Budget Review Commission - March 27, 2025

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if I can have someone take the roll
call I said we are
about to begin the budget review
commission meeting of March 27
2025 and I need someone to do the roll
call chair Smith Pres
Vice chair
schwier present commissioner Carla here
commissioner Newman here commissioner
ransco present commissioner sites here
commissioner Stevens
present everyone being present will uh
remind everyone that the beginning of
our meeting is a time for public comment
if anyone has public comments they can
pick up one of the blue cards over here
at the administration ative desk fill it
out and uh make a comment I have no
speakers
requesting time at this
moment so I am going to ask the city
treasurer to uh well I guess it's time
for the chair's report is that
right um so being the chair I guess I'll
report
um we are going to cover a little bit
later the uh procedure for each of the
Commissioners up here to submit comments
that might be incorporated into our
required meeting with the city council
uh I don't won't spend any time on that
I'll let them uh talk about the
procedure but I do want to reiterate the
importance to all my fellow
commissioners of gleaning through your
prior notes and minutes of Prior
meetings and trying to figure out what
do you think on there would be a
good uh piece of advice to give to the
city council and then those are all
going to be Amalgamated into a report
that we will hopefully have prepared for
them at our joint s uh session on April
22 the other thing that comes under this
General heading of uh the cherish report
are some of the questions that have been
asked in previous meetings and now
answered by uh staff and I'm not sure
Sonia are you leading us through this
disc this discussion of these questions
um Mr chair uh chairman no these are
just provided for information there's no
presentation or
discussion um so I don't think then that
the public has access to these or are
they part of the agenda they I'm getting
an affirmative nod they are part of the
they are part of the agenda and posted
on the web um then I would ask each of
the members up here to let me know if
you have any questions you presumably
have read through
these responses to the questions and do
you
have further questions having now seen
the responses for some reason I don't
have a screen working here is that is
that right I mean I don't know who might
want to
talk um normally it shows on a screen in
front of
me um trust me it's blank
while we're waiting if anybody up here
has a particular item that they would
like to comment
on uh make sure they understand or ask
for further information then raise your
hand everyone except you commissioner
Stevens commissioner Stevens I I just
had two quick things one I don't know
who asked the on item four I'm not sure
who asked the question but you asked if
uh developers paid 100 % of
infrastructure and the response says the
overall Community goal is to have new
development paid by them and so my
observation to that is that kind of
infers there situations where the city
does contribute to some of it and my
understanding is it's a more complex
Matrix that we can I think take on this
year but for whoever ask that question
we ought to think about is that
something that we want to look at next
year is part of uh part of our work to
see if that's something that we need to
dig into
and so that was one and then the only
other question I had was on uh the 228
meeting item six it talked about if we
hire a person from another uh City and
they've got years of service that are
already part of the same pension plan
that we inherit their years of service
and it was unclear to me about whether
or not we then uh that ends up becoming
obligate Our obligation or whether we
get any of the dollars that were funded
towards that person so that might not be
something we can answer or address now
but if all of a sudden the city of
Scottdale starts getting experienced
people from elsewhere we inherit their
projected benefit obligation without
getting any of the access to the
allocated dollars that have been funded
towards it it just seems like that would
be unfair but it's uh so I I guess
that's just an observation we can maybe
talk about some other
time that's all I Hadad thank you
commissioner Stevens um
the staff wished us to um answer a
question here Mr chairman speaking to
whe your screen um we don't have budget
staff today running the voting um
machine I guess they're working on
putting the budget together so I think
that's probably a byproduct of
that so will it ever fix itself or
no uh the question was will it ever fix
itself possibly not at this meeting Mr
chair um but in future meetings we will
have staff here to be able to run
it I think the intent Mr chair today is
to do roll call votes as we go um and
then just for you to call on people as
they raise their
hands that's what it's going to have to
be it may be a little awkward um anyone
else have their hand up otherwise I have
a question I'll proceed with on the um
items here let me just proce proed one
of the items um that we had
requested and it was from the February
28th meeting and the question was from
me did we have a list of employees that
are in the asrs plan not a list of
employees but could you tell me the
employees are that are in the asrs plan
the first answer provided was that
1,756 employees are enrolled in
asrs that's no doubt true but the
question was a little bit more complex
than that if you turn to the last page
of this Q&A that's attached and it is in
response
to I guess item
five uh you have a table in there that
shows the Scottdale fire department and
the Scottdale police department and it
has active members but it also has
retirees Dro retirees beneficiaries and
so on and so forth my interest was in
having the same kind of data for the
psprs or the U asrs
plan I think you have given me
1756 as being the active members that's
line one off this table I'm interested
to know how many people do we have that
are Scottsdale
retirees or do they lose their
Scottville identity once they retire and
they there's no way to
know um but if you can complete that
schedule U for the asrs plan with the
same level of detail that's really what
I was looking for when I first asked the
question a second observation and it's
more an observation than it is a
question but it is an answer to number
three um on that same packet from the
February 28 budget review commission
meeting
the question must have been what has
Scottsdale's payroll growth been over
the past few
years and you have provided a 10-year um
display of the growth in
payroll and I couldn't help but notice
that while you say the on the blue line
that is displayed on this graph for the
asrs
employees
um the
the payroll growth over the whole period
of 10 years has been 3.5% on
average but for some reason in
2022 through
2024 the number seems to have moved from
110 on the dollars and thousands I guess
um or Millions I don't know what it is
um but it's gone up more dramatically in
the last three years and and and maybe
as a follow-up question I know that's
covid related but uh even going back to
an earlier period it appears to be
larger than 3 and a half% growth in the
overall payroll for the past I'll say
three years past five years almost any
period other than the past
10 while I'm jabbering up here has
anyone else uh a question that they'd
like to ask on these Q&A slides
commissioner
Carla quick question about your previous
question about how many of these
retirees Etc are are still living in
Scottdale is that what you're
asking how many are still Scottdale
resident I was not asking if they're
living in Scottdale it's just if they
are uh how many retirees that were
Scottdale employees and then retired how
many of them are associated with the
asrs program still as a retired
okay that helps me thank
you I do have on the February 27 Q&A
responses I have a follow-up question or
a
clarification on item three we the
question was posed what has the city's
primary and secondary property taxes
been over
time and the table that was
provided shows what the tax rate has
been over time my question was more to
the dollar amount um knowing that two
things happen that improve the
collections
on um property taxes actually three
things I guess but the new construction
coming on I mean the rate is one of them
but it's only one of the factors that
plays into the thing the other factor of
course
is the dollar amount of taxable property
in in the city and so my question was
not as to the rate but as to the dollar
amount both primary and secondary tax
Collections and then finally I would
make an observation um perhaps for the
public at
large the question was raised do other
minuts and I'm still on the February 27
Q&A do other municipalities have sales
taxes that sunset in other words
temporary taxes
and the answer was only Phoenix on the
schedule has a sales tax that will
sunset and then you describ the
ones you provide then a comparison of
local sales tax rates as a
graph uh accompanying that answer and it
was really to that graph that my point
was raised Scottdale appears on that
graph as having a rate of
1.7% compared to many of the other
cities ranging from 1 .5 to
3.0 I was trying to illustrate both
graphically and
narratively that Scottsdale's
comparative rate meaning Scottsdale's
permanent tax rate is not 1.7 it's only
1.3 and we would move from the second
lowest to the absolute dead lowest of
any City on this graph because all the
other components of our 1.7 tax are
temporary in nature some EXP expiring 3
years from now some eight or nine years
from now and and of course the most
recent one past last November would
expire 30 years from now so again the
illustration I was trying to make was
our comparative tax meaning our
permanent tax compared to other
cities any other questions from
anybody commissioner Carla yes Mr
chairman um you know appreciate staff
giving all these answers and all of this
information I would ask the
Commissioners because for example today
we don't have staff to do help with the
presentations because they're busy
elsewhere I guess I would ask us and we
all have our own interest that if we
feel an a question is important to ask
staff for the things we're working on
now that you know that that's very
understandable but I would ask us each
to consider if we're adding more and
more time on for staff that maybe we
consider if it's an item we won't be
discussing until next budget over the
summer that maybe we hold that and just
make a note to ourselves that in order
