that are beyond the investments that we've made in our local grid. So let me first touch on our expanded low income assistance program. We're proposing a significant expansion of our lifeline program with discounts of up to 50% for qualified customers. The program would be used in a tiered structure, as noted here on the slide, so customers with the greatest financial need would be seeing greater benefit. Today the program provides a flat $20 monthly credit, so this would be a meaningful step toward more targeted and impactful bill relief for our customers that need it the most. Second, within the rate case, we have a mobile home park master meter conversion rider that we are proposing. We are viewing this as a pilot program in a way in which we can transition mastered metered mobile home parks to individually meters. So I know there are a handful of mobile home parks within Sarita. We see this more so in the Tucson area. But when we have mobile home park facilities that are served by a single meter, those residents, those tenants are not actually our customers. So they don't realize any program benefits, any savings that they can be provided if they aren't a TEP customer. Those are just going to one customer, a mastered metered scenario in this instance. So we are hopeful that this program will really address concerns that we're hearing in the community around master metered facilities like mobile home parks. And then finally, we are proposing an annual rate adjustment mechanism. This would allow for more timely and gradual recovery of changing costs instead of waiting three years in which we typically do for rate case proceedings. Importantly, though, these are not automatic rate increases. They would still be subject to public review and scrutiny by the Arizona Corporation Commission and still require their approval as well. If approved, the first adjustment wouldn't happen until April 2028. Adjustable rates have already been approved including for our sister company, Unisource Gas, which serves northern Arizona and Santa Cruz County with natural gas. So let me touch on the current status of the Raitt case since we've been at this for quite some time. So as of today, the case is still under review and nothing is final. We recently wrapped up an evidentiary hearing for the Raitt case in front of an administrative law judge, honorable mayor, as I had mentioned earlier, which took place earlier this spring. That process includes sworn testimony again as I had mentioned earlier from TEP witnesses along with cross-examination from Arizona Commission staff and other parties involved in the case. And today we have about 21 interveners in the Raitt case. So those are parties that can essentially review all the material that we are providing to commission staff to review and they have the opportunity to ask any questions that they feel relevant as part of that rate case. So what's to expect? We are providing briefs to commission staff throughout the summer. A judge's recommendation is expected in the third quarter of this year. And a final decision from the Arizona Corporation Commission isn't anticipated until November. And if approved, new rates could take effect in December. So in closing, I'll just say that rate cases, we understand that rate cases directly affect customers, and we take that responsibility very seriously. Our goal is to strike the right balance in these proceedings, maintaining reliability, supporting continued growth, keeping service as affordable as possible, and providing meaningful assistance for those that need it most. So with that, I'll address any questions that you may have.

Thank you. We'll go to questions, and then I have one speaker card, John, on this one particular item. Kim?

Yes. Is it Clark that's speaking or Stephen? I'm sorry.

Stephen.

Okay. So, Stephen, you mentioned about the battery energy storage systems. Is there any plan for something like that to be built closer to us? Or in our area?

Bill, where? I missed that.

In the future? Closer to us.

Oh, closer to us? Yeah.

Honorable Mayor, Councilmember Lisk, so we are actually planning a phase two that is actually operational today, if I'm not mistaken, immediately adjacent to this Roadrunner Reserve project. And Councilmember Lisk, if I'm hearing you correctly, really the proximity of these resources benefit all of our customers. So right, we can put resources in one area and ultimately those electrons are going out to our entire grid. So it is benefiting all of our customers. We also have other battery energy storage projects not too far from here as well. It was referenced earlier in the last presentation, the Sonoran substation. So that is tied into another large solar array and battery energy storage project there at that site. So again, as I had mentioned, battery energy storage is this developing technology that we really want to take advantage of. It has great benefits to our customers. And as that technology develops, we hope to include more and produce more on our system.

Thank you, because I know you. I just wanted to follow up. So I realize there's benefits. There's also cons. But I realize there's a high upfront cost. So I'd like to know what that would mean in the near future, what that would mean to our customers.

Honorable Mayor, Councilmember Lisk, so yes, these are significant investments that we are making with battery energy storage. So, right, that goes along with any investment that we make with new generation or other infrastructure upgrades. The benefit that we had for this battery energy storage system were the tax credits that were made available through the federal government. So it's roughly about a 30% production tax credit that we were able to receive as part of this project, which then those savings go directly back to our customers.

