e good afternoon welcome to the September 27th policy session of the Phoenix City Council will call the meeting to order will the clerk please call the role councilwoman Ansari here councilman deia here council member Garcia here councilwoman wado here councilwoman O'Brien here councilwoman Stark here councilman wearing here vice mayor Pastor here mayor gyo here Mario baras is with us to provide interpretation Mario would you introduce yourself yes mayor thank you hello my name is Mario wahas and I will be serving as today's in interpreter for today's policy session I'll now take a moment to introduce myself to our Spanish speaking audience inter yes thank you mayor thank you Mario we'll begin today with Council information and follow-up request starting with councilwoman anari followed by councilwoman O'Brien thank you mayor I do have slides perfect um I want to start off by wishing everyone a happy Hispanic Heritage Month um can go to the second slide I um do want to give a huge congratulations to councilwoman guardado council member Garcia and our City's Economic Development and Phoenix sister City's team for throwing a wonderful ELO celebration right outside City Hall the number of local vendors that you all were able to support and people who showed up was incredibly impressive um and I had a great time being there next slide I think our city may know that bad bunny is in town tomorrow that's all that my chief of staff can talk about um Downtown Phoenix is going to be busy and for those of you who couldn't snag tickets I wanted to share that the Renaissance will be throwing a free neighborhood celebration to Showcase all of the amazing local port Puerto Rican Cuisine one can enjoy here in Phoenix as we all know Puerto Rico and the Dominican Republic have recently been hit with a devastating hurricane hurricane Fiona has left Millions without electricity or running water this last week my thoughts are with any Phoenicians who may have family members who have been impacted this is another Stark reminder of what our climate crisis does produces more intense costly storms we don't see that here in Phoenix but Fiona has already taken 16 lives according to reports you can do your part to support local efforts by visiting donation for Puerto rico.com next slide please what we do see here in Phoenix are heat related deaths as of this September 209 deaths have been confirmed and 216 remain under investigation I am incredibly proud of the work that Dr hula and the entire heat ready Phoenix and volunteer Phoenix team have accomplished this Heat season my team has joined Ivon and their crew in LaVine and at the Human Services campus few statistics that I did want to share um there were 10,191 heat related items distributed this year by the City of Phoenix and 3,850 were the total number of contacts made and 305 Human Services referrals made I know we're about to close the heat relief tenth on 9th Avenue in Jackson but I did want to emphasize that I'm very much looking forward to a very detailed debrief this fall and how we can continue to work to reverse these alarming statistics what worked what didn't and what additional resources we do need next slide I also uh want to take a moment to acknowledge the protests that are happening in Iran right now and across the world following the brutal killing of a 22-year-old young woman Massa amini by the regime's morality police for not wearing the compulsory hijab correctly I am a proud Iranian American who has spent the last 11 days watching the courageous women in Iran who were at the for Forefront of these historic demonstrations for those who don't know 60% of Iran's 84 million people are under the age of 30 and they have also been leading this movement for basic freedoms and human rights I feel a huge responsibility to continue to lift the voices of Iranian people while an oppressive government is trying to silence them by blocking internet access killing innocent people and openly continuing to Target women and minority groups this Sunday October 2nd at ASU University bridg and 10p there will be a solidarity rally and Memorial vigil for Massa and the brave women of Iran starting at 5:30 p.m. all community members from all backgrounds and nationalities are invited to attend in solidarity closer to home we are dealing with our own form of right-wing religious extremism that has led to a judge ruling that Arizona can enforce a near tootal abortion ban that dates back to 1864 this law Outlaws Outlaws all abortions unless the mother's life is at stake what it doesn't specify is how close the mother must be to death before a doctor can intervene with a life-saving abortion doctors will have to risk their own freedoms to save lives and anyone who provides abortion services or assists in any way can face two to five years in prison we need our doctors to be saving lives and locking them up for doing so is reprehensible and disgusting next slide on a more positive note the deadline to register to vote is this November is uh Tuesday sorry October 12 11th and I encourage everyone to make their voice heard in this important election and then finally these are uh some of the dates in October to keep in mind where you can engage with my office this Saturday we will be in LaVine for a community cleanup again voter registration deadline is October 12th um on October 10th there's a big indigenous people's day Phoenix Fest right here in downtown Phoenix Outside The Churchill October 13th uh we will be doing mobile office hours in South Phoenix exact location TBD on October 15 uh we are working with the estrea village on a gain event at Santa Maria Park featuring a taste of australa with local food vendors October 23rd we are hosting our second Annual Pride on the Block um downtown as well and then October 29th uh taking part in the seventh annual noce and Blanco and as always please don't hesitate to reach out to our office um other either on social media email or phone for anything that you might need thank you so much thank you council member Garcia thank you mayor I have PowerPoints now trying to be more effective with our time and Council and then councilwoman gado Will Wait thank you so much first of all I wanted to start by wishing Mariana from our staff a happy birthday and thank you for all the work you do she's our our policy lead um next slide please um we had some really good events thank you councilwoman Ansari uh councilwoman guardalo and I got to partner to do Theo event we had 6,000 people uh join us for that event it was beautiful and thank everyone who helped out with that uh we're able to uh get a hawk at Perry Park uh or near Perry Park this week and and get it running and going um the we've been doing a lot of work in that area and we've had uh I think two or three pedestrians who uh passed away or died um so we're really excited from for that Hawk to be there and hopefully save some lives um I think a lot of us in the last week or on on national uh voter registration day went to different high schools to encourage youth to get registered I was fortunate enough to be at Wilson prep uh with youth and excited to to get them involved um in our democracy um for upcoming events next slide uh we have we've been working really hard at the four corners area on Broadway and 24th Street we have uh meeting next uh week on October 5th 6 pm at Broadway Heritage Resource Center um moving on forward and hopefully finishing up and getting RFP by uh the end of the year uh to get that project going we've had a movie in the park at at Garfield