e e e e e e e e e e guys ready good afternoon and welcome to the Glendo city council Workshop session of February 23rd 2021 the meeting is called to order I will now conduct an attendance roll call please signify by saying present council member Alam present council member Clark here council member malar present council member tomacha here council member Turner sent me a text he's going to be a few minutes late I'm here the vice mayor and mayor Wes is excused be aware that item two has been pulled by staff and will be placed on the March 9th agenda Miss Bowers would you please introduce item one fiscal year 1920 comprehensive annual financial report and annual audit vice mayor members of the council good afternoon uh here to make the presentation today will be our budget and finance director LTE kamacho she's joined by Dennis oich and Yan Yang a Fang excuse me of clipton Barson and Allen good afternoon vice mayor members of the council I'd like to introduce Miss Rebecca Chitwood to my right and Mr osat is right next to her they'll be leading the presentation today but before I turn over the presentation to them I'd like to point out out that in your packet you have the comprehensive annual financial report and also a copy of the single audit with that I'll turn over to presentation to miss chipwood good afternoon so the financial statement audit requirements I didn't know if I okay so it is required by city code it is also required by Arizona revised statutes we also uh it's required at as disclosure for our bonds and also uh the CFR the code of federal registers to receive federal Grant Awards so to prepare for our audit each year we receive a list of from our Auditors of things that they're going to be reviewing um we stay up to date with our accounting standards so staff and I attend uh trainings throughout the year to stay current with uh governmental accounting standards and we access changes in activities so we review dollars in accounts to see if there's any high or lows and if so we review those we also develop the timeline and assign work uh to not just to our accounting staff but also to the Departments and when the audits come in for preliminary field work they will meet with City staff and departments to review the controls within the Departments of the city and so we'll schedule with the external departments to make sure they're ready for when the Auditors come in Once We Gather the list of items that the Auditors are looking for we review that before we turn it over to them and then we will schedule final field work with Auditors and we set weeks aside and we are we make sure that all staff is in office and ready to answer answer any questions they may have um they will pull various transactions on with their three weeks in the office with us and several questions and answers uh to make sure that they are fully aware of what they're looking for and that we've provided everything that they need um and as the audit wraps up they will respond back to us with things uh areas for opportunities and process improvements that we can look at for the next year and with that I will turn it over to Dennis sauch with clipon Larson Allen uh to go over some of the things that they look for when they're on site all right well thank you for having me here today I'm going to talk a little bit about uh sort of just the overall audit process and then um I've got an Fang with us uh she was the director on the engagement um and she'll go a little bit more in detail on some of the reports that you have in front of you to and and as we'll both be here to answer any questions that you might have as well so really uh the audit that we perform uh what we're doing is we're giving a reasonable assurance that the financial statements are reported in accordance with generally accepted accounting principles so what does that mean when we say reasonable Assurance so we can't test 100% of the transactions within the city it just wouldn't be feasible and it wouldn't be cost effective whatsoever um so when we do the audit we do the audit on a risk-based approach which I'll talk a little bit about on the next slide uh but we do a risk-based approach on the audit um to provide that reasonable Assurance on the financial statements the other objective is uh so that we can actually provide an opinion and what we're doing is we're giving an opinion that the financial statements are reported in accordance with generally accepted accounting principles so the opinion um again like I said we're giving reasonable Assurance on the financial statements and then the other thing that we do is we provide any type of findings or recommendations and there's different levels of findings and recommendations that we provide uh some of those may be verbal to management uh where we just see that there might be opportuni ities for efficiency within the uh the audit or within the accounting system uh we may provide a written management letter uh to management these would be items where uh we felt it was important that they get addressed for future years but weren't significant enough where we felt like it had to be brought to the attention of council uh and then we get into more of the items where we feel it's important to bring it to council um they would be material weaknesses uh these would be items where it caused a material misstatement of the financial statements um that had to be corrected or we felt like the internal controls um that there was a control deficiency significant enough that it could cause a material misstatement of the financial statements and then the other category is a significant deficiency these are items where we don't necessarily think that it could cause a material misstatement or that it did cause material misstatement but at least significant enough that we should bring attention to uh Council and again um an will go over some of those items as well uh in her portion of the presentation so as I mentioned we're giving reasonable Assurance on the financial statement so we take a risk-based approach every single organization has risks um in their organization they're just different at different organizations um and so what we do is based on gaining an understanding of your organization uh looking at what the internal control structures are um looking at you know how it's organized uh we identify where some of those risks might be uh