And will that affect in the future as the tax credits burn off that you'd have to look? I know all the electric companies have a different year that they want to be off of coal or whatever it might be. But the circumstances change over time, right? And you have to look at the case on that. where it's beneficial because, to Kim's point, it falls back on the rate payers, right? I mean, you could be on all, potentially, all batteries, storage, solar today. We wouldn't want to pay that bill, but that's a possibility, right?

Honorable Bayer, we have an all-of-the-above approach within our resource portfolio. And, in fact, we go through what's called an integrated resource portfolio. plan that is reviewed by the commission. It is a 15-year outlook in terms of how we are going to serve our customers today and into the future. So that is sort of the forward-looking plan that we look at at new generation resources, whether it be natural gas, whether it be battery energy storage, wind, solar, or any other resource.

Right. And I know the rate case is a whole judicial process on all of the above. But we're here trying to get transparent and cover all bases. So what if the ACC came back and said, we're giving you a 1% rate increase. What would that do to future investment and or to reliability or all of the above? Because I think they have the sworn obligation, right, the ACC, to look out for the rate payers, but also the reliability, right, and not wanting to be caught with brownouts and those types of things because If our residents lost their air conditioning in July, they'd all be screaming at us, I can promise you, why didn't we push TEP or Trico to keep up with the utility infrastructure needs?

Mayor, we are an investor-owned utility, so I won't be long-winded with this, but because we look back in our rates, we have to pay for infrastructure today, and that comes from shareholders. So, if that investment market is not conducive to investment, it ultimately affects how we can borrow in the market and ultimately affect the rates that are charged to customers. So, this is, you know, again, this is a national model, investor-owned utilities. And so that rate of return, that risk that we are taking in making that investment is important, but also ensuring that we can pay for the upgrades that we've made in a past year.

Right. And the ACC takes all of that into account, right? That's why you have this long, lengthy process of your staff and ACC staff looking at all of those investments. upgrades, investments, and everything that's gone into it.

Mayor Murphy, it's written in the Constitution that those costs must be just and prudent. So, right, that is what they're evaluating when we go in front of the commission and presenting this information to them for review.

And you mentioned you have X amount of interveners, and they take that, they have meetings, they have public input, they have all of the above, right?

We welcome all input.

Thank you. Yes.

Can I ask another question?

Who was that?

If someone else has a question, I'll wait.

Okay. Diane, go first, and then I'll go back to you, Kim.

Okay. Steven, the slides that you had up there about the proposed rate increase, if everything goes through December 26th, Am I correct? Corrected my understanding that earlier in this evening we were talking about that the rate increase would be due to capital expenses incurred from 2022 to 2024 and that that those capital expenses would be driving the rate increase and it's backward looking up. Is that still applicable to that slide?

Honorable Mayor, Council Member, yes, that is correct.

Okay, thank you.

It is backward-looking.

It has nothing to do with HUD-B.

It is all backward-looking. Thank you. Kim?

Yes, so back to my question regarding rates. So let me understand. Is there a plan then to pay customers an increase for those that have solar systems and that you buy back their unused power?

Honorable Mayor, Council Member Lisk, so I may need to get back to you with respect to that specific question. We have a number of solar customers that have benefited from installing solar on their homes. Joe, sorry.

Everybody's welcome. Yep.

Hi, everyone. My name is Joe Barrios. I'm a manager of corporate communications, honorable mayor, council member Lisk. So I think what you're asking is essentially how do we compensate residential customers with rooftop systems for the solar they produce, the excess solar they produce. Basically, we have a system in place in which the energy that they export to the grid is For new solar customers, their compensation is essentially based on the rate that we pay for solar energy from large utility scale systems. And that, again, like all of our rates, that's based on a system that's determined by the Arizona Corporation Commission, gets revisited every year. And we have right now about 55,000 customers. The grand majority of them are residential who have their own solar systems. So if you've had a solar array for a long time, the method which you're compensated for is a little different. The system we have in place now, it's been in place for

Boy, I think seven years or or thereabouts, but it's based on what we pay for solar from other large systems and that's another Type program that has to work its way through the ACC Everything the public hearings the whole nine yards.

Yes, and and that was reviewed and approved I don't know like to rate proceedings ago or three I'd have to go back and check but yes reviewed and approved by the ACC.

Yep. Yeah That answer your question Kim

Yes, thank you.

Thanks. Diane? I'm good. Oh, you're good? Everybody good? Just stand by. I just have to go back to the call public. John, did you want to?

uh thank you mayor council i i just note that on the previous item 10a the staff was seeking direction from the council does the council wish to comment on the project what is the comment the council would like to make support or not support the project alignment preference of any i didn't hear any discussion upon that maybe i missed it but i did not hear any discussion on whether you were going to take a position on the santa rita connection

Yeah, I made the statement and that if anybody wanted to weigh in based on what we had previously voted on, that was the time and no one did. So the green line stands as it was from the last meeting.