this last week it went great and inviting folks to join us on October 22nd at 6 p.m. at be Park we'll be showing Coco and then next slide um so this one a little bit sad news but it comes with with uh good news moving forward & was a design architect who worked on many projects throughout District 8 in the city of Phoenix she passed away on January 14th earlier this year she inspired her colleagues through her persistence high standards and understanding that hard work can be join joyful when great purpose is is the driver at a student as a student and in her work m&a believed that shaping the physical environment was important to nurturing people and Community she was a peaceful talented and diligent Champion for Equity her work was about making something for others using her talents to express what others could not draw model write organized or design for themselves to improve the community and people's daily lives she contributed to local as well as Global architectural projects and higher education healthc care and Justice um her multi- Studio Legacy will live in the South Central Transit oriented development community plan Edison East Lake impact Hub and the rasa Development Fund Community Hub among many other projects um so announcing her scholarship um with her inspiration the National Organization of minority Architects and multi Studio are offering a scholarship opportunity to honor her and her belief that design was has the power in shaping places and Community benefit the scholarship is intended to support diversity within the student body and design schools by providing financial assistance uh to a nass member for Nas's student member that most embodies the spirit of Noma A's core Mission the scholarship is not uh need-based but rather Merit based Arizona residents are Arizona residency is not required application period closes on October 31st that's it for my comments thank you mayor thank you and why don't we go to councilwoman O'Brien and then get councilman cordado slides up thank you mayor I want to um remind everybody of an event that I'm uh partnering with councilwoman Stark and Phoenix sister cities for um on October 8th at 5:30 p.m. at ASU west campus we'll be hosting a double 10day cele CB ation event Double T 10 double 10 day normally celebrated on October 10th is Taiwanese Independence Day and celebrated all over the world as the day common Chinese people rose up against their feudal Empire and became independent from the reigning Dynasty celebrations have been held annually in Chinatown San Francisco Chinatown Montreal Hong Kong Taiwan and all over the world as you know with tsmc moving into the North Phoenix region we have already been seeing an increase in new Taiwanese residents creating homes here in Phoenix with many more on the way we wanted to find a way to welcome them celebrate their culture and take the opportunity to introduce them to some of our culture which is why we've partnered with ASU west to celebrate their independence day with the night market theme on ASU west campus this celebration will Encompass local vendors offering traditional Taiwanese Cuisine drinks and crafts as well as a as local Arizona vendors offering attendees a taste of our culture for the kids there will be games and entertainment including traditional lion dances Taiwanese yo-yo displays and martial arts demonstrations as the sun sets and the sky darkens everyone will be asked to step outside to enjoy a firework display celebrating the event I'd like to give a special thanks to our corporate sponsors tsmc Southwest Gas APS and and the taipe economic and cultural office in Los Angeles we look forward to having a great event and hope to see everyone there mayor thank you we'll go to councilman guado and then councilman wearing thank you mayor yes I just wanted to start by saying thank you to the over 6,000 residents who came out to our first annual elito event celebrated in downtown Phoenix open to the public I am very thankful for all the hard work that was done by my office and council member Garcia's office and also a big shout out um to Chris Mackey and Rita Marco for all of their hard work to the rvu family and to all of our sponsors and everyone that helped us put this special night together and I also wanted to thank our partners from the Mexican baseball Fiesta for an awesome two nights of me Mexican baseball in mville this past weekend as we continue the celebration of Hispanic Heritage Month I want to thank all the families who came out to cheer on their favorite teams and dance to some great life music as we approach October it's an exciting time for us we return to imperson gain events with our different neighbor groups I'm very happy to be hosting the Citywide kickoff for Phoenix gain events this Saturday October 1st at Christown Spectrum Mall from 10:00 a.m. to 1 p.m. come on out to meet and connect with Incredible neighborhood leaders who dedicate so much time time and energy to uplifting our communities October 15 will be the day a day filled of events for District 5 we're first going to start with West Plaza neighborhood association will be hosting their gain event from 9:00 a.m to noon at La Pradera Park elaro Vias Blog watch will be hosting their event from 10 to 11:30 at the elcar Vias Clubhouse from noon to 400 PM our Parks and Recreation Department will be out with information games and goodies for kids at Holiday Park and finally our good friends at parks RX and the County's office of nutrition and active living will be at Homestead park for a familyfriendly event in outdoor programming from 9:00 a.m. to 12: noon and lastly on a different note I would like to offer my sincere condolences to the family of Ali Osman even prior to the tragic incident from this past Saturday my office has been working with man with City management to increase CBI Outreach in the 19th Avenue Corridor we must as a city do better in responding to these mental health crisises in our community in District 5 we embrace our diversity and my heart is with our Muslim brothers and sisters as They Mourn in this difficult time I would like to also remind them that we are all one community and we we are here for all of them in the coming weeks I will be working closely with Chief Sullivan to ensure the needs of Alise family and the larger Community are met thank you mayor thank you councilman wearing uh thank you mayor uh so there's been one thing I don't think that's been mentioned at our meetings that will go noticed by everyone in the city and that's the change in garbage pickup dates uh so there's a lot of change uh coming starting next Monday and uh if you want to know when your garbage is going to be picked up go to Phoenix spelled out.gov backu works all one word um I think they're going to give some dispensation till the end of the year if you put it out the wrong day my day right now is Monday I guarantee it I'll have my thing out on Monday and then when it doesn't get picked up I'll have to figure out oh wait it's actually Wednesday so it'll take a little bit of getting used to but um should increase the efficiencies and fuel consumption should go down and so forth but uh so I hope people bear with us but they should definitely know uh to look for that change if you didn't get the card in the mail you can go online and find your spot or date thank you thank you vice mayor thank you mayor I'll wait for my slides thank you the district for policy presentation next slide uh Community meetings we had a WebEx meeting with mcdal neighbors live meeting with the