might occur uh where a misstatement could occur and we perform additional procedures in those areas uh to give us a level of assurance that the financial statements are are reasonably stated uh for those other areas where we may not assess a higher risk it doesn't mean that we don't look at those areas uh but uh we do perform other procedures more basic procedures um some of those would be analytics um we also use some of our data analytics where we are able to test 100% of the population for certain areas as well so some of the factors that we look at um in gaining an understanding um we do it through inquiry um but we can't base our audit solely on inquiry uh so we also do a base on observation some of our prior experience uh dur performing the audit so if we noted that there were uh control deficiencies in Prior years those might be identified as higher risk areas uh we also test controls and So based on the operation of those controls we're able to assess the risk in those areas and identify you know how much more we need to look at uh within the organization for some of those audit areas um and then we just use other factors uh if there are certain account balances or assertions um that you know might have more public scrutiny those would be areas that we would assess as higher risk then as well I'll just run through the audit process real quickly um so basically the first step is just getting the signed engagement letter um and then we do our audit planning uh and this is a little bit what Rebecca had talked about in the audit planning is that uh you know we do our end of the audit planning as well as the city does theirs but but our planning is is mostly based on looking at where the risks are and how we need to design our procedures uh and then we provide a a list of items that we need uh to the client um so that they can prepare for the the uh the audit and that's what Rebecca had gone over uh and then we'll do some of our audit communication with governance as well as management so I know some of you on uh the council here um had interviews with some of our staff people where we did some of our um you know fraud inquiries and um also open it up for any questions that you had with our team so we do that as part of our planning phase and getting an understanding of of the organization and then at that point we do our audit field work and so this is where we perform a majority of our procedures we'll do our test of controls our test of compliance over some of the major federal programs um and and then confirm and and detail test some of the account balances and then finally the last step is really issuing the reports and um communicating the results of those reports to governance because ultimately even though we work with management you know on a day-to-day basis when we're out in the field ultimately um we're responsible to governance and so we're here to report those results to you so within your reporting package uh what you should have in front of you uh as Lizette had mentioned is the comprehensive annual financial report um there is a letter with communication to governance which is basically all of the information that I'm covering here today but it's in written form that you have as well uh and then the single audit report and then the independent accountants report on the highway user Revenue funds um the landfill Assurance report we recently issued um and then if we had any type of management letter um then uh that would be issued as well the annual expenditure limitation report that has not yet been issued yet uh we have that going through our final review process um we don't can't give an opinion on it yet but I can tell you that you know based on our initial testing that we've done and and we're almost there as as far as issuing it um that we expect that a clean opinion will be issued on that report so I just wanted to report that as well so I'm going to go ahead and turn it over to an at this point she's going to go over some of the reports that you do have in front of you um again she was the director on the engagement um so she'll get into a little more detail on some of those reports can you hear me oh yeah thank you so I'm going to go over the various reports that we have issued based on our audit work the first up is the auditor report on the comprehensive annual financial report which is the big document sitting in front of you if you have it um so this report includes the city's Financial record for physical year 20 this includes the government wide statements that uh has the Deb comp Capital assets pension liability informations that are normally not on your fund statements and we also provide opinions on the notes related to these financial statements so we provided an a modify which is the clean opinions on the comprehensive annual financial report we also provided two in relations to opinions and these are on the combining and individual fund statements and also the financial the federal data schedule this schedule is submitted to the US Department of Housing and Urban Development and this is based on this is reporting on your housing department information we do not issue an opinion on other supplementary informations to the uh reporting package so the second report the audited report we issue is on the single audit and the single audit is basically where we present all the fin the Federal Grant information single audit is required if the city spent more than $750,000 during the year and this year in fiscal year 20 the city has spent approximately $46 million and oh we have picked two major programs for review one is the Community Development block R I'm sort of jumping around a little bit um and this was $1.6 million in expenditure the second program we reviewed was the Corona virus Relief Fund and that was approximately $20 million so in all we review 47% of your Federal grant expenditures during the year and I'm happy to review we did not find any non-compliance issues or any internal control issues related to these gr programs and that's kind of where we is isue our Auditor's report on internal control over financial reporting and other matters also the our report on compliance of each major federal programs and the internal control over the compliance compliance and on the SCH schedule of expenditures of federal award vice mayor yes Council D thank you vice mayor uh question