Budget Review Commission - April 10, 2025

Call to order the budget review
commission meeting of April 10 and ask
for a roll call.
Chair Smith, present. Vice Chair
Schwiker, present. Commissioner Carla
here. Commissioner Newman here.
Commissioner Ransco present.
Commissioner Sites here. Commissioner
Stevens here. I would just add that the
city manager has a meeting uh running
late and he will be here once he's free.
Thank
you. I will remind the people in the
audience that there is the opportunity
for public comment uh at these meetings.
You can address our commission regarding
items that are on the agenda as well as
items that are not on the agenda.
Um, and in order to
um address us, you have to pick up a
card over here from the table and fill
out your name and address and what you
want to talk about. You can also submit
uh written comments using the same
procedure, different color
card. And the time limit, of course,
will be three minutes per speaker unless
otherwise noted by the
chair. That's the ominous authority that
we have up here.
Um so I only have one speaker that's for
an agendaized item which we'll deal with
later and that point uh we can move on
into the next sort of unnumbered item
which is the chair's
report. I think some of you I do want to
make comments here. I think uh let
me I have a comment request from board
member number three.
Who is board member number
three? Sonnie, that must be
you. Anyway, the request to speak has
disappeared. So, board member number
three has apparently been
disappeared. Um, under the chair's
report, I wanted to uh comment. Some of
you may have seen our agenda for
tomorrow when we will reconvene here at
the same time and try to
um develop the the the gist that goes in
our report to council. As you also
probably know, we will make that report
to council at a joint meeting on April
22.
So we have to uh come up with sort of
the structure of the meeting or the uh
input for the report tomorrow. And what
I wanted to say to kind of give you a
heads up is um the agenda has been
posted. There may be changes uh to it,
but by and large it's been posted.
You'll find numerous recommendations in
there. And we do not intend tomorrow to
go through every single item on the on
the uh request list seeking approval. We
will in my uh as I try to conduct the
meeting in an efficient manner. We'll do
it more by
exception. Taking those items that are
broadly related to whatever category
we're looking at and saying, you know,
do the commissioners, any one of them
have a an exception that they want to
take to something that said there or
want to be um opposed to it in the sense
um that they don't want to agree to that
one. So hopefully that will make it a
little bit more efficient. And then the
commitment is that, you know, once we've
got those kinds of concurrences or votes
recorded, we'll begin the task of trying
to put it into a readable
document and and support the nature of
the the items that are support the the
intent of the submitters
item. Don't know whether that makes any
sense, but it's hopefully a strategy
that will get us out before midnight
tomorrow night.
At that point, uh I don't think I have
any
um meeting notes from prior uh meetings
to approve. So, we'll move right into
item number
one, which is a staff presentation or I
guess Nick is rapidly approaching the
podium here to give us a report on what
will be parks and recreation and
preserve department operating budget.
So, take it away, Nick. Thank you, Chair
Smith, Vice Chair Schwiker, members of
the budget review commission. Again,
Nick Moliner. I am the senior director
for the parks and recreation and
preserve department. I'm going to
present the operating budgets, the high
level operating budgets for both the
parks and recreation and preserve
division separately. I have one slide at
the beginning of the presentation that
talks about the the department as a
whole, but then we'll we'll present the
two divisions separately at the end. You
can really interrupt at any time and
I'll answer questions, but at the end
we'll take questions for each division.
I think that would be better to to
describe what those those budget
packages are. There are a couple of
points that I would like to make before
we jump into the slides. This is
specific to the parks and recreation
division. This past year, we we really
do approach the fiscal year 2526 budget
through a position of advantage, being
that we recently completed the parks and
recreation master plan, the most recent
parks and recreation master plan, which
was an 18month deep dive into the
division's operations, our facilities,
our assets, the condition of our assets,
and how our our division operates. And
there are a couple of of pieces to that
that I think are important to as they
relate really clearly to our budget
recommendations. A part of the master
plan is a thorough operations analysis.
So we had consultants come in and spend
a week of time with our
staff taking a deep dive into our
budget, our operations, how we handle
business. They got as deep into they
drove with us in our trucks and took a
look at how long it took for us to get
from point A to point B. They looked at
how we deployed equipment and how we
used equipment. They looked at our
balance of contractual versus in-house
staff, which I know is a a point that
we'll discuss with the commission here.
And then they made recommendations and
those recommendations that came out
through the master plan that were
recommended through our commissions and
then ultimately approved by council.
Those really form the basis for the
budget recommendations that we'll make.
We also have we'll talk about the park
and preserve sales tax with Prop 490 and
that's another very important
consideration in how we developed our
our budget packages is based on one the
the allocations that are coming in
through the the park and preserve tax
and then b what we promised the voters
through that process. So I think that's
very important. Next slide.
So this is the the FTE breakdown for the
parks and recreation and preserve
department. And if I if I uh get mixed
up between department and division, we
just switched them. But this is both the
divisions together. We have
249 FTEES. This we will have the slide
for each of the divisions. Um personnel
services are 19.1 million, contractual
services are 14.4 million, commodities
at 3.4 4 million and then capital
outlays at half a million. Next slide,
please. Not sure. We didn't know where
the best spot was to put this slide, but
this speaks to what the the projected
revenues are for the park and preserve
tax allocation and then the buckets that
the tax that the the revenue goes into.
and that those buckets are very specific
and that and they they relate very
closely to what our our budget packages
are and what our outofbudget requests
are. So I know that there have been some
questions about what is this new
spending what does this spending
represent? It seems like it's new
spending and in many cases it is and it
aligns with what these allocations are.
So we had 51% of the tax which is 12 a.5
million will be coming in and allocated
specifically for park improvements.
That's a lot of capital, but some I'm
going to use this term. I don't know if
it's correct, but non-c capitalizable
items. So, there are park
improvements that are in our operating
budget. So, some of the the packages
that we'll talk about, the budget
request, are park improvements in that
51%. Preserve maintenance is 18% and
then park maintenance is 14%. So, we're
looking at about $3.4 million coming in
in revenues for park maintenance. That
is in addition to the operating budget,
we have the the fire fuel mitigation and
then park rangers. Next
slide. Next slide.
Sorry. So, our agenda is going to look
very close to what the agendas look like
at the Monday meeting. We'll talk about
our FTS and the budget breakdown. We'll
look at key cost drivers, operating met
metrics, and then the budget requests
that we'll make for both the general
fund and then really the parks and
preserve fund for the maintenance
allocation and the the that should say
park improvements second bullet point
under the second parks and preserve tax
bullet point. Next slide,
please. So, this is a a breakdown of the
FTE count for the parks and recreation
division. We have
239.47 FTEES. That's roughly we've we're
running reports right now, but about 239
or 139 full-time employees and then
about 340 part-time employees that make
up approximately 100 FTEEs. So, it's a
big department over 500 employees. The
the part-time employees make up about a
hundred.
the the budget and the parks budget does
make up the bulk of the the budget for
the department is $18.1 million in
personnel services, 12.3 million in
contractual, 3.2 million in commodities,
and then half a million dollars in
capital
outlays. Any questions at
all? Next slide,
please. So, we'll talk about our cost
drivers. Part-time hours are a cost
driver for us. the new full-time
positions which
are primarily in the park and preserve
sales tax fund but we do have two
requests that are in the general fund.
Maintenance, medians and rightsways is a
is a maintenance driver for us and I can
really take those three bullet points
under maintenance and categorize them
into one lump sum and that is contracted
landscape maintenance. So when we look
at those, we can look at them separately
because we do have some items that
distinguish between all of these
services, but contracted landscape
maintenance is a significant cost driver
for us. It is a contractual service that
we continue to see increases in from
year-over-year. Our mowing contract,
which is a general fund contract, is not
any different. We have a new contract
that we entered into last year. it was
when we did that RFP, that solicitation,
the
the those submissions were considerably
more than they have been. And that's
what we've seen. I know you heard that
from public safety and some of the other
divisions that have presented. Our
contractual support continues to
increase from year to
year. We have tree care and storm
damage. That is a major cost driver for
us. The parks and recreation division is
the steward for approximately 30,000
trees in the division. And caring for
those trees, particularly during monsoon
season when we have major major storms,
is something that is a high priority for
us. It's a high priority for our
citizens, but it's a major cost driver.
In the parks and preserve tax
initiatives, we have a lot of planning
in year one that is budgeted in the 51%
allocation for park improvements. And
then we have contractual maintenance
increase as cost drivers in the 14%
allocation. And this is probably a good
time to talk about the approach to that
that maintenance budget for the parks
and preserve tax that 14% allocation.
When we went there was a couple of our
commissioners here that were were very
involved with the protect and preserve
Scottsdale task force that ultimately
made the recommendation to council on
the structure and the nature of the uh
0.15% sales tax. And through that that
that group worked very hard. It was a
lot like this. We had multiple
commission meetings a week and it was a
a tight turnaround but the unmet needs
for for maintenance for park maintenance
or what really constitutes our requests
in that 14% allocation. And during that
process we had I think 17 or 18 PCN's
FTEEs that we identified as additional
maintenance employees to meet the unmet
maintenance demands in the city.
And our request in year one is to bring
on four of those. So we'll talk about
that specifically in the budget packages
and I'll I'll try to be as efficient
with time. I know we have a long
meeting. But what we intend to do is to
bring on those those employees and that
workforce very very thoughtfully and to
be able to establish the best and most
efficient work plans for those employees
as we bring them on. But in year one, we
are going heavy in contractual
maintenance to get us caught up with
some of the things that we need as
opposed to bringing on 15, 16, 17 FTEEs
in year one. We really need time to plan
where those employees are going to be,
what type of heavy equipment we're going
to buy, where that equipment is going to
be be located, and how long it takes for
that to get from place to place. So th
those are important considerations and
we're taking those considerations as we
implement the tax beginning in July.
Next
slide. Overtime. Parks and recreation
has an overtime budget of
158,000
2425. Year-to date we're trending over
and we typically are a bit over in our
overtime budget. And the drivers for
overtime can be a number of things. We
show park maintenance. Storm damage is a
big part of that park maintenance. We've
had a few years where we have had major
major monsoon storms and micro bursts
that have contributed to overtime and
some of it does depend on what's
happening throughout the rest of the
department. If we were to have vacancies
during a time of need that could be an
overtime driver. We see park
maintenance, our sports complexes, and
then professional baseball as as the
third. Next slide.
our unfilled positions. We the the
budget review commission asked for this.
We don't see anything that that jumps
out at at us as it relates to RFTs in a
in
a department division as large as ours.
Having
nine vacancies at one time really isn't
a significant amount for us. That will
eb and flow throughout the year. The two
positions that have been open for more
than 180 days were both
reclassifications. So those are
positions that we and as we have
vacancies in our division, we evaluate
those vacancies. We evaluate whether or
not they could be best used somewhere
else for a higher priority. And there
are times where we will reclassify an
existing position through the budget to
meet a higher need as opposed to asking
for a new position through the budget
process. So that's what these two
positions
represent. Next slide, please.
some of the the operating metrics that
are really important to us. Park acres
are important. They're not as important
as the 459 green space acres, which are
the acres that we mow. And we are adding
to that from year to year. So, we have
increases to our mowing contract that
con they constitute a couple things.
They constitute a new contract that's
more expensive. they from year to year
can constitute a CPI increase. And then
as we build new parks, we just opened a
new
park 60 days ago up at Asher Hills and
74 at the Way. We're adding new
inventory. So there's an increased
expense. We
maintain just under 800 acres of
city-owned medians and rightsways. And
that is a that's a cost driver without a
doubt. It's one of the budget packages
that we've recommended that we're we're
asking for a budget increase for and it
is similar to mowing. It is similar to
our other landscape contracts. It it
continues to increase. I would say that
and I think I may address this in
another slide. The budget request and
the funding for the maintenance of the
medians and rights away is a transferin
from the transportation fund and that
request is a transfer in from the
transportation fund as well. So the
medians, the rights of ways, they're
they're not really a they're not a park
and they're not a recreation asset, but
based on the the landscape management
and irrigation nature of of the medians
and rightsways, we maintain those. The
30,000 plus trees are a huge cost driver
for us. And then we have about 3,100
programs that span across aquatics and
adult sports and learn to
swim. Next slide.
So
FTEES and the FTE histories, if you were
to take a look at our FTE history,
there's not a significant shift in our
FTEES
from 5 years ago to today. In fiscal
year 2021-22, our FTE count was
26685. It's essentially what it is right
now. that that increase and and the
decrease to today did represent a
reorganization where the railroad park
was moved under another division. So
we're about the same as we have been
with the
239.5 FTEES in fiscal year 2223 we have
242 in 2324 248 and then we have the uh
the 239 in the parks and recreation
division where we do see a an
FTE the major differentiation the major
swing we saw in our FTE count was
between 0708 and 2018.
18 2017 2018 and at that point the parks
and recreation division had 308
FTEES and then as we moved on we went
from 308 and 10 years later we had 265.
So a significant decrease over that span
of time in our FTE
count. We did that with bringing on a
number of new facilities throughout that
period of time. we were we were building
facilities that were funded through the
2000 bond program. So that's where we
saw the biggest decrease in our FTEES
and we've really been trying to get
caught up since
then. The parks and recreation master
plan and the parks and preserve tax.
These are things that are they're really
just um priorities that came out of that
process which was to reinvest in the
Indian Ben Wash and our South Scottsdale
parks to to make a commitment to
focusing on our aging in infrastructure
to increase levels of maintenance. We
plan to establish a neighborhood parks
team. There was a recommendation coming
out of our master plan to establish an
urban forestry team and that is I think
a significant point because it does
represent a shift in bringing some of
the the dependency on contracted
landscape maintenance inhouse and that's
something that we plan to do as we roll
out the park and preserve tax and some
of those budget packages that we've
recommended it. There was a
recommendation in the master plan that
we implement an asset management
software system that helps track our our
assets. It helps with a condition
analysis. It it tells us where we're
spending the most time, the most money,
the most resources, and and gives us
tools to to work through that in the
most efficient way. There's a couple
increasing special events team staffing.
We are doing that through a
reclassification without a budget
request. And then to increase park
security. Next slide, please.
So the following budget requests that we
have, these are the the budget requests
that are either through the general fund
or through a special program. So these
are non-p parks and preserve fund
requests. The $50,000 in aquatics
chemicals is simply an increase in
aquatics chemicals. And that increase
we've seen an increase over the past
five years every year. And that's to
maintain the pools and the the four
aquatics facilities. We had a an
increase when we went out to bid for our
citywide mowing contract. So that last
year our contract was up. We did a a
solicitation and the vendor that we
brought on there was an increase in the
cost from the previous contract. They
were the lowest
cost. Uh we did ask for an increase
in professional services uh contractual
money for leisure education classes
which do have a revenue
offset. There's a capital outlay
for benches on main and fifth. We asked
for the
$520,000 increase to the medians and
rights away contract and that is the the
amount through the transportation fund
and and I'll I want to make a couple of
points just for clarification about the
median and rightsway contract because it
does include the landscape management
for all the the medians and rightsways
but it also includes callouts and that's
a very callouts and storm damage which
is a cost driver for us and sometimes
it's a cost driver that we can't
necessar necessarily predict that's we
see a lot of it a mattress in the middle
of a road broken glass after things that
happen after after an auto accident. So
those are things that contribute to that
cost. We did ask in the general fund for
a maintenance worker too for Ashar Hills
Neighborhood Park which recently opened
and then for additional part-time hours
that we would add to existing
positions. Next slide please.