to discuss this parking lot item you
know we'll ask it over the summer and
get that information then because I just
worry that we are loading so much on to
staff that they're not having time to do
the work they need to do
for us to actually have input on the
things we can affect this upcoming
budget so I would just ask everybody to
please consider that thank
you and Mr chairman I I would Echo
agreement with what Carla is saying on
that you know if there are things that
for the future years that we just you
know tell or if we do tell staff we tell
them we don't need it now we need it the
fall any other any other comments from
Commissioners on the uh uh q&as provided
seeing none let's move on to item one
official item one on the agenda which is
the approval of minutes of March 19
2025 does anyone have any
corrections to make to the minutes
commissioner Carla yes on page five um
third paragraph third line um it starts
with she explained that should be Miss
Andrews explained because it's not clear
whether you're calling commissioner numi
or if it is Miss Andrews so if we could
get that clarification it would be great
thank you
I have for the record my pronouns are he
him I have one comment that uh is
probably trivial but make confuse
somebody on page six the third P
paragraphs uh begins regarding the
pavement overly program I think it means
to say overlay
program people won't perhaps know what
an overlay program
is um
and um any other questions or comments
on the um minutes if not I would
entertain a motion to adopt the
minutes I make a motion to adopt the
minutes do I have a second
one I have a second for Mr Newman one
second I'm sorry he withdraws his second
and he has a question um on the third
page second third paragraph it says 15%
preserve tax in that be
0.15% or did somebody mention
that third page third
paragraph it should be the
0.15% yeah so I would
yes now I'll second that and now offers
his second to the motion
um commissioner ransco was the member
who offered the motion if you need that
for the records I have a motion in
second all in favor raise your right or
left
hand all in favor
unanimously the second item on our
agenda is capital projects with an
increase exceeding $1 million and
10% from last year to this
year um and to explain to the audience
uh a couple of our members commissioner
Mark Stevens and vice chair Dan schwier
um stepped aside and in meetings with
staff uh investigated this uh at some
length rather than having the the whole
commission uh encumbered with looking at
all these capital projects so they're
going to have input on this maybe be
taking the lead uh so who starts on this
uh commissioner Stevens do you actually
there was um our uh city manager was
going to start with a few slides that he
had put together at a prior meeting that
tie into this I he was going to go first
thank you commissioner thank you chair
so if we could have next slide as
referenced we thought it would be a nice
introduction to kind of recap how a
capital project comes to fruition or
comes to the Forefront uh next slide
please kind of reminds me of government
days back when you're a little kid how
does a bill become a law and so this is
how of a how does an idea become a
capital project uh we'll start off with
some technical components I would refer
to which are pretty standard and so it's
a certain dollar amount uh 50,000 is the
threshold it's got life of five years or
more uh and and certainly a capital
asset next slide
please and uh starting at the top the
identified need and we'll get to kind of
some characterization on the next slide
in a minute um but that's how we start
off and then we really do some Define
the project and as you can see within
that scope it's a little tough from a
distance to see within the gray but
certainly uh identify scope start some
data uh estimate uh costs Etc and what I
would uh point out I think there's been
considerable discussion at the
commission level and particularly uh
with a couple of the members that have
spent extra time in this I think we've
really tried to identify how we can
improve or enhance particularly from my
perspective in the gray and in the
yellow area there and how can we improve
uh Communications and identification of
scope is really critical upfront really
at that uh gray portion and then as it
moves into adding into the the CIP which
is in the yellow portion uh and then
it's all proposed uh it moves forward
for city council approval and then we
proceed uh with the
green next slide please here is the list
that I reference and it's not in any
particular order with the exception of
uh the treasurers and the city managers
bosses uh up at the top with mayor and
councel uh and their priority as the
governing body that's certainly critical
and how we move forward uh with capital
Investments I would also maybe skip down
to second to the last which is the
master plan and within that in a fine
print is the general plan I often refer
to that as the people's plan uh and
through now through 2035 and then we
build many of the other plans such as
the character area plans uh city council
strategic goals to achieve uh that as
identified by city council uh back up to
the top we've got the mandated pieces uh
sometimes that come down from other
levels of government we not so
affectionately refer to these as the
unfunded mandate may have heard that
term for many years and so that
certainly occurs with us and we have to
implement that uh also the emergency
piece as I mentioned at maybe some of
our previous meetings where our whether
it's our infrastructure or various other
elements uh there are risks in our
community and mitigating that risk is
certainly a component in investing in
Capital Improvements annual oper
operating costs that's always a tricky
one is it going to increase costs I
think actually some of our uh projects
that were maybe presented at the last
commission meeting there were some
questions about how that could impact
operating costs operating programs and
in many instances if there is a
reduction in operating costs of savings
then that can rank higher as on the list
of capital projects that we're looking
at matching funding uh over the previous
recent years there's been some
significant amount of federal funding uh
and we look for those opportunities
there could be a limited or a different
view uh moving in the next few years and
we're keenly aware of that uh but I will
point out maybe some of our Enterprises
and uh more specifically maybe at our
airport is a good example those matching
dollars and how uh we can leverage uh
somebody else's funds to get
improvements in our area also economic
uh Vitality economic growth how can we
invest and I use that word invest in
capital infrastructure and what that
means to me is that there is a return on
that investment and and that return
could be in dollars there could also be
Community benefit uh to those returns uh
next slide
please and so then we take all of that
and we have a process as you might
imagine within our organ organization uh
we have staff levels that are uh I'll
call in the front line but also in in
the middle of the organization that is
certainly aware of operational needs and
bringing those forward for consider
consideration and then after that comes
forward then I would refer to it as the
budget Review Committee that we have
which is staff and we look at the long
list of needs and uh see where funding
aligns with uh the resource the
resources that we have aligns with uh
the expenditures that we are able to
accomplish next slide please so again
back to the gray and the the yellow
portions why would uh a project costs
change I again I think we've identified
the opportunity in the gray portion
first uh in that earlier slide of
identifying and clarifying how we can uh
get the most accurate cost for a project
we actually at some point will have an
update on a couple of the projects that
we presented to you at the last meeting
and uh through some of the appropriate
questions that the commission have we
have updated a few areas to do what I
would refer to is feasibility some
initial assessment as it relates to cost
before we include a capital pro project
cost that highly likely is is not the
full uh extent of what we need so we
appreciate uh the Keen Eye that the
commission has put in that regard and so
I I think that's an area of opportunity
then as we get into the Yellow Part uh
that on the earlier chart really some
impacts that are sometimes out of our
control how do we minimize that there
can be Des scoping
opportunities uh value engineering Etc
but as you see there uh that might be
some of uh the opportunity or issues
that uh come to us that we have to deal
with with on a capital
project that that completes my slides
and so it looks like Mr chair we have a
a question there before we go into the
second part of this let me see if
Commissioners have questions uh on this
first set of slides the
process hands are going up everywhere
commissioner
Newman um city manager kton um I'm I I
in the in the bubble chart that you had
I I was I was looking for step there
that says should we do this project now
I know there's a lot of things sometimes
it's it's it's a it's an off or it's a a
project comes out of a plan you say
identify need toine project but I'm
sitting here going okay should we do
this and we kind of had a discussion
about a couple of different projects
here like if you take a substation
that's going out yes we have to do that
you don't want the water plant going
down okay so there's not much of a
discussion other projects maybe don't
have quite as much I had some questions
about that when you think about um we
had the a question about adult daycare
and things on on one of the the other
project is this where we should go and I
don't know where that step in the
process is I you kind of talked about it
there in terms of feasibility and we had
a thoughtful discussion about that
yesterday with and on on a project so
I'm I'm curious as to where do we have
that kind of that let's let's put a I I
call it business decision making and
saying here are alternatives does this
make sense to do it this way or should
we combine it with something else you
kind of had those words in there but
there's no step somewhere to say should
we do this and I think a lot of times we
can get into projects as a as a as a
city that maybe we don't intend to get
into or there maybe there's better ways
to do it so and some things are driven
by the council some things are D driven
by a plan other things just kind of
start to happen because somebody thinks