um the mic may have hiccuped a little bit but you mentioned um $46 million can you go back just tell me what that $46 million was I just heard the number yeah um it's made up of various of different grants and I believe the city reported about 75 grants doing the year so if you have a single audit package in front of you there's a schedule that listed out all the grants of what the city spent this year um so the 46 million I assume is Grants Grant GRS federal grants okay that that's all I need thank you so much thank you mayor welcome so based on these reports the internal control over financial reporting is audit it's based on the what we call audited government to auditing standard the second one is based on the Uniform Grand guidance so like I said there were no issues over the major programs the federal major programs however on the internal controls over financial reporting we did report one significant deficiencies on internal control um like Dennis said we did not consider these to be major or significant it's just that something we feel like the city needs to be aware of so on this slide I basically already went over it um we did Cover 47% of the federal grants we audited two major programs that are considered significant there were no well we issue both unmodified opinions and there were no non-compliance issues noted so the rest of the other Auditors report that we have looked at one is the highway user Revenue funds this is done and to ensure that the city has spent the money based on the Federal Regulation the second one on Landfield Assurance this is an agree upon procedures which we follow the feder federal regulations and make sure that the city has complied as well there were no findings on both reports the last one to be issued is on the annual expenditure limitation report and uh this will be issued P possibly by the end of the month and I'm happy to say that there were no finding as well so this will conclude my presentation and open for any questions thank you council members do you have any questions comments recommendations yes vice mayor council member I I would just like to confirm and make sure that I I took down the reports that were were audited there was kaffer the comprehensive annual financial report then there were single audits on cdbg and Corona virus relief the third audit was of the herf Highway user fourth was landfill assurance and fifth was annual expenditure limitation is that correct those are the five reports that your firm did during the course of this year yeah that's correct the uh the agreed upon procedures is not an audit it's just an agreed upon procedure so we don't give an opinion but if we had any findings we would report findings related to that but yeah that's correct and then uh the last one that uh we have to finish job is there's an electronic certification uh with HUD that needs to be done basically what it is is it's an agreed upon procedures and all we're doing is we're saying that the electronic submission agrees with the um the information that's included in the comprehensive annual financial report okay I have one followup question we have an audit committee that assigns projects to during the course of the year but I just heard that these were not basically audits they [Music] were what would you call them no these These are audits so the comprehensive annual financial report is is an audit of the financial statements okay and then the single audit is an audit of the major federal programs so there were five audits done by the audit committee that the audit committee oversaw during the past year vice mayor members of the council the external audit or the audit of the of the financial statements the comprehensive of annual financial report the single audit and the um the report on the highway user Revenue funds the landfill assurance and then the annual expenditure limitation report are excluded from the um the audits that the audit committee oversees those are internal audits okay do you happen to know what internal audits were performed from this year Miss kamacho vice mayor members of the council um for this year I can name two because budget and finance were a part of the um the audit and that's a vendor management audit Capital asset audit I believe there was also a payroll audit but I can certainly send you a list of all the audits that were done um this fiscal year thank you very much council member Toma thank you vice mayor just have a question on the um under government auditing standards can you um confirm what the significant deficiency was says no material weaknesses one significant deficiency correct yeah the significant deficiency related to um a revenue acrel um that was not done at or near year end it wasn't a material amount um but it was a revenue that wasn't acur at year end I think I believe it was related to the casino this uh some of the casino revenue was interg government agreement I think that that that was out there vice mayor members of the council the revenue is related to the Toano Autumn um settlement agreement if I may vice mayor please um just to explain a little bit what that is saying is that those revenues came in after June 30th but they related to the prior period and um they needed to be acred back to the prior period and so that was caught during the audit process and then that was recorded uh properly uh but it is a deficiency because it wasn't originally done that way the Auditors caught it and it was done subsequently thank you vice mayor council mayor m d you vice mayor let me get back my page closed here uh under government auditing standards report you you don't provide an opinion on internal controls rather you provide an opinion on the deficiency IES my concern with that is is that you provide an opinion of deficiencies that may have been caused by a lack of controls so who in our staff monitors controls if if the auditor doesn't do that somebody help with that yeah so so real quickly let me just uh clarify that so the government auditing standards report we don't issue any opinion but we just report on control so if if we identifi a controlled efficiency we would report that um but within management and and lazette or Rebecca can speak more to it um they do have design control procedures um it's it's not uncommon that at times during the year especially for a city of this size that there may be a lapse in