2026-10-13 - City Council Policy Session

00:00And then my team, um, Danielle, who is

00:03the deputy director over the northeast

00:04division, Jake Johnson, who's our park

00:07supervisor, he's there in the back

00:08hiding. But, uh, this this could not be

00:11done without them. Our parks development

00:13team, Lance, uh, Gray, I know he is here

00:16somewhere. There he is right in front of

00:17me. Uh, he leads our capital improvement

00:20program. U, so I just want to thank

00:22them. And then, of course, our city

00:23engineer staff. Uh, I would also like to

00:26recognize Jenny Anne Sum. She's right in

00:29front of me. She just Yes, please give

00:31her a round of applause. So, so when I

00:34started in the parks department in

00:35November of 2021, I kept hearing this

00:37name, Jennyanne Sumers. Jennyanne Sum.

00:39And I was like, who is this? Jenny

00:41Sumers. So, I finally got a chance to

00:43meet her. She's very, uh, engaged in

00:46what goes on in her community, uh, not

00:48only this park, but old cross country

00:51canal. Uh, so I just want to thank you,

00:53uh, for your partnership and, uh, just

00:55give me a call whenever you want to,

00:57right? Okay. Thank you. Uh I know she

00:59will. Right. Um I earlier I met uh Dr.

01:03George Barnes um from the Balls

01:06Elementary School District. So I'd like

01:07to thank him. And then the mayor did

01:09mention um Gail Knight. She's over there

01:13uh right to the left there. Thank you

01:15for your partnership. And um Gail and I

01:18go way back. She's like a mentor to me

01:20and it's always great to to see you. So

01:22thank you. Um, I'd also like to

01:26highlight the efforts and leadership of

01:27Mayor Ggo. I know uh Vice Mayor Kish

01:30Kisha Hajin cannot be here today, but

01:32without them and of course Councilman

01:34Robinson, their support for the parks

01:36department, none of this uh would be

01:38possible. Um, I also do want to mention,

01:42I do not see her, but my former boss and

01:44assistant city manager, ah, there she is

01:47right there, uh, Inger Ericson. And I'm

01:49sure she'll be ripping up the pickle

01:51ball courts here in a minute.

01:54My my current boss is right next to her,

01:56Deputy City Manager Dave Matthews. So,

01:58thanks for to your support.

02:01One of my assistant directors is over

02:03there standing uh next to my wife uh

02:06Brandy Barrett. I could not do this

02:08without her. Uh we laugh on a daily

02:10basis. We also cry on a daily basis

02:12running this running this department,

02:14but without you, I cannot do that. Um,

02:16and then finally, she she might get me

02:18for this, but I'd like to thank my wife

02:20who joined me today, my wife, Julie

02:22Wickfield of over 30 years. Uh, this

02:24morning she said, "Honey, I'll go with

02:26you if you go to the grocery store with

02:27me after." So, I I I've been falling for

02:30this trick for over 30 years. She said,

02:31"We won't even get a cart." I said,

02:33"Yeah, right." So, thank you for that.

02:35Um, the refreshed amenities you will see

02:37today uh build on the legacy of this

02:39park and as a welcoming destination

02:41where families can relax, connect, and

02:43enjoy time. So, thank you again for all

02:46uh being here part of this celebration.

02:48And without further ado, let's cut the

02:50ribbon and officially open the new

02:51sports courts. Thank you.

02:55>> 5 4 3 2 1

03:01[cheering]

03:05[music]

03:14>> [music]

03:18>> I think when you when you consider the

03:20Synica Capri and the impact it had on

03:23Phoenicians and Phoenix [music] and

03:25society around this area, you got to

03:28stop for a second and really understand

03:30where Phoenix as a city was at that

03:32time. I mean, [clears throat] in the

03:34early 60s, Phoenix had just come from

03:38about a 10-year span where the

03:41population of our city increased 400%.

03:45So, Phoenix has always been associated

03:48with growth, but especially in the early

03:5060s, [music] we just reached a point

03:52where we're almost about 500,000 people.

03:56So, it was really growing like crazy.

03:59um the downtown had shifted, shopping

04:02had moved from downtown. [music] Places

04:04like Builtmore where the Senica Capri

04:08was were really booming. The whole

04:10Arcadia area, all of that was really

04:13really growing at a very rapid pace.

04:17uh movie theaters in town where they're

04:19just on the leading edge of what were

04:22called multiplexes where they're very

04:25common now where you go and there's 10

04:28or 12 theaters in one shopping mall or

04:31something and you have all kinds of

04:33choices. [music] Well, that was just

04:35beginning. Uh the majority of the

04:37theaters were still the single screen

04:40like the Fox Theater, the Oreium, the

04:43Palms Theater. [music] They were single

04:45screen theaters.

04:49Paramount Arizona

04:51uh hired a guy named Ralph Haver to

04:53design the uh Senate Capri Theater. They

04:56really wanted a one-of-a-kind

04:59massive um very ornate luxurious theater

05:05uh that rivaled theaters anywhere in the

05:08country. And that's what they wanted.

05:09They hired Ralph Haver who at that time

05:11was a very prominent architect in

05:13Phoenix. He was primarily known for

05:16designing homes and residences and

05:20different kinds of retail buildings. He

05:23wasn't really known for designing and u

05:27drawing

05:29um a theater. And so they hired him and

05:32building it starting in about 1964.

05:35[music]

05:36And uh the building itself when it was

05:39finished 16,000

05:42square ft [music]

05:4317,000 square ft theater had a big arc

05:47uh curved entryway a portico as you came

05:52into the lobby. There was Italian tile

05:56everywhere. There was [music] a 24 foot

05:59high stained glass window that the

06:02stained glass that had been imported

06:04from New York. One of the things that

06:06when you talk about people who went to

06:08the Synapri on a regular basis in those

06:10years, they remembered this the curtain

06:14and the curtain was just a massive piece

06:16of material and it was gold and it swept

06:20back and opened up and and just to

06:24display and present the movie theater.

06:26But there was 4,000

06:29in of gold metallic material that were

06:33purchased to create this massive

06:36gorgeous curtain. So on uh March 31st of

06:411966,

06:42the theater opened and the following

06:46day, Charlton H, who was a star of the

06:49first film there, The Agony and the

06:52Ecstasy, he came in person and did a

06:55little workshop for high school kids in

06:57the theater and introduced the first

06:59movie at the Cynica Capri. And he w it

07:03was a big hit. And the thing about the

07:06Cynica Capri which rivaled a lot of the

07:09other theaters and I can remember as a

07:11kid would you would decide which movie

07:14you're going to going go to and then you

07:17would go see which theater uh was

07:19showing it. Well with the Capri the

07:22Synica Capri just going there was an

07:24event in itself. People went to the

07:27Capri just to experience the luxury of

07:31it and the beauty of it. [music] It was

07:33a destination in itself. Um

07:38people would go there for celebrations

07:40or first dates or some special kind of

07:43event. Um the Synapri primarily in the

07:47early years anyway ran uh just just big

07:51movies, movies like Agon Agony in the

07:54Ecstasy which opened the theater. Uh,

07:56The Godfather [music] was the only movie

07:59theater in Arizona that was showing The

08:01Godfather at the time. Uh, that Titanic

08:05unfortunately was the final theater. So,

08:08Synica Capri kind of sank right along

08:10with the movie Titanic. At the same

08:12time, uh, Star Wars opened there in

08:151977. Had the Star Wars, the first Star

08:19Wars actually showed consecutively for a

08:22full calendar year. It was the longest

08:24run of Star Wars [music] in the entire

08:26country. It was very profitable movie to

08:30be shown. The whole theater was was an

08:33event in it in itself. You could

08:36actually they actually had at one time

08:38they had a dress code if you could

08:40believe it. They didn't allow anybody to

08:42wear jeans. Uh females could not wear

08:45[music] shorts

08:47and sandals. You could not wear sandals.

08:50They actually had a published dress code

08:53to attend the Sen Capri movie theater,

08:55which sounds kind of odd today. Uh for

08:57the opening, I actually saw an ad you

08:59could send in money and pre-order

09:01tickets for that [music] opening uh

09:04opening movie of The Agony and the

09:06Ecstasy. So, as years went by, the total

09:09of Synica Capri uh was open for about 32

09:13years from ' 66 [music]

09:14to 98. [singing]

09:16It changed hands several times.

09:18different owners ran it. The final owner

09:21was um a guy named Dick Harkkins [music]

09:25who still there's a lot of Harkkins

09:27theaters around Phoenix and Scottdale

09:30and he owned it for I think about 10

09:32years. The the thing that got in the way

09:36of it continuing [music] to succeed and

09:38be a presence in the valley was there

09:41was a different company that owned the

09:43land that the theater was on. Harkkins

09:46owned the building, but a different

09:48investment company owned the land. And

09:50they wanted to be build a multi- rise

09:54office building. Obviously, right there

09:57at 24th Street in Camelback, you can

09:59make a lot more money off of an office

10:01building than you will from a standalone

10:03[music]

10:04theater. So, there was about a year-long

10:06battle. There was a bunch of citizens

10:08saved the Cynica pre. There was

10:11something like 250,000 [music] people

10:13that signed a petition, but

10:15unfortunately

10:17property [music] rights and everything

10:19else and the investment company won out

10:22and in 1998 uh the C Synica [music]

10:26Capri went down. The legacy of the

10:28Cynica pre

10:30those of us that were around to attend

10:32it, it's it's always coupled with fond

10:35memories. [music] It was a destination.

10:38It was what I call a part of of civic

10:42pride. Yes, it was a building. Yes,

10:44there was a lot of money in it. Yes, it

10:46was ornate. But what was coupled with it

10:49for Phoenicians at the time was the

10:51civic memory of going there as a

10:53celebration or going there with a

10:56special person or some special event.

10:59That's the legacy of the Cynica Capri

11:01[music] is it's always associated with

11:04some fond memories of people that lived

11:07here at the time.

11:12[music]

11:18[music]

11:25[music]

11:28Checkmate.

11:31>> Good info is a good thing. The Broadway

11:33Curve project is in the works. Prepare

11:35for lane closures and detours. Stay

11:36ahead of the curve at i10curve.com.

11:40[music]

11:50[music]

11:59>> [music]

12:08>> My name is Danielle Povaro and I have

12:10the pleasure of working for the Phoenix

12:11Parks and Recreation Department as the

12:13deputy director for the Northeast

12:15Division. I love my job. I love parks.

12:20It brings me joy to see all of you here

12:22today because it has such meaning about

12:25what it means to be engaged with our

12:28communities and that it's not one small

12:30thing. It's not one person. It's all of

12:32us together collaborating, partnering,

12:35keeping eyes on the parks, telling us

12:37what's going on, where we're missing

12:39something and where we need something.

12:41And that is how we ended up here today

12:43with these amazing sports court

12:46additions, improvements to Pierce Park.

12:49So, it's a wonderful day to be here. Um,

12:53you know, coming together today has been

12:56a long road from doing community

12:59engagement surveys, engaging with

13:01Griffith Elementary, the 44th Alliance.

13:04Yes, I know you promoted the survey.

13:07Thank you. [laughter]

13:09Thank you. For those of you who took the

13:10survey, we had over 700 responses just

13:14directly that are in the Pierce Park zip

13:16code, and that's meaningful to us

13:18because we want to make sure that the

13:19improvements that happen in our parks

13:21represent our local community.

13:24Today, we have six pickle ball courts,

13:26two new tennis courts, a resurfaced

13:28basketball, and volleyball. But the most

13:31important thing that I know was really

13:33critical for the community was the newly

13:35paved parking lot. So, the big ruts are

13:38gone. [laughter]

13:40So, thank you for your support. Um,

13:43today we have uh with us our esteemed

13:46mayor, Kate Ggo, and I'd like to welcome

13:49her up. Please give her a warm round of

13:51applause.

13:57Thank you so much, Danielle. and to the

13:58entire parks team working with the

14:01community. We have delivered some

14:03incredible upgrades for Pierce Park. I

14:07want to see who's louder, the tennis

14:09folks or the pickle ball folks.

14:12>> All right, who's excited about pickle

14:14ball?

14:16>> Who's excited about tennis?

14:20>> All right, so in Phoenix, we love both.

14:23And across the country there there's a

14:25real debate, but we are investing in

14:27both park both uh pickle ball and tennis

14:30here because we just want people outside

14:32enjoying our wonderful parks. Uh I send

14:36greetings from our vice mayor of the

14:38city of Phoenix, Kesha Hajj Washington,

14:40who worked so hard on these upgrades and

14:42so wanted to be here but unfortunately

14:45has a family medical emergency. So,

14:48those of you who know her well, if if

14:50you could send her some love, but we uh

14:52are well represented on the city council

14:54and have Councilman Kevin Robinson who

14:57is here

15:01and and and it's not just the city. This

15:03is multiple branches of government. So,

15:05we have our state representative Janine

15:07Connelly is here with the gray hat. She

15:10wins the elected official hat game. And

15:13then we have the superintendent Barnes

15:15from the Balls School District, Jacob

15:17George, Gail Knight, so many of our

15:20great partners, the school district. We

15:23work so well between the city parks and

15:25making sure that we have safe places for

15:27our kids at every hour of the day. We're

15:31also joined by uh the leaders of our

15:33parks and recreation department and um

15:37so many leaders from neighborhood

15:39organizations including the 44th Street

15:42Community Alliance. So the great folks

15:45in green and white. Uh we were here

15:48together for a gain event last November

15:50and talking about today. So it's

15:52exciting that it is finally come with so

15:55many new amenities. six new pickle ball

15:58courts with lighting, two new tennis

16:00courts, basketball court reservicing,

16:03new drinking fountains, new benches, new

16:04picnic tables, and then the beloved

16:06parking lot uh upgrades that [laughter]

16:10we heard a lot about. And and this is

16:12possible because of all of you. Those

16:15those at the bottom of the ballot,

16:17there's often city funding items. And a

16:19really important one is the parks and

16:20preserve initiative. Our residents in

16:23Phoenix overwhelmingly voted to support

16:25our park system and because of that

16:28parks and preserve initiative, we're

16:30able to fund really important upgrades

16:32like the one you see here today. So,

16:34thank you to those of you who make it to

16:35the bottom of the ballot and help us

16:37fund these great investments. I've often

16:40said that parks are one of the clearest

16:42reflections of a city's values. When we

16:45invest in parks, we invest in people.

16:47And we in the city of Phoenix have made

16:49parks a priority. We have one of

17:44Good afternoon and thank you for joining

17:46us. We'll call to order the policy

17:48meeting of the Phoenix City Council.

17:50Will the clerk call the role?

17:52>> Councilwoman Wardado

17:53>> here.

17:54>> Councilwoman Hernandez.

17:56>> Councilwoman O'Brien

17:58>> here.

17:58>> Councilwoman Pastor

18:00>> here. here.

18:01>> Councilman Robinson

18:02>> here.

18:02>> Councilwoman Stark

18:04>> here.

18:05>> Councilman Wearing.

18:07>> Vice Mayor Hodgej Washington.

18:09>> Mayor GGO

18:10>> here.

18:12We will begin today with council

18:13information and followup requests. We'll

18:16begin with Councilwoman Pastor who was

18:18our parade marshal for Pride Parade this

18:21weekend. Congratulations, Councilwoman.

18:23>> Thank you. Thank you, mayor.

18:27I'm waiting for the slides, but as the

18:30slides come up, um

18:33I'm going to do a recap from July to

18:35September. Uh slide number two, back to

18:38school. Um obviously it's a busy uh

18:41summer across District 4. Back backpack

18:43giveaways, pool events, and back to

18:45school celebration alongside local

18:48school districts and community partners.

18:50We attended a back- to-school event

18:52hosted by Isaac uh school district mol

18:55and molina healthcare, the city of

18:57Phoenix parks and reccks department and

18:59Phoenix Union high school districts.

19:02These are all the different spaces and

19:03places that we were we were at September

19:06supporting education visited Whittier

19:09Elementary for partner with a principal

19:11for a day to gain insight into classroom

19:14leadership and explore new partnership

19:16opportunities that support student

19:18success and career readiness. I enjoyed

19:21going from kinder to uh junior high and

19:25uh that group the junior high group had

19:27a lot of questions for me.

19:30Uh slide number four, connecting with

19:32our neighborhoods. July, I joined uh

19:35Mville Blockwatch for neighborhood

19:37updates and resources uh from the

19:40Council of Mexico. In August, I

19:42congratulated Fairview Place historic

19:45neighborhood on receiving the 2026 Love

19:48Your Block Grant. And September met with

19:51Tildale Terrace neighbors to discuss the

19:53future of 27th Avenue and ongoing

19:55community safety efforts. Slide number

19:58five. Uh, neighborhood synergy 2026

20:02recognized three Mville and West Phoenix

20:04groups. Delmon Village Garden

20:07Association, Mission Heights Blockwatch,

20:09and Tillsdale, once again Terrace

20:11Neighborhood Association for their

20:13leadership and community impact. Slide

20:16number six, shaping the future of 32nd

20:19and McDow urban farm. September, I

20:22brought uh along with Bloomberg brought

20:24stakeholders together to plan the

20:26transformation of 11 acres of a vacant

20:29land into a community-driven urban farm

20:32that expands access to fresh and healthy

20:34food. Side number seven, Love My Phoenix

20:38campaign launch proclaimed September

20:4225th on behalf of the Phoenix of Phoenix

20:44Mayor Kate Ggo as Love My Phoenix Day,

20:47encouraging residents to take action and

20:49help keep Phoenix beautiful. Slide

20:52number eight, advancing community health

20:55attended red. Red is the night in

20:58support of Aunt Rita's Foundation and

20:59its works advancing compassion, health,

21:01and community support. Slide number

21:04nine. Residents recognition block grant

21:07rep recipients and board and commission

21:10appointees. Welcome six district 4

21:12residents appointed to city boards and

21:14commissions and recognize new village

21:16planning committee members for Encanto

21:18and Central City.