Carnation neighborhood and we were the first as you see in this picture having fun we were at the end of the meeting uh the first to host a meeting at the new Cooperative co-working studio uh this was after two hours uh debating zoning so uh you can see we're still having fun next slide uh celebrating Lieutenant Fields uh I am so so proud of her uh she won elevating women in law law enforcement award I've worked very closely with her on many different things and so I was really happy and as you see her mom she's there with her mom and her kids and we're just doing a fun picture next slide district for interns crystal mendosa is serving our country at the Naval Academy and and Hunter Franklin is our at our nation's capital interning for Senator Cinema uh so you can see as you intern in the city of Phoenix how you advance so I'm so proud of them thank you next slide Hispanic Heritage Month chop guacamole challenge it's October uh 12th uh 2022 at Chico Gallery we will have different representatives from different parts of our Latin countries and it is from five 5:30 to 7:30 if you are interested you are more than welcome to join us I would like to thank Fri and Chico for sponsoring uh there's will be a 10 uh $10 admission suggested for Chico and some programming for the Arts so thank you next slide coffee chat tomorrow is our coffee chat at 8:30 uh you will learn about the 27th Avenue action plan and it's at 4016 North Black Canyon Highway believe thank you vice mayor we will next go to a discussion of our budget and I will turn it over to our assistant city manager Lorie Bay thank you mayor good afternoon members of the Council budget and research director Amber Williamson will spend the next few moments walking you through our financial performance for fiscal year 2122 as the report and presentation will show we find ourselves in in a very favorable financial position because of your leadership Direction and commitment to sound financial stewardship we find ourselves in a much stronger position than many of our peer cities this financial position will be extremely important as we navigate the volatile economy labor negotiations and other legislative challenges that will threaten the Ser the city's various revenue streams decisions on how to best use this position will come later in the year as budget and research staff work to develop the 5-year forecast and general fund status in the spring I'll now turn it over to Amber for the presentation thank you Lori mayor members of the council and the public happy to be here today to talk about our 2122 general fund budget results I'll start by going over our resources which ended the year hold on just a moment it stopped working sorry try that again sorry so our resources ended the year 31.7 million above the forecast our expend expenditures ended the year 7.3 million below the forecast arriving at an ending balance variance of 39 million above forecast I'll also talk about some challenges we're going to be facing as it pertains to the budget in constructing the 2324 budget and then talk about next steps in the budget development process including rolling out our fund Phoenix tool in November to the public and then finally asking for Council action today to adopt the 2324 budget calendar so we'll start by talking about our general fund resources for 2122 resources include our beginning fund balance revenues and net interfund transfers as you can see by the chart on the screen the blue bar represents the estimate which was 1 b663 million our actual resources for the fiscal year represented by the green bar ended at 1 billi 6947 million for a variance of 31.7 million or 1.9% more than estimate this does account for one-time additional resources that will carry forward in the fund balance and will be taken into account as we construct the status as Lori mentioned I'll bring that back to you in February so for our general fund expenditures this represents the cost to to deliver programs and services to the community primarily made up of the cost for our city employees for 2122 our estimated expenses were 1 Bill 4776 million we ended the year at 1 B4 70.3 million for a variance of just 7.3 million or a half a perc under the estimate this was primarily made up of additional vacancy savings as I'll talk about in a moment with challenges facing the budget City departments are having a hard time filling positions we have around 1,000 vacant general fund positions so any savings as a result of those expenditures carry forward just like the resources and our fund balance and will be taken into account when we construct the status so when we take our resources less our expenses we arrive at an ending general fund balance that was estimated at 185.46 million 39 million more than estimate as Lori had mentioned this is good news we start the fiscal year in a good position with our general fund balance and we'll take that into account as I've already mentioned in constructing the budget for next year so I want to spend some time talking about challenges or demands that will be facing the general fund as we move forward I've talked to you before Council about the continued pressure that pension puts on our general fund budget it represents almost 25% of our operating expenses particularly for Public Safety as you can see the chart on the screen the blue bar represents police pension expense the red bars represent fire pension expense you can see those actual costs from 2122 going back to 1617 that increasing Trend we expect that to continue over the next several years through 2627 this was information we received from the public sa safety uh actuary we built those projections into the last 5-year forecast I presented to council last February it is suggesting we'll see increases anywhere from 45 to 50 million we will be updating those projections we'll receive the updated actuary reports from both the civilian and the public safety actuaries in December other challenges we know or demands on general fund resources that the council will have to take into account is the ability to offer competitive fair and affordable compensation packages for our employees we're going to start negotiating again in December with the labor groups we also know we have the classification and compensation study we should have the recommendations from that in the spring both of those are anticipated to result in increased demand for general fund resources as I talked with the council last spring when we presented the 2223 budget we want to make sure we have resources available to competitively pay our employees but do so in a way that's sustainable and affordable every 1% in total compensation for the general fund is roughly 12 to4 million so I want to be be careful as we move forward to make sure the numbers that we present to you in the spring with an updated status that you take that into account as you make your budget decisions we also know in addition to Rising pension costs we have Rising costs for other French benefits including um health insurance for example we'll be building those costs as well into the expenditure forecasts we also know we have growing needs for City facility U maintenance needs as well as vehicle Replacements we do have a backlog and our general fund uh vehicle Fleet we know that every dollar that's appropriated for general fund maintenance and vehicles does not go as as far because of inflation just received information from our public works department they are seeing increases in cost for vehicles upwards of 20% particularly for our fire