in control from time to time and so that's all that we're reporting is that we identifi a lapse in that control um so the finding that we had isn't indicating that there's no control in place um this was just an instance where there was a lapse in that control thank you for that um and so obviously there's a bunch of of controls in place to prevent any deficiencies so I'm not too I'm not asking for that to be an additional report that we want our city manager bring to us but who manages that is that Miss Rios you and your team vice mayor members of the council yes it's primarily the responsibility of budget and finance to set up those controls and ensure that they are being followed thank you that's that's clarity thank you mayor any other questions I think we're fine then thank you welcome council member Turner item two has been pulled Miss Bowers would you please introduce item three downtown Cafe lighting project update vice mayor members of the council here to provide staff report is our director of community services G Mar [Music] thank you Mr Phelps good afternoon mayor and Council we're happy to be here before you to provide an update on the downtown Cafe lighting project um joining me today is our design consultant Mr Mark greenal from Creative Design designs and lighting he will be talking a little bit more about the work that he has done um to advance this project um so as you'll recall we met with Council back in September to talk about this project after we met with Council we made a determination that we wanted to hire a professional lighting design consultant which is why um we have engaged with Creative Design and lighting um this particular project you'll recall when we first spoke about it um and I'll talk about it in detail about the different phases of the project but each phase of the project also has um specific components including architectural design electrical um engineering and Structural Engineering as well so what we're going to be talking about today is specifically phase one of this project and specifically the architectural design so at the end of the today's presentation we'll be looking for consensus direction from the council to approve the architectural design for phase one which Mr Green we'll um show you in detail um we will be um looking for some direction from Council to um consider the color changing technology option that is new um it's not something we had previously discussed with the council and then discussion on a slight increase to the project budget which will allow us the flexibility to continue moving this project forward through construction um with the the goal of not having to come back to council to address any unexpected issues that we might encounter as we get into the structural and electrical um engineering portions of the project so just as a quick reminder this is a multi- departmental project um requires a lot of work and energy I'd like to um espcially thank the engineering department who has helped us in terms of identifying Consultants um and special thanks to Mr Jack friedline who is going to help us you know ensure that this project um gets moving forward and then obviously the transportation department who will ultimately be the owner um Economic Development and then field operations as well so the original budget for this project was $185,000 that was authorized by Council um last September and we will be utilizing Community Development block grant funding it is an eligible use for this project the phase one of this project um in the direction provided by Council previously was to move forward with constructing um this design or this lighting project between 58th drive and 58th Avenue along Glendale Avenue and to obtain cost for potential future phases which are also shown here two separate legs one continuing East on glendel Avenue and then one potentially um headed north from glendel Avenue to Glen Drive and then again we selected um Mr greenwalt's firm to help us with the design of this project so the the scope of work that Mr greenal has been working on with us diligently for the last several months was assessing the existing conditions which he'll talk about in detail making a recommended layout for how we could construct this project and then recommending specific equipment that we could use which is one of the reasons why we arrived at this option for some potential color changing technology which we do feel will be a value added benefit so the deliverables for this portion of the contract and again this is the architectural design and Equipment recommendations um was to come up with the recommendations and present that to the council um provide very specific information regarding the equipment we could utilize a site plan and then ultimately an of probable costs which is one of the um other reasons why we needed to get in front of council today because we wanted to talk about a slight increase to that project budget so with that I will turn um the rest of the presentation over to Mr Greenwalt and then I will wrap up at the end to um seek consensus direction from the council thank you um mayor and Council uh pleaseed to be here and um present this uh fun project um this first slide shows kind of a little rendering of what it might look like so this is actually your downtown and um showing some of the um uh feston lighting going over there Cafe lighting feston has several names um see what am I hitting here okay um so in getting started the project considerations um uh we already had to understanding that it was the you know the desire for Gale to add this but um just some reasons for this is it it adds a sense of arrival to your downtown it's uh the feston lighting is something that everyone's familiar with some people in their backyard some restaurants uh cities have uh adopted it quite often to give more of a vibrant retail downtown feel um the city of Scott uh Scottsdale has it in their Arts District and um you know the Tempe Mill Avenue Bridge is a good example so it definitely gives a um a a sense of of festive and welcoming uh character to a place um as we started looking into this we wanted to obviously keep the budget in mind um and uh look at the existing character of of what the downtown has has to offer um other considerations that were made obviously we need to go from uh the Stringer lights need to be um mounted on something