21:20uh supporting local businesses and

21:22organizations which is slide 10

21:24highlighted local businesses and

21:26nonprofits including Mom and Pop Tax

21:28Shop,

21:30La Purisima Bakery who got the number

21:33one koncha and Melrose on 7th Avenue for

21:36their contributions to District 4.

21:39Community Safety and Infrastructure,

21:41which is side number 11, celebrated the

21:4430th anniversary of the Hispanic Bombos,

21:47joined city leaders to at historic fire

21:50station 8 to honor 140 years of Phoenix

21:53Fire Department,

21:55uh visited 24th Street water plant

21:58treatment plant for a thank you, a thank

22:01Wait, I messed that up. I'm trying to

22:03write speak fast. uh thank a water hero

22:06day recognizing essential work that

22:08keeps Phoenix water systems running and

22:10team celebrations is I want to recognize

22:13Bindda Munos on her promotion to public

22:16information specialist with public works

22:19and congratulate former intern Johannes

22:22Sapuva on beginning her studies at NEU

22:25and once again the final slide you can

22:28always contact my office reach out if

22:31there's any situation that you need or

22:33you just want to say thank you. Thank

22:35you, Mayor. Thank you so much,

22:37Councilman Robinson.

22:39>> Thank you, Mayor. I wanted to

22:41[clears throat] excuse me, take this

22:42opportunity to congratulate our very own

22:45assistant city manager, Lorie Bae.

22:47Excuse me. Named to Women's Achievers of

22:502026.

22:52This past year, SI City of Phoenix

22:54Assistant City Manager Lorie Baes has

22:56been named a winner of the 2026 Women

22:59Achievers of Arizona Award by the

23:01Arizona Capital Times. This honor

23:04recognizes her nearly three decades of

23:06public sector service public sector

23:09leadership and exceptional impact on the

23:11nation's fifth largest city. So Lori,

23:13CONGRATULATIONS.

23:20It says three decades. She started when

23:22she was about 15 years old. So we're

23:24good to go. Mayor, thank you very much

23:25for the time and Lori, congratulations.

23:29>> Thank you. Congratulations

23:31to assistant city manager Ba.

23:33>> Who else has an update? Yeah, I I I

23:36there was a line to congratulate Lori.

23:38Uh, [laughter]

23:40Councilman Stark, do you want to

23:42>> You know what? Kevin Robinson stole my

23:44thunder as always. Kevin, stop it. I

23:48wanted to also thank Lori. So, he beat

23:51me to the punch, but I think it's a

23:53great honor.

23:54>> Wonderful. And and speaking of women of

23:57achievement, our own vice mayor will be

23:59honored on Friday the 23rd as a 2026

24:04outstanding woman of achievement. Uh so

24:07we are lucky to be in the in the so many

24:11women of achievement

24:13vice mayor.

24:20Thank you so much, mayor. I actually was

24:21going to congratulate Lori on her

24:23achievement and I didn't know I was

24:25going to also be the recipient, but um

24:27congratulations.

24:29Job well done. Very well appreciate.

24:31Very welld deserved, I should say. Um

24:33look forward to celebrating with you a

24:35little further and thank you mayor for

24:37acknowledging my upcoming award. That

24:39definitely means a lot to me. So thank

24:41you guys.

24:43>> Council Gordado.

24:46>> Thank you mayor. And as well,

24:47congratulations to our vice mayor and to

24:50Lori. Thank you guys so much for all of

24:52your service. And I'm not surprised you

24:54guys are women and very amazing people.

24:56U we're a majority women on this

24:58council, so we do a lot of great things.

25:00Um congratulations to both. I I want to

25:03start to invite everyone to our upcoming

25:07events. This upcoming weekend is our

25:09yearly events that we do every year. And

25:12for anyone that doesn't know yet,

25:14Halloween is my favorite holiday of the

25:17year, and between that and Christmas,

25:19but Christmas has become more stressful

25:21since I've had kids. But yes, um

25:23Halloween it is. So, I just want to

25:25invite everyone Saturday, October 17th

25:28from 6:00 to 9:00 p.m. at the Marva

25:30Community Center located at 4420 North

25:3351st Avenue. We're going to have music,

25:36trunk or treat, a haunted house, a

25:38costume contest, and plenty of Halloween

25:40fun for the whole family. This is a free

25:43family event, and it's wonderful. It's a

25:45wonderful opportunity for our community

25:47to come together, celebrate, and make

25:49some great memories. So, bring your

25:51children, wear your costumes, and come

25:54celebrate Halloween Halloween with us

25:56here in Mville. Hope to see you guys all

25:58there. And for all of those parents, you

26:00get to wear those costumes twice. I know

26:02that they're very, very expensive. Also

26:05want to invite all of our families to

26:07our wonderful Halloween celebration

26:09happening family fright night is our

26:11annual event as well this Saturday

26:14October 17th from 4 to 9:00 p.m. at the

26:16Washington Activity Center located at

26:192240 West Citrus Way'll host a free

26:22evening of family fun as part of our

26:25game community celebration. There will

26:27be games, prizes, a custom contest, food

26:30vendors, candy, and a special showing of

26:33Scooby-Doo to end the evening.

26:36What I especially love about these

26:38events is that we get to bring our

26:40neighborhoods together. Neighbors get to

26:42come together. Children come in and have

26:45a healthy fun. I I love being able to

26:48judge. It's always hard to be the judge

26:50at these contests just because everyone

26:52looks so cute. Um but it's but it's a

26:54wonderful evening where um where the

26:57neighbors come together. Um our

26:59Washington activity center does such a

27:02great job. Kudos to all the staff there

27:04for all of their hard work and as well

27:06at the Mville Community Center. They go

27:08above and beyond for all of these

27:11events. For our blog watch at Washington

27:14Park, thank you so much um to Sarah and

27:17to all of her people there that put this

27:19event together. Um, looking forward to

27:21that this upcoming Saturday and I hope

27:23to see you guys all there. Thank you,

27:25mayor.

27:26>> Thank you, Councilwoman Hernandez.

27:28>> Thank you, mayor. Uh, super quick

27:29update. First, uh, I would also like to

27:32start by congratulating Lori on your

27:35award. That's amazing. Um, you know,

27:37you're you're someone I have respected a

27:39lot before I even joined this council

27:41because of how you really tackle

27:42leadership and work. So, I think it's

27:44just reflected in uh this award and I

27:47think we all recognize that as well. So,

27:50congratulations to you. Um, and a couple

27:53quick updates for district 7. Uh,

27:55actually this past week, want to

27:57highlight that with parks and

27:58recreation, we did two ribbon cutings to

28:00reopen two neighborhood pocket parks.

28:03Uh, Hoey Park and Kipok Park. Amazing.

28:06Because the kiddos came out and it was

28:07so beautiful to see them. Um, try to

28:10shoot a little basketballs. I the kids

28:12realize that I'm not very good at that.

28:13So, that was fun. Um, also just wanted

28:16to um highlight that we are still

28:18celebrating Hispanic Heritage Month

28:19until the 15th. Um, we have seen a lot

28:22of amazing uh events throughout the city

28:26and just want to share with everybody

28:28that we had an amazing event host hosted

28:30with Con uh the Consul's office um that

28:33we hosted here at city hall. So that was

28:35really beautiful to see community

28:37members in in a space that they're not

28:39always um invited into. So that was

28:41beautiful. Um, and recently, uh, I think

28:44you probably saw on social media, um,

28:46myself along with the mayor and

28:48councilwoman, uh, uh, Pastor and Vice

28:51Mayor Hajj Washington, we went to the

28:52ribbon cutting for Prisma's mobile

28:54healthcare unit, uh, just a week or two

28:57ago, uh, which was really amazing

28:58because in the moment we're in and

29:00seeing some of the cuts that are

29:01happening at the federal level with

29:03access to health care for folks, it was

29:05really really beautiful to see um, a

29:07mobile healthcare unit that's going to

29:08be out in the communities and also go

29:10out into the rural areas um and seeing

29:13amazing creative solutions like that.

29:14So, just a quick quick quick highlights

29:17I wanted to uh share from district 7.

29:20Thank you, Mayor.

29:21>> Thank you, Councilwoman.

29:23Uh anyone Councilwoman Pastor,

29:25>> sorry, I'm back again. Lori,

29:30congratulation and woohoo to you. uh you

29:34have uh carried us through some some uh

29:39situations that uh needed a strong

29:42leadership uh understanding of what the

29:45council wanted and to be able then to

29:47deliver that through your leadership is

29:50awesome. Um

29:53I'm speaking about getting us through

29:55COVID. I'm speaking about getting us

29:57through DOJ. I'm speaking about really

30:00looking at reform and what reform looks

30:03like. And so, uh, thank you for that

30:05leadership because it does take a strong

30:08person, uh, thick skin and, uh, not to

30:12take things personal as you are guiding

30:15and moving the city through these, uh,

30:18these type of situations. So, I

30:20appreciate you and thankful and I'm very

30:23grateful for your work.

30:27>> Thank you. And now we will go to our

30:29first agenda item, the general fund

30:32budget results. And I'll turn it over to

30:34our city manager.

30:37Mayor me mayor and members of the

30:40council. Thank you uh for this

30:42opportunity today. I do want to

30:44recognize that this is our budget

30:45director Aaron Mertz's first uh full

30:49cycle as budget director. So he and his

30:52team are stepping into this. And I would

30:54like to recognize our budget staff who

30:55are here today. if they would just stand

30:57up for a minute. It's really a a great

31:00job that they've done in as you're going

31:02to hear from Aaron in their in their

31:04ability to forecast. But the uh the wrap

31:07up of last fiscal year is what we have

31:10today. And it actually is interesting

31:12because the wrap-up of last year is the

31:14first step in the process for next

31:17budget year because we are always in

31:19budget season as Erin and his team

31:21reminds me. And so this is the first

31:24step in our budget process for 2027 2028

31:28as well as uh information about how we

31:31did with the last year. So with that I'm

31:33going to turn it over to our budget and

31:34research director Aaron Mertz to walk

31:36you through uh what we uh what we have

31:39today. Aaron,

31:41>> thanks Ed. Good afternoon mayor, members

31:44of council. I'm here to present as Ed

31:46said the fiscal year 2526

31:49general fund budget results. Uh I'll

31:52start by reviewing those results and

31:55then I'll discuss several challenges

31:57that will impact our budget as we uh

32:00move through the budget development

32:01process in the next several months.

32:05I'll then discuss uh several of those

32:07concrete steps and kind of what it takes

32:09to put together the city's budget and

32:11then I'll also provide an overview of

32:13the 2728 budget calendar which is

32:16requested for council action today.

32:19I'll begin with a review of the general

32:21fund budget results and focusing in

32:24first on resources. Uh these resources

32:26include our beginning balance in the

32:28general fund, our revenues which are the

32:31largest component of our overall

32:32resources. Uh interfund transfers, so

32:35for example, transfers from enterprise

32:37funds to pay for general fund

32:39administrative services that they

32:41benefit from such as IT infrastructure

32:43or HR services. And then this also

32:46includes expense recoveries and these

32:48occur when prior year commitments of

32:50funds are liquidated because they are no

32:52longer needed and that frees up the

32:54resources for our general fund. So with

32:57all of that said, our general fund

32:59resources came in $17.7 million more

33:03than estimated for a variance of just

33:050.8%.

33:07You'll see in this presentation that

33:09overall variances were extremely tight

33:11this year. Uh which is a real credit

33:13both to the BNR revenue team, Dr. Dan

33:16Wong and Young Fam, uh as well as the

33:19work of BNR staff, but also department

33:21staff really working together to create

33:23accurate forecasts and to control costs.

33:27Moving to expenditures, you'll see that

33:29actuals were $10.5 million more than

33:32estimated for a variance of just 0.5%.

33:36So again, you see those narrow variances

33:38that we just spoke about in the previous

33:40slide.

33:42And now putting those two pieces

33:43together, ex uh expenditures and

33:45resources, you can see that our overall

33:47general fund ending balance was $7.2

33:49million more than the estimate. Again, a

33:53very tight variance. This is actually

33:55the lowest variance in at least 10 plus

33:57years. So we were really um pleased to

34:00see that outcome. And our goal really is

34:02to have minimal variances. when we have

34:05small variances in the budget world, we

34:07like to say that we have uh very

34:09efficiently allocated our resources. Um,

34:11in less nerdy speak, that's a way of

34:13saying that we didn't leave any money on

34:15the table. And I think again, that's a

34:16really positive result for the council,

34:18especially as you think all the new

34:20programs and services the council was

34:22able to create last year in the budget

34:24while also creating, you know, new labor

34:26agreements with our bargaining groups.

34:29This additional $7.2 $2 million is

34:32onetime savings and it will factor into

34:34our 2728 budget status which is

34:37scheduled to be presented to council in

34:39February 2027 along with our typical uh

34:42multi-year forecast.

34:45I do want to highlight several

34:47challenges that we'll be navigating this

34:48year as we develop the budget. The first

34:51is the continued impact of CLA of the

34:53class and comp study and negotiated

34:55labor increases.

34:58also uh employee benefit costs and I'll

35:00I'll highlight two specific costs here.

35:03The first are health care cost increases

35:05which continue to be a challenge. In

35:07fact, there have been numerous articles

35:09out recently such as this New York Times

35:10article talking about the challenge that

35:13employers nationwide large and small are

35:15dealing with when it comes to health

35:16care costs. So, that is one area that we

35:18will be looking at. Also, we continue to

35:21face higher public safety pension costs

35:23as this chart shows. We factored these

35:25costs into our multi-year forecast, but

35:28they do continue to represent upward

35:30pressure on our budget.

35:32Also, we have significant uh major asset

35:35maintenance and replacement needs. This

35:37includes maintenance needed on se on

35:39city facilities uh as well as

35:41maintenance needed on the city's fleet

35:43and equipment. And many of these items

35:45continue to face inflation challenges.

35:47So, that's another item that we will

35:49follow closely. We also must build in

35:51new operating costs from our 2023 GEO

35:54bond program. Last year, we forecasted

35:57about $9 million in new ongoing costs

36:00coming online this coming year from the

36:01bond program. So, we'll be taking a look

36:03and updating those numbers and taking

36:05those into account as we build our

36:07forecast for next year. Uh revenue

36:10projections also continue to be a

36:11challenge. And this is just an overall

36:13challenging environment when it comes to

36:15revenue projections. I'm sure you've

36:16seen uh the news recently about interest

36:19rates and kind of the changes that are

36:20going on in that world. Also, federal

36:23policy uncertainty um remains a

36:25challenge and we likewise always pay

36:27very close attention to any potential

36:29state legislative changes. Uh we'll

36:32continue to use our partnership with the

36:33University of Arizona in building an

36:35econometric model that informs our

36:37revenue forecasting and we'll continue

36:39to consult other key sources as well,

36:41the joint legislative budget committee,

36:43the finance advisory committee and other

36:45sources. And then finally, we know that

36:48demand from residents continues for new

36:50or expanded services and so that remains

36:52one additional factor that we'll take

36:54into account as we move forward. So, as

36:57far as next steps in the budget process,

36:59we'll begin with our 3 plus9 technical

37:01review process. Those are actually

37:03kicking off uh right now. The letters

37:05went out today and so departments are

37:06hard at work on this. We'll look at both

37:09our revenue and our expenditures on a

37:10line by line basis. Um likewise, we'll

37:14then get into central reviews. These are

37:16citywide line items. So, think of things

37:18like pension, electricity, fuel. we look

37:22at those citywide and try to make sure

37:23that our forecasts are accurate there.

37:26We'll then move in to our program budget

37:29review which offers a couple of

37:31opportunities. First to evaluate current

37:33department service levels uh also to

37:35develop supplemental requests for the

37:37upcoming budget and then also to ask

37:39departments to create a prioritized list

37:41of reductions if they were needed due to

37:43a deficit.

37:45We'll continue to refine our revenue

37:47estimates throughout this time period

37:49and ultimately it will result again in

37:51the development of the 2728 general fund

37:53status and multi-year forecast again set

37:56to be delivered to council on February

37:5823rd, 2027.

38:01Finally, today's agenda does include a

38:03request for council approval of the 2728

38:06budget calendar. So this budget cycle uh

38:08really begins in just a few weeks with

38:10the annual release of the inventory of

38:12programs document uh which is a

38:14fantastic resource that identifies over

38:17365 different city programs complete

38:20with budget information uh narrative

38:22descriptions of the programs performance

38:24metrics. So really encourage our

38:26residents to check that uh document out.

38:29We'll go through the general fund status

38:30and multi-year forecast and then the

38:32trial budget on March 23rd and then

38:34we'll move into community budget

38:36hearings in April. We'll come back on

38:38May 4th for the city manager's proposed

38:40budget which will incorporate any

38:42changes and feedback we get uh during

38:44community budget hearings. And then on

38:46May 18th, council will take its first

38:48action on the budget with the council

38:50budget decision. And that decision

38:52allows us to complete the final legal

38:54adoption steps of the budget process

38:56beginning on June 2nd with the tenative

38:58budget adoption, June 16th with the

39:01final budget adoption, and then finally,

39:03the property tax adoption is set for

39:05July 1st.