These are these begin the budget
requests for the
51% and for the 51% of the parks and
preserve sales tax. So that 490
initiative the these are items that in
many of these ways will have to go out
for some kind of bid. So for master
planning, what we intend to get through
that master planning that that bucket is
a site plan for Aua Linda Neighborhood
Park, which is those improvements are in
fiscal year
2627. A site plan for Paute Neighborhood
Park, which is in our capital budget for
fiscal year 2627. a citywide signage and
wayfinding plan, a systemwide park
amenities plan for non- capital items,
and then a master plan, really not a
master plan, but a drainage study for
the Horizon Park dog park.
So, a a master plan, a full master plan
for Chapra Park, a park, $200,000 for
park amenities, and that could be for
benches, for playgrounds, things of that
nature. Um, we are asking for a
$450,000 landscape improvement budget.
And what that will be, what we intend
that to be is improvements that are
identified in the Chaparel Park master
site plan that will start in July. We
are asking for $200,000 in park cameras.
I'd mentioned that park security was
something that was identified as a as a
priority. Trees, sod replacement,
communications is just communications
about the projects about the the parks
and preserve fund. and then contracted
design for Vista Del Camino and Elorado
Parks Improvement. We have $11 million
in year three and $13 million in year
five of the parks and preserve 51%
improvement. And this amount is to start
the design for those improvements now in
July. Next slide.
These are the new positions that we're
recommending for fiscal year 2526.
Again, we this is relatively light. This
does not constitute what we had intended
and what we do intend to bring on
through this allocation of the the tax
long term. But these are the critical
positions that we need to start the
planning for that. So our principal
planner will handle all the planning
long term for capital projects for
improvements. The urban forester will be
the individual who will who will really
develop our urban forestry team, who
will advise us on equipment, advise us
on what type of equipment where, will
advise us on a plan on how we'll develop
an urban forestry division within the
city. And then a maintenance technician
for Chapper Park and a maintenance
foreman for the neighborhood parks.
Again, there was a recommendation to
establish a neighborhood parks
team. the contracts. Again, I I had
had covered this a bit, but our approach
was to go very heavy in contracts in
year one. So tree care and tree pruning,
we know that that may be something that
will bring more in-house as we as from
fiscal year to fiscal year, but that's
still something that I don't think we'll
ever get out of some dependency on on
professional contracted tree care and
pruning. So that's something that we
intend to go heavier on. We do have a a
line item for storm damage, which is not
anything we've ever had. So that's in
the parks and preserve sales tax
allocation and that will ultimately
result in a savings to the general fund.
So turf maintenance, professional
painting, sport court resurfacing,
vectoring services and then supplemental
restroom cleaning. Those make up the the
remainder of the
contractual. Next
slide. These are some of the equipment
needs that are in the in the parks and
preserve tax for 2526. the general
landscape maintenance, sod cutters,
gators, replacement valves, battery
powered equipment, and then technology
uh asset and work management software.
Next
slide. Happy to take any
questions. Um, thank you very much.
You've covered a lot of material.
Um before I go to the questions and we
do have some here but I want to uh
announce that the city manager has uh
has joined us. Um and for him we'll
assume that he knows all these numbers
already. We'll also extend our
congratulations to him. He's no longer
our interim city manager. He's now fully
responsible for everything that fell
before. So thank you, Mr.
Chair. Commissioner Ransco, you
mentioned 300 employees that make up a
100
employees. Does that mean they average
14 hours of work a
week? Chair Smith, Commissioner Ransco,
some of them do. Yeah, we have some
employees who work 10 hours a week. We
have some who work 30 hours a week
during a seasonal time. So, a lifeguard
would be the best example. We sometimes
our lifeguards will work 20 25 30 hours
a week but they'll do that for an
eightweek window. So they end up well
one thing we didn't cover and I probably
should have mentioned this is when we
showed our vacancies we showed our
vacancies for full-time employees and
not for part-time employees but a
a a high volume of our part-time
employees are intended to be seasonal.
So we will have we'll carry those as
vacancies throughout the year. Right
now, I think last week we we did a mass
hiring for all of our lifeguards for
summer swim programs and learn to swim
programs. So, we do have several
employees that are average 14 hours a
week over the course of a an annual Got
it. Okay.
Commissioner
Stevens. Uh yeah, I apologize for my
ignorance on some of some of this tax
works, but with the percentage splits,
those all add to 100% yet there's
something on top that's the Westworld
debt service. Is that the way that tax
read? It read that first it goes to
Westworld debt service specifically
identified and then after that it's
allocated by those
percentages. That's how it reads. Okay.
Okay. Thanks. Uh then on uh slide 12,
you had that
$520,000 increase to the RO rightway
contract. What what kind of percent was
that? Because I can't tell from the
dollar amount. Is that like five or 10%
or is it like 25? That was an 11%
increase. 11. Okay. And uh and then my
other question would just be on slide
13, there's a lot of round numbers.
Later on, you're going to do 23 is going
to be the same. uh is if this is all
new, so you're doing rough estimates as
to how you think you're going to spend
it. Now, here's my million-dollar
question. So, does that mean that you're
only going to spend the dollars that are
here, so there's no budget risk, and if
something runs over, you'll not do some
of the projects in there, or is there
budget risk here, and I might want to be
concerned about how rough the numbers
are?
Commissioner Stevens, that's a great
question and it does speak to some of
the the
the unique nature of this this sales tax
as it relates to the 51% allocation, but
we are recommending a spending limit, an
expense limit. So, we're we are
anticipating that the costs are going to
be at or below these costs. If we
weren't able to do something, we would
have to make an adjustment to our
expense budget or we may have to carry
forward a project to next year. um where
that really becomes a and I think it's
advantageous. I think it's something
that we could speak to as it relates to
how we manage this budget and how it's
different than the general fund budget
because we'll have a lot of capital in
this 51% allocation. And from year to
year, you have a better idea of what
your your spending and what your revenue
is because it's self-funded. The the the
amounts are intended to carry over. So
to answer your question, we wouldn't
spend over 225,000 in one allocation
unless we took something off from
another allocation. And if we had to
push something to the following fiscal
year, we would do that. Okay. So you're
going to f you do have financial
policies that say you're allowed to move
things within different categories of a
cost center with, you know, either
budget director approval or certain
things require console. So your thought
is you're trying to manage all this
within the totals that you have here and
then most likely you're you're going to
be a little bit careful so that if
you're looks like you're going to run
over somewhere you may defer something
that'll then go into the next year fall
into fund balance and get expended in
the future year. Absolutely,
Commissioner Stevens. And I think to
speak to that that really really
conservative approach to this funding
bucket where we're we're recommending
spending the the revenue through the 51%
is projected to be I'm 12.48 million and
our total uses is 7.6 in year one. So So
absolutely that would be our approach.
Okay. Thank you. You're welcome.
Commissioner, Vice Chair Swiker,
Nick, good presentation. Um, I listened
to this whole presentation and what I
hear is a cautionary tale that we can
learn from the past for the future
because having sat through 490 and been
involved in that, I know that a lot of
what we're doing is because there were
unmet needs in previous times where um
proper maintenance did not get funded
and and just like the manager was
telling us a few weeks ago about Thomas
Road, you know, if you if you don't
maintain something, you eventually have
a much larger cost to rebuild and
replace. So when I hear that there's
really no shift in FTEES over the five
years, um I think if you go back even
longer, I I think we're now paying with
some of these expenses for that deferred
maintenance and not having enough people
to do the proper job. So, uh this looks
like you put it together very well and I
congratulate you on that. Thank you.
Uh can you take us back to slide number
three which was the portrayal of what
the um the new 0.15 parks and preserve
tax will generate and that's the right
slide there. And you're saying that um
in the budget in the proposed budget
this year is proposed it will probably
generate 25.2 2 million and then the
revenue allocations equal that so that
the fund balance is uh zero at the end
of the
year. What we've been hearing from you
is that as you try to ramp up to hit
these
numbers, you'll actually you're not
actually estimating that you're going to
spend all of these categories. And maybe
my question is to Sonia. Um, is this the
really the way it's in the budget or is
there in fact an anticipation that there
will be an ending unspent balance at the
end of the year? Uh, yeah. Um, Mr.
Chairman, commissioners. So each of
those funds um allocations will be
transferred to the respective funds and
in each of those respective funds there
will be some reserves and some
unappropriated fund balance. The
reserves will be for revenue
stabilization because it's all sales
tax. So if that we don't collect 25
million, there's some cushion there. And
for some of the funds, they're not
planning to spend the whole allocation
in this fiscal year. So they may have
some timing differences because it takes
a while to ramp up some of these new
programs like the preserve programs. It
takes a while to ramp them up. So even
if they don't spend it all, they'll uh
plan on spending it in the future years.
And I understand that would be the case.
Um, I think my question is more
fundamental than that. If we bring in 25
million from this
tax, in all likelihood, we will not
spend all 25 million next year. I mean,
that's been the essence of what he's Can
I can I chair Smith? I' I I'd like to
answer that. And I think the the better
example is in the 51% park improvements.
So the 25 million is spit split between
these these areas. So it all is not
going to park improvements, right? The
park improvements that we're
recommending for Vista Del Camino and
Elorado Park in years three and five
thce exceeds the revenue that comes in
that year. So, we really need to carry
forward a fund balance to I mean, and
I'm using really to basically save up to
do the improvements and over the
five-year plan, considering the work and
the council approved master plan for the
Vistadel Camino and Elorado
improvements, that money is not even
close to enough to do those
improvements. So, yes, we will be
carrying a fund balance from fiscal year
to fiscal year. If we look at the the 5%
or the 14%, you do show a considerable
fund balance carryover from year 1 to
year two, but then it drops
significantly from year two to year five
through the the the length of the
five-year plan. So that that really
speaks to a very thoughtful and
strategic approach to how we bring those
services on and how we allocate the
right combination
of contract versus in-house and
personnel services. And that that really
is the trick. We have we've talked about
it I think through every single
presentation. We see an increase in
contractual year over year over year.
and I was here during that 089 time
where you could get better pricing from
the private sector. We have not seen
that in the last 10 years. So that's
that's the approach for us as we go
through the first year is to really look
at what is the best balance where can we
save and be more efficient more
costefficient but then also provide a
higher level of service by bringing some
functions inhouse and our budget
recommendations reflect that and what
makes sense to continue as as
contractual and there there will always
be contractual support that we'll rely
on.
I think you suspected something far more
sinister in my question than there was,
but it's a it's an elaborate and
interesting answer. My question very
simply
is you're not going to spend $25.2
million. We the city are not going to
spend $25.2 $2 million on the aggregate
of those items that were agreed to by
the committee that by the by the voters.
So, is is this piece of paper, page
three, is this a portrayal of what is in
the pre the proposed budget that will go
to council or does it track with what he
has said he's actually going to spend in
the areas that he's responsible for
here?
Um, Chair Smith, if you have your budget
binder with you, the spend, this is the
allocation based on the ordinance. The
actual spending is in other pages on the
proposed budget. It'll show you exactly
how much of the 12 uh4 million will be
spent, how much of the 4 million, how
much of the 3.4 million will actually be
proposed to be spent. So, they're in
these budget pages in separate funds.
Um, so all of this money is transferred
out to the six different funds. That is
correct.
I
think there will be an interest and
maybe you have intentions to do this but
there will be an interest from council
and the public in the future to see how
we have uh how we have spent this money
not just by transferring it out to other
folks. So exactly I'm sorry to interrupt
you Mr. Chairman. So, if you turn to
page B20 of your binder, that is the 1.7
million or 7% transfer for police park
rangers. And in that fund is only this
pot of money, no other pots of money.
And it'll show you the personnel cost,
the contractual services, commodities
for the park ranger program. So, it is
not comingled with any other funds. Each
of these funds are separate funds just
to show the expenditures of those monies
and they're not co-mingled in any other
other funds. So, do you I'll say at the
beginning of the year, do you transfer
out all of these funds to the other
funds in the in the proposed budget?
Yes, we do. And they're in separate
pages on the proposed budget. So, let me
show that. Yes. And and I'm sure it's
accounted for in those separate budgets.
I'm just saying that the public, I
think, and perhaps the council would
like to see every year that 25.2 million
came in from this tax and some was spent
by Nick and some was spent by Joe and
some was spent by
others and then the balance rolls
forward to the next year. Um,
and maybe it I don't know how you'll
display this, but it is I think
misleading to say that this
particular preserve tax is going to be
bringing in
25.2 and it's all being allocated and I
know it's being allocated, but what's
being spent? Do you get my point? people
will want to know what's being spent
against this tax that they have approved
um without going to six different
accounts and looking at what has been
spent against the allocation. I don't
know how they'll do that. Yeah, Mr.
Chairman, uh commissioners, the
ordinance that the council adopted to
allocate these funds requires the city
treasurer to report every year on how
these funds are expended. So there will
be a report that is included in our
monthly financials to city council and
the community posted on the web and
presented to council on exactly how
these funds are spent. For the budget,
we have split out all these into
separate funds. So it is very clear in
the budget what each of these funds will
be spent on.
So is that report available now or is
that an endofear report?
It will be a monthly report starting in
the new fiscal year because we don't
have any collections of this tax this
year. I understand that. So it will be
in the next starting in the next fiscal
year.
But there is okay there. So there is
nothing in the in the budget that the
council will look at on May the 6th. the
budget that will tell them ex unless
they go to the six different accounts. I
I do believe Chair Smith on on page B20
of the of the budget of the proposed
budget there is a breakdown that does
show the expenditures by category in
each of the funds. So there is a and it
shows the five-year plan for both the
revenue projections, but it also shows
the expenses. I do think I understand
where where we're at right now because
this is only showing the allocations and
it's not necessarily showing the
expenses against those allocations, but
that is in the budget book and I know
that that's not to the degree of detail
as far as what the public and what the
council will want to see, but in terms
of the five-year forecast, it is in the
budget book. What page was that?
If I can step in, B17 has this
allocation. And then B pages B 18 to 22
are each one of those separate funds
that then show the planned expenditures
for operating and for capital. So it was
confusing at first, but the fund balance
and the fund balances of each one. So
they're all tracked separately. So the
page 17 is just an in andout that you
see right there. And then every page
after that takes each one of those lines
other than Westworld says here's the
transfer in and then here's the
operating expense and here's the
transfer to CIP for each one of those.
So Mark, it's a little bit like the
difference between acrruel accounting
and cash
accounting, you know, because one of
them looks at the ongoing, but you may
not necessarily have that same cash all
the time. So I think that's where the a
little bit of the confusion comes from
because you're acrewing all these but
you may not spend them all in that
particular period. The fund balances do
move around on these funds as he had
mentioned earlier because of the the
timing of the
expenditures. Okay. So, we'll just add
up six pages. Commissioner Carla,
thank you. Um, I want to thank Miss
Andrews for laying it out in a way that
very clearly tracks it. And um just so
you know, following up on what uh the
chair said, we have actually proposed
through both commissions and the people
who did 490, that once a year that the
city should put together a
flashy, colorful report that goes out to
the citizens and says exactly, you voted
for 490, here's where it was spent this
year, and show the projects that are
being accomplished, the ones that are in
process. so that the public does know
and they don't have to read, you know, a
huge budget binder. Um, and following up
on that, I'd like to thank Mr. Molineri
for the good job he's doing within the
constraints we on 490 gave him, which is
pay as you go and and don't create risk
and find a way to rebuild the Indian bin
Wash even though it may take a few
years. So, very much appreciated.