Okay, as far as the rate increase, the city of Tucson's against it, Pima County's against it, the state attorney general has come out against it, and I see no reason to trust this company at all because the false statements that were made early on in this and that presented that there was no connection to rosemont or or hud bay or copper world now just is not true because we spent a good 90 minutes tonight talking about how this project can impact rosemont and copper world and i think it's very important to understand this is not just happening right now out of the blue Hud Bay Minerals is preparing a final feasibility study for the mine, and that final feasibility study needs to be completed this summer. That's what they say they want to do. Well, if they don't have the Santa Rita connection coming down here, bringing that extra 138 kilovolts needed to operate that mine, they got a big problem. And their board of directors cannot vote, or they can vote, but they can't vote until that feasibility study is done. They've got to have that done, and this is a big missing piece. It's no coincidence that this power line approval for the Santa Rita connection is occurring now. It's just not coming out of the blue. This has all been orchestrated over a long period of time to get this duck in the line so that the feasibility study can say, yes, We have power, and then it can go to the board of directors to sanction the mine. Believe it or not, this mine has not been approved by the board of directors. They're tearing the living daylights out of the mine, but they have not decided whether to build this mine. And one other point I'd like to make, this town council does have direct oversight on this mine. Topic?

Mayor, we're off topic. Yeah, it's on the rate case.

all right back on the on the power line i recommend you issue a resolution opposed to the rate increase and take note that tep that you're against the Santa Rita connection in the resolution against the rate increase. Put it in there. Because they needed to put all this information out on the table to begin with and they didn't. And it was only because of our effort that we had this hearing tonight and they came back in here and provided a lot more detail about what they were going to do. So there was some good through this whole effort and we got more information on the table. Thank you very much.

And when I looked at the background information, that's not actually correct. They did pass a resolution limiting it to 4%, both the city and the county. That's what the state attorney asked for too. And that's what the state attorney, so it wasn't opposed to it. It was to limit that. I'm open to a motion. My difficulty with it is there's a full... transparent process. I can't imagine they're going to get what they're asking for. It typically doesn't happen. It's up to them to prove it. And it's up to the various staffs to work on it and come out. I know it also includes maybe phasing it. I know water companies have done that through rate cases in the past. I certainly would be open to a resolution that would be as sensitive to our residents as possible, taking that balanced approach that was mentioned earlier. But at the end of the day, they have to make the case, and ACC has to approve it.

But I don't know if that's enough of a resolution, John, for... Well, I guess I have a question then, because it's already been heard.

Right.

And they're briefing... And so the question is, when did these other entities come in with their positions prior to the hearing already, I assume?

Because that's when the analysis is done. I mean, I'll defer to these guys. Yeah. Steven?

So, honorable mayor, the commission takes comments all the way up to the hearing, which we anticipate in November. So they're continuing to receive comments related to the rate case. We've been very open about this proceeding. It is a very transparent process. Anybody that wishes to comment on the Raitt case, we welcome it as the city of Tucson did and Pima County. Parties have up until, or individuals have up until the hearing in November to provide comments.

Oh, okay. So it's not even necessary to even come to that conclusion tonight then.

Shane? Thank you, Mayor. Stephen, hold up just for a minute. The city of Tucson has weighed in, the county has weighed in. They both seem to be supportive of what the Attorney General's office has put forward in terms of this 4% should do it type argument. I briefly looked at the Attorney General's work and I'm just curious to know, have you responded, has TEP responded to the Attorney General's proposal that 4% should take care of it?

Mayor Murphy, Mr. Dilley. So, right, that is all part of the briefs that we will be providing to the commission as part of our responses and rebuttals.

So you haven't quite yet done that yet?

I know from our standpoint, right, when we look at the investments that we've made, we feel that that 13% covers the cost of making the investments that we've made. And so we stand ready to defend that 13%. Mayor Murphy indicated it earlier, we come in with a proposal. It looks far different in the end based on the input of various interveners and testimony that's been provided and ultimately the commission that votes on it. So what we come in with looks very different or may look very different in the end.

Thank you. Thank you. Thoughts?

No?

Everybody good? Everybody's good? Okay. I'm getting to those two poor gentlemen sitting in the front there.

Oh, and then, of course, we have those in the very back, too. Well, that, too.