it's a good idea doesn't necessarily
mean collectively think it's a good idea
and I think that step helps bring people
together to decide should we do this or
not so that's my question yeah Mr uh
chair and commissioner I think you point
out something that in our lovely chart
here that uh is missing uh but is in
practice so we simplified it here with
the five bubbles but I would probably
say it's somewhere in between the orange
and the yellow all throughout that
process so just kind of practically how
it works we have staff members uh
identifying needs every day quite
frankly some are handled through
operating and accomplished that way and
others are more significant so it's put
through that committee if you will and
and added to the list then as it comes
forward to a higher level to management
review we say well is this a need is it
really a want and run it through uh that
it's almost kind of like a cylinder
approach Lots come in the top and then
it kind of filters out through the
process and then we end up when the ad
piece particularly at that yellow
portion there is really where we're
scrubbing the budget we are scrubbing
the the capital plan as I refer to
refining refining the capital plan from
quite frankly an initial list of
hundreds of items down to a list that
one we can afford and therefore is the
highest priority and then the priorities
are based upon that next chart which are
safety needs and and often times I'll be
frank with you that you'll have two
competing very high priorities and
literally you just don't have enough
dollars to fund both so then we try to
get creative can you phase it can you
take a project and split it into two and
then therefore get both of the emergency
needs or the needs done so it's really
probably through that orange all the way
through the yellow and then the yellow
is the balancing exercise and we not to
get ahead of myself but we do the same
thing on the operating as well um but
really the final calling out the final
where we balance is at the yellow piece
and that's what the treasurer myself and
we Al we have a small team uh that goes
through that process thank you
commissioner Carla uh yes please I have
two things I'm going to go onto the
prioritization criteria and you know the
first one says it's based on the
council's priorities Etc and yet we've
asked you questions you know here and
everything and the council hasn't the
new Council hasn't even had their
Retreat yet were they traditionally
identifi their priorities and the things
they want to see so in a way we're
working off of the previous councils and
I I know that everybody has busy
schedules Etc and and Ben Lane is
juggling like crazy um but if there's
any way
to put in that calendar in your policy
or whatever that you try to have the
council Retreat
first so you can know what the current
sitting Council priorities are um that's
the first thing then the second thing is
going back to um the decision making
about what commissioner Newman was
talking about my question is where in
this does community discussion come in
um to help determine
importance um you
know or where in the process does a
community actually have Outreach you
know you have out Outreach to the
community so that you understand if it's
really really important to the community
because if you get it after the fact and
you're showing them this is what we're
thinking of doing as opposed to this is
extremely important to our neighborhood
this is extremely important to our part
of town and the second part of that
question is I hate when things happen
and decisions are made
because the L lest voice wins you know
maybe a part of the city that has the
money to hire a really good lawyer or
something to that effect or you know as
personal friends with a certain number
of council people and and I just feel
like some people who don't know how to
work the system as well as others
something really important to their part
of the city might fall by the wayside
because they're not the loudest so where
in this process does the Community get a
say is my question thank you Mr chair
and uh commissioner I would say
throughout this process so a couple uh
we honestly do receive it daily feedback
uh from community members some are
louder than others I will point out but
we certainly receive that feedback and
we appreciate that feedback the other
thing I would say is I really did
emphasize the master planning portion
and the general plan uh so the general
plan is a significant
uh part of our process and our funding
the other thing with over
4,000 volunteers that we have within the
city is an enormous opportunity to stay
really close to the to the community I
think that's critical the other thing I
love about the council manager form of
government in the boards and commissions
the boards and commissions such as this
commission and the other commissions
really keep us as staff close to the
community where we are part of the
community and have a good sense of what
the needs are so all of these are
layered together you build upon That
Base that foundation of the general plan
and things do change we're talking about
already touching it or refreshing here
in the next couple of years because it
it's not long before it gets dated in
this uh quickly evolving world that we
live in so those the character plans are
Outreach is extensive so it's it's
embedded in a number of these processes
so I wanted uh to start with that and
then with the city council and the
timing and particularly related to this
chart it's important to talk about the
capital which may be a little less
Nimble than our operating budget the
operating can be a little more Nimble
for program services and adapt the
difference on the capital side so many
of it is based upon really an emergency
need an um or needs within the community
and have a long long lead time uh as an
example I was had an opportunity to dig
a little deeper into a certain road
project uh uh over the last couple days
and uh because of some inquiries and
that started uh back in 2021 2022 with
input from community members and then
that folds into the budget then we do a
design then you'll see construction
actually coming forward in Spring of
2026 so sometimes it can take four or to
five years for some of those projects to
come to fruition so I wanted to address
that as it relates to city council that
a lot of these are in the pipeline now
we can certainly pivot uh depending upon
uh the direction from city council but
they certainly inherit uh a path that
we're on the other thing I I would
mention are so many of the capital
projects are operational driven or
operations driven and I think fire uh
department is a great example so we've
got a couple fire stations 606 and 6 uh
16 I believe one's under construction
ones in
this uh budget which really serve the
needs uh that were constantly in serve
the needs of a growing community and
then also constantly in front of city
council talking about Service delivery
service expansion particularly the
ambulance is a good example uh and and
then how that relates to our rolling
stock with ambulances and then how
delivery times we constantly look or
excuse me uh Service delivery times in
that area constantly looking at those on
how quick we're getting to the community
members when they're in time of need and
then building those stations uh so that
we can meet those expectations of the
community so uh I think those are a
couple good examples how we're in
constant contact with the community and
then constant contact with city council
uh to meet the demands in that
expectations thank you that's very
helpful any other comments from
Commissioners um I will offer a comment
on on the slide with the prioritization
criteria that you have up there um and
it's probably I don't know where it fits
but it's it certainly fits in the third
from the bottom the economic
vitality and you said there is an intent
to figure out whether the project
contributes to the improved economic
Vitality of the city and and brings in
improved Revenue I don't see
anywhere a test of a project and this
may be more of an operating question but
the question would be very simply does
this affirmatively or negatively affect
tourism and I say that because I think
all of us are subtly aware that tourism
is in fact our biggest industry here in
the city and it is the economic
underpinning of the finances of the city
and it's in a big way what makes the
city a livable
City and I would like I personally would
like to see a litmus test if you will on
every Capital project and every
operating initiative where we
affirmatively ask our question is this
going to um affirmatively ask ourselves
this question is this initiative going
to positively or negatively affect
tourism and it may be imply and the
Strategic plans and the goals and the
priorities of council and the master
plans and all this other stuff um but I
would um make a note as I say for myself
I would like to for to be a little bit
higher litmus test for our city
actions anyone El uh Vice chair rker
yeah I I would like to second that
because everything that I look at on
this commission my first thing is what's
the effect on tourism because tourism if
it's good for the tourist it keeps them
coming here if it's good for tourism the
effect of that is that we have a
beautiful place to live and a wonderful
place to live so um not to mention that
they spend a lot of money that we don't
have to spend because you can tax the
tourists that you don't have to tax us
completely so I agree with David that
that should be embedded in there
somewhere is what's the effect of this
on tourism
bring no other questions on this first
part of the presentation then let's go
to the work that was done by what I'll
refer to as our subcommittee of
two okay um thank you for the
opportunity to make this presentation uh
and um also want to thank commissioner
schwier for helping on this because it
uh his background by being on the
Paradise Valley City Council I think was
helpful to get some site and this is
this is a model possibly for our
commission whereby a couple of people
dig into something because I I found it
very difficult to try to get some meet
on things just in a open meeting
presentation and I found that if I can
get with one person or uh uh separately
with staff you can sometimes get to the
meat of what you need to have so this is
potentially something we can consider
about how we're going to operate in the
future uh we can go to the next slide
then uh what the the purpose this
meeting was really all it was was a
meeting where we wanted to understand
better what was going on in the uh