apparatus so it we may need to consider as we move forward and constructing the budget do we need to appropriate more money for vehicle replacement needs just to keep Pace with what we were planning on replacing we also know we need to adequately fund our city trust funds we are statutorily and have a fiduciary responsibility to do so this includes trust funds including uh self-insurance Reserve as well as workers compensation we also know that the community expects uh expanded in new Services uh we want to make sure ongoing for the long term we have resources in the budget to be able to meet those expectations I do want to mention over the last two fiscal years we have added $60 million in general fund additions roughly 500 positions City departments are struggling as I mentioned to fill those positions and to execute those program additions so as we bring an updated status to the council bear in mind that expanding or adding new additional service um would would somewhat be a challenge for departments as they haven't executed what's already been added in the budget and having to balance that with the need to do employee compensation increases I also want to just spend a moment talking about the challenges we have with forecasting Revenue it's very difficult in the envir this current environment to do this U particularly as a result coming out of the pandemic and now dealing with what we see going on in the economy it's rather volatile it's uncertain we hear from economists we're either in a recession we're heading into a recession in 2023 we know we have high inflation um not certain obviously at this point what that could mean directly to Phoenix revenues so why we monitor it very closely we look at our Revenue uh every month we study the data we look at what our trusted experts are saying with our University Partners those at the Joint legislative budget committee and other economists this is just to mention that as we go to construct Revenue estimates it's it is incredibly challenging to try to accurately predict where we're going to be so we want to try to be prudent and cautious as we always are and not overestimate what our Revenue growth could be other challenges with the budget legislative action that could result in reductions to revenue we know in the last legislative session there was an attempt to prevent cities and towns from collecting residential rental sales tax if the legislature were to seek to do this again this would have a a pretty big negative impact to the general fund on an ongoing basis looking over the next few years it could could be anywhere from 42 to 46 million just for the general fund for all funds 81 to 88 million it does impact other special Revenue funds such as Transportation 2050 Public Safety specialty funds and parks and preserves so we will be monitoring that very closely as we move through the legislative session also I we know our Phoenix population is growing this is good news fastest growing Metro as a result of the 2020 census however our state shared revenues are calculated based off of relative population share and that has been decreased ining over the past several years we're going to see an estimated decrease to general fund revenues on an ongoing basis because of that of roughly $6 to7 million we'll be incorporating that negative impact into our updated Revenue projections so next steps in terms of budget development we just wrapped up the annual salary and benefit projection review process this is where we work with City departments to accurately as we can project where salaries and benefits for city employees are going to be for this year and next year next we're going to move into the month of October and November doing our 3+ 9 technical expenditure reviews this is the time of year where we do a deep dive a line item analysis on expenses with City departments for all the programs and services they provide based off existing levels to try to estimate those costs for this year and next year December we'll do central reviews this is where we do analysis and do projections on Citywide expense items such as pension Fuel and electricity we'll be working all through these months to develop updated Revenue estimates all of this will come together with a preliminary general fund status and five-year forecast I'll present to you on February 21st fund Phoenix in November over the last two years we've been rolling this tool out to the public earlier in the budget process to try to start getting feedback about what residents would like to see in the budget we'll be updating it with the 2223 budget we also we'll be bringing to the council starting in December with the general information packets any comments we get on the budget directly to budget and research as well as the tool so you can take that into account as you're considering budget decisions for the 2324 budget calendar as I mentioned November fund Phoenix February 21st is the preliminary general fund status and five-year forecast March 21st we'll bring to you a proposed trial budget in the preliminary Capital Improvement program in April we'll take the budget to the community as we do every year May 2nd scheduled for city manager budget decisions May 16th final Council action on the budget that's a critical step in the process without that we cannot move into what is legally required to do which is our budget adoption steps May 31 would be tentative adoption June 14th is final adoption and then July 3rd it concludes with property tax adoption so today as I mentioned we are asking for Action from the council to adopt the 2324 budget calendar and with that I can answer any questions wonderful thank you so much for your hard work in putting together this presentation doing forecasting in incredibly uncertain times we have worked hard to be fiscally responsible and we appreciate all the work that that goes into that and even with the Positive news about a small Surplus we have some looming economic issues on the horizon we'll go first to councilman wearing oh thank you mayor so uh you you guys in your shop and your predecessors should be complimented because you're right forecasting is extremely hard it's like trying to pick the Super Bowl winner every year which Sports Illustrated and all those so-called experts always get wrong but you guys have been pretty spoton accurate for really about 10 years now and and this isn't the first time we've had uncertainty or you know kind of a strange climate you had covid and everything I mean you know and there have been other downturns too this isn't the first in the last decade so but I appreciate you qualifying it saying it's tough to do and don't count on us being able to do that again I do appreciate that cander but I also think you were kind of selling yourself short on that because that's been a skill you guys have been incredibly Adept at and deserve a lot of credit because that really helps make informed decisions I mean it may sound like a small thing but you know to have a really accurate confidence in you guys from sitting up here to make decisions is I think really helpful um but there are a lot of uncertainties and I think you and I we talked individually you you kind of mapped some of those out um like kind of worst case scenarios the pension stuff that's been around for a long time it's sort of a known it actually looked like if I'm not wrong on your charts the trajectories kind of flatten as we go further out is that are those real numbers I don't know how else to phrase it but I think you know what I mean or is