But if they sit in the back, they don't count. Only the people set up in the front count. Madam Clerk, item number 10C.

Wait, wait, can I say something?

Can I say something?

Sorry, I didn't realize we were moving on to the next item. Not that I want to drag out this meeting any longer. I still think it's important that we send in a resolution. At least we can put our point of view out. I believe The ACC is taking comments up until July 14th, unless that's been extended? No, it's November.

It's November.

Oh, they're taking comments now up until November? Yes.

Yes.

I thought they were taking comments up until July, so I'm wrong.

Yeah, no, it's till November. So depending on how things go, you know, when we come back from the break, we still have that opportunity to have a discussion.

I didn't realize that. Thank you very much.

My pleasure.

Mayor and council. Yes. Staff would look to the council bringing that back forward if you wanted us to do something. Yeah. Thank you.

Yep. Thank you. Madam clerk, item 10 C.

Discussion and possible adoption of ordinance number 2026-201 regarding a town code amendment to chapter 3.10, the fee schedule.

Thank you and Jody Gurian will be presenting this item and I have one speaker card after Park and Rec presents, we'll comment and then we'll let, which one's Daryl? Okay. Did you say you had a comment as well? Okay. I don't have your call to the public.

It should be up there. Yeah, yeah, yeah.

Don't worry. Just before you leave. Thank you.

Good evening, Mr. Mayor. Thank you for sticking it out with us. I'll be fairly brief. I wish I had something clever. Devin's the clever one here, so apologies. Just as an overview as we start into the discussion about the fee adjustment, I want to reflect back on the last time that the fees were adjusted in 2024. Those were intended to be kind of a comprehensive adjustment that included ramadas and rentals and permits and also field fees as well. The council decided not to approve the field fees at that point and sent us back to do some more work. We've done that work. We've been discussing this with the users, obviously with you all, and so we feel like we've done the due diligence to bring it back and get your determination on where we should go tonight. So this particular piece of our revenue is a really important one because it's one of the big chunks of it. And I also want to say in terms of thinking about how we do this, the discussion and the decisions that you guys make help us form a trajectory. We present these things based on what we know about what our financial position is and where we should be headed in terms of recapturing those revenues to support the overall operations and infrastructure. So just kind of keep that in mind in terms of the why. It's certainly a piece of it. It's not the totality of our revenue. And so one of the things we're looking at is how can we adjust revenue streams across the board to help support our operations. This is just a piece of it. It's an important piece though. All right. So in terms of the need for adjustment, First of all, our fees haven't been adjusted on field since 2013. We did a little calculation just on the electricity alone. And over the last three years, that cost for the field lights has gone up about 10%. As you all know, staffing costs have risen and also supply costs have. The cost that we're talking about raising for this particular component is scaled back from what was presented to you the last time. Last time what was presented was a $10 fee going up from $5 for the fields. We came back and retooled that, changed it fairly significantly, not only cutting that part back and thinking about how we might be able to do this over a different span of time, but also looking at the different fields and how much maintenance they require based on the type of field. Multi-use fields are a different type of maintenance than ball fields are, and they have a lower cost. And so you'll see that reflected in the cost proposal. The increase that we're proposing is going to raise the cost recovery for the department about 1%. That's pretty small. That's about $30,000 a year for this particular increase. That's spread across all the users that we currently have. That's our estimate.

Jody, do you know the percentage? Because I know we've heard national averages or national park and rec recommend up to 24, and we were at 7, I think, on our recovery.

Actually, I think we're at 5. over at five so you're thinking we're going to go from five to six then okay from this component and and that's a departmental cost recovery um one of the things devon have been talking about is separating that out and looking at what's our cost recovery in parks what's our cost recovery in recreation what's our cost recovery from business operations so that we can report on that and think about that in a more segregated and targeted fashion because certainly Parks generates a good chunk of our revenue right now. I anticipate that other areas will generate a more significant portion over time. But this $30,000, it's not a big amount in the overall scheme of a large budget, but it's important that we keep up with those fees. Field maintenance costs alone, just direct field maintenance costs, this isn't the cost of overhead and management and all of that, is about a million dollars annually. The amount that we're talking about being generated from direct rentals, so users like our RSOs, generates about 15% of the total. That means that the general... fund is subsidizing about $850,000 just for our athletic fields. That's not for the totality of the things that we do in parks. So one of the things that we talk about a little bit is how do we support our total park system for the general user? The casual person who walks along the trail, they're not expecting it to be separate use for them only for a specific purpose. walking by, take an advantage. For the people who are using it for a specific use, like they come for a program, they rent a ramada, they use a ball field, and they're paying that fee as an enhanced user. And that's a very typical model across the country. We have general investments that we make for a park system across the board, and then we have specific things that cost a little bit more to help offset the cost, because the investment is more significant on the part of the town. As I already mentioned, your determination helps us determine kind of where we're going in terms of cost recovery. We all know we're going to have that conversation in a little more depth soon. But these are the things that we use to glean how do we do this? Where do we go? What do you expect from us in terms of fees? So this is a smallish step. I know it has an impact. Certainly we don't want to demean that. But we've reduced that part in half. We're contemplating what's our next strategy because we don't want it to all be borne by our local users. We're thinking about ways that we might be able to do local user groups versus outside user groups. There's more to come is what I'm trying to tell you. And I'm not going to outline in specifics what we are thinking we'll present because there's more discussions to have.