39:07Um, so again, this uh item is requested

39:11for action. We're requesting approval of

39:13the 2728

39:15uh budget adoption calendar. And with

39:17that, I would be happy to take any

39:19questions.

39:20>> Thank you so much. Vice Mayor, do you

39:21have a motion?

39:22>> I do. I motion, sorry. I move to approve

39:24the 2027 2028 budget adoption calendar.

39:28>> Second.

39:28>> We have a motion and a second. Now,

39:30we'll turn to our questions. Council

39:32Hernandez.

39:33>> Thank you, Mayor. Um and Erin, thank you

39:36for the presentation um and all the hard

39:38work that you and your entire team um

39:42have put into making sure that we have a

39:43balance budget and the fact that this is

39:45the closest margin in I don't know you

39:48said over 10 years. I think that's

39:50really amazing work. So, thank you for

39:52that. Also, I think like nobody else

39:54will nerd out on the fact that the trial

39:56budget will be discussed on my birthday.

39:57So, thank you for the early birthday

39:58present, Erin. Uh I think only me and

40:01you get that but thank you for that. Um

40:04also on a personal note just really want

40:06to thank you for the budget work

40:08education work you've done with my

40:10entire team throughout the entire year

40:11to really uh make us so knowledgeable on

40:15our budget process. um that with our

40:18team. Um you know, everybody on my team

40:20and our residents that you are directly

40:23have provided budget education to are so

40:27grateful for your support in that. Um

40:29they feel more knowledgeable and how our

40:31tax dollars are being spent and how

40:33they're understanding this process a lot

40:34better thanks to a lot of the time that

40:36you have dedicated to to meet with them

40:38and really share all your knowledge with

40:40them. Um, I do have a question about

40:43what we are prioritizing prioritizing in

40:46our general fund when we say we have a

40:48balanced budget. I um because I think

40:50it's important for our constituents to

40:52understand that a balanced budget

40:54doesn't always mean an equitable budget

40:56or that it's strategically

40:58um important to the welfare of all of

41:00our Phoenix residents. So Erin, my

41:02question is, what are the top three

41:04departments with the highest financial

41:06investments from the general fund, and

41:08what are the departments with the lowest

41:09investments from the general fund?

41:12>> Yeah, thanks, Councilwoman Hernandez,

41:14mayor, members of council. Um, it's a

41:17great question. There's actually a

41:18really useful uh page here in the

41:20summary budget book, which I'll take a

41:21moment to plug, page 38 for those

41:23following along. Um, a great chart that

41:25kind of highlights that those

41:27investments that you mentioned. So at

41:29the kind of top end of the range you

41:30have police, fire and parks are the

41:32three departments who have the greatest

41:34general fund operating budget

41:35investment. Um at the lower end there's

41:38a couple that I guess I would point to

41:40apart from sort of administrative

41:42functions right things like our

41:44retirement office and whatnot. Um a

41:46couple other areas office of

41:47sustainability. Um, our housing

41:50department has a relatively small

41:51general fund budget, but I think that's

41:53another opportunity to point out too

41:54that some of those uh, departments like

41:56housing have significant other

41:57resources. And so, you know, when our

41:59residents are taking a look uh, at the

42:01budgets, you kind of want to take both

42:02of those into account, you know, the

42:03general fund component, but then also

42:04the other resources they have.

42:06>> Thank you. And I think I agree with you.

42:08I think like we have to uh, really talk

42:10about it in both buckets, right? Because

42:11there is um, a lot that happens to our

42:14inter enterprise and additional funds

42:16separate from the general funds. So,

42:17thank you for highlighting that. Also,

42:19when I saw those books, I also nerded

42:21out a little bit. So, just so you know,

42:23uh don't know if that happened with

42:24anybody else, but we really enjoyed

42:26getting those those new books. Um you

42:29know, I I want to note that um you know,

42:33as we work through this budget process

42:34and as we look at the numbers, I have

42:36continued concerns about the dollars

42:39being spent on our police spent

42:40specifically, but I'm going to leave

42:42those questions for another day. Um the

42:45you know the city collected 2.208

42:48billion dollars in general fund

42:50resources and spent 1.942

42:53um 1.94 billion. Uh while the ending

42:56balance was 7.2 higher than estimated

43:00estim estimated by your figures um

43:03residents will continue to demand

43:04housing um youth pro you know resources

43:07and investments into housing youth

43:09programming mental health services and

43:11other resources. So for me f it's it

43:14would be fiscally fiscal respons

43:16responsible uh that we include um

43:19meeting those needs. So we love that

43:21books are balanced. However, I have some

43:24concerns about what is our highest

43:26investment depart invested department um

43:29because I believe that through that

43:31budget process that's really reflecting

43:32what we value. Um and although we voted

43:35yes to adopt the 2026 27 calendar year

43:38budget due to the significance of

43:40programmatic investments that were made

43:42in the surplus which were amazing and

43:44very very needed. Um the to the total

43:47budget as a whole doesn't always reflect

43:49that kind of investments or it reflects

43:52investments that are not sustainable for

43:54the city or that meet the needs of all

43:55of our residents. Um I'd like to take a

43:58moment to quote Dr. Martin Luther King

44:00Jr. here in a real way because I noticed

44:02that as a city we often celebrate what

44:04he stood for in theory but it's not

44:07always reflected in our practices. Uh

44:09Dr. King said a nation that continues

44:11year after year to spend more money on

44:13military defense than on programs for

44:15social uplift is approaching spirit

44:17spiritual death. Just as a nation cannot

44:20bomb its way to peace, a city cannot

44:21police its way to safety. We cannot

44:24arrest our way out of criminalization or

44:26homelessness um or criminal or or out of

44:29poverty or use punishment to address the

44:31root causes of harm. Uh the spiritual

44:34death that he is speaking of is present

44:35in our budget process as we continue to

44:37prioritize criminalization, arrest and

44:40punishment by investing the majority of

44:42our tax dollars over o over into the

44:44police department over supporting our

44:46residents who are struggling to find

44:48housing, struggling to pay their bills

44:51um and struggling to afford health care,

44:53especially right now. Um the spirit

44:55spiritual death is present in how this

44:57council has moved to criminalize

44:58healthcare providers in our parks while

45:00the federal government is actively

45:02kicking our residents off of SNAP and

45:04federally funded healthcare. You know, I

45:06know we want to separate ourselves from

45:07the current administration, but that is

45:09not always reflected in our votes. Um

45:11however, I will vote to adopt the 2026

45:142027

45:162028 budget calendar, but only because

45:18it is required by state law. I continue

45:20to find that our city's budget process

45:22moves at a pace where the community that

45:24relies on the resources funded by their

45:27tax dollars isn't fully included until

45:29the end. Um I recognize that it's going

45:31to take time to fix these things to

45:32build a budget process that is truly

45:34equitable and that work and that and

45:36that work needs to happen beyond this

45:38new budget calendar. Um but thank you so

45:40much for all the work that you and your

45:42entire team are doing. Um amazing

45:44numbers. So thank you. Thank you, Mayor.

45:50Uh, we'll go to Councilman O'Brien and

45:51then the vice mayor.

45:54>> Thank you. Um, I realize this budget

45:57calendar is our higher updates, but at

46:01one point we we had the ability online

46:04for folks to provide feedback to the

46:06budget and then that was removed last

46:08year. Is that coming back this year?

46:12Councilwoman O'Brien, uh, Mayor, members

46:15of council, we don't have any current

46:17concrete plans to bring it back, but if

46:19that was something that, you know, the

46:21council as a whole wanted to direct

46:22staff to do, that's something we'd be

46:24happy to look into.

46:26>> And why did we take it away?

46:29>> Yeah, Mayor, members of council,

46:31Councilwoman O'Brien, it's a good

46:32question. I think the uh the honest

46:35answer is that um it can be a difficult

46:39thing to get folks to fully submit the

46:40tool. The tool that we were using, if

46:42you recall, was called Fun Phoenix,

46:43right? Gave people a chance to balance

46:45the budget. Really a neat tool. It

46:47required folks to kind of click all the

46:49way through though and then fully

46:50submit. And so the number of submissions

46:52had dropped pretty significantly over

46:53the years. And so I think, you know,

46:55there was some questions of are we kind

46:57of getting a significant return on our

46:58investment um for that product. But but

47:02again the tool itself and finding ways

47:04to to keep people involved in the budget

47:06process is you very important and we we

47:08look for that here internally and you

47:09know in BNR.

47:11>> Okay. Could could I I realize you

47:13wouldn't have it today but could I get

47:14the data on the numbers of users over

47:18the years and what the cost was. So I

47:20think that we we should look at it. I do

47:23recall folks um lamenting that they

47:25didn't have that ability. I do

47:27understand us ensuring that it is an

47:29efficient use of our dollars, but not

47:32everybody can attend a community meeting

47:34or wants to call in. So, that's a an

47:38easier way for them to provide input. I

47:41would appreciate it. Thank you.

47:42>> Yeah, Councilwoman, we can definitely

47:43provide that. And then I would add too

47:45that actually right now one of the ways

47:47that we're using the Zen City tool is

47:48actually to collect feedback about the

47:50budget as well. So that'll be kind of a

47:51a new innovation and some new feedback

47:53that we're able to provide council as we

47:55develop uh the 2728 budget. So

47:58>> can you explain that a little bit more

47:59please?

47:59>> Yeah. So Zen Zen city is an online um

48:02survey tool that gets a representative

48:05community uh feedback on a number of

48:07different issues and kind of the

48:08questions change throughout the year.

48:10So, this would be an opportunity right

48:12now where we have a couple of budget

48:14specific questions um again that we can

48:16kind of get data on and use that as one

48:18of the things that can help drive um or

48:20inform the the trial budget and and the

48:23rest of the budget process.

48:24>> And do we feel confident that

48:26constituents understand that that is a a

48:28a link that they can confidently

48:32um click on? I I mean, I'm a little bit

48:35um hesitant myself. I don't ever click

48:37click on links anymore because I'm not

48:39sure who who they come from and and I do

48:42I know that Zen City is a popular thing

48:44to use. I just want to make sure that

48:45we're doing it in a way that they can

48:46feel confident they're not being punked

48:48or scammed.

48:49>> Yeah, I I think that this is an area

48:51Councilwoman Mayor members of council

48:53where um we're promoting that through

48:55our our social media pages, you the

48:57official social media pages and whatnot.

48:59So, I think trying to make people let

49:01let people know that these are coming

49:02through official channels, they can

49:03definitely be trusted. And again, I

49:05think this is survey data that's proven

49:07useful in the past. So, I'm very hopeful

49:08that when it comes to budget data that

49:09it'll provide similar.

49:11>> Okay. Thank you for answering those

49:12questions. Appreciate it.

49:13>> Of course,

49:14>> Vice Mayor.

49:15>> Thank you so much, Mayor. Uh, it's

49:16funny, Mike, most of my questions have

49:17been answered, but I wanted to ask one

49:19additional question regarding uh maybe

49:22talk a little bit more about the full

49:24spectrum of how we're going to get the

49:25information out to the community. Um, I

49:27would like to ask us not to emphasize,

49:29not to sorry, focus solely on social

49:31media and those types of tools. I think

49:34many times we take for granted that

49:36everyone is connected to the internet

49:37and that is their way of receiving

49:39information. But I would also encourage

49:41us to look at including information for

49:44example in our uh city services

49:46statement everyone. I mean you kind of

49:48got to look at them. Um, so I think we

49:51should look at that as one means of

49:52spreading of getting information because

49:54we may have older or younger individuals

49:56who simply choose to for their for their

49:59um for their uh mental ser mental health

50:02choose not to be online as much as

50:04others. So I want to make sure that we

50:06are not only just targeting one means of

50:09um communication and getting that

50:10information out about our budget

50:11process. So I don't know if you want to

50:13share about some of the other ways we

50:15plan on getting that information out.

50:17Yeah, thank thanks Vice Mayor, mayor,

50:18members of council. We do try to use a

50:21variety of ways to access folks as

50:23you're discussing because we know that

50:25our residents do have kind of, you know,

50:26different ways that they um keep

50:28connected with our city. So, I think you

50:30actually mentioned one, the um Phoenix

50:32at your service newsletter is one

50:34opportunity that is kind of nonline so

50:36to speak. Um, we also obviously go out

50:38into the community and we do that

50:40through our community budget hearings,

50:41the official budget hearings themselves.

50:44But then we also, um, have come to, you

50:46know, monthly meetings, breakfasts, you

50:49know, community meetings directly, uh,

50:50with each of you as council members

50:52before and I always happy to come out

50:53and do that as well. Um, you think about

50:57radio advertising that we do about the

50:59budget hearings during that season,

51:01encouraging people to to reach out. They

51:03can do so by phone, they can do so by

51:05email. So, we do try to provide a wide

51:08range of ways for folks to connect with

51:10us and share their priorities about the

51:12budget.

51:13>> Thank you. Um, and my qu my last comment

51:16is more of a statement than a than a

51:19question. I want to start off again by

51:21thanking the budget and research

51:22department for the work that goes into

51:24developing this these projections,

51:26monitoring revenues and expenditures,

51:28helping us to make informed decisions

51:30about the city's financial future. uh

51:33managing a budget of this size um while

51:36keeping actual revenues and expenditures

51:38relatively close to projection requires

51:39careful analysis and you guys have done

51:41a tremendous job. I really appreciate

51:44the team's continued diligence and

51:45commitment to responsible financial

51:47planning. So, congratulations again on

51:49the very successful first um budget

51:52cycle from beginning to end. I wouldn't

51:55be myself if I didn't also take this as

51:57an opportunity to talk about what I

51:59would like to see in the next budget

52:00cycle. I if first in line might be

52:02helpful. I want to emphasize that

52:04responsible budgeting is not just about

52:06balancing numbers. It's also making sure

52:08we have the resources that our community

52:10that reflects the needs of the people we

52:12serve. Um we know Phoenix continues to

52:14face significant affordability

52:16challenges. And for many residents,

52:18housing costs and unexpected financial

52:20hardships can be the difference between

52:22maintaining stable housing and facing

52:24displacement or homelessness. That's why

52:26I want to continue advocating for

52:28increased investment for our housing

52:29trust fund and flexible financial

52:31assistance. These resources are

52:33important to our broader housing

52:35strategy.

52:36So again, as we prepare the uh next

52:39budget cycle, I want us to look closely

52:40at opportunities to direct additional

52:43resources towards these programs. We

52:45need to ensure our investments reach the

52:47communities experiencing the greatest

52:48needs, including families struggling to

52:50keep up with housing costs, residents at

52:52risk for eviction, and individuals who

52:54simply need temporary assistance to

52:56avoid losing their home. I recognize we

52:59have significant financial obligations

53:00ahead, including rising operational

53:02costs, employee expense, infrastructure

53:04need, and uncertainty, and future

53:06revenues. However, I believe I support

53:09moving forward this item and I want to

53:11ensure that we invest in prevention and

53:13affordable housing as part of our as

53:15part of helping residents remain housing

53:17strengthening our communities. So, I

53:19look forward to working with my

53:20colleagues and staff throughout the

53:22upcoming budget process to identify

53:24opportunities to strengthen our housing

53:26trust fund and flexible financial

53:28assistance so that we can make a

53:29meaningful difference in the lives of

53:31Phoenix residents. Thank you,

53:34>> Councilwoman Pastor. Thank you, mayor.

53:36Um, actually, I want to thank everybody

53:39that worked on the budget because it

53:40takes a whole team, Erin, uh, to make

53:42these things happen. And, uh, I

53:45appreciate the all the pages in the in

53:48the budget book. Uh, I don't know if I

53:50have enough time to read each page. Uh,

53:53but thank you for providing that. I want

53:56to go back to the tools. I believe that

54:00the more tools we have uh regarding the

54:03budget the better. Uh the reason why uh

54:08the program that came about uh regarding

54:11the budget was because community came to

54:14the forefront and said we want

54:17transparency

54:19and we want to be able to look at a tool

54:23uh that we could do at home and do it on

54:27our own and be able to play around with

54:29the budget. Um, I understand the fiscal

54:32need, but I also don't think Zen City is

54:34the right tool al either. Um, Zin City,

54:38if unless you're on social media, uh,

54:41and know what Zen City is, then you you

54:45press on it. Uh we use Zen City majority

54:49of the time for police but I know we use

54:53it for other spaces like water like

54:56asking about uh water and um I can't

55:01remember the other department but one of

55:02the other bigger departments

55:04>> solid waste

55:05>> solid waste uh what their opinions are

55:09uh regarding that. Uh I'm not sure if

55:13Zen City is going to allow me to give my

55:16opinion on uh budget uh this department

55:21versus this department

55:23in the sense of the other the way the

55:25other tool works. Uh

55:28there are people that are more mature

55:34that aren't on social media and do read

55:37their bill but don't know necessarily

55:40how to go give their opinion unless they

55:43call. Um

55:46the [clears throat] other piece is that

55:48not everybody has access to internet and

55:52so I think we need to be mindful in this

55:54space as we are uh wanting opinions of

55:58our community. The other dynamic is I

56:02don't know if you guys have meetings

56:05with uh the nonprofits or the

56:08organizations that are in within our

56:10community to ask them their opinion uh

56:13regarding the budget. uh going to our

56:16normal standard uh community meetings

56:20and uh villages and our coffee chats,

56:24it's usually the same uh constituents

56:27that are always showing up for the for

56:30an opinion or to be vocal.