that just sort of that's our guess because it's so far out we can't really tell councilman wearing mayor members of the council that's a good question so we rely on the public safety actuary to provide us projected employer contribution rates we don't come up with those on our own um th those do assume that the plan hits their Actuarial assumptions every year which they don't some years when they don't hit their investment r return for example much like they didn't last year because of what was going on with the markets that would put upward pressure on the rates if they make other actual assumptions like changes to the payroll growth which they have done also that will put upward pressure on the rides so we are seeing um in the outer years it's starting to stabilize but again that assumes they hit every actual Target and they don't make any changes to their assumptions so we'll get updated rates again in December for both 2324 and the out years from the actuary I am anti ipating those are going to be higher than what they were last spring when I presented the 5year forecast if I could take a guess so to answer your question we don't come up with those the actuary provides those okay so those I guess mayor part of the reason I asked that question is you can't be held really responsible for these projections a few years out based on other people's numbers and the stock market's down what probably like 20% more or less probably since those numbers were provided to you I'm guessing because all that's happened relatively quickly am I wrong about the timing of that councilman wearing mayor members of the council no you're not incorrect about that the rates that we used in the last fiveyear forecast and what you're seeing on that chart were based off the actual evaluation as of June 30th 2021 oh yeah well so yeah that's that's gonna be markedly different but it's still not unexpected you know we've prepared for it as best we can um the rest of your projections that that I saw um weren't disastrous even when you were modeling pretty dis disastrous situations for the economy as a whole and I'm not saying it would be disastrous for individuals but I'm talking about disastrous in terms of our budget like can we do the stuff that we're obligated to do am I misreading that or would you say that's a fair assessment councilman wearing mayor members of the council I I think that's a fair assessment I think that the unknown is we're assuming that we're going to have growth in Revenue um that's a big component of this a lot of our revenue is made up of sales tax that's very volatile if we have legislative impacts that try to eliminate our ability to tax certain categories that would be problematic if we see an economic recession and our Revenue starts to decline it it wouldn't take long to start to eat into the fund balance every 1% variance in revenue is roughly about $15 million so that's why we watch it very closely I I don't want to present a a doom and gloom scenario it's good news that we have a significant fund balance as we move forward and I think that Phoenix um is poised to do well if we were to see an economic recession or a contraction much as we did coming out of the pandemic we LED out of that so there's a lot of strength I think in Phoenix economic fundamentals that would help us through that um it's just uncertain and so when we look to economists and we're hearing that we're in a recession or we're going to be in a recession I think it just gives us more of a reason because of that additional uncertainty to try to be more cautious with what we're estimating I would rather come to you at the end of the fiscal year and have more money than what I estimated then come to you and I had less so that's kind of the process we're going through but I it's a longwind answer I gu to your question um but but we we do know we'll we'll do what we have to do to try to present the best information to you the city has a long-standing history of adopting balanced budgets and taking quick action when the council needs to to make sure that it the budget stays um sustainable and balanced well I appreciate all the challenges that come with your job and uh with given all the uncertainty it's amazing what you guys have been able to do in terms of giving us accurate information but this is a very fluid situation there's no doubt about it um you know I will say that fund balance it looks like a lot of money on paper but it really pays for what a few weeks of operations if stuff really went to heck so I know the state found that out um during the Great Recession I think it was maxed out because that was if I remember right statutorily capped and I think the cap had been met it was hundreds of millions of dollars oh boy we can let you know that gets gobbled up in a heartbeat in a really serious uh recession so we can't count on that to carry us through it's good to have a balance it's great that you know we've been pocketing a few million dollars you know pretty much every year but uh and your goal of trying to be over rather than under is certainly meritorious to say the least but um you know we have to be really cautious about the spending going forward with as many uncertainties as you're talking about so well I appreciate it thank you mayor thank you councilman wearing I have a question government Affairs after councilman deio goes councilman deio am I up mayor well thank you very much uh and I want to thank staff just like Jim did uh on the presentation I think they did an amazing job and the forecast was outstanding I mean just by my you know back of the napkin numbers uh they came in at 2.7% and if you're if you're concerned to have a three and a half percent deviation that's considered an outstanding number when a lot of forecasters are around 5% so staff you're at you know 2.7 that's huge congratulations to you for having a a near perfect it's like having a near-perfect game in baseball I mean it just it wins it wins a lot so like Jim and just I want to just talk a little bit about the propensity to want to spend that $39 million that we're getting in and I get the nature of it because people will want to spend it right away way uh but to be very careful on that uh you know one of the things in business you're always looking for what's called reoccurring income reoccurring income can take the form of many things from businesses so when you you know you're investing you want to know what your return's going to be reoccurring income can end at times not end but it doesn't work all the time whereas reoccurring uh debt occurs all the time the debt Clock doesn't take vacation it doesn't take time off and it doesn't take holidays it is constantly going as we're sleeping debt accumulates likewise with the pension costs and you've heard us talk about this before but pension costs continue to accumulate over time and they constantly are going and so as we want to have the propensity to pay more to spend more to do those things we're also putting other you know future councils in debt so if you look your family you you know you always want to leave your family a little bit better off or a lot better off if you can than you did Yourself by spending more by doing more we're actually leaving future councils future you know citizens of our city with a debt that is going to be insurmountable over time and you don't ever want to do that like I said you know you don't ever want to leave your family your friends anyone worse off than they were uh than you you know than you were so likewise with these