Contracting and project management area
we had heard there had been a lot of
things referred to as overruns and and
so uh commissioner schwier and I decided
to see what we could start to learn
about it and I would say for myself I'm
probably at the 10 to 15% understanding
level compared to where City staff is so
this is just a we're in our infancy
right now but uh I'm going to share at
least what we found out through that
some of this I'll try to go through more
quickly because uh it'll be just a touch
redundant with what was presented
earlier uh by the city manager but this
is was all new stuff for commissioner
swier and I so uh we'll go through this
what we went through we looked at it was
fiscal two uh 2024 so that's 2023 to
2024 and year to day 25 so for the last
over year and a half they provided a
list of all the contracts that were over
uh had a change of a million dollars and
10% for us to look at uh at that meeting
joining us were actually 15 members of
the staff including uh senior people uh
and that was U quite a turnout we can go
to the next slide now and it was to give
uh give us a high level understanding of
what was going on we looked at 30
contracts are on the list we didn't
inspect them all we spent a lot of time
talking about what was going on because
one of the things we wanted to try to
find is are there some things going on
that are causing these differences some
of them likely have already been
addressed others maybe have not that
might be part of a commission report and
we'll get to at the very last slide and
the contracts we looked at uh 10 of them
were individual projects uh that were
approved by Council there's also seven
through the budget process it either
happens during the year with Council
approving or it happens through the
budget process so a bunch of happening
right now and then they're also called
bundled projects some projects are
Standalone that's easy to understand
others potentially are across a lot of
departments or cost centers like if you
put in a uh it infrastructure it goes
over a lot of things so it's not one
Standalone thing so there's different
complexities to all of them uh on the
things we looked at the changes were
anywhere from a million to 56 million so
there were some pretty big changes that
were in there and I won't over the
stated reasons again here a lot of those
are repetitive of what you heard before
so we can go to the next slide
uh and on the next slide uh some of the
common reasons for increases uh we heard
a lot on unforeseen drainage and right
of-way complications so that'll TI in
later to a question we might want to ask
uh covid delays evidently caused an
unusual spike in increases here by a
multi-year delay uh Not only was it
inflation but I think some of the
contractors found themselves so busy
that they took advantage of being able
to uh get more aggressive on their
prices which also was an adverse impact
uh for us so the covid delays and then
we saw a lot of changes uh changes are
probably the most expensive when they
occur after the shovels in the ground
and so there's different reasons why
changes might have occurred as you
decide to either change projects or you
find some unexpected uh discoveries as
you're doing it and those are probably
the most uh some of the most costly
changes you have because those are the
things you didn't know were going to
happen and then did happen
uh we can go to the next
slide uh some of the challenges that I
we discovered took place in in the uh in
the projects uh one of the things that's
kind of tough is city has a lot of
designers on staff and do we do it all
ourselves or do we need to elicit some
outside expertise in order to do it in
order to uh have the project be
appropriately scoped and designed uh we
learned that there are four different
ways the city tends to contract and
without getting into a lot of details
there's different elements to each one
and different risk factors if the city
can fully design something to their
satisfaction they can do a low bid in
which case a low bid that is a bonded uh
provider can actually get it that uh
puts less risk into the cost of that
specific project but if it wasn't
adequately scoped it can be very
expensive through change orders there's
also what's called semar I don't want to
get into too many details but that's
where you kind of co-develop some of the
design go into the Contracting with
another party design build is when you
do it with another company or a
partnership or a joint venture uh again
to sharing some of the design features
to try to minimize some of the buildout
risk and then there's job order
Contracting which generally for smaller
projects but that has a different way in
which you select people because you go
out through a uh request for
qualifications a scoring that takes
place and you have to select different
people and then there's a manner in
which you can try to decide which one
you're going to pick so there's just a
lot of complexities that have to go into
that uh a key decision is how much
predesign do you do before you go to the
buildout the more predesign you do maybe
that minimizes the risk of what's going
to happen when you do a build uh but
then that that costs money that takes
time so there's a lot of projects going
on here uh the coordination uh uh city
manager touched on earlier uh between
the user project team and you'll see
that in a recommendation I'll I'll go
over that a little bit later but uh when
you think about a user group and a
Design Group group and project managers
communication's kind of a key and if
you're not fully looking at all the
elements of that and you're not
appropriately engaged on that uh
problems can come out of that and then
lengthy delays like covid could uh we
can go to the next slide could also be
another uh another challenge okay so I'm
down to my final two slides on this part
uh what we wanted to do we are really as
a commission trying to find a way to add
value to the city and to our uh
constituents here so one of the things I
know I'm personally trying to do is what
recommendations can I come up with with
our limited understanding as we get up
to speed and these are some of the
recommendations and and one of the one
of the Cur uh a quote I got from someone
one time I love is um it's if you only
do what you always did you only get what
you always got okay and I love that
particular quote because it was a
reminder to me during my working days
that if I keep doing what I always did
I'm going to get the same outcome and so
the challenge here is and I'm
challenging ourselves in the
recommendations we make are we making
can we make recommendations that the
city might say hey we ought to take
another look at that or we ought to look
a little bit harder into that or let
let's let's kind of check that a little
bit more and so when I look at some of
the recommendations uh one of the big
ones uh that came out of that discussion
that we had was do the user departments
engaged deeply enough with design and
project management to eliminate changes
during this construction so you got to
uh pick uh you think about um when I was
when I was working if we were doing a
new we were going to move into another
building that's not my core expertise
but I need to have office space for my
people if they say okay I'm going to
have a designer and a project manager do
that for you mark then they'll start
working on that and someone will go uh
hey Mark you have a minute oh yeah I got
a minute and it says here look at this
design does this look okay yeah yeah I
guess that looks okay and then I didn't
totally focus on it necessarily well
that could be a problem because then as
they start doing the buildout and I
start going wait you forgot to have
restrooms on the floor uh that's not a
real example but then it's all of a
sudden I realized I should have spent
more time looking at that so the
observation here might be are we getting
people engaged enough from a user
standpoint and from a design buildout
standpoint so that they're all working
together and committed together and I
still don't know how that all works here
as far as how many touch points you have
as a project goes out but I guess I one
recommendation is going to be do you
need to look at that that process uh to
one extent our unforeseen adverse
contract experiences integrated into
future projects as we got some of the
presentations to US during the last week
or so we did hear that when we Serv
certain RightWay and drainage problems
coming that they are being considered
when you get into future projects and uh
so that that was one of the observations
uh are there certain types of projects
that should have more advanced
engineering or S surveying to m minimize
future risks on things I can't answer
that for you but it might make some
sense to take a look at what are the
more risky projects that we have and are
there some things we can do that might
cause us less surprises as it goes on uh
another one is adequate thought going
into the future cost estimates from
moldear programs I'm still not sure how
important the five-year type projections
are but I know you worry more about what
you think you're projecting for next
year than your our out years but if out
years are going to be changes that are
problematic to console then maybe some
more thought needs to go into that uh
and then finally should multi-year
projects uh factor in more possible cost
items uh like cushion we called it
cushion should you put some more cushion
into things if you do that does that
then mean you have to cut back in
another project I don't know so then
let's go to the the final slide on our
findings um and then our our our final
one okay with this one we're not going
to act on any of this stuff right now
okay what what this is are these are
some of the recommendations we came up
with and what I did I really did this
kind of for the commission here's an
example of how we might consider wording
things in a final report that would go
to
Cil uh and we we we mentioned that uh
staff may be accumulating this if if
they are this is just an example of how
we might want to do things and what I
have here I have two examples one is a
project specific example and the first
one is one where there's an advanced
water purification system and my
understanding is uh there's going to be
a $50 million increase proposed in this
budget and it was because of uh
expiration of permits and new
regulations that require the recycling
to be done in a different fashion that
is significantly increase the cost uh I
don't have an opinion on whether that
project's a good one or not personally I