56:34We're broader than that and somehow we

56:36have to figure that out uh in this

56:39space. It's hard because we get used to

56:42and accustomed to the same old way of

56:46doing stuff. So, I would like to see a

56:48broader stroke uh of opinions. So, thank

56:53you.

56:56Thank you so much. We passed a budget

56:58very much focused on affordability and

57:00the challenges our residents have been

57:02facing. It was a great budget and had a

57:04lot of really important investments with

57:06strong community feedback. look forward

57:08to moving forward with this year's

57:10process.

57:12With that, does anyone have any final

57:14comments before we go to a

57:17vote? All right. And we can do this one

57:20on a voice vote. So, all those in favor,

57:22please say I.

57:23>> I.

57:24>> Any oppose? Nay. Passes unanimously. We

57:28next go to our second agenda item, the

57:32general obligation bond, and I will

57:34return it to our city manager.

57:37>> [clears throat]

57:37>> Thank you, mayor, and members of the

57:39city council. So, we have a great team

57:41coming forward here today, uh, led by

57:44two deputy city managers, Frank McHune

57:46and Cynthia Aguilar, who are working on

57:49the previous geo bond program and the

57:52forward-looking geo bond program with a

57:55staff who are working on both of those

57:57as well. Our city engineer, Eric

57:59Froberg, and again, our budget director

58:02stays up here, uh, Erin Mertz. So, uh,

58:05Frank and the team have been working on

58:07making sure that the 2023 bond program

58:09is underway and being implemented. They

58:11just had a room full of folks over the

58:13noon hour on their monthly uh, check-in.

58:17And Cynthia has been working with the

58:18team as we're pulling together the

58:20fiscal capacity committee that you

58:22appointed in May to look forward to the

58:25next bond program. With that, I will

58:27turn it to Frank.

58:31>> Thank you, Ed, mayor, and city council.

58:33We have a lot to present to you today.

58:36Uh we are let me um presenting on the

58:412023 general obligation bond program

58:45where we will share lessons learned from

58:47the process including the development of

58:50a best practices list that are better

58:53preparing us for the 2028 bond program.

58:56We'll also present a proposed set of

59:00nonprofit guidelines for your review for

59:02the next bond cycle. Following that

59:05presentation, we'll review the findings

59:07of the fiscal capacity committee for the

59:092028 bond program. At that point, we'll

59:13open the floor up for questions and

59:15possible council action. So to begin

59:18today, please allow me to introduce city

59:20engineer Eric Froberg, who will present

59:22the update on the 2023 general

59:24obligation bond program.

59:28>> Good afternoon. Thank you, Frank, uh,

59:31Mayor, Vice Mayor, members of council.

59:33It's, uh, fantastic to be here today to

59:36give you an update on all the great

59:38work, uh, that the departments have been

59:40doing on the 2023 GEO bond. Uh as just a

59:44reminder, uh in 2023, uh the voters

59:48passed a $500 million geo bond program.

59:52The four questions uh that were uh given

59:54to the voters are shown here. The first

59:56question being public safety. Uh that

59:59first question included four fire

1:00:01stations, a few projects for the police

1:00:03department, and some drainage projects

1:00:06uh that will provide significant

1:00:07protection from flooding as those are

1:00:10installed. Question two was a quality of

1:00:13life uh project uh projects. Uh when you

1:00:16think of those thinks library, parks,

1:00:18those types of projects. The third

1:00:21question was about a modern and

1:00:23sustainable Phoenix. Uh those are very

1:00:25much focused on the arts and culture

1:00:28types of projects and that's where all

1:00:30the nonprofit uh organizations that

1:00:33partner with us um that's where their

1:00:35projects um reside. Uh that also

1:00:38includes uh projects like EV charging

1:00:41and the heat resiliency type projects.

1:00:43And finally, the last one, housing and

1:00:45senior centers. That's the most

1:00:47self-explanatory one. That's the one

1:00:49that includes a handful of affordable

1:00:52housing projects and two senior centers.

1:00:54One uh in Lavine and the other one being

1:00:56the McDow Senior Center.

1:00:59Wh

1:01:01uh of that $500 million wanted to

1:01:04highlight the departments uh that are

1:01:06working on there. There are 14 different

1:01:08departments that are helping to deliver

1:01:10these projects. Uh those are listed here

1:01:12on your screen. The number out to the

1:01:15side are simply the number of projects

1:01:17that each of those departments is

1:01:19responsible for. So you can see a pretty

1:01:21large cross-section of the city uh is

1:01:24helping to deliver these projects.

1:01:27uh of those 14 departments. Uh I won't

1:01:31go through all of the projects. We have

1:01:32just a couple slides here to highlight

1:01:34just a few of the different projects to

1:01:36give you a a sampling of the projects.

1:01:38There are 47 different projects or

1:01:41programs that those 14 departments are

1:01:43working on. Uh again, we won't go

1:01:45through all of them here. Uh those were

1:01:48shared in they're either shared in your

1:01:50monthly briefings by the department or

1:01:52recently when we came to talk with all

1:01:54of you. But the first one uh was a land

1:01:57acquisition uh the Rio Reimagine land

1:01:59acquisition for $23 million as we pieced

1:02:02together Rio Reimagined uh to provide

1:02:05for the future Rio Reimagine project.

1:02:08Fire station 15 is a $21 million fire

1:02:11station that is nearing completion. Uh

1:02:14that one's anticipated to be done by the

1:02:16end of the calendar year. Uh we do know

1:02:19that mayor and council are particularly

1:02:22uh excited about pavement and making

1:02:24sure that the pavement uh is maintained

1:02:26here. So there's $81 million in the geo

1:02:29bond about pavement kind of citywide uh

1:02:32spread amongst all the different uh

1:02:34council offices.

1:02:37Uh an exciting project that just had its

1:02:39groundbreaking a few months ago. ASU

1:02:41Health. Uh they are very near being able

1:02:44to to get their uh money from the GEOB

1:02:47bond. Uh once they pull their we tied

1:02:50that or mayor and council tied that in a

1:02:53uh IGA that we have with them. Once they

1:02:55pull their foundations permit, which

1:02:57they're very close to doing, uh we'll be

1:02:59able to provide them with that

1:03:00contribution. Heat resilience, it's a

1:03:03$7.6 6 million kind of bucket of money

1:03:06within uh the GEO bond uh that the

1:03:09Office of Heat Resilience uses to make

1:03:12sure that other projects within the GEO

1:03:14bond have the funding they need for

1:03:16shade, either structured shade or trees,

1:03:19putting reflective services, those types

1:03:21of things. And then again, uh,

1:03:23affordable housing is such an important

1:03:25thing, uh, here in the city of Phoenix

1:03:27that, uh, this is, uh, one of the

1:03:29pockets of money within the geo bond,

1:03:32uh, to do affordable housing for

1:03:34property preservation. Four projects are

1:03:36currently under construction with eight

1:03:38more being planned.

1:03:41So, now we've talked a little bit, just

1:03:43a sampling of the projects. We thought

1:03:45it was important and this was brought up

1:03:46in the fiscal capacity committee when we

1:03:48had the conversations about what the

1:03:50next project should look like is well

1:03:52what does it take to actually deliver a

1:03:53project. So here I've broken these up

1:03:56into kind of really high level the three

1:03:58different stages of project execution

1:04:00planning that's where the engineering

1:04:02studies and property acquisitions we do

1:04:04environmental research on projects that

1:04:07can be anywhere from 6 to 8 months some

1:04:09a little soon some can be a little

1:04:11quicker some can be a little bit longer

1:04:13but in general it's at 6 to 8mon time

1:04:16frame but after planning is done then we

1:04:17move into design there of course

1:04:20procurements to select engineers and

1:04:22architects for those projects this This

1:04:24is really where we first start looking

1:04:25at the sustainability efforts for the

1:04:28projects as the designers, the engineers

1:04:30and architects are making sure that

1:04:31those are included within the projects.

1:04:33And then of course the end result of the

1:04:36design process is the construction

1:04:37documents themselves. Uh that can be

1:04:40anywhere from a year to a year and a

1:04:42half to get the design done. But then

1:04:44that leads us into construction, right?

1:04:46And there we make the decisions on how

1:04:48are we going to deliver this project

1:04:50from a uh delivery method uh selection.

1:04:54We also uh have procurement to select

1:04:56the contractor but ultimately it's about

1:04:58constructing the project and again in

1:05:00general terms that's a year to two years

1:05:03sometimes to construct these projects.

1:05:06So when you look at an overall geo bond

1:05:08of being every five to seven years, if

1:05:11you are if a project takes anywhere from

1:05:13two and a half to four years, you can

1:05:15see why, right? Some of these projects

1:05:17and we are limited on how much we can

1:05:20actually execute these projects going

1:05:22forward. And that's another reason why

1:05:24we purposely stagger the projects within

1:05:26the geo bond to make sure that we're not

1:05:28frontloading or backloading the projects

1:05:31too much, that we're trying to spread

1:05:32them out.

1:05:34So now that we know how projects work,

1:05:36some of the challenges associated with

1:05:38them, the first one can't be overlooked

1:05:40is we already have a $12 billion capital

1:05:44improvement program, right? So we are

1:05:46the departments are already doing a lot

1:05:48of work to make sure that our CIP is

1:05:50being delivered. Uh there is a varying

1:05:53level of uh department delivery

1:05:56experience. Uh some are more attuned to

1:06:00getting these projects delivered than

1:06:02others. Some of that was a lessons

1:06:04learned on our on my part is to make

1:06:06sure that the ones that need more

1:06:08assistance that we are providing them

1:06:09that right up front. One of the

1:06:12challenges of 2023 was we were limited

1:06:15on our comparative costs. It had been a

1:06:17while to we'll use library as an

1:06:19example. It had been a while since the

1:06:21city of Phoenix had built a library. So

1:06:23we didn't have a lot of information

1:06:25about what it would cost to build a

1:06:27library. Now we did reach out uh while

1:06:30we developing the 2023 to other

1:06:32municipalities within the region that

1:06:34had built libraries but now going

1:06:36forward right into the 2028 we've

1:06:39started to have more relative data that

1:06:42of projects that we've delivered right

1:06:44so we will have better comparative costs

1:06:46moving forward and it is no surprise

1:06:49that price escalations is always

1:06:52something that's uh in my uh first and

1:06:56foremost in my mind as projects move

1:06:58forward, things cost more as we go

1:07:00forward. Now, we did anticipate some

1:07:02inflation in the 2023 program as we went

1:07:05forward. The first couple years uh were

1:07:08a little more than we thought, but yet

1:07:10that has since leveled off and it feels

1:07:12like we're in a good place now going

1:07:14forward to to deliver the 2023 project.

1:07:18So, now we have we know what it takes to

1:07:21build a project and what the challenges

1:07:22are. Well, how are we delivering that?

1:07:24Right. So, as Ed talked about, we I hold

1:07:27monthly meetings with the 14 different

1:07:30departments where we talk about how

1:07:31their projects are going. We make sure

1:07:33that they have the resources that they

1:07:35need, whether it's environmental

1:07:37procurement or from my office to make

1:07:39sure that they're moving forward, right?

1:07:41um to ex uh to kind of go that next

1:07:45level. Twice a year we have that same

1:07:47meeting, but we bring in the city

1:07:49manager's office and the department

1:07:51directors so they all know uh where

1:07:53their projects are. It also lets the uh

1:07:56department the subject matter experts

1:07:58from the departments know that yes, this

1:07:59is important to mayor and council and to

1:08:02city manager's office. on the geo bond

1:08:05website. We do quarterly reports so that

1:08:08the public can see how the projects are

1:08:10progressing every quarter. Uh we are

1:08:13working diligently now. The October ones

1:08:15are just about to be published here. So

1:08:18we're cleaning those up to make sure so

1:08:19that the public can see um how the

1:08:22projects are progressing. Uh we did

1:08:24select eight projects specifically to

1:08:27put on the city manager dashboard.

1:08:28Again, just another way to elevate

1:08:30certain projects uh to make sure that

1:08:32the public is aware of how projects are

1:08:35progressing. Uh as projects get

1:08:37completed, uh when one gets completed,

1:08:40we will add another one. So there will

1:08:41always be eight geo bond projects on the

1:08:43city manager dashboard. And one of the

1:08:46uh exciting things that came out of this

1:08:48was the facilities review committee has

1:08:50been brought back to life. It did exist

1:08:52here um in the in the very distant past,

1:08:56but it has now been brought back. And

1:08:58really what this is, it's a

1:08:59collaboration between the city engineers

1:09:01office and the public works department.

1:09:03And what it provides is an opportunity

1:09:05for the departments or the offices that

1:09:08typically don't see CIP projects or

1:09:10provide review. So think the office of

1:09:12sustainability or heat resilience or the

1:09:16office of environmental programs, right?

1:09:18those then departments get to see

1:09:20projects as they come in and can make

1:09:22sure that we are dealing and addressing

1:09:24all the sustainability uh things that we

1:09:27talked about with the voters as as we

1:09:29went forward.

1:09:31So some of the lessons learned uh in

1:09:332023 that we will carry through to 2028

1:09:36is um again we will be we will carefully

1:09:39select projects for consideration into

1:09:42that next program. are these projects

1:09:44that have extreme merit and that we know

1:09:46that we can deliver in that time frame.

1:09:49We will start procurement earlier. We

1:09:51will start design earlier in the process

1:09:53so we can get to construction sooner. Uh

1:09:56we will provide greater support to

1:09:59departments and again that was a lessons

1:10:00learned on my behalf is to help those

1:10:02departments that don't do these types of

1:10:05projects as frequently as some of the

1:10:07others. Um, we have added dedicated uh

1:10:10staff in my office particularly for the

1:10:13geo bond. Uh, and the last one is, and

1:10:15you'll hear Aaron talk about it here

1:10:17shortly, is some formalized guidance for

1:10:19the nonprofits where in 2023 it wasn't

1:10:22quite as clear as we're hoping to make

1:10:24it this time. So, with that, I'm going

1:10:26to now hand it over to Cynthia. She

1:10:28leads us into the uh 2028 GEOB bond.

1:10:32>> Good afternoon, mayor, members of the

1:10:33city council. As you can see, thanks to

1:10:35your leadership and the hard work of our

1:10:37departments and partners, the 23 general

1:10:40obligation bond has set us up uh to look

1:10:42ahead. This next portion of our

1:10:44presentation will focus on a proposed

1:10:472028 general obligation bond. Aaron

1:10:50Mertz, budget and research director,

1:10:51will begin with recommendations on

1:10:53requirements for nonprofit agencies,

1:10:55followed by chief financial officer

1:10:58Katie Gregory, who will provide you with

1:10:59an overview of the work and

1:11:01recommendations of the fiscal capacity

1:11:03committee. And with that, I will turn it

1:11:05over to Erin.

1:11:08>> Thanks, Cynthia. Uh, as Cynthia just

1:11:12mentioned, before we dive into the work

1:11:13and analysis of the fiscal capacity

1:11:15committee, I'd like to talk about

1:11:16another item included in today's

1:11:18materials, and that's information on

1:11:21requirements for nonprofits interested

1:11:23in participating in the GEO bond

1:11:24program. Uh similar to what Eric

1:11:27mentioned, I think this is an area we

1:11:28learned and hope that by providing this

1:11:30guidance, it can really be helpful for

1:11:32our nonprofit partners and for the city

1:11:34to clearly lay out expectations and

1:11:36requirements for participation. Uh

1:11:39typically with when it comes to

1:11:40nonprofit partnerships, these are

1:11:42city-owned facilities um in which the

1:11:45city owns the facility, but the

1:11:46nonprofit partner may be the operator.

1:11:49In 2023,

1:11:51uh no requirements were provided. So

1:11:53again, our hope is that by doing so now,

1:11:55we can make participation clearer, more

1:11:58accessible, and ultimately to result in

1:12:01smooth project deliveries that benefit

1:12:02our community. These requirements would

1:12:05reply would apply, excuse me, to

1:12:08nonprofit partner requested construction

1:12:11of new facilities or enhancements to

1:12:14existing city-owned facilities.

1:12:16Conversely, this would not apply to city

1:12:18initiated projects to address owners

1:12:21that or to address responsibilities that

1:12:23we have um as owners of existing

1:12:25facilities.

1:12:28I'll highlight several of the key

1:12:29proposed requirements. The first is that

1:12:32there's no more than one uh proposal per

1:12:34per organization.

1:12:36Uh second organization will will be the

1:12:40organizations, excuse me, will be

1:12:41expected to fully fund the day-to-day

1:12:44operations and maintenance um of the

1:12:47facility. That is to say, the city will

1:12:49not pay for day-to-day ONM. Again, this

1:12:51is a capital facility program. So, the

1:12:54this funding is focused on the creation

1:12:56of um of the asset, but not not of the

1:12:59day-to-day ONM costs. Another item

1:13:02you'll see in the requirements uh deals

1:13:05with cost overruns and how to address

1:13:07those. And in practice, that means a

1:13:10couple of options. The first would be to

1:13:12potentially reduce project scope um if

1:13:15the costs are coming in higher than

1:13:17budget. Another oper option might be for

1:13:19the partner to bring additional funding

1:13:21to bridge the gap uh or potentially

1:13:24project cancellation in which case we

1:13:26would return to the council for

1:13:27direction on how to reallocate those

1:13:29funds. These agreements are subject to

1:13:32negotiation and execution of funding

1:13:35agreements and operating agreements. So

1:13:37essentially you can think of the

1:13:38approval and the bond um proposition as

1:13:41the first step and then a funding

1:13:43agreement which comes to council and

1:13:45gets approved before the project

1:13:47commences.