And I think the report you're talking
about is what the public will want to
see. I just thought perhaps they'd want
to see that in the projected proposed
budget. Um, and there is no such report
as you've described except I think if
you add up six pages,
but the screen says that
Commissioner Stinfens would like to
speak. I assume that's you,
Commissioner. I just it was my original
question I had before. I u s help me big
picture because a lot of times people
just want to look at the budget like in
your cool chart that you gave us the
other day it said here's a change in
operating here's a change in capital
improvements. This is a new tax and I
can see on some of these pages that
there's going to be new expenditures for
operations. There's going to be new
expenditures for capital. So to the
extent there's new expenditures for
operation, I'm presuming it goes into
your overall chart as new expenditures,
an increase in expenditures, although so
that makes it sound like the budget
expenses are going up, yet there's kind
of an offsetting revenue element to
that. So that's just part of what you
have to do when you try to get your head
around operating expenditure increases
to figure out which ones are supported
by new revenue sources.
You're absolutely right, Commissioner
Stevens. That is absolutely correct and
that goes with any of our other
operations that have um supporting
revenues like ambulance or even some of
our uh part programs they come with
revenues that pay for those expenses. So
one of the things we're going to be
meeting with council and if someone says
hey expenses went up by blank dollar
amount do we really kind of need to also
look at what revenue sources uh might
have come in to help defay some of those
to get the whole picture? Absolutely.
And we do have those numbers so we can
put together a list of all the revenue
sources that we know will come in to
offset those expenses. Okay. We'll think
about if that makes a more clear
picture. Okay. Okay. Thanks.
I don't see any other comments or
questions. So, thank you very much for
your presentation. You're welcome, Chair
Smith. I actually have some more to to
go. I have to You're going to keep
going? I'm going to keep going, but I'm
going to go very quickly through the
preserves operating budget. It is not as
big as so we will and it is it is very
similar in nature. There's a couple of
of differentiations between the preserve
divisions operating budget and the parks
and recreation division's operating
budget. Next slide
please. So again we'll talk about FTES
and key cost drivers and the the same
the same metrics that we talked about
before. Next
slide. This is a snapshot of the
preserved division. So, a lot smaller.
9.71 full-time equivalents. That does
make up a a collection of of full-time
employees and part-time employees,
similar to the parks and recreation
division. Personnel services
950,000, contractual 2.1, which is 64%
of the
budget. Commodities 221 almost 222,000
and we don't have any capital outlays.
But the one the differentiation between
the parks and recreations budget the
budget philosophy is that we are moving
the entire preserve operating fund from
the general fund to the parks and
preserve fund. So that's a major
difference is with parks the allocations
are intended to be a supplement to the
the parks and recreations budget. In the
case of the preserve, we are moving the
entire preserve budget from general to
the park and preserve fund, which in in
this particular allocation represents a
general fund savings of $1.1 million.
Next
slide. Personnel increases. These are
increases that are funded through the
the park and preserve tax. Um these are
our cost drivers. Maintenance and
protection of the preserve habitat. A
lot of fire fuel
mitigation, ecological resource plan and
natural resources studies projects and
then our cultural resource and
protection management. And then we have
education and preservation as a as a
cost
driver. Next slide.
habitat protection um really is focused
on the treatment and the the removal of
invasive
plants. There's a a bit of a difference
in how costs are accured for some of the
work that's done the contractual work
that'll be done in the preserve because
in in the preserve an acre is not
another acre where in parks and
recreation if you're our contracts are
typically by acre. um you could have a
very densely vegetated space that may
cost more for mitigation and and
invasive plant removal and you could
have areas that don't have quite that
much. So we will see some
differentiation um additional
restoration of disturbed lands and
that's the restoration of approximately
200 acres of previously disturbed
wildlife habitat. Um progress mapping
and assessment there there are large
areas of the preserve that have not been
assessed. So that pro proc progress
mapping is a part of that and then an
implementation of the ecological
resource plan which was approved by city
council in
December. Next slide
please. Uh sonor and desert preservation
and
education. These are
all operating principles for the
preserve that are outlined in the the
Scottsdale revised code. um cultural
resource protection and management and
that's to complete cultural surveys for
all the unserveyed areas. Next slide,
please. These are some of the changes to
the budget. Uh we intend to bring on
really a couple of new positions that
are full-time positions and then reclass
one part-time recreation leader to a
full-time maintenance worker, too. and
then an increase of part-time hours that
would basically fill hours to existing
part-time positions. And then we have
the different buckets from invasive
plants, wildland, fire and fuel
management, implementation of the
ecological resource plan, habitat
monitoring and land restoration,
cultural resource protection, and then
education. And these are the areas
couple points about these areas. These
are the areas that were identified
during the the process. The the protect
and preserve
Scottsdale task force identified these
areas as the areas of priority for the
preserve. They are identified in their
management objectives and these there
there's this work has already been done
in some ways but this adds budget to to
those existing services. Next slide.
We do have a a an increase in
contractual services. Um, one area to
note here is that the custodial services
contract that will move from the general
fund to the park and preserve sales tax
is about a
$260,000 general fund savings. That will
that savings will show in the facilities
department's
budget. And then increase commodities.
Next slide.
happy to take any questions.
You have apparently dazzled everyone
again. So, thank you very much. Thank
you very much.
The next item is item 1A which is a
presentation and recommendation on the
proposed budget for the Rio Verie Drive.
wildlife crossing. I have before we
begin, I have one speaker that would
like to speak to this item and
it's Eric
Fzinger who is close to the microphone.
Eric,
um, Chairman Smith and Commissioners,
thank you for hearing me today. My name
is Eric Filser. My address is on record
and I wish to speak on the agenda item
that was noted. Uh I've been involved
with the preserve for over 30 years. uh
starting in the mid 1990s uh I became
active in the group served on various
city uh committees of the preserve
commission and then uh from the period
time period of 2003 to 2009 served as uh
a commissioner preserve commissioner and
then subsequent in the second half of
that I was vice chair to with art deco
on the preserve commission. So uh during
this time I served a lot uh related to
the preserve. I got to know it a lot
especially in the early planning years.
I had also served on the board of the
McDow Snoring Conservancy. I first set
foot in the preserve in 1968 when uh I
took a job as a professor at Arizona
State University uh and began to explore
the area. Uh I don't usually mention my
academic career and some of my friends
here from uh the staff may not even know
that I was a professor at ASU but that
was a significant career for me and I
was very involved in research a lot of
different types of research
multiddisciplinary research. Uh I ended
up my academic career as an associate
dean for research at the University of
Alabama in Tuscaloosa. uh I was full
professor having published over 50
scholarly articles and scholarly
journals and uh three books of scholarly
nature. I just mention that to say I do
believe that I have a firm foundation in
science and believe strongly in science.
I believe that over the years that I
have uh logged probably as many
footsteps in the preserve as
anyone considering that it's been you
know 40 to 50 years. Uh, and during that
time I've hiked the preserve probably
uh, you know, three or four times a week
over the the whole year. So I pretty
much got to know all the wildlife that
are in the various areas of the
preserve. And particularly I got to know
the wildlife in that whole area from
Tom's thumb up through Granite Mountain.
Uh and during that time I've been
blessed to see uh all the types of
wildlife uh big game all up through even
mountain lion. So I've been out there
early morning uh at basically sunrise
hiking and observing uh by myself. I
don't disturb the the land. I'm there
quietly and I love to see the animals.
So I know them really well.
uh I've been have not been involved in
city matters that much for the past uh
15 years or so. uh I believe in passing
the torch but occasionally there's an
issue arises that I feel that I have
some special knowledge uh and I ca care
to to speak on it especially when I want
to find uh make a contribution to what I
consider be a balanced uh consideration
of sensitive topics
uh for this notion of a land bridge or
wildlife crossing on Rio Verde I asked
myself and have asked myself and I see
my friends Scott Hamilton and Cory For
example, Eric, I'm I'm technically your
time is up. We're going to I'm going to
give you another minute, but um I think
we will concede that you're qualified
and whatever you're going to say. Okay.
But try to get to your point in the next
one minute or something. And thank you.
Thank you, chairman, for giving me that.
Um I've asked myself, is the land bridge
a real need? And then is it the correct
solution? Um, and to that I would say
this is a real need. Most of my
observations of the wildlife, and this
is a good thing, they move east and west
in the washes through that whole section
that we call the gooseeneck. I've
observed them. I've seen them. Um, and
that makes sense ecologically. There
have been studies, the wildlife study
that was done by Arizona Game and Fish
noted that the track data was east,
west, not north south. uh the the study
that was done for uh one of the
subdivisions, I believe it was Ranch
Gate, uh off of Ranchgate, there showed
wildlife, the crossings, the track data
were basically east, west, and the
washes consistent with my so there's a
huge need. The wildlife killings, there
was only four out of 450 wildlife that
were roadkill and there weren't any
large mammals. There were no deer
havling crossing Rio. Um so on that
score I would just like for us to
consider what the actual nature of the
real data and the real problem is. Uh
I'm not opposed to a land bridge or some
sort of crossing. I just want to have it
considerate and consistent with the real
need and I am not having to reach that
level of my science yet. With regard to
the other topic of uh is the landbridge
the only solution. I would just submit
to you I would like to see a
consideration of some other
alternatives. I know land bridges really
well from having visited B National Park
since the 1980s. Uh and they had land
bridges that were fitting a need where
there were a lot of wildlife crossing. I
don't there were a lot of roadkill a lot
of accidents human accidents here. I
don't see the data that actually
supports that. I think if we do a land
bridge we should we ought to do it
consider an underpass. I've observed
deer crossing underpasses at 105th
Street, the underpass on the court
trail. There's deer and havalene across
there and the underpass animal tracks
eye observations similar with a culvert
that's up further in it. So in the urban
wildlife areas, they do use those. I'll
I'll call it quits with you there and
let's hear the folks that may have a
solution. Thank you, Eric. Thank you.
With that, we will go into a
presentation. Um, and I think Brad is
going to Commissioner uh Newman is going
to lead us through this presentation,
but it is uh not for a vote or anything,
just anformational item and carry on.
Thank you, David. And uh this is a
subgroup project between Commissioner
Carla and I. We both worked with staff
to understand the wildlife crossing
better because I I was approached by
Steve Felicuchio and Commissioner Carla
to to talk about this or to understand
it and uh and uh work through the
details of it. And so there obviously I
had a lot of questions when we went
through this. Um this item we'll show
here uh we can't vote on it today but uh
we will vote on it tomorrow. So we'll
talk about it here because it's relevant
Germaine to the topic. But um we can do
a quick vote on it tomorrow if it if we
feel that is a recommendation. And so
this is a jointly working with
commissioner Carla and Steve to put this
together uh working with staff. Uh go to
the next slide
please. So the issue is that there's
really has been wide disagreement on
whether this is needed. It's a new
project. It has not it has not been in
the budget before. Uh even though I know
um there's been the thought of this but
in as it for it actually be in the
budget. This is the first year in the
capital plan and so it gets attention
and so we we really need to define that
and this is really some of the other
steps we've talked about as far as
feasibility of projects. This is a good
opportunity to understand the project
and come to a reasoned uh approach
because early on if you do it now
there's obviously one cost associated
with that and then there's a
justification to it. But then in some
some point in the future, Rio Varity
Drive will be widened at which time it
may make more sense to um do do
something as Mr. Filzinger uh described
do something at that time uh in terms of
intervention with with a road widening
because it there's efficiencies
associated with that. So that came to a
discussion with staff. Also, in terms of
scoping the project, there wasn't an
understanding that we found out from
staff that the $35 million number is
driven by a 200 foot wide bridge, which
would make it the largest uh widest
bridge in the world. Um, and and in
comparison to others and if it compares
to other projects in Arizona, it's not
as it it's they're they didn't cost that
as much as this one is proposed to cost.
And I think that's one of the areas
where we really do agree is that it's
not a $35 million number. Um but we need
to understand that. So those are the
issues. Also there's some other issues
in terms of the Scottsdale city limits
are one and a half miles to the east.
After that you get into unincorporated
area where you'd have to buy rightway
and it's not sure how the fencing would
work because fencing needs to go three,
four, five miles each way to guide the
animals to that. So I don't know how you
get the animals to abide by the
Scottsdale city limit. So we'll have to
we'll have to think about that in in
terms of a creative solution. So with
this it it's the proposal is to move
approximately $250,000 from the budget
to spend that on a feasibility study to
understand this. There's two options
here. We'll show you in that and right
now it's a $35 million uh budget item
but it would become a future project in
the budget until that's really
understood and maybe this becomes a
model for other projects as they get
proposed because they're large dollar
items. Next slide. Next slide please.
So option one is to now build a north
south crossing as a standalone project
and there's um you would the scope of
that would be um you know right now it's
200 feet wide but I think um we've also
determined that it wouldn't be that
number other comparable projects are in
the 50 75 foot 100 foot wide depending
on the needs but that justification has
to occur as part of that the cost
obviously would reflect that fencing all
the work that needs to be done to that
and then the
would be to drop that in and right now
it's assumed to be a 2027 time frame but
there's a certain cost associated with
that and a certain rationale and
justification why that would need to be
done now the other option would be to
wait until Rio Verity Drive is widened
um there's not accident data right now
um that shows that there's a significant
problem there but as traffic builds um
the traffic I I found some data that was
like 5,000 cars a day I think Steve
Kuchio's counted 9,000 cars a day. So,
everybody's out there counting their
cars. But up on I17 where they're going
to build one, that's that is an
I17 sixlane interstate highway with
divider and you have big horn sheep and
elk that are coming across the road.
It's certainly understandable that that
can cause significant accidents. That's
a more substantial project. Uh but it
doesn't cost $35 million. So, um there's
a discrepancy here and it's it's
reasonable to go through this process
and understand should that be done
should that what is the scope of that
project? Should it be done early? should
it be done later? Um and what are all
the issues to understand so people can
really use data to to base to base the
decision and go forward from there. So
that's the proposal um is to is to let
staff work through that over the next uh
9 to 12 months whatever that is um and
then u and then come back with a
reasoned uh budget entry that makes
sense there if the project decides if we
decide that the project is justified.
Mr. Car. Yes. Thank you very much. Uh,
Commissioner Newman, uh, we truly
appreciate your willingness to learn all
about wildlife and bridges and
appreciate what you've taught us. Um,
because but the bottom line on this is
we need to get facts. We need to get
Scottsdale specific facts because when
capital projects management put in this
price for a 200 foot wide bridge, that
probably isn't needed. The only 200 foot
wide one in the United States that's
being built now is in California. And
the reason it is is because it's going
over 10 lanes of freeway. So don't think
we need that here. But what we do need,
we don't know exactly because ours is
going to be a hybrid versus the other
ones in Arizona which are wildlife only
and are in rural areas. Here it's an
urban area and you want to have it wide
enough so that to one side you can have
a people trail and again that comes down
to feasibility design and then you get
more of an idea of what you're actually
talking about and that's why we decided
to propose this because right now you
know as wonderful as as it's been we're
talking in circles because nobody really
knows. So we the whole hope is to move
this discussion forward and quit wasting
time going in circles and and come up
with the feasibility study. And you know
I thank Mr. Philinger for all of his
years he's given to the preserve but I
you know will point out that a lot of
his observations are directly contrary
to the Arizona game and fish data. But
again, we need to get the most current
data and that needs to be part of the
feasibility study so we really know what
we're talking about. And my hope is that
this will help, you know, shortcut some
discussion. This will give us a path
forward and that it will be done in time
for the next budget cycle, you know,
when we have to talk about that and then
we'll know, you know, that future budget
item we have. Do we change the number
and and do we do something based on
facts? And that's the whole purpose
behind this. And I think that's part of
what gave rise to this is that the
drivers for doing something here.