kind of like it uh but we're going to
highlight that to I'm going to propose
that we highlight that to conso for a
cost benefit consideration about what
they really need there and then I've
been talking too much now so uh
commissioner schwier you want the next
one you've had some personal experience
with so can you touch on that
one yeah thank you and and Mark was a
perfect person to be working on this
because the CPA background he really
knows how to delve into numbers and
everything and and I take more of the
880,000 foot policy sort of overview of
things um I'd like to start off by
saying that the city staff who worked
with us were very very help helpful and
you have to understand in the current
political climate where you have a group
like this that people could look at us
and make some parallels to things that
are happening in other parts of the
country you know you think it would be
hard for people to open up and have a
fruitful conversation but they were very
very helpful and they were they were
good at coming up with ideas of things
that they could do better and
communication they could have better to
make these projects more efficient so
I'd really like to uh thank the staff
for
that one of the things we did when I was
in The Paradise Valley Town Council was
we got tired of projects who would
always run
over and because it most of ours were
road projects and things like that and
it really inconvenienced our residents
those big capital projects we started
doing um a project where we would go in
there and we would figure out what the
timeline was and then we would write
into the contract that there would be a
penalty if the contract ran over if the
project took longer than was expected
now we would factor in rain days and
things like that so things that were out
of their control or
natural occurrences that they couldn't
do anything about we factored that in
but there would be a penalty if if they
just ran late on the project if they
took people off of our project and were
working on another project for
example but the flip side of that was we
also paid them a bonus if they got the
project done early early and son of a
gun they all got done early we never had
to penalize anybody so I think it's
something that I don't know the
practicality of looking at it on all
projects but I think caseby case
projects uh it would be a good thing to
look at
and Mark was um really good at leading
this so it was fun to sit there and
delve into these projects and figure out
the kind of things because I think what
we really want to do here is we're
looking more at policy or not policy but
process how can we improve the process
for the city to get a better outcome for
less
money so I thought it was a very good
few hours we spent with them yeah we did
get some excellent cooperation with the
city staff because when you're you're in
a role like this you kind of wonder if
people are going to put up walls and get
defensive or whether they're going to be
forthcoming with some information and uh
they were uh pleasantly forthcoming with
some information that leads leads to
this and um
uh the third point there was the one I
kind of touched on earlier and again I
don't know how users work with the
project managers but in my mind I'd love
to see it where they're both in bed with
each other so to speak so that they're
both so committed that they're holding
each other accountable to make sure
everything's fully communicated and
fully explored and that's how you can
minimize some of the surprises that take
place uh the other comment was increase
contingency element on riskier projects
some projects are uh just more risky
than others and so I can't answer this
for you but some of those it's like you
know every time we do this type of Road
Project or this type of construction
project it seems like something happens
well should we be factoring in some more
contingency in there to be allocated
later I think some contingency is
factored into contracts but is there
enough and are we challenging that
enough on some of these on some of these
projects and then on the multi-year ones
and also inflation factors again that
we're encouraging uh staff to make sure
they include enough from an inflation
Factor
standpoint uh for future cost increases
that that might happen so that would be
um that'll be uh that's kind of the end
of this part of the presentation skip
forward one more slide I want to just
tell you something that's in here this
is something that we had that's not
readable for you all but this is
something that we uh uh worked with
staff to put together and this is
something different than what we looked
at before what this is this is a chart
that we're I I believe would be helpful
to present to council when we meet with
them on the budget what I told you that
uh commissioner schwier and I looked at
everything through today so to speak
what the current approved things are
that Council has seen this has a middle
column that's going to be future changes
being requested through the budget
process and I'm not sure that was always
highlighted quite to the same degree and
so this chart actually starts with hey
what was it a year ago in last year's
book what is it today because some of
them Changed by Council approving things
column three is how much more are we
asking for now in this new budget
request and then column four and five
are the things that they actually
approve that are going to be in the
budget book column four is what's the
new total cost and column five is how
much of that total cost are we spending
next year so I believe the schedule is
going to tie very nicely and help counil
go through because they're going to know
where they're at at a starting point
that way they can just focus on what's
changing or any new projects that are
that are in there so i' I'd like to uh
thank uh thank staff and Scott
particularly for putting that together
for us because I think that'll be very
helpful when we meet with uh meet with
Council so again that's it and I guess
for the commission the only thing I'll
point you to that last slide we went
over is a a model to think about how you
might want to report and um so just kind
of a a FYI example
and I guess if there's any questions I
don't know if there's any questions for
commissioner schwier now would be the
time thank you both thank you both for
the work that you did offline and uh and
I'll Echo your uh appreciation of the
staff involvement and participation in
educating the seven of us up here so
that we don't go down some rabbit holes
that don't make any
sense the other thing I think I would
comment generally on this it it has been
a useful exercise and I hope a good
presentation for people here
um the My takeaway from this I I think
I've made a comment very early in one of
our meetings we're we're not on a Witch
Hunt here we're trying to figure out is
there something that we can discern from
our experience and our additional set of
eyes on these uh issues that we can
share advice to council
and to and to staff um and perhaps find
a better way to avoid some of the
problems that we've had in the
past and I would I would like to put in
perspective this chart uh that
commissioner Stevens put up here at the
end it's my understanding that these and
there is a second page to this I guess
too if you flip the slide one page yeah
uh these 31 projects that are enumerated
here are if I understand it correctly
all of the projects on which we are
asking for an or which staff is asking
the council to approve an increase in
the
budget
um and it does not show in total but if
you if you
uh if you looked at that uh slide column
three the fiscal
2526 um proposed changes
I think the total of all those proposed
changes everything that's a council's
being asked to increase the capital
budget by is something like $284
million and is obviously dominated by
some of the bigger winds like the
advanced purification recycling Water
Project where um as significant changes
is being asked and maybe you do have do
you have the totals of are looking at
something that is the totals um
actually I totaled the column four and
five not those the ones that they're
going to approve to get a feel for how
many of the actual contracts are part of
it and it's like 30% of the total value
and about uh 15 16% of what they're
going to spend next year so there's a
lot more and I and I think that's the uh
important point to make is that uh as I
said column three is we're going to
councel they're going to councel asking
for $284 million increase and then to
the
point that commissioner Stevens
mentioned if you say how much are we
going to spend of that next year of that
284 million increase we are going to
spend 163
million and that's undeniably a lot of
money but understand these 31 projects
are plus all of the projects that we are
not asking for an increase for and I
keep using the word we and I mean staff
but um the total Capital spend next year
is proposed to be 1 billion
$6,000 and so on a billion dollar
um collection of money to be spent next
year 163 is from The increased requests
and I think more significantly since
they're these requests are often times
for the five future years over the five
years it's $2.5 billion or something
like
that and um so as I said not to minimize
the number but to put it in perspective
because the the only ones that reach the
headlines in people's minds are the ones
that have large overruns for a variety
of reasons and I I think I'd like to
give a a shout out to staff and to
councel for the work that they've done
in managing a large large portfolio of
projects and a large expenditure budget
with a relatively speaking small
overrun I do have a comment from the
desk down here and I hope I haven't said
something wrong that you're going to
correct me publicly on Mr chairman um I
just wanted to clarify that this list
that you're looking at with the 31
projects on it these are in fact
projects that we are requesting an
increase that meets the threshold of $1
million and 10% um there are other
projects that are potentially requesting
increases that do not meet that
threshold and are therefore not on this
list thank you these are the offenders
if you
will
um at any rate um enough of the
compliments on the on the hard work
staff is doing um and I hope that some
of our comments will be helpful to
council and helpful to staff in the
future in understanding the priorities
clarify and we have other comments
commissioner Newman just a question if I
go down and I it's it I mean I realize
it's a summary explanation for change
scope inflation U scope scope you go