1:13:48We're also asking our organizations to

1:13:51identify uh cost shares that they are

1:13:54able to bring to the projects. You'll

1:13:56note that no specific cost share amount

1:13:58was required. The uh concept here was

1:14:01really to a couple things. To allow the

1:14:03bond committees to um see the the full

1:14:06range of projects that might be out

1:14:08there and if we have partner

1:14:09organizations who are not able to bring

1:14:11funding but feel that their project is

1:14:14deserving of consideration, we wanted to

1:14:15preserve that capacity allow the

1:14:17committees to see those. We do highlight

1:14:20that we expect competition to be

1:14:22significant. there are limited resources

1:14:23in this program and so you know

1:14:25potentially if a partner is able to

1:14:27bring more funding that could be uh that

1:14:30could allow their project to be seen in

1:14:31more favorable light by the committees

1:14:33but again we didn't uh identify a

1:14:35specific cost share and finally the

1:14:38letter we are asking for letters of

1:14:39interest from nonprofit partners due on

1:14:41January 4th and then we'll be holding a

1:14:43workshop with those who submit letters

1:14:45of letters of interest excuse me to go

1:14:48over uh this guidance to give an

1:14:50opportunity to ask questions and just

1:14:51make sure sure that everyone is clear as

1:14:53we move toward the final submitt date of

1:14:56March 1st. Attachment C in the council

1:14:58report includes the complete draft

1:15:00requirements. And with that, we'll turn

1:15:02the presentation over to our chief

1:15:04financial officer, Katie Gregory, to

1:15:06discuss the 2028 program.

1:15:12>> Thank you, Aaron, and thank you, mayor,

1:15:13and members of the council. So in this

1:15:15portion of the presentation um I'll be

1:15:17sharing some of the key financial

1:15:19information that was shared with the

1:15:20fiscal capacity committee as they

1:15:22developed their 2028 general obligation

1:15:25bond re recommendations.

1:15:28And just so you're aware that over the

1:15:29course of several meetings, the

1:15:31committee really did carefully consider

1:15:33and examine details across um our

1:15:35current and proposed bond programs, um

1:15:38secondary property tax rates, and other

1:15:40financial information to help really

1:15:42inform their uh decision-making.

1:15:45And really at the heart of this analysis

1:15:48uh was a fundamental question and that

1:15:51was what level of investment um can a

1:15:53city responsibly support that addresses

1:15:56our needed capital infrastructure and

1:15:59does not increase our secondary property

1:16:01tax rate but preserves our financial

1:16:04flexibility for the future.

1:16:08So, just so you're aware, the city has a

1:16:10long history of using general obligation

1:16:12bonds to pay for public infrastructure.

1:16:15Phoenix voters have approved 13 general

1:16:17obligation bond programs for a total of

1:16:205.1 billion since 1957.

1:16:24General obligation bond programs are a

1:16:26responsible and equitable way to finance

1:16:29major capital needs by really spreading

1:16:32uh the costs over time and aligning the

1:16:34repayment with the assets useful life.

1:16:37General obligation bonds are repaid

1:16:39through the city's secondary property

1:16:41tax and it's levied to cover both the

1:16:44annu the annual principal and interest

1:16:46of voter authorized debt.

1:16:48Phoenix's excellent bond ratings not

1:16:51only indicate strong financial

1:16:53management and credit quality but they

1:16:55also enable favorable access to the bond

1:16:57market and favorable interest rates.

1:17:03The city levies both a primary and

1:17:05secondary property tax. And the primary

1:17:07property tax is used to support general

1:17:10fund programs and services and is

1:17:12limited in its growth to no more than 2%

1:17:15annually plus the growth associated with

1:17:18new construction. The city's primary

1:17:20property tax rate is currently at its

1:17:22maximum allowable rate and levy at just

1:17:26under 127 per $100 of net assessed

1:17:29value.

1:17:31The secondary property tax rate is

1:17:33levied to pay the principal and interest

1:17:35on general obligation bonds and that's

1:17:38collectively known as debt service. The

1:17:41city's current secondary property tax

1:17:43rate is about 77.5 cents per $100 of net

1:17:47assessed value and that rate generates

1:17:50approximately $145 million per year to

1:17:54pay the debt service.

1:17:56state law uh pre prohibits levying more

1:18:00than what we uh what the annual debt

1:18:02service is except for a reserve of up to

1:18:0510% of the annual debt service. And this

1:18:09past year, just as a note, we were able

1:18:10to reduce the fiscal year 2027 secondary

1:18:13property tax rate by approximately 4

1:18:16cents, bringing the total property tax

1:18:18rate to just under $24.

1:18:22And I would just like to remind everyone

1:18:24that that um uh Phoenix is just one of a

1:18:28number of jurisdictions that assess

1:18:30property taxes. And on average uh the

1:18:32city of Phoenix portion represents

1:18:34approximately 18% of the total tax bill,

1:18:37property tax bill. [clears throat]

1:18:42So this slide here shows the total

1:18:44estimated outstanding debt service um

1:18:46after we issue the second half of the

1:18:482023 bond. So, it's our estimated debt

1:18:51service when we issue the 2023 bond. The

1:18:54principal is in dark blue and the

1:18:56interest is shown in light blue. And as

1:18:58you can see from this chart that the

1:19:00debt service is higher in fiscal years

1:19:022027 through 2029 and then the debt

1:19:05service drops off as the existing debt

1:19:08is paid off. What this tells us is that

1:19:11there's availability uh there's

1:19:12available debt capacity for a 2028 bond

1:19:15sale. and that was the job of the fiscal

1:19:18capacity committee to consider the size

1:19:20of the next program.

1:19:25During their analysis, staff shared

1:19:27financial, legal, and economic details

1:19:29to help guide their discussion. The

1:19:30committee discussed and considered the

1:19:32importance of maintaining our high bond

1:19:34ratings um as that's a way to achieve

1:19:37lower costs. uh setting the targeted

1:19:40annual debt service at a reasonable

1:19:41amount by benchmarking the new program

1:19:44to the current secondary property tax

1:19:46revenues of 145 million. They reviewed

1:19:49the forecasted general fund operational

1:19:52capacity uh uh and as to what we could

1:19:55take on for new assets as well as the

1:19:57staff capacity for delivering projects

1:20:00over the program time frame. They

1:20:02considered affordability and minimizing

1:20:05impacts to property taxpayers, staying

1:20:07focused on no increase to our current

1:20:09secondary property tax rate.

1:20:12They asked a lot of questions um and to

1:20:14ensure that debt and valuation growth

1:20:16assumptions provided enough cushion for

1:20:19unexpected economic factors and and

1:20:21evaluated the impact of a number of

1:20:23stress scenarios. and they requested

1:20:26information about market conditions,

1:20:28similar to what uh Eric was talking

1:20:30about, specifically how inflation has

1:20:32impacted both affordability and our

1:20:35overall purchasing power since the 2023

1:20:37program.

1:20:41staff shared actual and projected

1:20:43inflation uh which estimates that in

1:20:462028 $559 million would be needed to

1:20:50have the same purchasing power as $500

1:20:52million had in 2023.

1:20:56The committee also recognized that not

1:20:58all projects will be delivered at 2028

1:21:00costs, but rather spread over five to

1:21:02seven years, and they arrived at a

1:21:04capacity recommendation for a $575

1:21:08million bond program.

1:21:12[clears throat] With the size of the

1:21:14program established, uh the committee

1:21:16then evaluated how that level of

1:21:17investment performs across three

1:21:20different valuation scenarios. The first

1:21:22scenario was the base scenario um and

1:21:24that was based on a most likely forecast

1:21:26of net assessed valuation. The next two

1:21:29scenarios were very un while very

1:21:32unlikely um are designed to really model

1:21:34specific declines in the overall net

1:21:37assessed valuation over the life of the

1:21:39bonds. The assumptions are intentionally

1:21:42conservative and evaluate what happens

1:21:44to our future debt capacity and to the

1:21:46secondary property tax rate if several

1:21:49things go against us at the same time.

1:21:51>> [clears throat]

1:21:51>> So the stress scenario, which is that

1:21:53second scenario there, assumes continued

1:21:55declines in the commercial assessment

1:21:57ratio and that beginning immediately

1:22:00after the bond sale, we experienced

1:22:02three consecutive years of substantially

1:22:04lower new construction similar to what

1:22:06occurred back in 2008.

1:22:09The third scenario is the required voter

1:22:11pamphlet scenario, which prescribes

1:22:13specific valuation assumptions that must

1:22:16be presented in the election pamphlet.

1:22:19Under those requirements, growth in net

1:22:21assessed valuation during the first five

1:22:23years grows at 5% and for years six

1:22:27through 20, valuation growth is limited

1:22:29to 1%.

1:22:31Each scenario um applies several

1:22:34conservative assumptions about nest net

1:22:36assessed valuation which really allows

1:22:39us um to evaluate how the secondary

1:22:41property tax rate then would respond

1:22:43under a range of economic conditions.

1:22:48Before we review each scenario um and we

1:22:51can see what that looks like. I do want

1:22:53to talk a little bit about the baseline

1:22:54assumptions. Anytime you're doing a bond

1:22:57um issuance, there are some base

1:22:58assumptions that you build in uh when

1:23:00you're modeling those. Similar to what

1:23:02we did in 2023, we plan to issue two

1:23:05issu we plan to have two issuances and

1:23:08each with a 20-year amortization

1:23:10schedule. We assume a 6% interest rate

1:23:14which is slightly higher than what we

1:23:15had in 2023 as we're kind of recognizing

1:23:18the current interest rate uh market and

1:23:22we assume a maximum annual debt service

1:23:24of $145 million a year.

1:23:29So when uh we look at the tax rate and

1:23:32how it responds under the various uh

1:23:34scenarios you can see here the black

1:23:37line represents our current tax rate of

1:23:40approximately 77 12 cents.

1:23:45When we lay in the blue line this is our

1:23:47baseline forecast. And so as you can see

1:23:50as the assessed valuation grows over

1:23:52time the secondary property tax rate

1:23:54declines even with a $575 million

1:23:57program. So this is what the tax rate

1:24:01would how the tax rate would behave over

1:24:03the course of time based on a $575

1:24:06million program.

1:24:09The red line here is the pamphlet

1:24:11scenario. This is the voter required

1:24:13scenario. And you can see while it kind

1:24:15of mimics the uh baseline forecast for

1:24:19the first five years because the amount

1:24:20the growth amounts are similar, it then

1:24:23starts to uh raise up that secondary

1:24:26property tax rate. um when it starts to

1:24:29only allow a 1% growth per year.

1:24:33And then the last line here is the

1:24:34orange line uh which is the stress

1:24:37scenario. And as you can see in this

1:24:39stress scenarios, we experience a

1:24:41significant reduction in valuation

1:24:42shortly after issuing the debt. So you

1:24:44can see that kind of flatlining that's

1:24:47occurring at around 66 cents or so where

1:24:51uh we that that is the we uh see kind of

1:24:54that zero growth occurring and so the

1:24:57tax rate has to elevate or stay a little

1:24:59higher um than it would otherwise show

1:25:01but it continues to be a declining rate

1:25:04and I think those are important things

1:25:06that the uh fiscal capacity committee

1:25:08needed to see and and um understand in

1:25:11order for them to make their

1:25:12recommendation.

1:25:14So that's the most important takeaway I

1:25:16think from this slide is that in all

1:25:17three scenarios, we continue to see a

1:25:19decline in that secondary property tax

1:25:21rate even with the addition of a $575

1:25:24million geo bond program.

1:25:28So what would we forecast then the debt

1:25:30service would look like um if we were to

1:25:33put in the $575 million? Um you can see

1:25:37during the initial years of the program

1:25:38the annual debt service remains

1:25:40relatively level at that max annual debt

1:25:43service of 145 million and that's

1:25:46intentional because we are trying to uh

1:25:49we're structuring the issuance so that

1:25:51the bonds and repayment of the debt

1:25:53remain [clears throat] within that

1:25:54general level.

1:25:56You may also notice that beginning in

1:25:582035ish you can kind of see the debt

1:26:00service begins to decline creating

1:26:03future capacity. This preserves the

1:26:05flexibility for a future council to

1:26:07evaluate the city's capital needs at

1:26:09that time and determine whether another

1:26:12general obligation bond is appropriate.

1:26:17So with that, it is now my pleasure to

1:26:19introduce um retired managing partner

1:26:22from uh Ernston Young, Ron Butler, who

1:26:25also served as our fiscal capacity uh

1:26:28chair. So he can provide a few words

1:26:30regarding their work and their

1:26:31recommendation.

1:26:34Great, Katie. Thank you. You did a

1:26:35tremendous job uh taking weeks of

1:26:38meetings and hours of meetings and

1:26:39condensing it to 15 minutes. So, I I

1:26:41feel like we didn't do our job well

1:26:43enough. We spent so much time. Um good

1:26:45afternoon, mayor and members of council.

1:26:48Thank you for allowing me to be here. As

1:26:50Katie said, I I did retire from Ernston

1:26:52Young after 30 years, 16 years as the

1:26:54Arizona managing partner. Uh but I'm not

1:26:56retired per se. I'm also still an active

1:26:59certified public accountant licensed in

1:27:01the state of Arizona and I'm a qualified

1:27:02financial expert as defined by as

1:27:05defined by the Securities Exchange

1:27:06Commission. I serve in that capacity on

1:27:08two public company boards. Uh is my

1:27:11honor to serve as the chair. Um this was

1:27:14my third time I've been on the

1:27:15committee. I served it in 2019 when we

1:27:18determined at that time we did not have

1:27:19the fiscal capacity uh to take on any uh

1:27:22new geo bonds. uh you know much to the

1:27:26chagrin of folks in in the room at the

1:27:28time but uh we made the right decision.

1:27:29We came back in 20 uh 2022

1:27:33uh again looked at this and determined

1:27:35that we did have the capacity for a very

1:27:37successful u um election that resulted

1:27:40in the geo bonds that you heard about

1:27:42today. So um let let me just touch on a

1:27:46couple items uh that uh that Katie

1:27:48talked about. Um it was clear to us that

1:27:51based upon our analysis we were able to

1:27:53confirm that the secondary property tax

1:27:55is not forecasted to increase based on

1:27:57any of the scenarios presented including

1:28:00the stress and pamphlet scenarios as uh

1:28:02Katie indicated here. Uh that was really

1:28:04important. That was really one of the

1:28:05primary guidelines put forth uh to the

1:28:08committee uh when uh we we sat down to

1:28:11look at this. No additional taxes. We

1:28:14understand the affordability for our

1:28:16residents is important. We also

1:28:18concluded that any additional bonds uh

1:28:20would continue the city's excellent

1:28:21credit ratings. Uh that is important.

1:28:23You heard from Katie that that reduces

1:28:25the cu uh cost of financing. Uh if our

1:28:28ratings uh go higher, that res results

1:28:30in less capacity uh for those dollars.

1:28:34The other two main considerations that

1:28:35really impacted the committee's decision

1:28:37on the 575

1:28:39uh was project delivery and operating

1:28:41and maintenance cost. uh you know a bond

1:28:43program that is considered every 5 to

1:28:45seven years on regular intervals isn't

1:28:47just about the capacity that we're

1:28:48trying to put forth but it's our ability

1:28:50to deliver on the projects and you heard

1:28:52about some of the lessons learned. We

1:28:53spent a fair amount of time talking

1:28:55about that. Uh the ability to raise the

1:28:57money is one thing. How do you deploy

1:28:59it, manage it and then assume the

1:29:00operating and maintenance costs is

1:29:02another. So we concluded that uh we do

1:29:04have the appropriate capacity to absorb

1:29:06those costs and uh would be able to

1:29:08deliver those on time in addition to the

1:29:1023 bonds that were in place. So in in

1:29:13conclusion the 575 million does address

1:29:16all of all of those issues very well. Uh

1:29:18we believe this amount is deliverable.

1:29:20It doesn't overburdened with on andm

1:29:22costs and sets up the city uh very well

1:29:24for future bond programs in a very

1:29:26responsible way. So uh it was my honor

1:29:28to serve as the chair. Thank you. our

1:29:30committee members uh did a tremendous

1:29:32job. I just want to highlight that. I

1:29:33know they were selected and appointed by

1:29:35you uh having done this three times. Uh

1:29:37this was a great group, very uh uh you

1:29:41know curious uh also spent the time

1:29:43prepping for meetings. So great job in

1:29:44this selection. Uh that's all I have for

1:29:46you.

1:29:48>> Wonderful. Thank you so much Chairman

1:29:50Butler and to your entire committee. I

1:29:51see Steve Zabilki here with us. You guys

1:29:55did rigorous analysis and I learned from

1:29:59your questions and just really

1:30:00appreciate you being willing to serve

1:30:02our city. Thank you to our professional

1:30:03staff for all the work you did. We do

1:30:06have four members of the public to weigh

1:30:08in. Uh we'll begin with uh Stephanie

1:30:11Herd followed by Neil Hadad.

1:30:19>> Go.

1:30:21Yes.