debt and the you know the the propensity to want to spend it you've got to be super careful one other thing that I'd like to bring up too and that's to Jeff and I know you're looking at a $500 million Bond I think that that might be a little bit too aggressive I think you're probably pretty close on that but when you look at the amount of debt that we're going to be incurring uh in the future with these pension costs because we don't what's going to happen next year we have no clue what's going to happen next year and that is problematic and I know we wanted to get you know that I know we'd like to get that 500 million going but I think that might be a little bit on the aggressive side and not as safe as we need to be Jeff so um I appreciate all the work but again I'm just going to caution people this money is a small amount but it can go a long ways when we reach a a really difficult time and that debt clock will never ever stop it goes all the time and that reoccurring debt is a problem for future councils and future citizens of Phoenix and we don't want to leave them off better you know worse off than we are today thank you mayor thank you um councilman deio and Amber both teed this up a little bit with reoccurring revenue and and um Amber had mentioned some of the bills from from last session but question for uh Lauren with government Affairs can you talk to us about some of the things happening at the state legislature that might impact our Revenue uh yes good afternoon mayor and councel um the uh at the end of toward the end I should say of last session a Senate Bill 1116 was introduced which would have eliminated the city's ability to charge um rental uh transaction privilege tax uh not just for the City of Phoenix of course but Statewide um it would have eliminated that ability and that bill came very very close to passing so I think that is a very realistic possibility um in this upcoming legislative session that that bill comes back or one like it um and beyond that I think that um generally Revenue that that cities are charging in in tax revenue particularly is going to be in the sites of the legislature more broadly so that rental um that money from rental sales tax is um just one aspect let's say we moved it to another sales tax type Revenue Source um I think that the legislature would be likely to Target that as well thank you I think that's very helpful context for us making decisions and Amber will you say one more time what was the the total impact of that res residential rental yes mayor members of the council for the general fund over the next 3 years it's estimated to be anywhere on an annual basis from 42 to 46 million all funds 81 to 88 million again that does impact the general fund which provides our core programs and services as you know like Public Safety um Human Service type programs and then also it would affect our Public Safety specialty funds as well as parks and preserves and transportation 2050 great so it's our public transit system blockwatch dollars a huge number of things that are funded and allocated from sales tax including taxes on residential rentals and anything for our government Affairs director just to just to add um just additional context the they have come after the rental tax for years um the changing uh dynamics of the legislature has made this like Lauren said uh we were able to kill it by one vote last year so um it's there are uh candidates who have said it's a number one priority to end they're also targeting the food tax for cities who still have food tax so the environment in this upcoming year for this to be on the chopping block very high to succeed on the to succeed on it um you know if we're looking at it today very high um the election will dictate very very much on how it's being looked at in the legislative session wonderful thank you council member G mayor we'll go to council member Garcia and then councilwoman Stark thank you thank you mayor um it's good to see that we have a a fin a good Financial Outlook uh for next year's budget um I think uh the priority of the council should be to use the extra funds for employee compensation I really do think that that's where uh we should focus we still have a lot of vacancies um and a lot of departments aren't able especially the ones that are out you know facing and serving the public they're not able to do what we need them to do I know we still have about 33 positions that are under $15 an hour um and and many of those positions are also Community facing um a lot of these concerns we had uh one particular Department um get increases uh to the point where they're the highest paid employees in the state and none of these concerns were were brought up and I understand there's differences in funds but I really hope that as we're um and I wholeheartedly agree with councilman Garcia I think our employees should be our number one priority I remember during the Great Recession the sacrifices that our employees made taking days off without pay and Los to add the night service back so we can't add new service um you know hearing the same thing in parks with delays around construction I think you know the the Caesar Chavez Community Center is one example of a part you know a community center that I think it was when I first started it was supposed to be completed by next summer and now it's this fall and every department is saying that so I really hope that we can prioritize that um this uh upcoming budget cycle and um otherwise I think we're going to see significant issues and and significant constituent uh frustrations with all of us at the city if we if we can't fill those positions um also just want to add I know this is about the general budget but when it does come to arpa and the review of what is remaining from our allocations and what maybe wasn't spent I think with the fact that we are seeing 133% inflation and so many um families struggling and and another rise in um we just got an updated Street count that we're back to over a thousand people outside the Human Services campus so clearly people are struggling I really hope that we can use those dollars for the things that are really needed like more free bus passes rent and utility assistance and meals to homebound seniors among many other things thank you Council Mado thank you mayor I I think I sound a little bit of a broken record every time we talk about compensation and and the workers but also like I really think we got to look very wholeheartedly I mean the fact that we have all these positions that are open that we're sitting here we're saying that there's programs that we're not running things that we're not doing because we cannot hire the folks to be able to to do the jobs and I think that's why I think it's very important that if we prioritize anything moving forward is the salaries is the jobs because I I think it is sad that we have all these open positions because we cannot fill them and I'm sure it's because we're not paying enough so I really think that you you know we we have the money there I I really think we need to be a little bit more aggressive I know that we're looking for the com study to be done in March and I know that everyone is working really hard to get it done sooner but the more we wait the longer it's going to take for us to fill these positions um we continue I still continue to get reports of all the workers that are that are leaving the city because we do not pay enough so so I'm hoping that we're able to make some of some of these changes um faster sooner rather than later