There's not the animal data. There's not
the accident data. There's not a
compelling driver for movement of
animals there. There are hikers and
maybe horse brake riders. And as that
road widens, then it becomes option two.
There would be a driver there for um
human safety. and then animals kind of
come along with that free whereas if you
did it right now it would purely be a
animal driver to do that but that data
has not been shown and so that was my
challenge back and that's where we
arrived at and so um I think the
observations from Mr. Filzinger what I
saw in the in the data that was
presented to me and then the possibility
of a project in the future it makes
sense to to go about this and so um no
no need for discussion unless there's
questions but we would vote on this
tomorrow as a recommendation as a part
of the package we just can't vote on it
today otherwise we could do it now but
it's germanine to the topics here today
so that's all but we do welcome
questions if you have them of
course and you're right we're not here
to vote on this today, but um presumably
you'll have some recommendation that
goes into our
um 2,000 other recommendations when we
visit the subject tomorrow. Um does
anyone have an a desire to speak on this
today or you withholding your comments
until what comes on your screen
tomorrow? Seeing none, I thank you for
the presentation. And Croy, I think
you're up next to uh talk to us about
the preserve fund
budget. Um, Chair Smith and Commission,
while Croy is um getting up there, I'd
like to have you turn your um budget
books to page B16.
You're presuming I brought my big thick
budget book with me. I'll borrow Vice
Chair Swikers to follow the discussion
and the rest of you will just have to
guess what we're looking at. Go ahead.
So B16 is the proposed budget for this
uh preserve fund which is the 02 the
1995.2
2 preserve tax and the 0.15
um preserve tax that was voted on in
2004. And um based on our budget for
2526, the
2195 tax sunsets. So there will be no um
collections from that tax in fiscal year
2526. and um the 0.15 tax that was voted
on in 2004. We anticipate 25 million for
next fiscal year and we anticipate as
you can see on that proposed budget. We
anticipate transferring it out for
capital improvements, which Croy will
speak to in a minute. And we also um
propose transferring out for debt
service for the purchase of preserved
land 26.4 million for the debt service.
So uh can you put to the next slide? So
at the end of this fiscal year, the
principal outstanding on that preserve
land debt is 149.4 4 million. And the
all the debt that's remaining there that
we won't be paying off next fiscal year
is um structured as a u make whole call
debt. Meaning that if we call the debt
early or if we try to pay the debt off
early, we still have to make the
investors whole. So we still have to pay
all the interest that's due through
2034. So the principal and interest
remaining that's due through 2034 is
164.3 million and the the earliest call
allowed on that debt in is fiscal year
2728. So our budget is put together
assuming that we will call this debt in
fiscal year
2728 to pay off the remaining principle
and interest that we owe owe based on
that makehole call and that's how we've
put this budget together.
Um, do you have any questions on the
revenues and the debt and how we've put
this budget together before I turn it
over to Croy to speak about the capital
improvement projects that's proposed in
this fund or this that's going to be
transferred out to capital for this
fund.
I have a couple of questions from
people, but while we're sitting and
looking at this slide, you've shown what
the principal outstanding is on the debt
at June 30. What is the your projection
of the available cash at June 30? At
June 30 of um this fiscal year, we
project 159.8 million in fund balance.
Do you have any idea what uh if that
fund balance did did nothing more than
just crank interest which it will um
earned interest income what would it be
at the comparable point in time when you
have displayed
164.3 I mean it's it's obviously 10
million greater than principal at the
end of the year by what you
said but the 149 grows to 164 what do
you think the cash on its own would grow
to in that same period of time.
I'm sorry, Mr. Chairman. Are you
speaking about what that cash would be
at the end of 26? Well, whatever relates
to your 1643.
You mean when we will have enough cash
for the 1643?
I think that's what I'm saying. If I if
the two beginning numbers are that I owe
149 and I've got cash in the bank of
159, I think you said
you have displayed what the 149 grows
to. What would the 159 grow to in that
same period of time?
Mr. Chairman, if you're trying to say
how soon we can pay off this
debt, if we don't h if if council
doesn't approve any of the capital
transfers that's being proposed in the
debt, then we will collect enough to
cover the debt next fiscal year.
However, we cannot call the debt until
fiscal year 2728.
I I do understand the call
provisions. I
I'm I think the public should
understand if we're going to talk about
principal outstanding, they should
understand as you've uh told us that at
the same moment in time that we have
principal outstanding of 149, we will
have cash in the bank of
159. And while the principal will
continue to acrue interest until it can
be either called or
matures, so will that
cash for two reasons. Number one, we'll
continue
to collect $25 million a year and
reduced by whatever we choose to
whatever the council chooses to spend.
But I think that's my only point. We
presently have 10 million or we will
have at June 30 $10 million more in cash
than is the principle outstanding on the
debt. Maybe it's as simple as
that. Uh Commissioner
Stevens, it now says Stevens, by the
way. Oh, it does. Okay. Thanks. Um just
you confused me just a touch when you
said you had to make them whole. That
inferred we had to keep it out to 2034,
but that's not the case. It has a call
provision, so you can call it early in a
couple years, right?
We can't call the debt till
2728, but we can put the funds in escrow
to defease the debt. So, you're doing
insubstance defeasance on it then? Yes.
Yes, we can do that. Okay. So, it's
going to stay out there till then and
then there's no reason to keep it open
even if you're any more money because
you'd have to rebate it back anyway.
That's that's correct. That's the
direction of council and that's the, you
know, approval. Okay. So the point is
you can't really call the debt. You just
do it in substance defeasence. That is
correct. Okay. Thanks,
Commissioner Newman.
I guess maybe I'm listening to this.
Maybe the question is in when you could
on the earliest call date, if you
collected no more money right now, on
the earliest call date, how much money
would be there?
Um, Commissioner Newman, based on our
budget, assuming that we are
transferring funds for capital that Croy
will present, um, based on the call
date, we will be able to we will still
have a remaining 29 million in the fund,
but based on if you go back to the page
16,
B16, based on this proposed budget, we
will end the five years with 2.8 million
left over in the fund. If we um pay off
the debt in
2728, if we fund the capital
improvements that's in proposed and if
we collect two more years of this 0.15
tax, we will have 2.8 million left over
in the fund at the end of the five-year
planning period that we have. But let's
say today we didn't collect any more
money. the money you have, what would
that be worth? What how much money would
you have when you could first call the
debt? I'm I'm I'm breaking this down.
So, forget about additional collections.
What would that the money you have
today? What would that be approximately
worth? If we didn't collect any more
money this fiscal year, we would have
159.8 million at the end of this fiscal
year. Okay. And then that would grow for
another couple of years at say 5%.
Yeah, that would be about four million a
year in interest. Okay. So, you're going
to have close to somewhere between 165
and 170 million by 2027 28 if you've
collected no more money and and invested
that with the interest rates that we
have. Correct. Correct. Okay. And now
now you add spent how much then you say
what else do you want to do in terms of
capital project and then you say how
much do you need to collect to do that.
Right. Which is how we've laid out this
budget exactly that way. Okay. We
anticipate paying off this debt in
2728 continuing to collect interest
earnings proposing the capital
improvements that Croy will talk about
and based on that we show that we
collect two more years of this. Now I
think the city attorney has an opinion
on or you know advice or whatever on the
um calling of this or suns setting of
this tax. I don't think it's uh you know
I don't think staff can't do that and I
don't I think council I don't know maybe
she needs to comment on
that. Um Chair Smith
I have looked at this issue legally. I
think that um is something that I would
provide to the city council and um
confidential uh executive session or
confidential legal advice memo. Um but I
do think um that the the board should
understand this may be something that um
in order to sunset would have to go to
the voters. But again, I would I will be
giving confidential advice to the city
council about that issue.
Thank you, Jerry.
Um, Commissioner, I'm sorry,
Commissioner Newman. Did
that exhaust your query? Yes. Thank you,
Commissioner Stevens.
Okay. Um, now that I understand that
these bonds are going to have to stay
out till maturity, do you have your
investments, because you almost have
enough to pay it off now, do you have
your investments laded based upon the
interest rate being out far enough so
that you won't get hurt if interest
rates fall in the next year or so? Um,
Commissioner Stevens, no. Our
investments are uh restricted by state
law and we cannot invest beyond five
years and we cannot invest in um
anything but fixed income investments.
So we're very limited in our ability to
invest these funds because they have to
comply with state law. So we we could
get hurt if rates fall, but there's
nothing you can do about it. That is
correct. So, we've got to hope that if
you do decide to defease it in 2728,
interest rates are adequate so that once
you buy the bonds that'll ladder with it
that it uh will be effective. Okay.
Thanks. Didn't know
that. Croy, did you have something to
say?
Good afternoon.
Thank you very much for your comments,
Croy.
Uh we can go to the next slide.
And this is uh the one slide of my
presentation uh speaking to the uh
capital projects that would apply to the
uh remaining preserve tax. Um as listed
here and I'll focus mostly on these in
uh yellow uh the top half uh so to speak
of this line which makes up the majority
of this number. you've already spoken
uh to the Rio Verdie Wildlife Crossing.
Uh and that's
um an item that I will not focus on
unless you have questions of me. Um but
the other projects are are listed as
trail head projects. Many of all of
those are existing. Uh and what we
really have are three different levels
that are occurring here. And all of the
improvements that are suggested here
were developed by working with our user
groups uh the uh equestrians, the
mountain bikers, the hikers, the rock
climbers uh and our existing trail
heads. So, back in
2022, we walked through all of the trail
heads with a group that ranged up to
about 35 people, including folks from
the McDall and Orange Conservancy, folks
from staff, and from all those different
user groups, and simply talked about our
trail heads because our trail heads have
been developed since the early 2000s up
until about 2020 or
2021. and our earlier trail heads which
tend to be the southern trail heads, the
sunrise trail head and um uh Lost Dog
Wash uh Gateway uh were developed uh
most of those were developed before 2010
and then our northern trail heads
developed after that for the next 10
years and we learned along the way and
added some amenities I'll call them uh
or how we uh included amenities to be
more effective effective and so our
older trail heads didn't necessarily
benefit from that learning curve. They
were the uh ones we learned from. Uh and
so the the older trail heads tend to
have a little bit more cost associated
with them. And so that would be the the
gateway, the lost dog wash, uh the
sunrise that are identified in those
projects. And it's a range of things of
providing uh small education
amphitheaters that have shade um that
we've done to the northern trail heads
were not done on the older trail heads.
And so uh we find uh folks being a bit
more uncomfortable uh in the uh spring
fall uh time frames when it's still a
little warm and the sun is pretty
intense. And so those were the types of
amenities we've looked at. Also, some of
our storage in the earlier trail heads
is not as adequate to the types of
things that our volunteers do uh to um
help people at trail heads, uh users at
the trail heads. So, those have been
included. Um a couple of these projects,
uh specifically
Frayfield and um Tom's Thumb are uh
completion items. uh substantially and
by that I mean when we built those trail
heads they did not have water or sewer
to them and we anticipated over time
that that would come that has happened
at Tom's thumb and we will be
anticipating we're working on a design
right now that will uh connect the water
and will modify a uh uh existing sewage
treatment system to a uh either a septic
or a pumped uh solution for sewage. Uh
Fray um yes, Frasefield will be similar,
but it currently does not have water to
it. Uh and so there will also be
completion work associated with those
two trail heads. And then the remaining
um trail heads, the northern trail
heads, uh tend to be some, excuse me,
some things that are uh cleaning up
where we've discovered some drainage
issues or we've discovered uh some of
our parking improvements may need uh
there there was some room for expansion.
And this really doesn't address
expansion. and it addresses kind of what
I'd call hardening uh the parking going
from a uh stabilized
uh material. Quite often it was
decomposed granite or gravel to more of
an asphalt uh solution uh is included in
those numbers. And then we have an item
of preserve safety uh fences, trails. Uh
and we do have some be that old mines in
the preserve that were done before our
acquisition. And there may be some
safety issues in closing up some of
those and some fencing uh around the
perimeters of the preserve, particularly
in areas where we have road frontages uh
or other situations that may simply be
uh three strand wire. And in many cases,
some of that wire is still uh barbed
wire. And the goal would be to replace
that with either smooth wire or to
replace it with a pipe rail fence detail
that we've used uh in other parts of the
preserve. Um that's really a summary of
these projects. Uh you can see the
overall total um at 65 million and these
are spread out over five years. Um and
obviously uh the wildlife crossing is
almost or a little more than half of
that. Uh and so certainly the discussion
about looking at a feasibility and other
things could lead to uh a a different
number down the road associated with
that. With that, I'm be happy to uh take
any questions that you might have. Uh
and that concludes our presentation on
the preserve project.
Thank you. Uh, Commissioner Sites,
thank you. It's kind of a simple
question. I hope you're showing 15
million here for proposed, but the book
is showing
11,500. Is something dropped from this
list in this book or the book doesn't
include something?
I just I was just looking.
Okay. Um, Commissioner sites
that includes the
carryovers. So there are there's some
carryover funds from fiscal year 2425
that if they didn't spend it, we would
add it to the 20 uh 526.
Thank you. I'm beginning to learn how
these reports report.
Um but I'm not quite there yet. But I
appreciate the answer. Thank you,
Commissioner Carla.
Yes. Um, when Croy was describing what
the trail head Working Group um, talked
about, and I was on that group about
updating and is simply updating the two
oldest trail heads, Lost Dog Wash and
Gateway. He was very careful to say that
it's small improvements. And so I'll say
what staff can't stay and address the
elephant in the room. This is not the
Desert Discovery Center. This is simply
adding more shade for users in a
reasonable amount and maybe a little bit
more seating for people attending
education events. That's it. Period. And
so I don't want anything to get blown
out of sorts across the community. This
is adding a little bit of shade and
maybe a little bit of seating. So for
the record, thank you.
Um let me remind Let me ask a question
here. Uh but you have some history.
Um Carla alluded to the desert discovery
center which was a project of uh
probably seven or eight years ago that
was proposed not necessarily in the
preserve but uh it was construed to be
so but that gave
rise to the voters in the city in
2018 passing
uh a measure which eventually was
incorporated in our city charter, our
constitution if you
will, making sure that there were
limitations on what we could do with
preserve funds.
And maybe they got a little overzealous
in their limitations, but what's written
into the charter is that um preserve
funds can only be
spent for the acquisition of preserved
land, the building of new
trails, or paying off
debt. Period.
Um, so I guess my question to you, Croy,
because since you work with these people
all the time,
um, how do you, uh, how do you and they
and everyone else think that we can fund
some of these projects given that severe
constraint that the voters imposed on us
in 2018?