1:30:22>> Okay. Um, I'm Stephanie Herd. I Um, do I

1:30:26need to say my address or anything?

1:30:29>> Nope.

1:30:30>> No. Okay. Um, so even though I know

1:30:33Phoenix has a plan, water for me is

1:30:36critically important in so many ways. It

1:30:38is for everyone. I mean, drinking, food

1:30:40supply, construction, the economy.

1:30:43There's so many ways that we rely on

1:30:44water. And I think we need to be

1:30:46responsible for the future of water in

1:30:48Phoenix. In considering the recent

1:30:50Colorado River decision and our water

1:30:52needs, I think the city should act to

1:30:55protect our water supply. And now is the

1:30:57time to prioritize water infrastructure

1:30:59and include water plans in the GO bond.

1:31:03>> Thank you.

1:31:04>> Thank you so much, Stephanie. Neil is

1:31:06next, followed by Kate Wells.

1:31:12Mayor, Vice Mayor, and Council members,

1:31:14this is Neil Hadad, and I'm speaking as

1:31:16a Phoenix resident, a neighborhood

1:31:19leader, and in my personal capacity as a

1:31:23Salt River Project District 7 council

1:31:26member. I'm here to ask you to support a

1:31:29future bond program component dedicated

1:31:32to new water purification.

1:31:35The news is no longer hypothetical. The

1:31:38Bureau of Reclamation's 2-year plan

1:31:39gives Arizona the largest cut, 760,000

1:31:44acre feet, and cuts the central Arizona

1:31:47project allocation by 50%. The Colorado

1:31:50River supplies about 40% of Phoenix's

1:31:54water. Phoenix has prepared well, in my

1:31:57view. The city has about 700,000 acre

1:32:01feet stored underground and it completed

1:32:03the roughly $300 million

1:32:06drought pipeline project. Those steps

1:32:09buy us time. They don't buy us a future.

1:32:12I see this from both sides. About 58% of

1:32:15Phoenix's water comes from the Salt and

1:32:18Verie Rivers, the system SRP manages.

1:32:21That system is resilient, but it can't

1:32:24absorb every acre foot. The Colorado

1:32:28River no longer delivers. Every source

1:32:30is stretched and demand keeps growing.

1:32:33That's why purification matters. Phoenix

1:32:36is building three advanced water

1:32:38purification facilities with Cave Creek

1:32:40expected to produce portable water in

1:32:432027.

1:32:45Purified reclaimed water is

1:32:47droughtproof. It is supply we control.

1:32:50one that doesn't depend on snowpack in

1:32:53another state or on a federal agreement

1:32:57that is still unsettled. A dedicated

1:33:00bond gives us three things. It gives us

1:33:02dependable funding instead of emergency

1:33:04spending. It lets us build capacity

1:33:06before a shortage arrives. And it lets

1:33:10voters decide with full transparency

1:33:12whether to invest in their own water

1:33:14security. As neighborhood leaders, we

1:33:17are ready to explain this to our

1:33:19residents. Please support a plan that is

1:33:21clear about costs, timelines, and

1:33:24benefits. Water security is a public

1:33:26safety issue and an economic issue. I

1:33:30respectfully urge you to move toward a

1:33:33purification bond and we offer our help

1:33:36and the help of our network

1:33:39neighborhoods.

1:33:41>> Thank you.

1:33:41>> Thank you so much for that important

1:33:43testimony. Uh Kate is next, followed by

1:33:46Mark.

1:33:49Good afternoon, mayor and council

1:33:50members. First, I want to start off by

1:33:53thanking you for your ongoing

1:33:54stewardship of our city. It's, you know,

1:33:57it's just amazing. It's amazing to come

1:33:59here and listen to the budget

1:34:00conversations and see a little bit of

1:34:02how the sausage is made. And so, thank

1:34:04you all for that work. Um, I also want

1:34:07to thank you for your support of the

1:34:08arts and culture community in general

1:34:10and also um for the children's museum

1:34:13and the 2023 bond. um it's been very

1:34:15significant in aiding us in our

1:34:17expansion and so I wanted to thank you

1:34:20all for that. Um I'm here to comment on

1:34:22the requirements for the community

1:34:23organizations requesting 2028 GOB bond

1:34:26funding. Um we just the organizations um

1:34:29just received um those requirements in

1:34:32the last 48 hours and um

1:34:37given the guidelines um and the

1:34:40potential implications of the

1:34:42requirements um on the nonprofit

1:34:45partners, I would like to respectfully

1:34:47request that um the requirements um be

1:34:50split apart from the bond budget vote um

1:34:53to consider a pause in voting on the

1:34:55requirements for just a month um and um

1:34:59asking the budget and research office

1:35:00and the Phoenix office of arts and

1:35:02culture to meet with the impacted

1:35:05organizations.

1:35:06And um I'll just be clear, I'm not

1:35:08asking that the timeline of the January

1:35:104th and March um 1st [clears throat]

1:35:12dates be changed or moved. Just that in

1:35:15this interim, there's an opportunity for

1:35:18the nonprofit community partners um to

1:35:21meet and discuss the requirements and

1:35:23the potential impacts of those. Um so

1:35:26thank you. We appreciate the opportunity

1:35:28for the community partners to be

1:35:29involved in the process and um we're

1:35:31very very excited to be part of the 2028

1:35:34bond globally, not just the museum but

1:35:37arts and culture. [laughter] Thank you.

1:35:41>> Thank you. Mark will be our final

1:35:42speaker.

1:35:46>> Good afternoon, Mayor Ggo and members of

1:35:48the council. My name is Mark Medis,

1:35:50president and CEO at the Herburger

1:35:52Theater Center. I'm here to support the

1:35:55fiscal capacities committee

1:35:56recommendation for $575 million bond

1:36:00program. The committee's work was

1:36:02careful and conservative and it puts

1:36:04Phoenix in a strong position to continue

1:36:07to invest in our community without

1:36:10raising the secondary property tax rate.

1:36:12Thank you to the committee members and

1:36:15staff. The nonprofit requirements which

1:36:18are necessary for the success of the

1:36:21program

1:36:22do need further consideration.

1:36:26They need more time. Phoenix Community

1:36:28Alliance has compiled thoughtful

1:36:30questions from its members to seek

1:36:32clarification on a number of items.

1:36:35Under the proposed requirements,

1:36:37organizations much must accept all

1:36:39conditions by March 1st. So, we need

1:36:42clarification relatively soon to allow

1:36:45time for organizations to determine what

1:36:48is needed to move forward. I

1:36:50respectfully ask council to approve the

1:36:52$575 million bond program today and

1:36:55allow staff time to meet with

1:36:57organizations before the nonprofit

1:36:59requirements are finalized. If council

1:37:02acts on both today, I ask that you

1:37:04consider requesting that staff address

1:37:07these concern and publish clarifications

1:37:09well before the January 4th letter of

1:37:12interest deadline. We look forward to

1:37:14working with you and city staff to make

1:37:16the 2028 bond program a success. Thank

1:37:19you.

1:37:22>> Thank you so much. I believe that

1:37:24concludes public comment.

1:37:27Again, thank you to everyone who

1:37:29participated. This is the beginning of a

1:37:31process and a significant process.

1:37:34General obligation bonds are a critical

1:37:36tool for building the kind of

1:37:37infrastructure we need in the future.

1:37:40There's no more essential infrastructure

1:37:41for us to invest in for Phoenix's future

1:37:44than water. When I talk to community

1:37:48members, from neighborhood leaders to

1:37:49business, water is coming up more and

1:37:51more often.

1:37:53A few months ago, the federal government

1:37:55made deep and serious cuts to Arizona's

1:37:56share of the Colorado River. It will

1:37:59have a significant impact on our entire

1:38:01state, including here in Phoenix. In our

1:38:03city, we've used water wisely. It's one

1:38:05of the reasons we've thrived. We use

1:38:07less water today than we did in the

1:38:091990s, despite our considerable growth.

1:38:11Yet, the reality is we have to prepare

1:38:13for a future with even less water.

1:38:16As we move forward with this bond

1:38:18program, I think we need to look at both

1:38:21our short and long-term water

1:38:22infrastructure needs.

1:38:25In our last 2023 bond, water

1:38:27infrastructure was not a major focus,

1:38:30although we did have some flood control

1:38:32infrastructure.

1:38:34I would like to look at the possibility

1:38:36of two separate bond measures. One

1:38:39expedited to 2027 to address significant

1:38:42water needs and then our regular general

1:38:45obligation bond program that the fiscal

1:38:48capacity has been looking at. I believe

1:38:50we have the ability to do both, but Ron,

1:38:53we're going to need the advice and

1:38:54counsel of our very impressive fiscal

1:38:56capacity committee. And I know you have

1:38:59just finished a series of work, but

1:39:01given the seriousness of water and how

1:39:04important that is to our residents, I

1:39:06hope that folks would be willing to do a

1:39:09little bit more to understand what is

1:39:11possible in this area.

1:39:14We have all sorts of needs all over the

1:39:16city, but water is so fundamental for

1:39:18our success as a desert city. To me, it

1:39:20underlines our economic future as well

1:39:23as everything we do. So, wanted to put

1:39:26that one that idea forward for

1:39:29discussion.

1:39:33Council or vice mayor. Thank you, Mayor.

1:39:36Um, I I guess maybe I'll start off with

1:39:38this question for Ron and and your

1:39:41committee. Um I presume but I don't want

1:39:44to make assumption based on

1:39:45presumptions. My question is due to the

1:39:47recent cuts to the Colorado River was

1:39:49there any um consideration for water

1:39:51specific um improvements or water

1:39:53efficiency within the geo bond program

1:39:56as the fiscal capacity committee met.

1:39:59>> You know we were directed to assess

1:40:01capacity. Uh so for us it was about what

1:40:04could we afford the projects have

1:40:06typically been the second phase of this.

1:40:09I think the question to look at would be

1:40:11the timing. So if you're an expedited,

1:40:12how does that impact the capacity and

1:40:14ability to do that? So uh we could and

1:40:17you know obviously working with staff be

1:40:19prepared to do that.

1:40:20>> Okay. And I also um I represent the city

1:40:23on what's called AML the Arizona

1:40:25Municipal Water Use Association. And as

1:40:28part of my in my role, I did come across

1:40:30a few articles that talk about the

1:40:32credit impact from the Colorado River

1:40:35water cuts to municip um long-term

1:40:38long-term municipalities. I see you

1:40:39nodding your head, so I presume that's

1:40:41something that the fiscal capacity

1:40:42committee took into Well, I don't know

1:40:44if you want to answer that.

1:40:46>> No, again, it was just about capacity.

1:40:49If we were to have a second phase of

1:40:51this, uh obviously those things would

1:40:52impact the ability to assess

1:40:54affordability.

1:40:56>> Okay, thank you for that. Um my next

1:40:58question would more so go to um city

1:41:01manager's office in in response to some

1:41:03of the questions we heard from the

1:41:05nonprofit organizations regarding um an

1:41:08opportunity to have a further

1:41:10conversation with them and I presume

1:41:12there's no objection to that.

1:41:14>> Mayor, vice mayor, members of the

1:41:16council, no. There is time here. Uh this

1:41:19is actually a good time for these

1:41:21conversations because we we have time to

1:41:24do whatever you'd like us to to look at

1:41:27between now and you know Thanksgiving.

1:41:30Certainly uh we could spend time with

1:41:34the nonprofit partners as Miss Wells

1:41:36suggested with Frank and Cynthia with

1:41:39Philip from our arts and culture and

1:41:41from Aaron and hear more feedback on

1:41:44those uh those guidelines and if there

1:41:47were changes we wanted to make could

1:41:49easily bring those back to you before

1:41:51Thanksgiving for any final approval. So

1:41:54based on the will of the council we we

1:41:55can definitely um take that time to do

1:41:57that.

1:41:58>> Okay. Thank you. Um, and I presume that

1:42:01we would want to do these on a on a

1:42:03parallel track for for example, whatever

1:42:06the feedback is from the nonprofit

1:42:07guidance and if we were to approve

1:42:09allowing the fiscal capacity committee

1:42:11to look at a separate um water specific

1:42:15um bond. Um, I heard city manager Ed

1:42:18Zucker mention a Thanksgiving time

1:42:20frame. That is I don't do math in

1:42:23public, but that is not too far away

1:42:25from that. Um, Chair Butler, do you

1:42:27think that might be something that your

1:42:29committee might be able to coincide

1:42:31with?

1:42:32>> Uh, Vice Mayor, I think it's something

1:42:34we'll look at from a from a calendar

1:42:36standpoint. Uh, I I know and I believe

1:42:38the other committee members have been at

1:42:40least um discussed whether they can

1:42:43reconvene if needed. Um, so we'll go

1:42:45back to them and make sure we can fit

1:42:46that all in.

1:42:47>> Okay. Thank you for that, Mayor. I can

1:42:49make a motion if you're ready. Thank

1:42:51you. I I move that one, we direct staff

1:42:54to meet with the nonprofits and the

1:42:56philanthropic experts regarding the

1:42:59suggested guidance and report back to

1:43:01the full council, and two, direct the

1:43:04fiscal capacity committee to analyze the

1:43:06city's capacity for a water

1:43:07infrastructure bond in 2027 in addition

1:43:10to its standard general obligation bond.

1:43:13And I would just also add in doing so, I

1:43:15would ask the committee to only consider

1:43:17options that do not raise the city's

1:43:19property tax rate for our residents. And

1:43:22I would also ask the committee um and

1:43:24staff to expedite their efforts and

1:43:26prepare and be prepared to present

1:43:28options to the council by Thanksgiving.

1:43:30>> Second.

1:43:32>> Thank you.

1:43:33>> Thank you. Thank you, Vice Mayor. And

1:43:35and thank you for the focus on

1:43:37affordability. She's consistent.

1:43:39>> I am nothing else. Councilwoman Gordado.

1:43:42>> Thank you, Mayor. [clears throat]

1:43:44Yes, I agree. I mean, we we've seen all

1:43:46the issues with water. we see everything

1:43:49that's going on throughout our country.

1:43:51Um how we're being affected with all the

1:43:54challenges that we're seeing especially

1:43:56coming um from our federal government.

1:43:58Um there's a lot of challenges and we do

1:44:01have that responsibility to prepare for

1:44:03our residents and see how is it you know

1:44:06that we're going to try to tackle our

1:44:08own way um the the water issues that we

1:44:11see um in front in front of us. So, I am

1:44:14supportive of of this motion. Um, and

1:44:18then I'm I'm hoping that we can also

1:44:20look at ways that how is it that we can

1:44:23also continue to help our residents and

1:44:26figure out ways on how we can continue

1:44:28to support them. I know we have a huge

1:44:31um water debt um from our residents that

1:44:34we have to look at. And I would also um

1:44:37try and see I guess this question is

1:44:39more for Ed and figuring out Ed, how is

1:44:42it that we're able to help residents?

1:44:44How do we I know that we're in the

1:44:47middle of helping people figure out a

1:44:49plan on how to get out of that water

1:44:52debt um bill that they have. So hoping

1:44:55um that as we're figuring out all the

1:44:57water issues that we have and trying to

1:44:59make things better for our city that

1:45:01we're also looking at that for our

1:45:03residents as well and seeing what is it

1:45:05that we can also do. Um thank you mayor.

1:45:10>> Thank you. Did you want uh just asking

1:45:13Ed to do it or do you want a response?

1:45:14Mayor and Council Member Gordado, I

1:45:17think you're if I have it right, you're

1:45:19referring to those residents who have

1:45:22large water bills and we have not uh we

1:45:24are going to be begin resuming shut offs

1:45:27in the near future, which we haven't

1:45:29done for the last six years. But we do,

1:45:32to your your point, we do have a couple

1:45:33of things. One is we have a really good

1:45:35staff uh who know how to work with

1:45:38people on payment plans to make sure

1:45:40that they have adequate time to pay

1:45:42those bills off. Then we also do have

1:45:44project assist which is some funds

1:45:46available to assist our those who simply

1:45:49cannot pay. So we have both of those

1:45:52tools that we will be using with our

1:45:54residents. Uh if that I think that is

1:45:56the question you were asking.

1:45:58>> Yeah. And I'm hoping I know that I I

1:46:00think it was vice mayor that asked for

1:46:02this and I will just advocate for this

1:46:04as well that as we're looking at the

1:46:06next um as our our next budget cycle

1:46:09that we continue to look how do we

1:46:11continue to put money in into this fund

1:46:14so that we can continue to help folks um

1:46:17bring bring down that debt.

1:46:18>> Yes. And and thank you for that. the

1:46:20council did put extra funding into our

1:46:23general assistance for residents and

1:46:26that was something that you all had

1:46:27indicated when we passed the last budget

1:46:29that that was something you did not want

1:46:31to stop if we were able to continue to

1:46:33do that and so that is part of what

1:46:34we'll be looking at in the budget cycle

1:46:36this year to your point council

1:46:38>> great okay thank you thank you mayor

1:46:40thank you council wearing

1:46:41>> thank you mayor I completely agree with

1:46:43what the mayor said about the importance

1:46:44of water and separating it out I when we

1:46:47met I I didn't know that was can

1:46:50potentially be an option. But when we

1:46:52met a couple weeks ago with your team to

1:46:54go over this, uh I think I emphasized

1:46:56water to you with the fear that if we

1:46:59didn't make it more or less as much

1:47:01about water as possible, it might

1:47:03overshadow everything else, including

1:47:05public safety options. Um and certainly

1:47:07some of the arts things and stuff that

1:47:09people are talking about here. Not

1:47:10saying they're not important, but

1:47:11obviously the water is more or less life

1:47:13or death. So, I do agree that that doing

1:47:16what we do in that realm first and then

1:47:20moving on I won't be here for it, but

1:47:22moving on uh to the other second is the

1:47:25way to go. So, I I strongly agreed with

1:47:27the mayor's comments. Thank you.