And Jody, just to reiterate, what was proposed a couple of years ago and what's being proposed tonight is half as much as what was proposed a couple of years ago, even though costs have continued to go up. Correct. Correct.

Thank you. Brief history of what we've done in terms of the work that you sent us out to do. As I mentioned, the fees for the fields were not adjusted in 2024. They generate about 40% of our revenue in the department currently. And the last time they were updated was in 2013, which that's 13 years ago.

for doing math. Should have asked for a rate case.

I'm just saying. We held two initial meetings with our RSOs. I've been listening to all the rate stuff. With our RSOs to gather feedback, to talk about other options, to talk about ideas. That actually is when we came to the conclusion that maybe we should talk about stair stepping it. And so that's when we reduced it. We also talked about delaying the implementation date. We talked about other improvements to the way that they manage the lighting and the way that we bill them. to try and improve the experience that they're having. We recognize that there's some things that we can do as we're doing the cost increases. One of the things we're really working on is trying to remediate the fields to improve their conditions. It takes a little bit of time to take them offline and let the grass rejuvenate itself and allow us the time that we need for those bigger and more in-depth projects. And so that's some of what we're doing. We're getting ready to do, I think Dylan told me this morning, Quail Creek 1 and then all of Wrightson this next month. All right, so this just outlines the timeline. This is really in here just to kind of give you an idea that we've been doing this for more than a year now by the time it gets implemented and updated for the user groups. We started back in November with a meeting We had discussions. We did some more research. We came back in January with another proposal and discussed it. Our final proposal, you'll recall seeing in April. We followed your meeting up with a meeting with them to let them know what our final proposal had been. That's what you all see tonight. And then we've been in this period of time that is required by law where we post it. We allow for comment. We allow for this opportunity. And we see what we do. So dependent upon what our decision is tonight, fees would be available, although we're not planning to implement them until January. They would be available in July. But we decided to delay implementation at the request of the users. Oh, we tried to adjust it so it didn't have that split. Sorry about that. This is just an overview of what we're proposing. So multi-use fields, all of the fields right now are currently at $5 an hour. They would be going up for multi-use fields to, or excuse me, multi-use fields would be staying at $5. The baseball and softball fields, because of that higher level of maintenance, are going up to $750 if it's approved. This is the typical number of hours that we see them rented for and the total amount on the right that we would see as an increase. Lights would be moving from $10 to $13. That would be affecting multi-use fields as well. So they are going to see and experience an increase in that area. The ball fields would experience both of those increases. Total is just under $30,000. I think my calculations here are a little bit low because they were based on a year prior. And so I think they're coming in a little higher. So we'll see a larger number of rental hours.

And so. And then isn't one part of the changes is giving the RSOs more access to the lights, which could potentially compensate for some of it? Because now we're burning electricity, right? Sure. That isn't being used.

honorable mayor it's a good point um currently we we schedule it based on the schedule that they give us and so if nobody's out there the lights are burning and they are being billed for them um presumably if the situation were that we had scheduled the fields and they had to cancel nobody would be there to turn the lights on so they wouldn't be billed for those hours um we do have a situ uh system in place so that they can cancel that that schedule but sometimes it doesn't happen we occasionally get reports that lights are lights are on and there's nobody on the field so we know that there are times when it doesn't get cancelled so there should be any savings thank you any questions before yes Diane there was a microphone

One of the residents spoke during call to the public and expressed concern. She was a mom, and she was against the increase in parking rec fees. And she described having her kids in multiple sports and that it was a big impact on the budget. Was the reduction of the fee that you just presented here, was that taking something like that into consideration, hearing that angst of that mother? You reduced it from $10, right? You could have done from $5 to $10, but you went at $7.50.