down the list a lot of inflation things
like that but some of these things if I
look at the kind of project is if I take
Scottdale Sports Complex it says scope
now if it's a water project you find
something unexpected and you have to do
something I get it you know or a
substation goes out and you have to
replace it I mean those are unexpected
scope changes do we do we do we have
different types of scope change or do
you clarify that because if it's just
well we wanted to do something different
on something that's one thing and I
would put that at lower priority vers
unless we there's a compelling reason to
do it versus we found something that
makes sense to spend more money to go
dig deeper foundations or whatever it is
or a wash project that that we found
some things we didn't expect and it was
we needed to make a change there it cost
millions of dollars to do it but it
makes sense to do it now because it'll
cost more later do we clarify and
stratify that for counil for for the for
the council so they know what they're
approving Mr chairman commissioner
Newman um speaking of the project that
you're speaking of uh project number two
the Scottsdale Sports Complex Turf
replacement um my understanding of that
project is that the original project was
completed as originally intended but
they are seeking to now do Turf
replacement at additional fields and
based on the administrative nuances of
how those projects are how those tasks I
guess are fit into existing CIP projects
we label that as a scope because we were
trying to fit all of these into four
categories which was inflation scope
conditions and phased and so of those
four options we felt that scope fit the
best and so that's why we chose that
particular one for that project and if
if I said anything wrong I'll call on I
guess Nick mulliner to correct me and
I'm not being critical of any particular
project but it it let's use it as an
illustrative example scope creep happens
is that scope creep because gosh those
those fields look really nice let's do
them over here well that's getting
outside the intent of the original
project should that come back for
approval again when we can prioritize
that money and do that versus one that
says no hey we've got a big hole in the
road and we have to do this because we
found a big cavern down there we got to
fill in and it's a million dollars and
or millions of dollars to do that so
scope creep can happen and it can't be
just because oh we want to do it it has
to be a compelling reason to have that
kind of scope Creek so so there's
different types of scope here when you
say the word scope um if I may um Mr
chair and commissioner and uh just to
add a little bit to what my colleague
was saying let's pick one that um
addresses the fire station is maybe a
good example and I think what we said is
scope
change uh I use you add the word creep
which is usually not a good uh word as
it relates to to budget so we as
reference we were just trying to
identify with these limited categories
and I I'll use the fire station as a
point where it's critical and I think
what is happening is no good deed goes
unpunished and by staff and what I mean
by that we really are mindful of the
public dollar and so often look to
remodel rebuild build things of uh
lesser value and then what happens is
when you get into the building when you
get into the fire station you have more
extensive needs uh that you you wouldn't
have figured out unless until you get
into the project and then it turns into
a more significant that's the creep what
and sometimes there's no way to know
that until you get in to the project and
the fire station is a great example of
that you know I agree with you there's
there's hidden things but then it's you
can also have using the word scope creep
it's a real word it's a real term in
capital projects is that well we could
do this well we could do this well we
and at some point you have to draw a
line yeah and that's
discipline and so there are things that
says no we have to do this because we
found asbest we have to replace that or
whatever you know remediate that there's
things that happen just because we it
would look nicer if we put new ceiling
tiles in think that's scope Cree you
know and and we should be able to
determine those things at the beginning
so we don't get that we know what we're
approving and we don't have those kinds
of changes I'm not saying that's all
through the thing but I'm just trying to
how to think about scope change and the
various categories that that it falls
into commissioner
Carla thank you yes I have two questions
um on Sample commission report
recommendations draft points on your
first one about the purification recycle
Water Project it says it's due primary
to new regulatory requirements to me
requirements means you have to do it um
so but you say we should highlight this
to council for cost benefit
consideration if it's a
requirement then how could the council
say no is there another word that should
be used there no the cost benefit would
be uh was this too big of a project to
take on and we need to find other
sources of water rather than recycling
water that was the cont of that right
but I I'm just asking should you use
another word than requirements because
requirements means it's something in the
existing facility you have you're going
to have to
do that's I thought this was all
perspective like it was part of the
design if you now want to go forward
with this here's the things you need to
incorporate into your
design okay only if you're making
changes okay all right then the other
one is on the other side on
recommendations and questions the Third
it are there certain types of projects
that should have more advanced
engineering Etc to avoid expensive
during project delays um I'm thinking
about the roundabout near my house at
Miller and Osborne which went way over
budget and way over time because when
they got down there they found I can't
remember if it's an SRP pipe somebody's
pipe was in really bad shape so that
then had to change my question is if
you're doing a project in the older part
of town like Miller and Osborne does it
require more testing so that you can
avoid those types of things because you
know that the infrastructure down there
is pretty darn
old well that's a wonderful question Mr
chair and commissioner I think that
might be need to be a followup and look
into my my colleagues that what I would
say as a general practice though just
talking about road work and then working
with utilities is having good
coordination meetings and I've discussed
this with staff and I understand that
this occurs here and so just to lay that
out what that looks like um in practice
is we have this Capital Improvement plan
and we're looking out three and five and
even beyond that years and so meeting
with the utility provider ERS so that
they can get in if they have uh
Improvement plans planned then they can
get into those areas and make those
improvements before we do our uh Road
improvements does a couple things one
increases the coordination two what we
don't want is to put in new asphalt and
then them to come in afterwards and cut
so I think there is we certainly do it
um but I think there is an opportunity
to always enhance that communication and
collaboration in the further out we look
that helps because of lead times that's
been one of the challenges for all
utility providers all the infrastructure
improvements is the lead times on these
projects and so they'll need to get that
uh product moving in order to get it in
place so that we can uh do our uh
Transportation enhancements yeah I
appreciate that I I just specifically
was curious if in the older part of town
where you have that infrastructure that
you know is older is there a requirement
with you know other people who have
pipes whatever down where you're digging
um that they do an evaluation first um
I'm just curious and I know you may not
be able to answer it now um and other
than that I just want to say thank you
to our small working group and staff for
all the time they put into this because
it was very
helpful you know and if I could chime in
on that just for a second I forget what
the exact uh situation was we were
talking about when we were having our
meeting up there but there was one of
them where they were getting into
something and they discovered that there
was a utility problem under the
ground but I forget if it was APS or who
they had prior rights there that we had
to go in and and correct at our expense
whatever the problem was under there so
you know you think you know where
everything is in all these roads but
when we built our China Miss building
it was beautiful we were there for maybe
two years we finished out some offices
so we decided we want Windows into the
warehouse so we knew where everything
was so we said yeah we hired somebody to
come and cut areas to put in Windows son
of a gun there were electrical and
plumbing pipes behind that wall that
weren't on any of the blueprints or
anything so you can imagine what a
city's like when it's 50 or 70 years old
um you never know what you're going to
run into when you start digging up the
ground so some of those things just
happened commissioner n did you want to
have the last word um just a question to
clarify lines 15 16 and 17 they all say
inflation yet the if I'm understanding
this right the 2526 proposed changes
are multiples of the original project
just last
year and it says inflation
I mean these are hundreds of percent
inflation over one year that can't be I
I that that that's a outlier for me Mr
chairman Mr commissioner Newman I'd have
to defer to City staff that could
potentially explain the nuances of that
yeah I I just highlighting that that if
you want to get approval on that I think
you've ought to explain that to council
as to why that kind of inflation is
occurring C can I just do a final
comment but on that uh what this
document didn't exist two days ago okay
so this just came together fairly
quickly I'm the one that forced them to
only have four descriptions that are one
word to explain stuff so this thing just
came together like late last night or or
whatever and I had the same question you
did and I asked them to look into the to
find a better description my goal on
this is to have a single word or a
couple of words so that when Council
looks at it like you just did if they'd
say how can it be 40 million well now it
might later on say scope inflation and
then they'll be ready to answer so I
just wanted trigger words there so coun
could decide where to ask this will be a
trial run for Council review because I