1:47:29>> Thank you, Councilwoman Stark.

1:47:32>> Thank you, Mayor. Um I too agree. If we

1:47:35don't have water, we really can't do

1:47:37anything else, can we? I mean, it's that

1:47:39critical for us. Um, I do hope that as

1:47:43we look at this part of the discussion

1:47:45is our smart meters and a way that we

1:47:48can advance that so that we know we're

1:47:50trying to detect leaks early on. I know

1:47:52a lot of cities have been putting them

1:47:54in place. I know it's a lot more

1:47:56expensive for the city of Phoenix to do

1:47:58that, but if we can look at how that

1:48:00that might be expedited just to help

1:48:02people with uh water bills. I it's tough

1:48:07um because there's so many needs in our

1:48:09city. But again, if we don't have water,

1:48:12I'm not sure we can really meet other

1:48:14needs and I think it's that important.

1:48:17Clearly, I still want to see us pursue

1:48:20the additional bonds. I mean, it's

1:48:22important that we pave our streets. I

1:48:25have a lot of flooding issues right now

1:48:26with this rain and I think we certainly

1:48:29we could address those. Clearly, there's

1:48:31needs in our parks and for our

1:48:33nonprofits. Um, I think delaying it for

1:48:36a little bit as far as the nonprofits,

1:48:38we can have a more robust conversation

1:48:40with them as well. Um, I want to thank

1:48:44staff for all the work. You have done a

1:48:46lot of work looking at the 2028. Now,

1:48:48we're asking you to expedite it and so

1:48:50hopefully you have the time to do that,

1:48:52but I have a lot of faith in all of you.

1:48:54I think we have a fine team at the city

1:48:56of Phoenix. And I know our committee,

1:48:59Ron, I know you'll take charge of it and

1:49:02can do an analysis for us as well. So,

1:49:05thank you. Thank you, Mayor.

1:49:07>> Thank you, Councilwoman Hernandez.

1:49:09>> Thank you, Mayor. Um, I'm probably going

1:49:11to be the first one that doesn't agree

1:49:13with this proposal. Um, I I fully

1:49:17support staff going to take the time to

1:49:19talk to the nonprofits, but I think I

1:49:21want to start with first the clarifying

1:49:23question. So the motion is that the

1:49:25finance committee would go back and look

1:49:27at an expedited bond structure for 2027

1:49:30and 2029 with the 2027 focused on water.

1:49:36No, I didn't have a date. So it's

1:49:38two-part. One is directing staff to meet

1:49:40with the nonprofits and the

1:49:42philanthropic philanthropic experts

1:49:44regarding the suggested guidance and

1:49:46report back to the full council. And

1:49:47then the second part was direct the

1:49:49fiscal capacity committee to analyze the

1:49:52city's capacity for a water

1:49:54infrastructure bond in 2027 in addition

1:49:56to a standard general obligation bond.

1:49:58>> Okay. And the sorry one more on the the

1:50:02standard obligation bond. There's no

1:50:04time limit on that. So we wouldn't know

1:50:05what year that would focus on.

1:50:09>> I intentionally left it vague so that

1:50:12the committee could tell us on that or

1:50:14the recommendations. I think they can do

1:50:15it. There's a couple of avenues that

1:50:18allows them to do them that way.

1:50:19>> Okay. Thank you. Um Ron, question for

1:50:21you. How long did the finance committee

1:50:24work on the proposal that was brought to

1:50:25the council today?

1:50:28>> Uh we had four separate meetings. Um and

1:50:31we had pre-work that was sent to us in

1:50:33advance. All committee members, in my

1:50:36opinion, spent adequate time analyzing

1:50:37the information that was pulled together

1:50:39by staff. Fortunately for me, I'd been

1:50:41through this a few times, so I

1:50:42understood the information well and

1:50:44could converse with the other committee

1:50:45members to bring them up to speed. Uh,

1:50:47and the information which is in uh I

1:50:49think in the packet also uh highlights

1:50:52all the work that was done over that

1:50:53course of time. So, it's not

1:50:55unreasonable to request uh us to be in a

1:50:58position before Thanksgiving to look at

1:51:00it again.

1:51:00>> Okay. Thank you. That was going to be my

1:51:03question because the committee was

1:51:04appointed in May. You're bringing this

1:51:06proposal in October, right? that's given

1:51:11plus or minus about 4 months of work and

1:51:13now we're asking you all to bring back

1:51:15something before Thanksgiving um to the

1:51:18full council on if that's possible. So I

1:51:20just want to recognize that we are

1:51:22asking for a lot of extra work that I

1:51:26don't know if it's necessary. Um I have

1:51:28some concerns not because I don't value

1:51:30water as the on the same level that

1:51:34everybody else does. We all recognize

1:51:36the water situation we're in, but I

1:51:40guess I'm not understanding why we would

1:51:42separate that out when I think a better

1:51:46path forward would be looking at a

1:51:47higher capacity bond for 2028 that would

1:51:50encompass more water infrastructure

1:51:52projects because as my understanding

1:51:53right now, departments aren't even going

1:51:55to bring us their priorities until mid

1:51:57November. So, we really don't know what

1:52:00kind of I at least I don't know what

1:52:02kind of infrastructure projects we're

1:52:03talking about with water. And I have a

1:52:06lot of concern splitting these when

1:52:07we're talking about voter engagement. We

1:52:10know that

1:52:12in a election year like 2028, we're

1:52:14going to have a very high number of of

1:52:17um voters be engaged. A lot of those

1:52:20voters are going to be some of the

1:52:21historically dis disengaged voters,

1:52:23disenfranchised voters. And so moving

1:52:27and splitting a vote and doing an

1:52:29expedited one for 2027 and not knowing a

1:52:32date for a future one um that impacts

1:52:35really all of our voters because in off

1:52:38election years we see a higher number of

1:52:41affluent and white voters and we don't

1:52:43see the same turn voter turnout from

1:52:45other communities. So to me, I guess

1:52:48someone explained to me why um even

1:52:51looking at this structure would be a a

1:52:53good thing for from a voter

1:52:54participation side.

1:52:56>> Mayor, Council Member Hernandez, I won't

1:52:58pretend to be able to speak on voter

1:53:00participation because that's really the

1:53:03purview of of you all, you know, you

1:53:05know, voters. I will talk a little bit

1:53:06about your first part of your questions.

1:53:08So while the committee was appointed in

1:53:10May, they did their work really over

1:53:12four four and a half weeks in August. So

1:53:16they weren't they didn't take four

1:53:17months to to do this work. Okay.

1:53:19>> I would also say that that work that

1:53:21they did and I think Ron said it too is

1:53:23really foundational to what they're

1:53:25being asked today as I understand it

1:53:28>> because they they already have the

1:53:30understanding of the different levers of

1:53:32tax rates and assessed valuation and

1:53:35those things. It's a really a more

1:53:37narrow question I'm understanding from

1:53:39the the vice mayor's motion. And then I

1:53:43had forgotten this until Ron said it,

1:53:45but I had forgotten that he actually did

1:53:47chair or was part of a committee in 2019

1:53:50which recommended that we didn't have

1:53:51the fiscal capacity to do something. So

1:53:53I'm I'm confident that Ron will shoot

1:53:56straight with us as to what makes sense.

1:53:59Back to another point you raised which

1:54:01is about the um the the 575

1:54:04recommendation. I think that's a

1:54:07foundational piece of this whole

1:54:09discussion. I don't know that it's it's

1:54:11that there's any assumption that water

1:54:15comes completely out of that or it's

1:54:16additional to it. I think that's the

1:54:18work I'm understanding from the motion

1:54:20that we need to do. Is there capacity to

1:54:22do water as well as to do what is being

1:54:26proposed for the rest of the city's

1:54:29programs if that is answering your

1:54:31question? Yeah, it I mean it does it's

1:54:33still my concerns still it doesn't appe

1:54:36uh ease any of my concerns because there

1:54:39are neighborhoods and projects in

1:54:42districts in communities neighborhoods

1:54:44through district 7 that have been

1:54:46underinvested over the years and that is

1:54:50true for also neighborhoods in districts

1:54:52four five and 8. And so now what we're

1:54:55presenting is like, hey, we're gonna

1:54:57look go look at we're going to go study

1:54:58this thing another first another study,

1:55:01right? I think our residents are tired

1:55:03of hearing us fall back to we need

1:55:06another study to go do some things that

1:55:08they need us to deliver on. That's the

1:55:10first problem there. Um, and without

1:55:14we're we're pitting them like projects

1:55:16against each other. We're saying that

1:55:18water matters more than the fire station

1:55:21in your neighborhood. So, we can cut

1:55:22down on response times because response

1:55:25times and fire getting to a call is also

1:55:27a matter of life and death.

1:55:30So, it's like,

1:55:31>> yeah,

1:55:31>> and without knowing the date of when the

1:55:34general election bond would happen, I

1:55:36can't go back to my residence and say,

1:55:39"Hey, in 2028, this this bond is going

1:55:41to be on the on the ballot that's going

1:55:43to bring these amazing things because

1:55:44now we don't know because we're asking

1:55:46for a study." And if we are transparent

1:55:48with our community, we know that this

1:55:50motion was made for a reason and that

1:55:52there's a plan to make this happen. I

1:55:55don't need you to answer to that. That's

1:55:57my concerns.

1:55:58>> I would I would just say I don't think I

1:56:00don't think there's an assumption.

1:56:03I think this this next 30 days allows us

1:56:06to give you the data to to answer the

1:56:08questions you're asking is what I would

1:56:11say.

1:56:13And if I if I may chime in on the intent

1:56:16of the I want if I may if councilwoman

1:56:18just chime in on the intent. I don't

1:56:20view it as a foregoing conclusion that

1:56:22this is going to be a certain decision

1:56:24one way or the other. I think the way I

1:56:27view this motion is this is to determine

1:56:28whether or not there is even a capacity

1:56:30and a potential plan to do it this way.

1:56:33So I I I understand your concerns. I

1:56:35don't want to feel like I'm minimizing

1:56:36them in any way, but from my

1:56:37perspective, this is simply to ask the

1:56:39professionals, the fiscal capacity

1:56:41committee, hey, can this be done, yes or

1:56:45no, and what does that look like? Versus

1:56:47myself here as a council member saying

1:56:49like I think if the motion was written

1:56:51in another way or articulate in another

1:56:52way that says from this 575, I want to

1:56:55artic I want to allocate this amount for

1:56:58water, it would be us making that level

1:57:01of a conver of a determination. The

1:57:04motion from my perspective is to ask our

1:57:06expert, our fiscal capacity committee,

1:57:08if this was something we wanted to

1:57:09pursue, how is this possible? What would

1:57:11it look like so that we can come back

1:57:13and make that determination? I just want

1:57:14to make sure I'm clear about that. So,

1:57:15thank you.

1:57:16>> Yes, I appreciate that, Vice Mayor.

1:57:17However, like there's politics playing

1:57:20here and I think we need to be

1:57:21transparent with our community about

1:57:22that. At least I will be. So, my

1:57:24concerns lie. I've asked the questions I

1:57:27needed to. I don't think that this is

1:57:29the right process how to handle this go

1:57:31bond moving forward. Um, but I do

1:57:34support the nonprofits being talked to

1:57:37to make sure that their requirements um,

1:57:39they have an opportunity to talk about

1:57:40the requirements.

1:57:42Thank you.

1:57:44>> Thank you, Councilwoman O'Brien.

1:57:47>> Thank you, Mayor. Um, so I want to go

1:57:51back first to Well, first let me ask,

1:57:54could we have um Brandy come to the

1:57:57table so I could ask a couple of water

1:57:58questions, but while she's doing that, I

1:58:00have another question about the motion.

1:58:03Um, there's a statement in here that

1:58:05says, "In doing so, I asked the

1:58:06committee to only consider options that

1:58:08do not raise the city property tax rate

1:58:10for our residents." Would that some

1:58:13would that statement is just giving

1:58:15direction to the committee? Therefore,

1:58:18would it somehow tie a future council's

1:58:21hands if we say that property taxes

1:58:27can't be raised? And I don't know who

1:58:29wants to answer that question. I just

1:58:31want to understand from a legal

1:58:32standpoint

1:58:34maybe or from the the motioner or vice

1:58:38mayor, sorry,

1:58:38>> mayor, council member O'Brien. I took it

1:58:40as one of the parameters that we give

1:58:44the fiscal capacity committee just as

1:58:46they had one in the presentation of the

1:58:48575. That was a parameter that they use

1:58:50was they weren't going to consider

1:58:52things that raise the property tax rate.

1:58:54I took that as the vice mayor's motion

1:58:57as reinforcing that as a ongoing

1:58:59parameter. Uh I don't know that it has a

1:59:02binding effect and I would look to the

1:59:04city attorney on that.

1:59:05>> Yeah, it was an ask and not a part of

1:59:07the motion.

1:59:09Yeah, mayor, members of council, um I

1:59:11took that as a request and nothing that

1:59:14would bind them to one or the other, but

1:59:16as um taking into consideration that

1:59:19factor when they are evaluating.

1:59:23>> Okay, [clears throat] thank you for that

1:59:24clarification. I do appreciate that. Um,

1:59:27I will say I saw you come up just

1:59:29didn't. [laughter]

1:59:30So, can you help explain what might come

1:59:37in? I guess what projects might find

1:59:40here that

1:59:42because my understanding is we have

1:59:44projects that might be planned for with

1:59:46impact fees and future water rate

1:59:49increase potentially. So, how would this

1:59:51play into that?

1:59:53>> [clears throat and snorts]

1:59:53>> Uh, mayor and council, Councilwoman

1:59:55O'Brien, that's a great question. Uh, we

1:59:58would look to um do projects that are

2:00:01citywide that would help us um find

2:00:05water efficiencies,

2:00:06um reduce leaks, um talk about um

2:00:09Councilwoman Stark mentioned smart

2:00:12meters that would allow us to go to AMI

2:00:14a little bit faster. That gives our

2:00:16residents the ability to look at their

2:00:19water use in real time and find and fix

2:00:21those leaks more. um quickly. Um so

2:00:24those are the types of projects that we

2:00:26would recommend. Um obviously there's a

2:00:29whole process that goes through that,

2:00:30but that's kind of the topline what I

2:00:33would say.

2:00:34>> Okay. Um so I have I don't I guess have

2:00:39a problem exploring options. However, I

2:00:42do have concerns about um I'm going to

2:00:45use the word bifurcating and having

2:00:48separate elections.

2:00:50um one in 2027 and then a one to be

2:00:54determined. Um we went

2:00:5717 years I think if I did my math

2:01:00correctly and sometimes that's a little

2:01:01scary on on the fly in front of a bunch

2:01:03of people without

2:01:06um bonds and I appreciate financial

2:01:10stewardship of our our committee our

2:01:12capacity committee and saying no when

2:01:14the time was to say no. Um, but I'm also

2:01:18concerned as a council we've committed

2:01:20to a regular cadence and we have um

2:01:24infrastructure needs in other and

2:01:26capital needs in other departments.

2:01:29So having that be a complete unknown and

2:01:31fuzzy um for our voters to have no idea.

2:01:35Water is incredibly important and and we

2:01:37absolutely need it. What what I would

2:01:39ask is if vice mayor would consider um a

2:01:43friendly amendment to consider yet

2:01:46another option which is could we

2:01:47increase the bond to 6 or 650 dedicating

2:01:5350% of it to water and the remaining

2:01:56part to um other projects in the SC in

2:02:02the but in the effort of 2028 in the

2:02:04time frame of 2028. So that we're

2:02:06looking at both what she proposed and a

2:02:09second option should that first option

2:02:11become um seem unattainable due to the

2:02:16parameters.

2:02:17>> I'm sorry can you repeat it? You said

2:02:19650 or more with

2:02:21>> about no 6 to 650.

2:02:23>> Okay.

2:02:24>> With 50% of whatever that number is

2:02:27going to water. So you would have a

2:02:29water and we bifurcate or we we do

2:02:32different questions and

2:02:36um sorry I've flipped over my page and

2:02:38we had four questions in the 2023 bond.

2:02:42So this one would be dedicated solely to

2:02:44water that would be somewhere between

2:02:47300 to 325 if we could depending on what

2:02:51the capacity committee said we could

2:02:52withstand in 2028.

2:02:57But as a as a second option to evaluate

2:03:00since they're going back to the

2:03:02evaluation table potentially.

2:03:07>> Okay.

2:03:08>> So just to clarify the

2:03:10>> the second would

2:03:13>> if I could reread kind of read the

2:03:14motion with your just before I accept

2:03:16it. It would be yes. I move to direct

2:03:18staff to meet with nonprofits and

2:03:20philanthropy philanthropic experts

2:03:22regarding the suggested guidelines and

2:03:24report back to the full council and two

2:03:26direct the fiscal capacity committee to

2:03:28analyze the city's capacity for a water

2:03:30infrastructure bond in 2027 in addition

2:03:32to a standard general obligation bond

2:03:35and three direct the fiscal capacity

2:03:38committee to analyze the city's capacity

2:03:41for $650 million general obligation bond

2:03:45where 50% of that goes is for to water.