Uh, Mr. Chairman, the uh the the second
tax which this is all funded from which
you've been talking about identified
improvements and thus the the trail
heads you you mentioned trails but the
trails and trail heads uh were included
in that and all of these are um still
fit within that category of improvements
and we have uh consistently reviewed
that to be sure that we are not uh
crossing any line over what the voters
approved um in those uh earlier votes,
but I'm really talking about a later
vote that muted the 2004 improvements
allowance and said more specifically
that preserve funds would only be
spent on preserved land, the building of
trails, and payment of debt. Uh the
2018 vote by voters
was to overrule the
2004 language in the sense that that was
so broad that it might allow somebody to
build what Carla referred to as the
Desert Discovery Center. It seems to me
that the governing language would be
what the voters clarified in 2018. And
maybe we're both out of our realm here
in trying to interpret legal documents.
Uh but it
uh have have you as a commission ever
considered the 2018 limitations to be a
limitation on your recommendations?
Uh the short answer uh Mr. Chairman
would be no, but I I will be happy to
defer to the city attorney as well. But
the as I recall and I don't have that
language in front of me right now, but
it also spoke to I think our master
plans and
you will soon have the language in front
of you. Yes. Uh and the approval of the
preserve commission and council on those
improvements and that if something were
beyond that then it would require an
approval of the voters is my
recollection of the past.
And so the language is in item 13, the
first paragraph 13. It's actually
section 8 or article 8, I'm sorry,
section 13. And it's the first
paragraph.
And again, I could defer to the city
attorney, but she'll tells me she'll
tell me she wants to go into executive
session, and and I I appreciate that.
Maybe it's just a question we bump up to
council, but do you want to chime in,
city attorney? Certainly. Uh, Mr. Chair,
I I do think that that section that
you're referring to, which um is in the
city charter, goes on in section B.
There there's section A, which you've um
correctly summarized, and then it goes
on to section B. The section does not
apply to funding improvements that
existed prior to the effective date of
this section or those authorized by
sections
12B1. That's the new trails approved by
the Metal Sonor and Preserve Commission
12P5. Uh that's expansion of trail head
parking facilities
um as depicted in the approved trail
head plan. and
12B6, which lists out a variety of uh
construction completing the little
granite,
um the phrase field, the primary
dynamite trail heads, and any necessary
trail connection as depicted in each
trail head approved plan prior to the
effective date of this section. So
there's there is um some more exceptions
to the primary paragraph that um that
you led with uh chair. I would have to
study this much more closely with the
preserve staff to form a legal opinion.
Um but I do I do know that they're very
acutely aware of this charter provision
and keep that in mind as they move
forward with their recommendations.
Hopefully. So, by the way, for the
record,
12B6, that is one of the
exceptions refers to something that
doesn't exist. There is no
12B6. Unless I'm reading a different
charter.
My charter has a 12B6.
Does it really? I got mine off of the
um off of the internet. 12B5 relates to
the completion of trail head parking
facilities and so on.
Croy is indicating that 12B6 isn't
terribly relevant to this discussion.
Well, it th those are all then referred
to as elements. Uh some of those were
yet to be built in uh a couple of those
were yet to be built in 2018 and have
since been built. And then all of these
that are listed on here would qualify
under the second element of item 13
because they were all they are all
existing or have been developed with
those funds. And so the second element
he's referring to, I believe, is
maintenance on existing trails and trail
heads that were completed or under
construction prior to the effective date
of these changes. So these would be
construed as
maintenance of trails.
The items on the screen would be a
maintenance of a trail.
That's correct. But that's also now
included under the um 490 just approved
that we will be uh addressing long-term
trail maintenance through that. Okay. So
that may be a funding source for them
rather than the preserve tax. I've
probably confused everybody enough at
this point that um it will be uh perhaps
a recommendation that we will send to
council that they clarify this uh and
perhaps change the charter language if
necessary. But however that's done.
Commissioner Newman, you have another
comment hopefully more clarifying than
mine. I don't know if I'll clarify
things, but I'll try.
Uh the question to council 126. You
mentioned that this pertained to
projects that were in progress or in
place. The changes were applied to that
before. Correct.
It refers to the plans and to the Okay.
So my so my question then is around the
Rio Verarity wildlife crossing. I tried
to find it in capital plans on the
website going back as far as far as it
would go which goes back to I believe
201617 time frame. So that would be
before this vote. My question would be
since it entered the capital plan for
the first time this year this proposed
this proposed plan would that project
then qualify under the language you just
outlined?
All right.
Um I h again I haven't studied this
issue but my understanding is um it
qualified as a new trail approved by the
Mcdow sonor and preserve commission.
So, the funds that we're referring to,
the the the funds that were um passed by
the voters in
2004, that has the restriction,
um does have an exception for new trails
approved by the McDow Sonorin Preserve
Commission, and it also has the
exception for maintenance on existing
trails and trail heads that were
completed or under under construction
prior to the effective date of this
section. And so I I believe that the
land bridge, for lack of a better word,
that we've been discussing, um,
qualifies as a new trail, at least the
way the McDow Sonorin Preserve
Commission considered it.
Okay.
I'm just I'm just confused as to why if
it's such a big line item and it's such
a clear um mandate, why it's never
showed up in any any documents
anywhere. I I don't understand that it's
it's because it's more than half the
budget you're proposing here, but yet I
can't find any evidence of it other than
the discussions we've had and this
discussion here.
the the specific reason that it has
shown up in this uh time frame. Um we
have had it as an identified um concept
project but had and had a conceptual set
of numbers over the years that evolved
up to where it's at today. Um but it was
a matter of identifying it for the
purposes of being able to have these
discussions. It was presented to uh the
commission over the years and their
formal recommendation uh first occurred
uh last May of 2024.
Okay. Thank you, Commissioner Carlin. In
reality, it all came down to
transportation. We were waiting for the
transportation department to get to
where they said we're ready to widen Rio
Verie to four lanes because it only
makes sense to do the two together.
Well, after 20 years, we got tired of
waiting. The deer aren't traveling the
same way anymore. And that's why it came
in now because Commissioner Newman is
correct. It wasn't put in the budget
before. And the reason is we were
waiting on transportation.
Commissioner Newman, do you have a new
thought? I'm I'm not sure what we're
waiting on. There's 5 to 10,000 cars a
day. It doesn't justify any widening
even now after the development. So, I'm
not sure I'm not sure where that was.
So, I I question that and I hope the
feasibility study will answer exactly
when that road will be widened and uh
and clarify this all for us because I'm
completely confused at this point. Well,
I I agree with your hope a thousand%.
Thank you, Croy. Thank you for your
endurance. We are now going to look at
the um tourism fund and I think Rachel
Smatana is going to walk us through the
tourism fund budget.
Mr. Mr. Chairman, members of the
commission, I'll be presenting some of
the budgetary information of the tourism
development fund um before handing it
off to Rachel to discuss some of the
more programmatic um aspects of the
fund. For those that may wish to see the
fund in the proposed budget, it's it can
be found on page
B26. Could we go to the next slide,
please? This slide has some background
information on the fund itself. Back in
2010, voters approved Proposition 200,
which increased the bed tax from 3% to
5% and designated 50% of that revenue
for what's called destination marketing
and 50% for tourism related event
support, research, capital projects, and
other eligible
uses. Moving on,
um this next
slide will show the funds revenue
sources. Once again, we have three
columns. We have the actual 2023 24, the
forecast 202425, and the proposed
2526. You'll see that the vast majority
of the fund's revenue comes from the
transient occup occupancy tax or the bed
tax. Um, we're projecting this to de
decrease slightly in
FY2526 based on the trends that we've
been seeing in the current fiscal year.
It's not on this slide, but you'll
notice that in the fund's five-year plan
that we project that this uh this
revenue source, the bed tax will start
to pick up again starting in 2627 and
into the outy years. The property rental
line, this is the Fairmont Scottsdale
Princess hotel lease. Interest earnings,
they fluctuate over time based on fund
balance and the interest rate
environment. The transfers in CIP line
shows any remaining funds from completed
capital projects that were returned to
the fund.
Um, in last year's adopted budget, we
projected 35.5 million in total revenue
to the fund. I'm sorry. Yes, that's
correct. In last year's adopted budget,
we projected 35.5 million this year to
the fund. Our most recent forecast, as
you can see on this slide, has the fund
at almost 38.8 million total. So, we're
about 3.3 million ahead of the original
projections in the adopted budget. The
change can be attributed to bed tax
coming in higher than originally
forecast in the adopted budget by about
2.3 million. and the one million that
you see in the cap transfers in capital
improvement plan line item. Can we go to
the next
slide? This slide shows the distribution
of bed tax funding. 50% of the bed tax
funding goes to destination marketing as
I mentioned. Now 45% of that goes to the
experience Scottsdale campaign and 5%
goes to city destination marketing. And
then moving down to number two. By the
way, this is a slide that was presented
in a previous BRC um meeting. 12% goes
to the general fund, 9% to tourism
events, and 4% goes to tourism admin and
research. The remaining 25% and any
remaining funds can go to other tourism
related projects and activities. I just
call your attention to the little arrow
off to the right, which is that any CIP
projects that utilize tourism uh funds
are reviewed and approved by the tourism
development commission and by city
council. Can we go to the
next? This is a breakout of fund
expenditures over the three-year period.
Actual 2324, forecast 2425, and then the
proposed budget
2526. Um, we have these broken out into
destination marketing in your book on
page B27, and non- destination marketing
on page B28. if interested. One thing
I'd call your attention to is the
transfers outline which includes
transfers out for the CIP debt service
on MPC bonds and operating transfers
out. So with that, um, I'll hand off to
my colleague Rachel Smith to speak in a
bit more detail about the programmatic
uses of the tourism development fund.
Thank you, Scott. Hello, Chair Smith and
Commission. It's a pleasure to be here
before you. I have attended all your
meetings but Monday and I listened to
Monday last night and I have really
learned a lot from your deliberations
and your questions and staff's answers.
Um I said this to Chair Smith recently
in person and he called me a a kiss up.
Uh but I am sincere and I think whatever
we're paying you, we should probably
double
it. So I am Rachel Smutana. I am the
tourism and events director. I have been
in my position uh this week. I'm
starting my eighth month. So, I went
from I've been with the city for a
while. I came from overseeing a very
small
um operating budget
to now be the steward of the tourism
development fund which as Scott
mentioned is forecasted to be $33
million and is governed by the voters
and ordinance and financial policy. So,
I've spent the last few months really
trying to get a wholesome understanding
of this, how it's worked in the past, um
the decision making behind some of the
expenditures in the past, if I could get
that uh reading council reports and uh
so for
2526 what we're proposing
uh came together in December and even
since that time I have had new
leadership. Judy Doyle is now the um
senior director of enterprise operations
and she is new to the position since
February and um obviously the city
manager is new when he was in his last
role as assistant city manager. Tourism
wasn't part of his portfolio. So he is
bringing all sorts of new ideas and
direction as well. So the December
budget uh is what you'll see, but we are
anticipating just a few changes and look
forward to hearing your recommendations
and input so that we can be even better
stewards of the public trust. All right,
destination marketing. So the voters
said that we will increase this tax, but
you must use 50% for destination
marketing and the other 50% can support
tourism in other ways. So, since 1977,
the city of Scottsdale has employed um
someone to help with destination
marketing. In 1987, the Chamber of
Commerce had a tourism arm doing
business as the Convention and Visitors
Bureau. Eventually, that
operation grew out of the um Chamber of
Commerce and became its own uh its own
organization
and I'm not sure it wasn't that long
ago, maybe it was less than a decade
ago, they changed uh and rebranded to
Experience Scottsdale. So, we have a
contract with them right now that we
renegotiated in FY for
FY223. Um, that contract will expire in
2627 and has an option for a 5-year
renewal.
Um during those contract negotiations it
was decided that previously previous to
that we gave the entire 50% to
destination uh to experience Scottsdale
for their destination marketing work but
in 22 23 um the city council voted
through that contract to for the city to
keep 5% of that for our own destination
marketing um work. And so as you can see
here uh we do an analysis of experience
Scottsdale's work um their
advertising the investment in their
advertising and it is estimated by a
third party that we are receiving $116
in spending for every dollar in
advertising they create. So um
Commissioner Stevens had asked about the
contract
Um, and some questions. So, I printed
you and I apologize for the way it's
printed. It's It's printed this way. If
anybody wants a different copy or a
link, we've got it online. But this is
what Experience Scottsdale submits to us
every year. They've got a master
contract with us. And then every year we
bring forward a financial participation
agreement. In addition to that, that
financial participation agreement uh
includes their business plan, their
annual business plan. And towards the
back of this business plan, you will see
some detail around what they're planning
on doing this fiscal year, as well as
performance standards that we hold them
to. So, that's a piece. We also receive
quarterly reporting from them. And I
gave uh you a copy of this. This is just
one month of
Q2 that they gave us. In addition to
that, they also um detail by month the
other deliverables that are in their
contract. So, uh they also
uh present here at city council. Um our
city manager is on their board. Uh we
have
councilwoman Whitehead right now is also
on their board. every every year a city
council member is part of their board.
So, all of this to say, there's a lot of
oversight. It looks like a lot. It's
$14.8 million. Uh but we believe that
we've got a lot of checks and balances
in place to make sure that we're getting
our money's worth. And it's also
evidenced by the tax receipts that we
are seeing. Um, experience Scottsdale is
bringing folks here and the city's job
is to make sure that when they're here,
they're having fun. It is safe and they
want they have enough things to do so
they want to come
back. Any questions on the destination
market? Oh, so the city is 5% of the
destination marketing piece. We're new
to destination marketing. Uh, we haven't
done this prior to 2223. So since 22 23
we have used that 5% allocation to
market Oldtown Scottsdale as a
destination to help with West um
position Westworld as a destination for
events that bring tourists. Scottsdale
Stadium also has used some of that money
as well as our economic development
team. Um they have a campaign called
Choose Scottsdale. So they do some
out-ofmarket advertising and they also
do we help with some of their uh
business attraction efforts as well
through that 5%. The majority of it the
lion share of that 5% uh previously has
been used to promote Oldtown Scottsdale
as a destination. Um this year we
proposed in December to we had some
ideas that we thought would really boost
um our destination marketing program in
some different areas. So we brought that
forward to the tourism development
commission. We submitted as part of the
budget. Uh but since then as I mentioned
I have a new boss and she has a new boss
and he has uh four new bosses and um a
whole different point of view. So things
have changed. So what our city manager
has asked that I do uh with the help of
Judy Doyle is to reook at how we're
spending that 5% of the city's piece of
it and be very intentional that we're
doing that we're using that money to
support the existing businesses in
Oldtown Scottsdale and to really start
being forward thinking and and slightly
more intentional. just we're right now
we're spending that money in Oldtown to
market
Oldtown as a whole, but it's got all
these great parts that we could be more
specific about. It's got museums and 55
plus art galleries and things like that.