thought this would be helpful for them
I'm trying to make their life easy I I
think they're doing a great job I just
just those are those if I were going
through this list I'd say wait a minute
you know so go ahead uh chairman uh
commissioner Newman I'll take number 16
joax Road sewer improvements this was
actually started as commissioner Steven
pointed out uh this is the multi-year U
document 2015 original cost was about 6
million um wasn't going in and this is
up on Joe Max up north um I foret the
cross streets then after a few years
they went and updated it was actually 15
million then as we go through our I this
is part of our infrastructure
Improvement plan and as we updated it um
the cost did go up to what you see now
55 million it is slated for 2028
depending on the cost to start the
construction we may or may not do it we
may have to push it out further because
it may be too expensive so it's not
going from
15 million um 55 million that hey this
is the initial project the initial
project was over 10 years ago actually
going on 13 years of we need to get this
sewer in um in this area um it has dry
sewers so it's septic systems with dry
sewers so there are pipes in the ground
once we get this infrastructure in they
can connect the piping's already there
that was already put there so this it's
kind of misleading in the sense that hey
this is just within a few years this is
13 years that we've been planning for
it so you're saying we're talking about
a decade's worth of correct construction
inflation yes or more than a decade in
the location it's over a mile um we had
to do gravity and then we had to put
build a pump station then we also have
to do force mean to get it back to
gravity to get to the water campus to
recycle that water treat it and recycle
it so you're talking a couple miles
right there just in piping alone large
diameter P piping an example of that is
in your neighborhoods outside where you
live you have 8 in pipe this is 18 inch
21 in and typically the bigger the pipe
the deeper you have to go yeah okay
thank you I um just when it goes to
council maybe a little bit more of that
and that's a good recommendation
clarification on that so thank
you anything else seeing no further
questions so I think
we have overwhelmed ourselves with
information here um at this point why
don't we go on to agenda item number
four which is to talk about the timeline
and the proposed process for commission
review and recommendations and Sonia
will lead us through that uh discussion
thank you Mr chair and um next get the
slides
up okay we've had four meetings with the
commission to date and we have another
three me meetings in April uh before our
joint work study with Council so I
thought this would be a good time to do
a midpoint check-in and prepare the
commission for the upcoming meetings in
April next
slide just a quick recap and for the
benefit of our C any citizens watching
for the first time the duties of the
commission include son I think the
slides are not coordinated with the
verbiage yes yes they are so this is the
slide I'm on right now okay all right
proceed on I apologize okay I was just
trying not to just read off the slides
so um this is a just a quick recap and
also for the benefit of any citizens
watching for the first time the uh
duties of the commission that's laid out
in the council adopted ordinance
includes reviewing the proposed budget
each year before the council adopts the
tenative budget uh reviewing
specifically the proposed operating
budget and capital budget major Revenue
forecasts and also budget policies next
slide these are the items reviewed by
the commission to date which includes
budget policies reviewed in February and
major projects in the proposed fiscal
year 2526 capital budget which was
reviewed in the last two meetings our
proposed fiscal year 2526 operating
budget will be finalized and released
next
week so I'm not going to go through this
uh list in detail but this is just a
recap um for the commission and also for
our audience that these are all the
items that the commission has looked at
and reviewed uh over the last four
meetings next
slide and from those four me meetings
some of these topics were identified by
the commission for further or future
review including looking at maintenance
repair and replacement costs and
specifically reserves uh for maintenance
and repair there was also discussions on
uh the PCI for streets maintenance and
replacement of facilities and um looking
at whether we need to um beef up
reserves for those there was also
discussion of bringing back in the
future a more robust conversation of
grant funding operations specifically in
light of the uncertainty of Federal
grant funding and also discussions of
cost benefit of Outsourcing versus
in-house services and also the
incremental cost of maintaining our AAA
Bond rating and there was also
discussion and interest in ensuring
Financial sustainability considerations
of opportunity costs and level of
service these will be parking lot items
to be reviewed after the commission
completes review and and recommendations
for the proposed 2526
budget um the budget staff are currently
in the process of finalizing the
proposed 2526 budget and we will release
the city's official proposed budget
document on Thursday next week and the
uh it's going to be a budget binder with
the whole entire proposed 2526 budget
and it will be available for the
commission um probably Friday morning
we'll try to get it done by Thursday
afternoon next
Slide the next three meetings in April
will be devoted to reviewing the final
proposed budget as presented in the
proposed budget document that you will
receed the proposed budget document will
contain a lot of details of all the
revenues all funds and all departments
it will include comparisons of revenues
and expenditures to the current year as
well as to the last fiscal year the
budget document will also have
expenditures by department for all
departments and it will also have
revenues and expenditures by fund for
all funds including our fiveyear
forecast for all funds with the limited
time we have we will only be presenting
certain major departments and funds on
April 7th and uh 10th and I we will go
over which major departments and funds
we will cover April 11th will be set
aside for the commission to discuss and
finalize recommend recommendations
before the April 22nd joint meeting with
Council and to help organize the
commission's thoughts and
recommendations chairman Smith at the
last meeting requested commissioner send
recommendations to our City
attorney and um Sher Scott and I believe
that our City attorney will be sending
out an email with more guidance on that
following this meeting and we will uh
Greg and I will work with her to put
together the recommendations for the
April 22nd work study with
Council so so far I've rambled a lot on
process is there any questions before I
move
on commissioner Stevens uh yeah my um my
question overall on all this like on
Revenue you told us about the revenue
funds but we haven't really looked at
what the revenue changes are and the
same thing for
expenses uh whatever we're going to get
if it's just like the budget book you
have that shows the differences that's
nice but it doesn't give us any
substances to what went into it or any
thought that went into it I guess I was
hoping or is there any way to have the
equivalent of light management
discussion and Analysis or a a thing
that would tell us more about what's
going on there like for revenues here's
these three categories of Revenue this
one's down this one's up here's why
something qualitative or on the
Departments here's some of the budget
changes we can see the changes but if
there's a couple that are appear worthy
of comment will there be anything
narrative for that are we just going to
be looking at Raw budget books just like
the big book you put
together um commissioner Stevens the
proposed budget document will have some
narrative there will be some narrative
discussing the um forecast changes of
revenues at a high level for our major
uh revenues with our presentation on
April 7th we will also be discussing
what went into those projections and why
we projected the numbers we rejected so
it'll be both some limited narrative in
our proposed budget and through the the
presentation we will provide that um
qualitative dis um explanation and
discussion and as far as the Departments
are concerned the department pages will
have some narrative on mostly the
requested um uh the the items that are
requested in the fiscal year 26 20 uh 25
26 budget so the major changes between
24 25 and 25 26 and I guess what I'm
hoping it would be music to my ears as
some of your department directors would
say oh we took a look at our unfilled
FTE positions and we determined that
three of them we didn't need so we've
taken that out of the budget but we also
had to add another one over here because
I have a a service thing I needed so
just you know that would be music to my
ears that everyone actually dug in and
then shared some of that with us yeah so
I think we were planning to have that as
a presentation discussion because at
this time we don't have enough time to
to add the narrative to the uh proposed
budget document okay but if the
department has can at least share some
of the substantive things they did that
were changes just to let us know they
put a lot of thought into it that would
just help us rather than just looking to
changes in numbers so I'd appreciate
that okay thanks
yes commissioner
Newman just thinking about the parking
lot items here I I understand there's
many things that we can push off till
the summer but
there's a couple of items that we've
gone through in the previous slides that
I think we should put some attention to
one is we've talked about the the roads
condition and of course every year the
roads get one year older and the PCI
continues to decline I know there's
going to be a study coming out soon I
looked at the chart that was presented
it's 20 $30 million in the budget that's
needed to kind of get on with this
program to me it's pretty obvious that
we're going to get on with that program
and figure out how to get the PCI turned
around and move in the right direction
because there's a critical Cliff that we
that we fall off of and then you're
doing base failures roads things like
that so we can park it lot that but to
me it's very obvious that that's low
hanging fruit that we should that we
should prioritize is I'd like to see
that in the budget there and the other
one would be we've talked a lot about