2:03:48Is that about correct?

2:03:49>> It would be 600 to 650. So I would I

2:03:52wouldn't lock them in at 650, but 600 to

2:03:55650.

2:03:56>> 600 to 650 with 50% of it going to

2:03:59water.

2:04:00>> Yes, ma'am.

2:04:01>> Mayor, vice mayor, if I might.

2:04:04>> Yes.

2:04:05>> I think one thing to remember is the

2:04:07fiscal capacity committee is agnostic as

2:04:10to what the bond goes toward. So, um, I

2:04:15would say you don't have to make a

2:04:17decision about some particular split at

2:04:20this point. What what I think the vice

2:04:22mayor's motion is asking, and I think

2:04:24you're getting to, Councilwoman, is

2:04:27expanding the horizon of what the fiscal

2:04:30capacity committee

2:04:32has has set at 575.

2:04:35and they can certainly do that because

2:04:36it's about adjusting

2:04:39uh the different levers with the

2:04:41understanding that the the property tax

2:04:45rate does not rise. So I guess I'm

2:04:47saying you don't have to have that that

2:04:49decision on the split is not necessary

2:04:52today unless that's you can do that but

2:04:55it's not necessarily for them to do that

2:04:56work.

2:04:58>> Thank you for that clarification. Yes,

2:05:00they don't need I let me I guess further

2:05:03explain. I'm not asking them to decide

2:05:04what water projects I guess just the

2:05:06understanding that from this group right

2:05:09now and and however it may go forward is

2:05:13that 50% of it would be dedicated to

2:05:15some kind of water projects as

2:05:16determined by our committees going

2:05:18forward.

2:05:21>> Thank you mayor.

2:05:25Thank you. I'm just trying to think

2:05:26through in real time. I was hoping to

2:05:29move forward with water, but not in a

2:05:30way that

2:05:32took away from some important needs such

2:05:35as public safety. And I do worry

2:05:39the way that's constructed might

2:05:43have unanticipated consequences.

2:05:46So, just trying to think that through in

2:05:47real time. Uh, Counciloman Pastor,

2:05:51>> thank you, Mayor. Um I need some clarity

2:05:55and I need clarity on this motion. Um

2:05:58Ed, you just said stated that uh the

2:06:01group is agnostic uh that they're going

2:06:04to do the the numbers or give us the

2:06:06numbers and and what is uh what capacity

2:06:10we can go to without uh raising uh taxes

2:06:14uh property taxes.

2:06:18I think they are agnostic, but what the

2:06:20motion states is about water.

2:06:23And so, uh, I know they're going to come

2:06:26back and give us numbers to state yes,

2:06:28you can do this and yes, you can't do

2:06:30this or you this is how far you can go.

2:06:33I get that. I think the dialogue right

2:06:36now is about uh

2:06:40what we want to look at uh in the sense

2:06:44of is it water or is it uh other uh bond

2:06:49projects um and what I heard from you is

2:06:53like we don't need to make that decision

2:06:54right now. Um and we can discuss this in

2:06:59the future. However, it's it's right in

2:07:02front of us now. Um

2:07:05so my question is

2:07:09my question is about infrastructure

2:07:13not only of water but infrastructure and

2:07:16maintenance of other projects

2:07:19that I have had to sit here and

2:07:21experience where we have delayed

2:07:25uh those projects

2:07:27uh due to finances [snorts]

2:07:31and then we get caught up in a situ

2:07:33situation where uh a building

2:07:37pipe bursts

2:07:39and now we're dealing with that problem

2:07:42at that moment and also the insurance

2:07:45and all the pieces i.e. Burton Bar. Um,

2:07:50so I'm trying to understand

2:07:53at this moment how we would balance that

2:07:57or is it just we would vote for they

2:08:00come back and say this is your capacity.

2:08:02We vote for the water infrastructure and

2:08:04then delay

2:08:06not delay uh postpone till

2:08:102029.

2:08:12>> Is that what I'm hearing?

2:08:14>> That's not what I heard them. Okay.

2:08:16>> I'm sorry. I should be but I guess I

2:08:19would say there's two questions here.

2:08:21One is what is the capacity?

2:08:24>> Okay.

2:08:24>> And that comes from assumptions

2:08:29if the if this is the will of the

2:08:30council to say is there more capacity

2:08:34than 575?

2:08:36What is it? And what are those

2:08:38assumptions? And that is what Katie and

2:08:41Aaron, Cynthia and with the committee

2:08:43and Ron would go back and say, "Okay,

2:08:46let's look at our assumptions." That

2:08:48then comes back to you and you say,

2:08:49>> "Sorry,

2:08:50>> that works or it doesn't." And then how

2:08:52do we split that up amongst the projects

2:08:54that that we know we have in the

2:08:56community of which I've heard water is

2:08:59one of those. So

2:09:01the work that the staff would do from

2:09:03the motion is go back and identify the

2:09:06capacity. And I think I heard like tell

2:09:09us what Brandy would tell us like what

2:09:12would we need to spend it on in water.

2:09:14That comes back to you. All that

2:09:16information comes back to you and you

2:09:17then make a decision about the split,

2:09:21the timing, the amount. Um and that

2:09:24that's that's how I'm in uh taking this

2:09:28motion. and mayor and and members of

2:09:30council, just to be clear, the 575

2:09:33assuming a 2028 bond

2:09:36was what we felt was prudent, didn't

2:09:40require us to raise the taxes. We can go

2:09:42back and look at assumptions and

2:09:44challenge those again to see if it can

2:09:46go higher. The other interesting thing

2:09:48is when um we said 2027, so we didn't

2:09:52ever anticipate a 2027 bond. We

2:09:54anticipated 2028. So, we'd have to look

2:09:56at timing and then rechallenge

2:09:59>> what we thought was a conservative

2:10:01approach to the assumptions. And we

2:10:03looked at 600, 650, it get debt service

2:10:07gets a little difficult. And when you

2:10:09layer in the uncertainties and some of

2:10:11those assumptions, it might put you in a

2:10:13precarious situation where then in

2:10:15future cycles, you don't have the

2:10:17capacity to serve the needs of the

2:10:19constituents that you would hope to.

2:10:25Thank you. And and council pastor, it's

2:10:27a fair point about water. We did not

2:10:29mention any subject areas with the

2:10:31fiscal capacity committee, but I thought

2:10:33I owed it to people to understand why my

2:10:35thinking has changed and that I do think

2:10:37we should consider a 2027. And that is

2:10:41responding to events that happened since

2:10:43we appointed the fiscal capacity

2:10:46committee,

2:10:47including the fact that the Trump

2:10:49administration put forward a plan where

2:10:51in the next decade they left open the

2:10:54possibility that the central Arizona

2:10:55project canal could run dry.

2:10:58Our residents, just as I'm out in the

2:11:01community, are asking me about water

2:11:03with a increasing frequency. The Center

2:11:05for Arizona's Future just put out

2:11:07information saying that that is now the

2:11:08top issue for Arizona voters that they

2:11:11want us to be working on protecting our

2:11:14water supply.

2:11:16I do think going to the ballot and

2:11:18asking voters to make these investments

2:11:19might provide some added support in

2:11:23Washington DC as we ask the our federal

2:11:25government

2:11:27to make additional commitments which

2:11:29they are going to need to do. But if we

2:11:31can say our voters value this and we are

2:11:32putting up our own money that I have

2:11:35found is often very valuable to folks in

2:11:36Washington DC who feel they're asked to

2:11:39do fund complete projects. So this would

2:11:42give us a chance to ask our voters if

2:11:45this is something they'd like to move

2:11:47forward with. But I do sense some real

2:11:50urgency in our community and an ability

2:11:53for us to to respond to that. So, not

2:11:56fair to ask the fiscal capacity

2:11:58committee to divvy up, but I do think

2:12:03we asked Ron and his committee to do one

2:12:06set of timeline and and so I owe it to

2:12:07folks to explain why I think we should

2:12:09at least explore and nothing final, but

2:12:13explore if we couldn't do something in

2:12:15in 2027. And again, this this wouldn't

2:12:18this is just getting more information

2:12:20and more analysis at this point. But I

2:12:23do think it's important that we look at

2:12:25a variety of different funding

2:12:26mechanisms for water. We need to

2:12:29continue to do things like impact fees

2:12:32that help pay for the water. But to me,

2:12:34it is responsible to look at general

2:12:36obligation bonds as part of a diverse

2:12:38funding portfolio for a diverse water

2:12:41supply.

2:12:44>> Councilwoman O'Brien, I just am curious

2:12:47if the vice mayor is willing to accept

2:12:49the friendly amendment. And the one

2:12:51other thing I would add is just that for

2:12:52B for 2028

2:12:54I I think that got left out the my your

2:12:57third mark or your third question.

2:12:59>> So I'm just going to read it over so

2:13:01everyone has the same information. So

2:13:03the motion would be um one to direct

2:13:06staff to meet with nonprofits and

2:13:08philanthropic experts regarding the

2:13:09suggested guidance and report back to

2:13:12the full council as well as two direct

2:13:15the fiscal capacity committee to analyze

2:13:17the city's capacity for a water

2:13:18infrastructure bond in 2027 in addition

2:13:21to a standard general obligation bond.

2:13:23and three, direct the fiscal capacity

2:13:26committee to analyze a city's capacity

2:13:28for a $600 million to $650 million bond

2:13:33where 50% of that goes to water in 2028.

2:13:38>> Yes, ma'am.

2:13:40>> And then sorry is that would be

2:13:43acceptable from the amendment.

2:13:44>> Before I amend that, I would want to

2:13:46check with the chair of the fiscal

2:13:48capacity committee to feel like we are

2:13:50asking for quite an a bit on that time

2:13:52frame. Just want to make sure it still

2:13:54works.

2:13:57>> Yeah. And that mayor and uh council

2:13:59members, um yes, I I think it still

2:14:01works, right? We we've run the scenarios

2:14:03on a lot of different numbers. The only

2:14:05thing we would do is expedite to 2027 to

2:14:08understand how that would impact this.

2:14:10And then we're still agnostic to the

2:14:12project to where the dollars go. We're

2:14:14we're agnostic to that unless there is a

2:14:16mechanism that that creates an

2:14:18assumption that has to be driven off of

2:14:20something having to do with a fee or

2:14:22associated with water, which I don't

2:14:23think there is. So,

2:14:25>> thank you for that. I just wanted to

2:14:26make sure that as we as the motion Thank

2:14:29you, Councilman O'Brien. I just wanted

2:14:31to make sure that it would actually work

2:14:32with the time frame that is set forth in

2:14:34the entire motion. So, my friend that

2:14:36friendly amendment will be accepted.

2:14:38>> Thank you. And

2:14:41and then can um I'm sorry, mayor. Um,

2:14:43can you read then what the motion would

2:14:45be?

2:14:46>> All right, I'll read it slow. I move to

2:14:49one, direct staff to meet with

2:14:51nonprofits and philanthropic experts

2:14:53regarding the suggested guidance and

2:14:56report back to the full council as well

2:14:58as two, direct the fiscal capacity

2:15:00committee to analyze the city capacity

2:15:03city's capacity for a water

2:15:04infrastructure bond in 2027 in addition

2:15:07to a standard general obligation bond.

2:15:09And three, direct the fiscal capacity

2:15:12committee committee to analyze the

2:15:14city's capacity for a bond of 600

2:15:18million to 650 million um where 50% goes

2:15:23to water in 2028.

2:15:27>> Is that correct?

2:15:28>> Yes, ma'am.

2:15:29>> Okay.

2:15:30>> Or yes.

2:15:30>> I I just don't feel comfortable putting

2:15:33a number on how much it would go to

2:15:35water. I think I'm okay with the

2:15:37increase. um that that the committee um

2:15:41feels good about. I just don't feel good

2:15:44about putting and saying x amount is

2:15:46going to go to water because we're like

2:15:49we're acting like we already know what

2:15:51we're doing and we don't know what we're

2:15:52doing. We're still waiting for the

2:15:54committee to come back and give us and

2:15:57letting us know this is what's going to

2:15:58work, this is what's not going to work.

2:16:01So, I would be okay with it if we just

2:16:03don't add how much of that will go to

2:16:06water because that's just us assuming

2:16:09that we've already made decisions and we

2:16:11haven't.

2:16:12>> Councilman O'Brien, Councilwoman

2:16:13O'Brien, any thoughts on that?

2:16:16>> I I'm trying to craft something.

2:16:17>> No, I understand. No, I understand that

2:16:19they are their capacity. So, I guess we

2:16:22can discuss the where it goes to um once

2:16:26if they decide that that's a

2:16:28recommendation we could live with. I

2:16:30just want to make sure that we have an

2:16:33an additional option. So you can just

2:16:35take out the 50% water

2:16:37>> with an allocation going to water or

2:16:39just say we can take out with going to

2:16:41water in general.

2:16:42>> Sure.

2:16:43>> Okay.

2:16:44>> Thank you,

2:16:47Councilwoman Pastor.

2:16:49>> Sorry.

2:16:51I know we're trying to get to where we

2:16:52need to get to. Um I have one question

2:16:54that I wasn't able to ask earlier and I

2:16:57wanted to know I believe I have the

2:17:00answer is that are there eight projects

2:17:03pending from our past bonds?

2:17:08I don't know why I I my question is how

2:17:11many more projects are pending from what

2:17:13we got from the projects underway. How

2:17:17many additional projects are still

2:17:18pending? Mayor, council member uh

2:17:21Pastor, just to clarify, are you talking

2:17:23about how many are pending from the 2023

2:17:25bond or how many are pending from the

2:17:272006 bond?

2:17:30>> I'm just whatever bonds whatever

2:17:33projects have not been

2:17:35uh on their way. Okay.

2:17:37>> I'm just asking how many

2:17:38>> how many from the 2023 are yet to be

2:17:41started.

2:17:42>> Correct.

2:17:42>> Okay. Thank you.

2:17:45>> We don't

2:17:47>> we'll have we'll have to get that. I

2:17:49>> Okay.

2:17:49>> Yeah.

2:17:50>> Thank you. Um

2:17:52I think we have some clarity and I think

2:17:54we're ready to go. Um I just want to

2:17:57thank everybody for understanding our

2:18:00conversation and dialogue. Thank you.

2:18:03>> Thank you. Roll call.

2:18:05>> Council I'm sorry, not roll call.

2:18:06>> I just want to make sure because I don't

2:18:08think that Deb officially accepted the

2:18:10second as well. And does she have to

2:18:12accept the friendly amendment? I want to

2:18:13make sure we're we've done it properly.

2:18:15>> Council Gordado would believe.

2:18:16>> I apologize. Counciloman Gordo. I that

2:18:18explains why.

2:18:19>> Yes.

2:18:20>> I'm so so sorry. I think we got through

2:18:22it then. I apologize for interrupting.

2:18:24Mayor,

2:18:25>> does anybody need the motion read or

2:18:27>> Councilman Gordado? Did uh you were

2:18:30comfortable with the

2:18:33with the

2:18:34>> Yeah. With with with taking off um

2:18:37allocations of where the money will go.

2:18:39Yes. Once we don't have allocations, I

2:18:41think I'm fine with that. Would it be

2:18:44better official to read?

2:18:46>> I think we should consate it again. Not

2:18:48that I want to hear myself, but I want

2:18:49to make sure everybody knows what

2:18:50they're voting on just to be clear. So

2:18:52the motion is to one direct staff to

2:18:55meet with nonprofits and philanthropic

2:18:57philanthropic experts regarding the

2:18:59suggested guidance and report back to

2:19:01the full council as well as to direct

2:19:04the fiscal capacity committee to analyze

2:19:06the city's capacity for a water

2:19:08infrastructure bond in 2027 in addition

2:19:11to a standard general obligation bond.

2:19:14And three, direct the fiscal capacity

2:19:16committee to analyze the city's capacity

2:19:19for a 600 million to 650 million bond

2:19:25with an allocation going to water in

2:19:282028.

2:19:31>> Mhm.

2:19:31>> Yes. Thank you.

2:19:34>> All right.

2:19:36But just to be clear, mayor, I still

2:19:38think that my guidance um still would

2:19:41guide the committee and where I asked

2:19:43the committee to only consider options

2:19:45that do not raise the city's property

2:19:47tax rate for our residents.

2:19:50>> Okay.

2:19:50>> Yeah.

2:19:50>> Y Okay. So,

2:19:53I do think that

2:19:55is important given the affordability

2:19:57challenges.

2:19:58>> Correct.

2:20:02>> Roll call.

2:20:05Yes.

2:20:05>> Hernandez,

2:20:06>> no.

2:20:07>> O'Brien,

2:20:08>> yes.

2:20:09>> Pastor,

2:20:09>> yes.

2:20:10>> Robinson,

2:20:11>> yes.

2:20:12>> Stark,

2:20:14>> yes.

2:20:15>> Wearing,

2:20:16>> yes.

2:20:16>> Hudge Washington,

2:20:17>> yes.

2:20:18>> GGO,

2:20:18>> yes.

2:20:19>> Passes 81.

2:20:21>> Thank you so much. It's important

2:20:23process and we so appreciate everyone

2:20:25working with us. We are adjourned.

2:20:37out once we got the tractor that we

2:20:40could do a few more things with it. So,

2:20:42it's been a it's been a um a great

2:20:44success.

2:20:46It's been a priority of mine to really

2:20:48celebrate our