because I do think that we we are hurting you know we're doing all these changes um throughout the city because we don't have enough because we don't have enough workers I I know that I drive around the neighborhood and I see like all the bulk of trash that has not been picked up um and you know this is this is a huge challenge that we have you know I hear it from the fire department as well our our you know our minutes to be able to respond to someone you know that might their life might be in danger that's that's a huge issue and I really think that we you know take some sort of aggressive approach and try to make some some of these changes um soon because we we have a city that is hurting we have workers that need the compensation but then we also have residents that continuously call our office for for a lot of these different issues I I appreciate the hard work but but I would ask that we figure out a way how do we move some of this stuff faster thank you thank you councilwoman councilwoman O'Brien um thank you mayor so you mentioned the a thousand vacant general fund positions but in addition so that includes the 500 we added last um budget cycle councilwoman O'Brien mayor members of the council that's correct we've 500 positions added over the last two fiscal years so some of those some of those positions that we're at it have been filled but as we fill positions we're losing people as well so some of them remain vacant so it's it's a combination of the two okay and then what um steps are we taking to fill those positions or get them filled so mayor uh councilwoman O'Brien members of the council that's an excellent question and it's it's a multifaceted answer so we're doing quite a few things um some some of the things that we're doing are including um hiring incentives for some positions especially those that are harder to fill um we are also doing U more aggressive advertising through social media than we've ever done before uh and and doing some additional levels of marketing um trying to explain how we can um how we offer opportunities to folks that they may not realize are there and the different opportunities within the city as well as the excellent benefits that we offer we're also doing um something with starting pay in many of our positions where we don't um start Folks at step one as has typically been the tradition we have approved in many cases a higher starting step for positions that are harder to fill so that someone may come in at step three or step five wherever the appropriate Market range is for that position so that we can attract more candidates now in doing that we don't leave anyone behind others who are not at that level as well would move up to that same point um but those are things that we can do within the tools that are available to departments right now to attract um individuals to City employment and we are we are utilizing all of those tools right now in in most departments and in addition you us tools that are available to you to retain our employees because it's you know we might R attract them but if we're not retaining folks that we're creating a bigger problem absolutely yes ma'am we are um actually employing uh retention incentives as well so the council has improved has approved excuse me uh retention incentives for existing employees so we are uh beginning to see more requests for those from departments and applying those uh in order to retain quality employees employes as well and so I know this is a fine uh there's a fine line or a balance to things as as we have brought all our employees back to to work and I know that I've had complaints about folks you know not being able to get in to see people at in customer service positions in um City Hall but I also am hearing about situations where we've taken away work at home options from folks who are not forward facing so I hope we certainly will evaluate that more closely to make sure that we really are utilizing um tools that don't cost us money to ensure we're retaining employees um as well in that that area too um the mayor councilwoman O'Brien if I could just respond to that quickly um what we are doing with that is we are going through a process with our departments who have uh telea workking or remote working employees to identify which positions can continue to do that in perpetuity um with the expectation that departments would ident ID ify if they cannot t a workk in perpetuity that position that they would uh bring forward an explanation as to why so the assumption would be that they would be able to continue to do that unless there is an operational reason um that they need to do their work in the workplace in which case then they would be approved to to bring those employees back into the workplace to do their their da in addition could they have I mean some folks don't it could be not necessarily an either or right have a flexible option I can recall that when I got out of college and started my first um big girl job so to speak we went from you know having to work 58s we had the option to work four T and um you know there were growing pains in that and and which employees had which days off but it it did things like have less cars on on the streets and certainly even I hate to age myself but 30 some odd years ago you know pollution and traffic uh and and saving all that was important then um I know it's not back then it seemed just as important as it does today but I hope we would also look at offering flexible options where it could be split 3 one two however that might work um in being you know trying to offer that as an option for folks absolutely um and then I had I think another question could Amber could you just touch again on the popula our population share with um state revenue to say that one more time I want to make sure I got my notes correct on that yes councilwoman O'Brien mayor members of the council so our state shared revenues that's State shared income tax vehicle license tax and sales taxes it's based off of relative population so how we compare to other cities and towns and while Phoenix is growing so are other cities so our relative percentage share declines has been declining every year for several years and it's going to do it again starting in this current year so that $6 to7 million impact that is an ongoing Revenue impact and we'll be building that into our updated Revenue estimates excellent thank you and then Lauren you talked about um we talked about the residential rental sales tax um being under attack for many years but then potentially food taxes are there other taxes that are on that list and um that we should be aware of um none that have had legislation introduced about them at least in the last two uh two legislative sessions um that doesn't mean they're not being considered but I I haven't I guess heard uh any discussion about that in the background either any specifics um not to say that we couldn't draw attention to one if we were to propose it but um I haven't heard that ongoing at this time okay thank you so much thank you mayor thank you and and Lori as you were mentioning our employee benefits the one enhancement that I hear the most about out in the community is people are very excited about the parental leave policy and I think that is a good news policy also want to applaud the city manager for taking on looking at the census and making sure that we had the most accurate count possible because that is a chance to um address deficiencies in the census and maybe get us a little bit more of our fair share of both