pension pay down and getting from a
fiscal standpoint to get us to a place
that um where we have less risk in the
pension those promises have been made so
I think those are things that we should
talk about even though though there may
be parking lotted items and more
analysis but let's not wait a year to to
to figure that out I think we we can
make the decision to do that now that
would be my ask in in some of the work
study work that we consider yes uh thank
you commissioner Newman so we did as you
know as we were uh conducting these
budget uh commission meetings through
March we were also putting the proposed
fiscal year 2526 budget together and we
did incorporate a lot of these
conversations and discussions so what
you'll see in the proposed budget is we
did increase the budget for Street
overlay thank you to our interim city
manager who did some magic on the budget
and moved some dollars around and so you
will see that you'll see that we have
significantly improve uh increased the
overlay budget for fiscal year
2526 we do have in our budget a proposal
to pay down additional psprs debt to
hopefully bring that um funded status up
to around 80% and you will also see
based on these discussions for uh the
commission's interest in seeing some
reserves for maintenance we have also
put a line item for reserves for
maintenance so we have Incorporated to
the best of our abilities some of these
parking lot items even though they
haven't been thoroughly studied or
discussed you know in in you know
excellent thank you that that that's
very practical and and I think we can
all agree that we're pro we're going to
do something around those things um and
so it's there thank
you so uh before I move on to the next
slide so back to the April 7th meeting
um like I said we will present the big
picture overview of the city's proposed
budget for fiscal year 2526 and then we
will dive into some of the major
departments and funds um next Slide the
major departments and funds that we plan
to uh have specific presentations on on
April 7th and April 10th are listed on
this slide they're major our major
departments like police SP
transportation and infrastructure Parks
and Recreation and Preserve in our
library and Human Services and then to
the right there the general fund tourism
fund Transportation fund and preserve
tax fund each of these Department
presentations will also address the FTE
the unfilled positions and overtime and
any significant budget
requests um and these uh departments
were selected based on uh feedback from
the commission at one of our very early
meetings and also direction from the uh
our um chairman next
slide and this is a list of departments
that we are not scheduled for
presentation specific presentation
however even though uh we're not having
specific presentations on these
departments and funds the commission
will still be able to review the budgets
of these departments and funds because
the budget document you will receive
will have all funds and all departments
and the department staff will be
available on the um at the April
meetings for any questions you might
have so what I hope what I hope is that
this gives the commission a road map and
sort of an idea of the upcoming meetings
in April and how we can get through the
proposed uh 2526 budget and with that I
can answer any other questions you might
have
does anyone up here have a question
um or shall we just March
forward commissioner Carla um I just
want to thank you very much Sonia and
staff for doing this because when I
asked last time for a gut check I think
this is exactly what we needed so thank
you commissioner Stevens you want to
congratulate them as well what's that
you want to congrat at them as
well they've been so patient with me and
I can be kind of detail oriented
whatever and everyone's just been so
patient with me so thank my wife's
laughing out there so thank you for
being so patient and responsive uh to me
uh the only thing I was going to mention
is Enterprise fund uh the water's huge
but I think you had mentioned earlier I
was reminded that we're just not going
to deal with the Enterprise funds unless
something jumps out at us so I I'm just
saying that I think I agree with that
and that there's something that's
particularly trou some that one of us
can just go ask for a
clarification yeah I think the um the
selection of departments to review and
funds to review was more order of
magnitude and um and staff time to make
presentations but as Sonia said
um the whole budget will be posted I you
said next Friday morning um good Lord
willing in the creek don't
rise um so
each of us can individually pull that up
online and and formulate questions that
we may have and I'm sure they'll have
answers or wing it
somehow other comments commissioner
Newman just a comment on the Enterprise
funds and and just we can talk about it
offline or here if the Enterprise fund
like each per each resident is going to
see a increase over a certain amount or
whatever or a change a significant
change is there anything you see right
now to to say hey there's certain things
that are going to drive significant
changes you might want to look at the
Enterprise fund if you going if there's
going to be something that people would
react to but if it's going to be pretty
normal then I'm not too worried about it
at this point you know we can talk about
that later but son you can tell us if it
there's anything Dam any surprises there
I guess yeah commissioner Newman thank
you for the question uh the commission
can certainly request us to bring some
presentation on any of the Enterprise
funds if you would like our largest
Enterprise fund is our water Water
Reclamation the cost drivers are the
purchase of the capap water which the
cost of that capap water has increased
chemicals electricity and personnel and
you know Kevin is here if you want more
specifics about that and those are
normal operating costs of our water and
wastewater utilities then there is also
all the infrastructure costs and um we
do have planned a rate study an update
to our rate study which we do every five
years with a consulting firm with a um
rate consultant we have we have plan we
will plan to do an update of our rate
study next year for this year we've
already gone to Council in March uh
presenting a I think four and six% I
can't remember the exact number but
somewhere around four or 6% rate
increase for water and waste water so
it's a very reasonable rate increase to
cover these operating cost increases and
also the capital cost yeah the 4 to 6%
is what I was looking for it's not 20%
and then you say why so there's nothing
like that so no need to no need for us
to spend time reviewing that in detail
at this point but when the when the new
study comes out then obviously we'll be
interested in that thank
you other questions or
comments um let's go on to item number
five if there is anything this is where
each of you commission members uh can
request that an item or proposed topic U
be placed on a future
agenda if anyone has anything to suggest
commissioner Stevens this tell me what
you think about this I I uh I'm
struggling about trying to set a format
together for how we're going to approach
things I'm considering having an agenda
item proposed that would say
we have a discussion by the
Commissioners on ideas and approaches
for future year reviews because I'm not
sure because we can't talk I can talk to
you but that's it I and what do you
think of having an open Forum where we
all talk about hey next year uh why
don't we set together a program for
who's going to tack water how we're
going to do this or what we're going to
look at just to start a discussion so I
guess I want to know if there's if there
would be value to having that as an
agenda item to start talking about it
sure I'm not sure how we would agendize
that I would suggest that maybe when we
have we're we're intending to have on
April 11 a what's called work study
session which is a far less structured
kind of discussion um it will be guided
by whatever collectively we have
submitted as being the topics we'd like
to see moving forward to a council
uh
proposal but uh maybe that would be the
less
structured um approach I don't let me
ask the City attorney if she's wants to
chime in on this as to what we can and
cannot
do well we could certainly add an agenda
item uh for the commission to discuss
possible future recommendations and that
way you have that on the agenda and you
could discuss that um I think the
priority is definitely getting this
first batch of recommendations to
council and the timeline that it's
required but we could have an agenda
item if if if that's the commission's
desire that allows some of those um
discussions amongst the Commissioners on
future
items I can so we could we could have
something that um in layman's terms just
says this agenda item is what's on your
mind yes we might want to um add a few
words to that but yes
generally would that uh be responsive to
what you're looking for commissioner
Stevens it it would be here's where I'm
coming from I'm I was a financial
auditor Inon young so I'm used to when
you go audit a company here's all the
things you're planning on doing here's
going to do what here's what you're
going to do in each of these areas
here's who's going to do it and then as
you find stuff you change things so way
down the road I'm wondering if each of
us are eventually going to say hey
here's what I want to do I want to look
at some projects during the year I want
to look at one of the Departments I want
to meet with someone on this uh just to
give us a framework for what we each
want to do and this thing can all wait
till after we're done with this year if
you'd rather do that but my my because
my proposal otherwise be to just um it
was going to be I was going to move that
an agenda be added for discussion by
Commissioners on ideas for approaches to
Future reviews so it was broadly like
that so we could talk but I'm really
indifferent because we got a lot to do
so I'm okay if you just want to park
this for now I think realistically it
will be something that happens after
we've okay finished the budget review I
made no
motion no motion no motion but hold on
to it and we'll uh we'll try to
facilitate that to guide the uh
discussion in the what I call Post
budget period
any other items from any Commissioners
or comments before we adjourn if not I
will entertain a motion to
adjourn motion to
adjourn Newman made a motion to adjourn
I think Vice chair schwier second all in
favor raise your hand anybody oppose
spend the night all it's a
unanimous e