sometimes you have buildings to mount that sometimes it's poles so we wanted to look at what our existing conditions were um and then uh first and foremost too is to consider safety and and the traffic safety involved um so in in getting started with assessing the existing conditions obviously the first thing was to look at the uh distances that we had to work with um as a rule of thumb 100 foot is about as long as you want to run um the uh messenger wire and an extension wire to hang off of um within reason you can go over that a little bit but we ended up having um on the order of 70 almost 75 foot straight across at the widest points which included the parking areas and the um the four lanes of traffic um and then some points that were smaller on the order of 50 foot that that was between uh curb to curb um at an angle uh for going across 78t seemed to be the the number we were dealing with so were within reason um to to move forward with it being plausible um the existing pole Heights there um are 30 foot for the street lighting and then there's also the pedestrian scale poles that are are much smaller um that we we'll look at in the next slide uh let's see um there's traffic poles also uh we opted not to use any of the uh traffic poles that have um signal lights on them um the information that we gathered was from 1994 as builts and then we've site verified most of the information that we needed uh for Dimensions um assessing the existing character uh we looked at all of the um first of all the color scheme that's that's down there and it's all the black rod iron look um there were uh poles that had uh fluted design um and then the street lights were more of a linear um uh pole that's the 30 foot with the um Mast arm that comes out um so as mentioned before the The Pedestrian scale poles are not tall enough you need uh the lights that go over the road to be at least 16t tall and and that's not uh attainable from The Pedestrian scale poles and also uh aesthetically would not have looked right since they have a posttop light um Source um so so the the one question was would it be interesting um to come up with a new pole design and we threw a few ideas out but as as uh uh we looked at most of the ideas one was budget we to to maintain the budget we wanted to stay with something that maybe was more in character with what's existing and also maintainable the uh existing street lights are something that you know are are stocked and something that the car were to hit them they are um definitely easier to replace those because of uh them being being the standard so um the option after considering uh all the different options available was to use the existing street light um the goal would have been to use existing lights that are polls that are there now um however uh as we started to look at the uh locations of where we would have to have it to give um the look uh a few polls needed to be added so um I just wanted to point out that you know this poll is a standard there's a design for it available and um the uh there's a contract that's available uh right now if to get uh when one is um how would I say it if they have to replace one uh the next part of the the study of what we wanted to consider was the lamps themselves um the the standard that everyone's used to is um just standard incandescent light bulbs obviously everybody's switched to LED now and so there's white um uh LED lights that uh mimic incandescent look um another static option would be to get a colored light bulb um which they offer you know several colors um we'll go across a few things too that I wanted to mention um with the colored light you obviously want to avoid red and green and yellow because of the traffic considerations because you wouldn't want someone to um see a green light but it was actually a red light that they went through so um the the the static colors also you're kind of set with if you pick that color um luckily there's um the technology has increased to the point now where you can can actually get um color changing uh even to the extent of every light bulb can be addressed individually um so that you could have anything from each row uh potentially be in a different color just for special events or every other light um or or actually there can be motion um in in all honesty most of the traffic uh places these have been installed uh they keep the color option only for Special Events maybe special um uh festival type things or also maybe some holiday type things but they uh the I do want to mention that even if you do the color changing option you can set it for white most of the time vice mayor go ahead Council um so when I was looking at the um the lamping page I immediately thought that these were you were recommending Inc condensing Li in but you said these are actually LED that mimic them however these are um LED lamps that get screwed in to the base is there a reason why we're not going to an LED diode type rather than having to have maintenance on these yes as a matter of fact um what's shown here was some of our studies but uh agree 100% uh to have the lamp is probably uh an easy easier one to maintain because of that but the diode uh type is what we're recommending and it does uh is able to be replaced uh it it kind of um uh Clips onto the wire and actually punctures the wire whenever it's placed on so uh you would replace the whole bulb if needed does that answer the question so um thank you for that so just a little more clarity um so if one lamp went out our staff would have to get a lift truck out there to replace one lamp and continue that correct correct because of the height we're probably going to be to the point where um you know we're uh 30 foot poles uh we're not mounting at the very top but it's uh going to be yes higher than 16t say thank you and the reason why I'm asking for the DI type it's not a base mounted like this one is so that we get I don't know 10 years out of them before staff has to get up to and start start changing these lamps so is there another option that you have that doesn't have this this type of um in condensing base where they screw in yes a mogul base yes um when we get to the page that has our recommendation it is a kind that does not screw in it is uh clipped to the to the wire itself then I am prematur in my question sir thank you very much no no problem Vice M council member thank you