So you will see that there is an
increase there is a request
for funding over uh forecasted sources
in that 5% piece. Right now we're going
to go and do uh you starting next month
we're going to ask the community do a
public outreach process ask the
community really do some focus groups
and come back with a strategy. Also,
Westworld is going through a strategic
planning process. So, we think that we
even though it's in the budget as it is,
we likely won't spend the entire budget
request this year and and hope to have
something more specific and more
intentional going forward for use of
that 5% for destination
marketing. Sound good? All right. So,
you can't have a wonderful fun
destination without wonderful fun
events. And so, we spend 9% of our
budget on event retention and
development. Um, the tour to Scottsdale
I I noticed is actually this is it's in
the wrong place. We actually use some of
our strategic planning money to support
that event. Um, how we support that
event in particular, it's
$200,000. A lot of that goes to, you'll
recall, um, at your last meeting, Chief
Leuk talked about recouping the costs
from special event producers. Um, we are
paying his public safety costs. Tour to
Scottsdale is a 60-mile bike ride, bike
race around North Scottsdale. So, it
it's imperative that we keep those
bicyclist safe. Um, so we whatever's
left over after we pay those public
safety costs go for other operations
around tour to Scottsdale, which
benefits the McDow and Preserve and is
sponsored also by Honor Health. It's a
great event. Um, the Fiestable
Agreement, this is the last year of a
20-year agreement with the Fiestable. We
have previously for the last 20 years we
have contributed over
$200,000 to the agreement. Um this was
something when the Fiesta Bowl was
leaving Tempe and going to Glendale.
Rachel Sako from Experience Scottsdale
actually was able to negotiate uh with
the city and
the Fiesta Planning Committee to have an
exclusive agreement here in Scottsdale.
So for the last 20 years, even though
the event has been in Glendale, uh we
have had a commitment from the festival
to house teams here, they've got
guaranteed room nights. This year, the
Experience Scotsdale thought that they
would
have 2,700 room nights and they actually
ended up with over 3,000 that were
related to the Fiesta Bowl. So that has
been a wonderful economic driver in what
typically has been a slower season um
around the holidays for tourism. Um the
nature I don't know much about college
football but the nature of it is
changing away from the bowl type
um the bowl type structure to more of a
a tournament. So,
we anticipate that the impacts from
college football around the bowl season,
the typical bowl season and time will
change. If there if it is a tournament,
uh, and teams are moving locations,
they're not likely to bring their band
um, which is, you know, we get the
bands, the fans, the alumni, the
parents, and all that when it's a bowl
and when it's one game. But if it's
multiple games potentially, then we
anticipate seeing less of a tourism
impact there and the teams probably
won't bring everyone um to every
destination. So, we're
rethinking what we want to do now that
that agreement is ending naturally, how
we want to invest in sports, what makes
sense um in that regard. So, that's
something that will be a conversation
this year with the city manager as well.
We also fund external events through a
funding program. Um these go through the
tourism development commission and then
the new event funding program uh will
also go to city council. The others are
smaller expenditures. So the budget
naturally gives the authority to enter
into agreements as long as the TDC
um concurs as far as community events
go. We also have an event venue funding
program. So, we get a lot of competitive
youth and adult and professional leagues
that want to play here in our in our
best seasons at the Scottsdale Sports
Complex or other places. So, if someone
brings a tournament and they can
guarantee us a number of room nights, we
will offset that. Um, because it's not
just the room nights, obviously, these
families are in our restaurants and in
our shops and all that. It's a great
tourism benefit. So, we will help
uh attract the tournament here by
supporting uh the fees that they are
charged by the venues mostly through our
own parks and recck department. And arts
and culture was something that my
predecessor put together wanted to be
more intentional about attracting events
that celebrated Scottsdale's brand as an
arts and culture destination. So, Dios
de los Muertos for example, uh, Arizona
Music Fest, we want to retain our
reputation as a high-end arts and
culture community. So, that is set aside
there. Again, the TDC oversees all of
that. Um, if it's a new event, we want
to support events that could
potentially grow into real tourism
drivers like our main ones, uh, Barrett
Jackson Arabian, um, Bike Week. It's
actually a great example as well. So, we
do have a new event
um, funding for up to
$75,000. And we need a guarantee that
you're going to attract so many folks.
It has to be a multi-day event. it o we
only allow you to apply for that funding
in the first three years of the event
and then if the TDC does believe in that
particular event um we will bring that
to council to make sure that they
concur. We also produce internal events
ourself. Uh we Scott Dazzle is headed
into its 10th year so there is no reason
to go back east. Uh and a white
Christmas means nothing when you're
having this much fun in December in
Scottsdale. So, my team
uh me and actually four folks put
together an event season last December
that consisted of 45 events in Oldtown
Scottsdale with the help of some
merchants and and some community
partners. So, we've seen uh I the hotel
um the hotel receipts we saw for
December are actually 45% year-over-year
from the year before. And I want to take
credit for it for Scott Dazzle, but it
was probably the Fiesta Bowl or the Rape
Bowl or something like that. And then
also Western Week, we have to support
our Western heritage. This is part of
what makes Scottsdale special. We uh we
helped to produce the Proadel Soul. Um
we had the Pony Express back this year
for the 67th time. And then we want to
build a week of programming so that um
Scottsdale is known as a a western a
southwestern western destination. That
is really important. We do some other
smaller internal events as well. But uh
no matter if you're here for a business
conference, we want you to feel
compelled to stay through the weekend or
a whole other week. We want to have an
active and fun destination. Even if
you're here visiting Grandma Ruth, we
want you to uh have so much fun that you
want to come back and visit her again
next year. So, we pay a lot of attention
and put a lot of energy into our event
retention both internally and through
our external
partners. Administration and research.
Uh this is a 4% bucket. It's pretty
self-explanatory. You'll see the other
contractual is
334,000. That is a big jump. that is,
you know, it's 4% of the forecasted. We
do a lot of tourism research out of this
and I anticipate that over the next
fiscal year, some of that other
contractual will need to be resp-spread
into the tourism research piece. Uh Judy
wants to do some research uh around
current economic impact of spring
training. We are looking, we are in
phase one of a feasibility study um for
a potential event venue and phase two if
council likes it uh will be will come
out of the tourism research piece. And I
also want to better understand those
youth, you know, those league
um that we support with our event
funding, those competitive league
um groups that we see from around the
country that want to come here. whe they
play lacrosse, soccer, baseball. I want
to understand better the economic impact
of that and and understand if that's
something that we should put more time
and attention to. But um other than that
general administration, it's how we run
our office and a little bit of training
dollars. The personnel services we took
um so in
2324 I my position was funded at the
general fund. Before I got to this
position, uh my salary was moved into
the tourism development fund. And then
you'll see it decreases again for next
year. That's because we took a position
that is dedicated to marketing Oldtown
and put that that position into the 5%
destination marketing piece, if that
makes sense. I find this very
interesting. I hope you all do, too. So,
thank you for having me. All right.
Other commitments. This is the last 25%.
So, we support Museum of the West with
$250,000 in operating costs.
Additionally, we will match them up to
$400,000 in additional dollars uh a
matching um a matching fund for private
donations that they receive. And this
year, on top of that, the Museum of the
West is expanding uh which is very
exciting. they are in the middle of that
and the city council, the last city
council
um approved putting in this year's
budget for this year's city
council's deliberations and potential
approval $600,000 this year and $600,000
next year to support a
um a refresh of revitalization of their
existing. So, they have paid for their
expansion with private dollars, but the
10-year-old museum needs some love and
some work. And so, the idea is to spend
$600,000 this year and $600,000 next
year
um working on the original museum to
make sure that those two are uh to make
sure the quality of those two go well
together. We also do seasonal
entertainment. So, we want when people
are here, we want them to We've done
ropers, Native American dancers, all
sorts of fun stuff during our high
season. We had mariachis at the gold
pallet art walk, things like that. Event
related rentals I think is only $75,000,
but we do we have seen an increase uh in
that piece as well. There are other
parts of the 25%. Those were just kind
of the bigger dollar items. If you have
any questions, I brought this much
information hoping for your excellent
questions. So, uh, please let me know.
But, and then finally, we have our
transfers out. Um, part of these
transfers out are in that 25% uh, other
commitments bucket. This pays for debt
service on the tournament pay players
club, uh, the Westworld Tony Nelson
Equestrian Center, um, the stadium. Um,
I think one other project at
Westworld and what am I missing? It's in
my
note.
See? Oh, and the 80
acres. Um, and the Museum of the West,
of course. So, that that's ongoing debt
service that we um pay out of the
tourism fund. We do an operating
transfer out. It's $1.5 million. Um
$500,000 of that this year is going to
Westworld to support their operations.
That's the biggest portion of that. And
then we also just have two CIP projects
this year. I will say that the Prop 490
has taken some pressure off of the
tourism development fund, which is very
nice. Uh we previously we had park
rangers and uh all sorts of stuff that
now
is being assumed elsewhere which is
which is great and and great for the
house of the fund. And then the last
piece is we do an automatic 12% transfer
to the general fund this year. It's just
under four proposed um to be just under
$4 million. That is not earmarked. that
is really just those um costs that you
get when you have tens of thousands or
millions of visitors every year. Um Judy
Doyle at one point had done an analysis
of the costs around just uh the public
safety piece in Oldtown and the Oldtown
maintenance and um adjusting to today's
dollars. I think it's 13 million just
for that piece. So obviously tourism has
an impact on our general fund. This is
to help support that. We did a study in
2023 and for every dollar we spend uh on
tourists, we receive a
$1.44 in tax receipts. So, it's all
worth it in my mind. And that is our
2025 budget. I am I believe that is my
Yeah. Happy to take any questions. I
hope you have some good ones like you
did for everybody else.
Thank you, Rachel. Um, we admire your
enthusiasm and hope you can maintain
that.
Uh, as an observation for the public at
large, this is one of the largest input
budget revenue items that we have in the
city and it is dedicated for the uses of
promoting tourism as
described.
Um,
and I've said and many others have said,
you know, I've just observed that's our
largest industry here in town and it
needs to be funded. It needs to be
nurtured and and certainly not u abused
in any way. So that's been the root
reason behind many of the questions that
we've had for others. I'm going to defer
to a couple of other commissioners
first. Commissioner Stevens.
Uh yeah, you know, I got to tell you,
it's pretty tough uh coming in and
trying to without getting into the
details, it's really hard to get our
arms around this. So maybe next year
someone can dig into this a little bit
more, but it's just too hard to figure
out what's going on here. I will uh the
only observation I'll make is experience
Scottsdale appears to be a not for
profit that has uh some board members.
Uh, I'm curious about how big a part we
are of them, if anyone knows, because I
did notice that we have two board of
directors members and none of the other
30 board members have representation
other than one people. So, I'm assuming
we're pretty big and if we're a big
piece of them, it just might bring some
other questions into someone's mind
about are we getting our fair share? Are
we getting the right input? And what are
they really doing? But I will not be
part of this in the in the future
because this is so far out of my
competency as far as knowing marketing.
I just point out that we are have a lot
of money going to a separate entity that
is serving a whole bunch of other
people. So my only question would be are
we getting our fair share and are they
paying attention to us? So there isn't a
question in there other than if anyone
knows ballpark are we 20% of their
revenue? Are we half? Are we 5%? 70%.
We're 70%. So we're really they should
be taking care of us then. Yes. And 70%.
Yes. And I I do uh commissioner, thank
you, chair and commissioner. I I do hope
that you will hear more on tourism and
the tourism development fund in the
future. I know that this was a very
compressed time frame. Um I really
dedicated myself to this and it took me
a long time to understand this and I
probably still didn't explain it to you
very well, but experience Scottsdale 70%
of their budget comes from city of
Scottsdale bed tax. 13% comes from the
state of Arizona Prop 302, 11% from the
town of Paradise Valley, and 6% from the
private sector.
Okay. Interesting.
Commissioner Newman.
Yes. Thank you. And I I uh I appreciate
your passion as a fellow marketer. So,
um question I I hear and see and I
haven't had a chance to look at the
report in detail, but I thumb through it
real quick.
I hear and see the focus on retail
tourism. Okay. And I think you did a
nice job with that and all the tactics
go with that in terms of awareness and
getting that out there various cities
around the country to draw people here
from a retail standpoint. Okay. Where in
your plans is there the attraction of
the business convention, the moderate
size business convention? I've done a
lot of pharmaceutical um conventions,
business conventions. Uh ASU is a
robotic center of excellence. Where are
those conventions? because the business
people are also kind of subsidized
because they're here for some work, but
they're subsidized to stay and do all
the other things. So, Scottsdale fits a
need in terms of you want to have a a
great venue to go to. So, then they
might bring their family and they'll do
other things while they're here. Uh it's
not just a business event like some
other cities in the winter. My company
always wanted to have it in Chicago in
the winter. So, it was really cheap and
so but nobody wanted to go there and
nobody would bring their family and
there was no additional tourism dollars.
So there's a great opportunity here from
a business standpoint, but I don't
really see that. And maybe it's there
and I just haven't haven't gone through
it yet, but I would like to understand
that. So, uh, so I am the contract
administrator for Experience Godsdale.
What I gave you is their strategic
business plan for Experience Scottsdale,
the nonprofit that Commissioner Stevens
mentioned. I do know however that 50% of
the bookings experience Scottsdale
um spir in 2324 which is the last time
we have whole numbers 50% of the
bookings were meetings and conventions
we have an issue sometimes with size of
venue. Um the strategic plan that we're
in year two of talks about the need for
um venues of of different size but a
large percentage of what we are bringing
our meetings and then what I hope to do
through marketing oldtown through events
through supporting wonderful uh venues
McCormix and Railroad Park is that we'll
get that stay lift from that from that
meeting visitor. So just going forward,
I think what would be helpful, and this
is just a suggestion, but um to reach
out to maybe those meeting planners and
and target a a moderate sized convention
that fits the venue that you have here
and track those in. It's and I would
expect to see in the budget going
forward, like some travel dollars,
things like that to go out and do
outreach to the meeting planners, the
event planners, the people who influence
where to take your event. And so just a
just a thought there. That's a great
happy to talk offline about that.
Commissioner Smith, I mean Chair Smith
and Commissioner Newman. That's a great
thought and that is exactly what we pay
experience Scott. They do fam tours.
They uh do a lot of outreach with site
selectors for those sorts of meetings.
They do um trade shows, travel trade
shows. They um they will set up, for
example, I think last winter they set up
a giant sun globe in Chicago in the
winter and you could go inside and it
smelled like creasso and they had
prickly pear tea. like it was a whole
experience. They've wrapped the inside
of uh subway stations before. So, you
walk out, you know, it's dreary New York
winter. You walk out and it's all just,
you know, beauty shots of Scottsdale
everywhere. You know, go to Scottsdale,
go to Scottsdale. So, that is where our
$14.8 million dollars go is for them to
bring the tourists here. And then, uh my
piece is to make sure they're doing
their job, they're meeting their
metrics, to make sure um the metrics
make sense for what we want and then
also, you know, to work with my
colleagues to make sure that Scottsdale
is the the best destination that they
all go home and rave about and come back
to often. Great. Thank you.
Uh adding to that, Commissioner Newman
and others, I think if you read through
the annual report that uh Rachel shared
with us for whatever year that was, um
there's a robust discussion of what uh
experience Scottdale is returning to the
city in terms of um services. And it's
not just our city. They're also
partnered with
uh Paradise Valley and maybe
Commissioner Swiker will talk to that in
a moment. But um the other thing that
they do, they have a fairly robust set
of metrics that they respond to, I
guess, is it quarterly or semianually?
And quarterly and annually, Chair Smith.
Yes. To the u to the council. Uh, so
there's a a great deal of oversight and
a great deal of uh um I'm sure
satisfaction with what they're doing in
terms of making Scottsdale honestly a
tourism destination.