state and federal funds did I get everyone Council uh vice mayor I want to go back to the rental tax because I I think that's going to be critical and we are going to have to have a a very uh difficult conversation um because I don't I I think I don't think I I I believe what's going to happen it will be removed so could you please once again tell us what we will be losing yes vice mayor mayor members of the council so the estimated ongoing annual general fund impact is anywhere from 42 to 46 million but then the total all funds that would include Public Safety specialty funds Transportation 2050 and parks and preserves is anywhere from 81 to 88 million so as we continue to move forward in the budget development process and we get more information from our government relations team and what's happening at the legislature will bring to the council in February probably as well as in March if we're if we're seeing that that's really a likelihood options for the council to consider and how to offset that Revenue loss and I don't know at this point what that could look like I don't have a status yet to know if the if the if the status can absorb that impact for 23 24 and 2425 I also don't know when it would be effective if it be effective in July of 23 or they would try to phase it in so we need to get more information but we would come to the council with potential Solutions on how to resolve that ongoing Revenue loss it certainly puts us in a position if that were to happen it's less resources we have to do things like employee compensation increases or future addition um to programs and services for the community and the oute but but we will come back to the council once we have more information and like I said options on how to offset that loss if if we really believe that's going to happen in 23 24 okay thank you because I I I think that conversation needs to be had now for that possibility I know it's not a doom and gloom but there is the strongest possibility in any time point in time that that will happen to us um the other piece is that we keep growing and we keep pushing growth however our services are not growing and our quality of services we're we're lacking it um from what you know you're talking to a girl that grew up in the city so uh I understand the Dynamics of of what was back 10 years ago even 15 years ago or what we're getting today and it's it's not the employees fault because they are providing the service that they have it's the fact that we don't have employees and the importance of having and recruiting and retaining our employees uh so compensation is critical I know that uh the the generations that we are trying to attract it's their salary it's not their pension ion it's not their vacation it's not their sick days they want the salary they want it today they don't want it tomorrow and uh it is important to them but they want to be able to uh live have a vibrant uh life now and not like my parents generation and maybe me where I uh life work balance is not not in that's not part of my vocabulary uh but it is part of their vocabulary and it's part of my kids' vocabulary of like you know we want to be able to do these things and so I think that's another key that we're going to have to look at uh but when we look at that we also have to maintain all our knowledge and be able to maint retain them and so that's the whole balance that that that happens within a budget and a compensation uh which I don't know how any faster we can move um I think what's going to happen is we as a council or some of us are just going to say we're moving um just because of the vacancies and and and I don't want to be in that situation but we are in that situation and so how do we balance those pieces so I think it's great that we have a a surplus but as I'm talking to my community and saying this is the one time fund and this is the general fund uh is that a want or is that a need for our community at this moment um and what are our needs that need to happen because I don't want to be in the situation uh when I entered where I was making some decisions as to why didn't we maintain this building uh why didn't we hire our uh Public Safety uh fire and police why didn't we Main maintain the growth or what we needed to maintain in order to be there I want to be very thoughtful in how we how we move forward uh because of all these different elements that are going to hit us and we're going to have to make some tough decisions but thank you for for the work that you're doing councilwoman and sorry uh I have two questions based off of that and I will Echo the point about pensions um as someone who has a team that is pretty much all under the age of 30 except for one the pension removal with the salary is very very jarring to people and I know that it takes a very rare young person I think at right now to want to accept a job at a much lower salary than the private sector and then to get the pension removed I don't know what can be done about that but I do think that's a huge deterrent for younger people to want to work at the city um and then I was also wondering and I guess I think this is a question for you Lori and I've only heard this anecdotally but I have heard um that it can be difficult for um City staff to move from one Department to another and they like not getting the same sort of HR Support or incentives as new hires and maybe having a more difficult time going up a level so I'm just wondering if you could talk a little bit about that policy and if you think there's any improvements that can be made there for the retention um aspect mayor uh councilwoman and sorry I guess I'd have to better understand the circumstances I I do know that some times there are challenges moving from one Department to another based on the experience that the employee has whether that's you know a lack of supervisory experience or something like that and moving to the next position that they you know want to move to for their career path um other than that I mean I don't know if it's you might be referring to something that I have heard about which is that sometimes um in a promotional process you know employees do not always um have the same opportunities for incentives as far as like hiring incentives and things that a new hire would have so that may be what you're referring to I'm really not clear so maybe we can talk more about the specifics of that I think I don't know I'm sure you all with an HR do you know conversations with staff about what's working what's not working but I think that could be something and I think even doing a pilot where you talk to younger employees um because I think I don't know oftentimes I feel in a bureaucratic system there's also very you know strict hierarchy or certain things that you're looking for for a certain position but often times young people are very ambitious and bright and do you know a you know a ton of work for very little and they're not getting the same sort of acknowledgement that they maybe deserve at a higher level so just some things to think about and I would love to talk to you about that further absolutely thank you seeing no additional questions that is our final agendized item for today so we are Jed were we supposed to we need we're supposed to do a motion to vote on the calendar uh please thank you to our city park and councilwoman O'Brien vice mayor I make the motion to move second Motion in a second any comments we all Voice vote okay all those in favor please say I I I any opposed passes unanimously we are adjourned [Music]