Um, while I have the microphone here, I
I I know that you have talked some about
the 5% piece that of the destination
marketing that we keep here locally uh
for
execution. And I know that I'm
um we stumbled a bit for the first
couple of years that we had this uh when
I say stumbled, I mean the first year we
couldn't figure out what to do with it,
so we didn't spend any of it, I think.
Um and then the second year we um
directed some to underwriting the final
four over in Glendale, which really
doesn't address the kind of local
destination marketing that we need to be
doing. So I applaud you, Rachel, and um
and Judy and others who are involved in
this
in honestly now trying to focus on
making this piece work for us locally.
and we're a little bit in unchartered
waters, but um I I think eventually this
expenditure will pay huge dividends in
terms of
um promoting our local um particularly
downtown
area. Um I'm going to turn it over to uh
Vice Chair Swiker.
Yeah, you know, I I have a lot of
experience with this because I was the
town of Paradise Valley representative
on the CVB board for 10 years and then I
think I was just a general
representative for like 11 years after
that. So long history with that. Um, a
lot of the value that we can learn about
this will come not so much for this
budget, but as we look for the future
and as we meet in the fall and
everything, I would suggest that we have
Rachel Sacko come and make a
presentation. You know, in PV, we looked
at this very carefully and and we
returned uh $7 for every $1 we spent on
the
CVB and the um the hotels that they
would bring people to were all in either
Scottsdale or Paradise Valley. Now, now
the um Salt River Puma Indian Community
is kind of a partner and so some of that
goes over there, but for the most part,
Rachel brings people and they do a very
extensive work with meetings and event
planners. So, you know, that that is one
of their focuses on bringing people in.
Um, but I would just suggest that in for
a future topic that we have Rachel Sacko
in to really explain the whole
organization because I have to tell you
it's amazing Scottsdale has kept her for
all of these years because she's been
recruited by every
um CVB kind of organization in the
entire country and she's so dedicated to
Scottsdale and she's got the metrics to
show that it's a good investment. So,
um, I'm a strong endorser of that and I
look forward to learning more and
sharing all that with the rest of the
people when we can get Rachel on the
agenda.
She didn't even pay you to say that. No.
Amazing.
I think it's it's true the organization
has been a partner with Scottsdale for
many many years and we tend to think of
it as uh Rachel Sak Rachel Sacko and
experienced Scottsdale but there's a
whole team of people uh executing that
contract on our behalf and uh from all
appearances doing a great
job. Again, it's our most important
industry. I applaud you for u being the
gatekeeper on this money and making sure
that every dollar is spent to promote
tourism and have we have no other
questions. I mean I I'm sorry to
disappoint you but uh you must sit down
now.
Thank you.
The next
um the next area we're going to look at
is the library and human services
department operating budget and Kira
Peters is here to tell us all about
that.
Good afternoon uh Chair Smith, members
of the commission. Again, my name is
Kira Peters. I'm the senior director
over library and human services. So, I
am happy to be here this afternoon to
share the operating budget for this
department as well as take a little
deeper dive into the housing and
community assistance office which is
federally funded because I know that's
been a little bit of a topic of
interest. Before I jump into the
presentation, I wanted to make sure
everybody knew what library and human
services is composed of. Obviously in
the title the libraries we have got four
public library branches all amazing from
civic center to Mustang to Arabian to
Appaloosa Library. The human services
division is made up of two robust senior
centers Pyute neighborhood center social
service hub Vistad del Camino. We've got
youth and family services um and the
housing and community assistance office.
So, this is a department that really is
forward- facing and in service to the
community. Similar to the other
presenters, I'm going to be um reviewing
the full-time equivalents, budget
breakdowns, information on federal
programs, key cost drivers, vacancies,
operating metrics, and the 2526 budget
requests for the library and human
services department. um which will
include additional FTE request and new
initiatives. So here is a slide of our
FTEES and a visual breakdown of the
employees that are at each of the areas
within the department. Um libraries and
human services has an operating budget
of 33.7 million. So 15.3 million of that
is FTEES. It's the personnel. And
Commissioner Stevens, thank you for the
advanced question. I know in the budget
book um you had a question about the
decrease in FTEES and so I did a little
bit of research on that and Rachel
mentioned the
reorganization. Um formerly we had
community services and there was an
administration budget for the community
services division of which we had
several employees uh community services
IT staff. We had marketing marketing
staff in there when we did the
reorganization. That is evidence. This
was kind of the um the landing of where
though they wanted to show where those
came out of. So it it shows that
decrease of 16 I think.7. That's really
because that's where those community
services staff were before the
reorganization. So that kind of shows
there those ones went out.
Don't know if I'm articulating that
super well, but it's almost like my
department was the one where they showed
those coming out of, but really it was
the community services and again IT
staff moved out and uh the marketing
team moved out. Hopefully that answers.
Happy to dive in further to that if need
be. So again, these are the staffs and
some of the things I wanted to focus on.
While libraries and human services is
not a large revenue generator, the ROI
is really in the people that we serve.
So, a lot of the slides and things that
I'm going to talk about, I'm really
going to show the numbers associated
with the Scottsdale residents that we
serve as a result of our programs. So,
this these are the teams that provide
literacy, access to information, social
services to people in need, and a lot
more.
I'll pause on this slide for a second.
This is our library and human services
proposed budget um fiscal year 2526. You
can see visually the breakdown of the
personnel services which I just talked
about 15.3 million capital outlays is uh
less than 1% there. Commodities 1.4 4
contractual services
16.9. Um thought there might be some
interest in what those contractual
services are. So some of those higher
dollar contracts are with our housing
assistant payments. So I'm going to talk
later in my presentation about the
housing choice voucher program, formerly
known as section 8, and the rental
subsidies that go out. That's a big
piece of the contracts there of the um
contractual services. That's also where
we have a lot of our grants and
subsidies. We have got um contracts for
the library system are housed
there and also some of the larger
rehabilitation projects that are housed
in the housing and community assistance
office. Those were some of the higher
dollar contracts that make up that
number. Housing and community assistance
office
This is the area of library and human
services that focuses on managing the
federal funds that come in. And I spent
a lot of time um preparing for this to
try to explain how these programs work.
And in the audience is our housing and
community assistance officer manager,
which is Mary Wikovsky. She is very
versed in this, closer to the work than
I am. if there are specific questions I
know she'll be happy to come out and
help answer. Um, so I'm going to spend a
little bit of time on this and before I
jump into it, the way that I think about
it is these are all the federal
programs. I think of HUD as the
umbrella. So the federal department
housing and urban development HUD
provides funding out to um different
cities. The city of Scottsdale's housing
and community assistance office
administers those funds. So that's the
big umbrella. Under that umbrella, there
are several programs that this office
administers. And the first program is
the housing choice voucher program.
Again, that's formally section 8. And
the housing choice housing choice
voucher program um is funded through the
US Department of Housing and Urban
Development. The program provides
affordable and safe housing
opportunities for lowerincome families,
senior citizens, and persons with
disabilities. The Scottsdale Housing
Agencies, sometime we refer to that as
SHA, subsidizes the rent of eligible
families by paying a rental subsidy
directly to the landlord each month
under a housing assistance payment,
otherwise known as HAP. So that is the
HCV portion of the housing and community
assistance office. The second piece of
that or the second bucket is called the
home program and that stands for the
home investment partnership program and
the following activities are funded via
the
home. The home piece of it also focuses
on affordable housing initiatives. So,
some of the programs that we've run out
of this, and I don't want to get too in
the details unless you're curious about
it, but we offer a tenant b tenantbased
rental assistance program for seniors
that work with case workers at the
senior centers. So, if they need a
little bit of help with rent, they can
be involved in the tenantbased rental
assistance program. And again, that's a
rental subsidy that helps Scottsdale
residents who are 62 and older are 30%
below the area median income and are 50%
or more costburdened by housing costs.
So that's the tenant b tenant-based
rental assistance. Um and then in the
future under this home program, we want
to also explore helping um children that
qualify for McKenna Vento. So that is
kids that are homeless and using some of
these funds to identify families that
could help with some subsidies in that
area. So that is the part of HUD that
helps people with affordable housing. I
call that the first bucket. The second
bucket, we use those federal funds to do
maintenance. So to maintain lowincome or
certain areas, CDBG funds, that's what
these are. and those provide a broader
broader community development and
funding around those. So some examples
of CDBG community development block
grant are housing rehabilitation
programs, roof repair replacement and an
emergency repair program. So those are
some of the things high level probably
the bigger ones within housing and
community assistance that are supported
via the federal dollars that the housing
office here in Scottsdale manages. And
those are some of the bigger ticket
items. One of my future slides is going
to have a breakdown of our funding
sources and you will see many of those
fall within this category. So I want to
just preface that slide with just this
general information about the housing
and community assistance
office. We also um we are home to
Operation Fix It. So if you're a
longtime Scottsdale resident, you might
have seen the Operation Fix It trailer
out. That is a program that will go out
and help eligible Scottsdale residents
in need. if they need a little bit of
help with landscaping to meet code
enforcement. That program is funded via
the general fund. And then we are also
um the agency that manages um local
funding and handing some funds out to
local nonprofits that complements the
work of human services in our community.
So that's just a general overview to
hopefully warm you up um with all of the
housing and community assistance office
federally funded programs. Recently,
Mary and I do get a lot of questions
with things happening at the national
level with HUD and things with federal
funding, what the status is and what
impacts might be. Right now, the federal
government is operating under a
continuing resolution. So, funds are
going through at least September of
2025. We know there's still some unknown
beyond that, but right now it has been
business as usual and we are um we are
still we are doing business under that
continuing resolution.
This is the slide that I talked about
and wanted to warm you up for. I'll give
you a little bit of time to digest
it. What I wanted to do in this slide
was really just show the different
divisions within the department. So
you'll see there are the admin admin
cost. You'll see the column for housing.
You'll see the column for human
services. You'll see the column for
library. Those are the divisions within
this department. And then what we did
was we broke it out so you could see
what was paid, what we budget for in the
general fund, what we're using, what we
budget for CDBG, a CDBG loan, which is a
different program. We have got some
properties, some affordable properties
at
Belleview. We've got the home program. I
just talked about that in the earlier
slide. Grants, HCV, which again, housing
choice voucher, special revenue, and
then the opioid funds. And I've got a
little bit of information on opioid
settlement funds as well. Um so for
those who don't know, the pharmaceutical
industry is being held accountable for
its role in perpetuating the opioid
epidemic. So really there's
um Arizona is slated to get $1.12
billion dollar. And so some of those
funds are allocated to Scottsdale in the
form of opioid settlement funds. Those
funds are restricted on what we can use
them for, but they do come to the human
services department. So we work to
manage and use those funds within the
guidelines which we're
allowed. These are our key cost drivers.
Uh personnel library materials um like
with anything in the world library
materials and the and the cost of e-
resources is increasing for our public
library system. So there is an increase
in inflation there. And then the
Scottsdale rental market, especially as
it relates to the HUD programming that
we that we offer through human services,
you know, the cost of rental units is
higher than it was in the past. So that
that is definitely a cost driver. Um I
talked about the home program. Um those
also cost some work when we have to do
some rehabilitation work to the bigger
bigger dollar amounts. Um so that's the
escalating cost of the home repairs. So
those are the highlevel key cost drivers
for the library and human services
department. So for the vacancies right
now or snapshot in time we have six
current
vacancies and we have one FTE request
for fiscal year 20 2526 and that request
is for a grant accountant. We've got an
existing vacant position that we want to
reclass into a grant accountant for to
help us with all of that work I just
talked about. Managing the HUD program
and the federal dollars can be very
complicated. We've got an upcoming
retirement and we really need to get
somebody in who knows that work and
knows everything that we need to do to
maintain compliance with our federal
funds. So that's a really important
vacancy that we would like to be filled
in fiscal year 20 2526.
You see here there's positions that are
general fund positions and then there's
other funds. A lot of the work that we
do in human services is funded by grants
and we have got at Vista del Camino that
is called the community action program
or CAP. So we have case workers that
help eligible residents with rent and
utility assistance and we are fortunate
that those case worker salaries are paid
for through the county. So those
positions, their salaries are paid for
through the county. Scottsdale's portion
of that is to pay their fringe benefits.
So when I talk about those vacancies
there, um two of those vacant positions
are case workers. Um that would be
funded via via the county, that grants
accountant that I talked about earlier.
The other third one also funded through
grants and that would be paid for
through the federal federal dollars.
So, our new initiatives really one thing
that we want to do, we just finished a
strategic plan. I know this is important
for public libraries, too, is really
increasing community connections. Um, I
know it's been a while since we've
talked about CO 19, but for vulnerable
populations, aging population, um, you
know, really making sure that we're a
place for community connections is an
important initiative for us. And also
improving our data collection and
processes. We collect a lot of data. We
have a lot of partners, nonprofits, and
we really want to improve on how we're
collecting data, processing it, and
reporting it out. So, that's something
that this department will be working on
moving into the
future. These are our budget requests.
Again, reclassing a vacant
administrative aid to a grants
accountant to help with the federal
dollars. We are requesting $10,000 for
Vistadel Camino recreation programming.
I just talked about community
connections. We have actually recently
expanded our food bank out of Vista Del
Camino into a warehouse off Mckelp's
road. So, we're really trying to open
that center up for more community
activity, welcoming in the Yaki
community that has really been missing
the area. So, really needed some dollars
to provide recreation programming at
Vista Del Camino. I know a lot of the
other departments have talked about
overtime. There is no overtime in the
libraries and human services department.
So, that's that's not an area I felt we
needed to worry about. no overtime
there. And then these um talking about
return on investment for all of this
stuff, these are some of our select
operating metrics. The senior center
attendance is really around
approximately 36,000 annually. That's
conservative. Um but again, that's a
lot. We've got a lot of people visiting
our senior centers. senior center
program attendance. Over 6,000 seniors
attended um programs at either Granite
Reef or Vinda Senior Center. I talked
about the CAP office for rent and
utility. We were able to help in fiscal
year
2324,
583 households with rent and utility
assistance. I assume that that number
will be similar moving forward into
2526. And then our public library
system, which is well loved by so many
people in our community. Library
attendance fiscal year 2324 was over
6,000 people attending our public
libraries. I have here just a snapshot
of the library material circulation.
That's a big part of public library
work. So you can see there over a
million physical circulation. So people
actually coming in getting books,
checking them out. And then the e-
resource is same. We're seeing that
circulation be just as high. library
programming, we had 1500 programs happen
fiscal year
2324. And then our housing choice
voucher participants, the HCV, formerly
section 8, um we have got 531 families
who are recipients of that rental
subsidy in our
community. And that concludes my
presentation and I am happy to answer
any
questions. Come along folks.
ask her a question, try to put her on
the
spot. Now, thank you, Carrie. It's
um it's an interesting part of our city
services, particularly the human
services part that uh not many people
are aware of, but it's obviously
important to a certain segment of our
citizens, and we should be proud that we
can offer them that help. The libraries
of course I think we're all familiar
with um and enjoy utilization under
that. I would also point out for the
public at large if you're not aware
Scottsdale is truly unique in having the
number of libraries that we do. Many
communities have one or zero just
relying on county libraries. But
um you might talk Carrie about some of
the partnership that we actually have
with the county library system because I
know that things flow both directions.
Um and spend just a minute talking about
that. Sure. Thank you very Thanks
chairman for the question. So, we really
do have we do have an agreement with the
Maricopa County Libraries and I guess
the most important part of that and I
know my librarian colleague is in the
audience so please do jump up here if I
am wrong but we've got an agreement to
where the county does give um some
dollars for the collection and those
numbers have been pretty high anywhere
around 400 or
$500,000 that the county we can purchase
materials for the collection and the
county pays for those materials. I also
know there's some reciprocal use
borrowing agreements that happen with
the county and the other public library
systems which is really nice. So if
there's something that the Scottsdale
public library system doesn't have, you
can come in and we can work with our
other partner community libraries
including the county to get a material
item that you might want. So very strong
connection with the county as well and a
good relationship which we're proud of.
you're so dependent on some federal
funds. Are there concerns and
uh plans? Plan B.
Thank you very much, Chairman Smith and
Commissioner Sites. We are really We do
have a plan B. We're kind of evaluating
what that will be and it it is hard
right now because there's just so much
unknown. Um you know, it'll be really
hard. I talked about the 531 um families
that are on a voucher and if those
federal funds go away that's 531
households in our community um that
would be without rental subsidies. So
that is a challenge that I don't have a
solution to right now. But it is
something that we pay very close
attention to and have in the back of our
minds and actually discuss all sorts of
different options um on what could
happen if there are some significant
cuts at the federal level.
You're welcome. With that, I see no
further questions. Carrie, thank you
very much for the presentation.
And the remaining item number five on
the agenda is a general fund budget
review of some specifics by our city
treasurer, Sonia Andrews.
Thank you, chair. Um, commission. This
is a review of the general fund budget.
Um, next slide.
Um, so to truly understand the general
fund budget, I'd like to take you back
about five years and speak about the
events that significantly changed the
our revenues and expenditures in the
general fund. Starting with the
pandemic, towards the end of fiscal year
2020. Um, we had an initial shutdown
that caused our expenditures to be lower
than we had budgeted because of the
shutdown. We didn't hire our seasonal
workers. We had supply chain issues. So
delays in expenditures. We also didn't
really know where our revenues would be
because the shutdown impacted our
largest industry which is the tourism
industry. So we delayed salary
increases. So there was an initial
reduction in our expenditures and even
though um we thought that there would be
a recession as well. We were very
conservative with our projections, but
instead of the revenues going down, our
revenues actually went up because
consumers did not um even though they
didn't go anywhere, they did a lot of
shopping online. And we received almost
60 million in federal stimulus funds to
pay for COVID related expenses and
public safety expenses that we would
have otherwise paid out of the general
fund. And those were all one-time
revenues that we received during this um
three three-year
period. So while all that interruption
of the pandemic was going on, we were
also dealing with the changes in PSPRS.
As many of you know, PSPs was fixing a
lot of problems that they found um in
2017 to 2019. They made a lot of
corrections to their actuarial
assumptions and they also hired new
actuaries. This led to an increase in
our unfunded liability, an increase in
our police contribution rate. So our
unfunded liability reached um the
highest it reached was 216 million in
the fiscal year 20 valuation and also
our contribution rate increased from
36% for fiscal year 2017 to 63% in
fiscal year 2023. And that 27% increase
in contribution rate resulted in an 8
million a year more of pension costs for
the police
department. Um so with all of that going
on, we also had a housing market price
surge in uh in that time period because
of the low mortgage rate environment and
also the high housing demand at that
time. The surge resulted in a spike in
capital gains tax which then resulted in
a spike in our state shared revenues
that we received in 2024. And that was
about 20 million of additional state
shared revenues which is also one-time
revenues that added to the buildup of
our uh uh funds or fund balance in the
general fund. Um then as if that was not
enough, we had high inflation and high
interest rates setting in. We started
seeing construction inflation uh first
and then wage inflation, contracts and
commodities which then increased our
expenses. Um revenues also continued
going up with the inflation and during
this time the state eliminated
residential rental tax which was a 16
million loss to the entire city and a 10
million loss to the general fund. And
the state also implemented the flat
income tax. Both of which resulted both
of these resulted in revenue loss which
impacted the general fund. Next
slide. Um continuing on this roller
coaster ride um we did sell some land in
the general fund which uh boosted our
general fund revenues um by about 42
million and that was used to pay for
capital projects. And um we continued to
see construction cost increases with
inflation and some scope changes. And so
we transferred uh quite a lot of those
excess funds and excess revenues we
collected to the capital projects fund.
So from fiscal year 22 to fiscal year
25, we transferred 226 million to our
capital improvement projects.
Um then aside from all of that, the
general fund also was affected by the
tight labor market. Our vacancy savings
increased significantly which added to
the buildup of our fund balance. We
faced significant wage pressures. Uh we
put in place the police and fire step
program and also started a citywide
compensation study which adjusted wages
throughout the city this fiscal year and
we still have more to do to ensure our
wages are at market. In the meantime, we
launched the ambulance service, opened
new fire stations and training
facilities and um and those impacted the
general fund as well. And last but not
not the least, this year we lost 10
million in property taxes, five million
in the general fund and five million in
our debt service fund due to the quasima
class action judgment against the
county. Um so that sums up the last five
years and the next slide will show you
how these events collectively impacted
the revenues and expenditures in the
general fund. As you can see, our
revenues and expenditures were pretty
close prior to the pandemic. we didn't
generate a lot of excess revenues. Then
starting in uh fiscal year 18-19 we
started seeing increased revenues and
then it just took off in fiscal year 21.
We always considered these increases to
be a spike in our revenues due to the
extraordinary events caused by the
pandemic and not a new higher revenue
base for which we could rely on for
operations. And because of these
increases are due to again the pandemic,
the housing surge, the land sales, the
uh the stimulus money that we talked
about previously. On the expenditure
side, you can see that little dip in
fiscal year 20 on the expenditure and
then it flattened out in 2122. This is
also due to the pandemic where we
initially had lowered expenses and also
the stimulus money. We actually didn't
put that money in the general fund
because it's restricted money. So that
money was actually in a special revenue
fund. So we shifted $59 million of
expend expenditures out of the general
fund in between 21 and 23 so that those
could be paid for from those uh stimulus
dollars. And that's why the revenue line
if those stimulus dollars weren't there
would have been slightly higher. And
then on top of that we had a lot of
vacancy savings during that time.
And now we are seeing increases in our
expenditures because of inflation, the
new um services that we provide, new
personnel, not just public safety but
other personnel needs and also new
technology investments. And with the
buildup of the fund balance as you see
over there, we have used those funds for
capital projects and to address the
PSPRS unfunded liability. And this chart
that you're looking at shows the
revenues, all the revenues that we've
received. um but it doesn't show the
transfers out for capital projects and
the payown of the PSPRS. This the the
orange line you see there is just our
operating
expenses. The next chart, next slide
please. So shows you uh what we've
transferred out for uh capital projects
and also the PSPRS to address the PSPRS
and this is how we used a lot of our
excess funds that we've collected during
that time.
Um let's see and also it's not shown on
the chart here but we also were able to
increase our rainy day funds in 2023. We
increased our policy for rainy day funds
which is our operating and emergency
reserves in the general fund from 10% to
25%. 25% being the three months of
operating expenses which is what is
recommended by GFOA best practices and
also as we spoke about earlier helps us
in u maintaining our AAA um uh bond
rating and
um so wanted to comment that what has
happened in the last few years has not
been normal. It is not our normal
business model to have so much excess
revenues in our over our expenses. The
1.1% sales tax in the general fund is
for operations and minor capital costs.
So, as you can see, before the pandemic,
we transfer a little over 10 million and
that's our policy transfers, which we
anticipate we can take from the general
fund operating revenues to fund minor
capital improvements. The 1.1% in the
general fund is not meant to pay for
major capital expenses. We typically ask
voters for bond program approvals or we
ask for dedicated sales tax to cover um
uh capital expenses like our
transportation sales tax or our bond
2019 program. So moving forward we
expect that our revenues and
expenditures will return to normal. We
will revert back to a normal typical
business model where our general fund is
spending um primarily the operating
costs and some uh capital costs but not
all our uh major capital
costs. Um let's
see next slide.
So this slide shows our proposed fiscal
year 2526 revenues compared to our uh
current year adopted budgeted revenues
and also our forecasts. Um as you can
see we budgeted 43 uh 4.9 million in
revenues mostly over 70 more like 74% is
made up of the local sales tax, state
share taxes and our property tax. the
primary property tax that goes into the
general fund and we are anticipating
445.5 million for the end of this fiscal
year mostly increase in the uh local
sales tax and mostly driven by the
retail sales as well as you can see the
property tax I'll draw your attention to
the property tax line our levy was 38.4
4 million but we are anticipating 33.1
million because of the quasmire um 5
million quasmire reduction or judgment
and the proposed um levy for uh the
general fund is 40 million for uh 2526
and I know there was a question in the
previous uh one of our previous meeting
how much of that was related to the 2%
versus the new construction so of the
levy increase. Um
768,000 is related to the 2% 440
um or sorry, yeah, um 440,000 is related
to new construction and there's a little
bit of u collections from prior periods
as well. That makes up that 40 million.
Um the um other the other fees and
charges we anticipate going up by six uh
million for fiscal year 2526 and that is
due to the general fund loaned the solid
waste fund about 17.8 8 million for
expansion of the transfer station. And
starting in fiscal year 2526, there's a
2 million repayment from the solid waste
fund to the general fund for that loan.
And that um repayment will continue
until they uh repay the whole amount.
There's also 2 million of additional
building permits and planning fees that
we anticipate with all the developments
um in the north. And there's also about
a million or more from fire insurance
premium u tax that we're um that we'll
be receiving and also an increase in
Westworld revenues and other park and
rec
fees. Um next
slide. This is the expenditures in the
proposed uh general fund budget. And I
just wanted to um make sure uh everyone
knows that this is only the portion of
the expenditures that is funded out of
the general fund. It is not the complete
department um budget. So the police
department for example their total
budget is 210.4 4 million and there's
portions of it funded from special
revenue funds and dedicated funds or
like you just heard from Kira with
library and human services. Her total
department budget is 33 million. 15
million is funded out of the general
fund and the other 15 million is funded
out of dedicated special funds or
grants. And so this is the um general
fund budget with the and we al already
went through the department
presentations the increase in police and
fire primarily driven by personnel and
um you've heard of the from the other
departments the other increases as well.
What I do want to point out from the
previous slide, if you jump back to the
previous slide real quickly, you can see
that from our revenue standpoint, and
this is our revenues that we um
anticipate to collect for fiscal year
2526, we anticipate to collect
441.8 million for next fiscal year. And
if you flip back to the next slide, our
operating budget is 410.2 2 million
before transfers and the PSPRS um
payment. So as you can see the uh
operating revenues and the revenues we
receive do cover our expenses that we're
proposing for 2526 and the um the excess
we are planning to um proposing for
those items that you see below the uh
PSPR's payment the debt service the
transfers to capital the transfers to
capital are um 33 million above our
policy transfer of about 15 million that
makes up the total of 48.8 million and
then in in addition we will draw down
some of our fund balance by about 79
something million. So our total uses is
521.5
million. And um my last slide is the
actual fund balance. You'll see that
this fiscal year, our fund balance in
our budget is 256.5 million made up of
all these items uh listed the 94.1
million of operating and emergency
reserves. That's our 25% policy and that
will go up to 115 million based on our
budget and we will um propose
contingencies and other assigned um fund
balances as you see on this slide. the
council can move um any of these
assigned fund balances around if they so
desire. Um the only one that we uh have
a policy on is the operating and
emergency
reserves. And uh with that I can answer
any questions.
Commissioner Stevens. Yeah, I just
really wanted you just read what you
just said. Make sure I'm reading that
slide right. The 115 you say you need to
make the bond rating agents happy, but
frankly the rest of it can be
reallocated by city council however they
choose. If they want to do roads, if
they want to do more uh uh police
funding, whatever. So that's
discretionary. That is correct. And I
just also wanted to point out that that
is correct. There is no policy to
maintain these these levels of um
assigned fund balances. there is a
policy that we should carry some kind of
contingency but there is no policy that
dictates the amount of contingency we
should carry. Um also I wanted to point
out the PSPRS fund uh fund balance that
we had previously was
accumulated even in prior to fiscal year
20 or 21 before my time that what we've
done is um taken it to pay down the 50
million and also we've reassigned it to
uh facilities repair and replacement
reserves and a revenue loss reserves
based on you know um the uh
conversations and the meetings that's
that we've had with the budget review
commission. The development agreements
that is development agreements that we
have entered into and that we know we
have to pay those dollars amount amounts
when they the developers hit certain
milestones. So we set aside that money
to in anticipation of those uh cash
outlays.
Okay. And then just to follow up with
what you said, uh the point is this
council hasn't seen this. This is just
your staff budget recommendation right
now. And so what's happened because
it'll tie into another comment tomorrow.
The PSRS actually went down uh you did
um you're proposing 50 in payments and a
$40 million reallocation to other
elements. Yes. Okay. Thanks.
I see no other questions. So maybe we'll
uh put this one to
rest. Which then leaves us on the agenda
only item number six, which is the
identification and approval of possible
future agenda items. If anyone has any
requests, Commissioner Stevens. Uh yeah,
I'm going to make a a motion and you can
let it die for a lack of second because
I really just want to make a statement
for things we want to I think you ought
to think about for the future. My
observation is that presentations to us
are kind of nice for the overview to get
us to know things, but I I have a
trouble adding value just based upon
receiving a high level presentation. On
the other hand, I've met with some of
you privately with staff where we've
gotten to dig into some things a little
bit. I've learned a lot and I believe
I've gotten some value added uh compos
or ideas out of that and also the
individual meetings uh where staff has
given me some time I've gotten some
meat. So I I think the only way we would
get meat might be doing something a
little different than we've done. So I'm
going to make a proposed motion for an
agenda item but you can let it die for a
lack of second and that's fine. My
proposal would be an agenda item for the
commission consideration of using two
member groups to meet with department
heads in budget development and report
back to the
commissioners. I don't hear any second.
So you can chairman you can let it die
for a lack of second.
Well, we will do so, but uh we
appreciate your
uh comments and I think that it it is
obviously an effective way to meet more
like one-on-one in casual conversations,
but it's um we have to be sensitive to
the amount of time we're taking from
staff as
well. Uh I thought I'd kill a little
time talking here to see if we get a
second. I did not. So, I have a
question. Are you talking about now or
next? No, I'm really talking about the
future. It's all perspective. That's why
I didn't need it as an agenda item right
now because we we probably need an
agenda item at some time to just talk
about how do you want to tackle this
beast next year.
I just I just a comment I would agree
with um Commissioner Stevens because it
worked very well with the discussion
kept going. it finally became a evolved
into a subgroup
and and I think now that we've had the
big broad overview, you know, from
everybody, then what you're saying makes
more sense too for the going forward
because now we've heard from every
department.
Yeah. I I appreciate your comments
there, but I also uh for the record
recognize there was no second to that
motion. Well, the reason I didn't and I
don't want a second. I think it needs
Oh, do you want Well, no. Then then it's
got to be an agenda item for our next
meeting. So, if you want it as an agenda
item for our next meeting, go ahead and
second it.
[Laughter]
So, I think we are uh done. We're well
off of the uh what we're allowed to talk
about probably on this agenda items, but
nevertheless, useful conversation.
Um I will therefore entertain a motion
to
adjurnn for little less than 24 hours.
So moved. Second. Moved and seconded.
And if you approve, press the yes button
and it is unanimous. We are adjourned.