couple of questions M um what color options are available can't use red green or yellow to me all that's left is blue uh purple and orange is what's actually shown in this picture I'm not sure you can tell it from the uh from the photo there but they actually have a a varat colors of of purple and orange is what's used there um there's also color combinations that could be for example blue and white um I would throw out um you know orange could be a Halloween red white and blue is something that maybe it could be uh used even though the Red's in there but if it's um obvious that it's um mixed with those colors but but yeah orange orange and purple and blue are the me colors that pop up um I would say that um VAR variations of white could be warm white and cool white also all right next question to incorporate the color changing technology what's the difference in cost between remaining with the white lights or adding the color changing capability uh our last slide is going to go over the the costs uh completely but um it it ends up um the controls portion of it is is the made cost in in our um uh estimate I think it ended up being on the order of 20,000 uh is the actual controls cost the the difference in cost of the lamp and the Stringer light is a lot less I think for our first phase it ended up being I forget now but on about 5,000 3,000 3,000 so the actual lamping material the cost difference between white and color capability is 3,000 yes but the major cost is controlling the color of the light correct that is an additional 20,000 correct yes okay thank you m any other questions okay um so our design option uh we looked at several ways of of uh stringing them across the street which there's the portal where it's just straight across but the zigzag is obviously the one that gives you the most bang for the buck so to speak because it looks the fullest and uh uses uh the least amount of poles in this image um on the phase one portion the uh the dots in red are existing poles that we could use so um as you can see there were only four there uh available um and it very much limited how much you would see so additional polls did need to be added um so we added three new ones to get um what we called like the Three Peaks there uh and each of those runs like I said earlier was is less than um 100 foot for a total of about 510 feet of feston cabling um uh phase two is shown here I just kind of graded it out but this is um uh what we were proposing uh to to be able to do that one and obvious obviously you'll see there's a whole lot less existing poles there's only two poles on that portion to work with um couple fine notes Here of of of what we weren't able to necessarily study was the structure Integrity of the existing poles um so that's a part of the engineering portion that we'll talk about that that needs to be done um so Structural Engineering would need to look at that um the uh electrical engineering and complexity is also something that's not covered uh in our conceptual study that we did however we did look at the location of where electrical is available for um Holiday Lights nearby already uh there's the potential that we could tap on into that um uh this is where the controls question that you had um there's obviously no controls there now so that would all have to be uh put in in cable and conduit for that that's where the U additional cost of that comes from um okay this one second council member Toma thank you vice mayor I'm a little bit confused because I'm looking at the slide uh what page is this um the one that that shows the design option stud layout out and it shows phase one glendel Avenue between 58th and 50 58th Avenue and 58th drive and then phase two going east on Glendale Avenue and then when I go you go back to slide three I thought I thought when we first discussed this that we were going to do glendel Avenue and then we increased the budget to the 185,000 to go around the corner on to 58th Avenue so now I'm seeing is 58th AVU now now considered phase three or um I'm just I'm just really confused vice mayor and council member Tom chop yes so the the northern leg to go on 58th Avenue between Glendale Avenue and Glen Drive would be a phase three of the Project based on what we know today and based on um the opinion of probable costs what we're speaking about today is the budget specifically for phase one of the project as um we discussed back in September phasee 2 and phase three would be explored as part of this initial to understand what the opinion of probable cost is for those phases but there was always an expectation that we would need to come back to the council most likely to ask for funding to construct phase two and phase three um of the project if that was council's desire uh vice mayor if I could that's not how I recall it I I recall that we increased the budget to and that if there was additional funds needed that but the priority was to go north around the park because we were you know planning on having the music in the park and things like that rather than the I thought that was what the preference of the council was rather than to continue East on glendel Avenue so I'm thoroughly confused I can go back and watch the meeting and look at the minutes but I'm confused how 58th Avenue now is um the third priority vice mayor and council member Tom maop that's just how we've phased it in terms of the order of priority for the opinion of probable costs it doesn't necessarily mean that that um they could be constructed differently at different timelines that is something that we would need to bring forward to council once we have an opinion and probable cause on those next two legs so you know ultimately um those next two legs along glendell Avenue continuing East and then north um from glendel Avenue would certainly be at the um at the discretion of the council as to how you'd like to proceed May if I could just to make sure that I understand this correctly then so there the the original amount proposed was I want to say around 90 or $100,000 when you brought it when it was brought to Workshop in September somewhere around that amount and that there was additional VIP money cdbg money available and there was a consensus of the council to go ahead and devote that money to this project whether it was to to 58th Avenue I'm going to leave that part of the conversation out but I thought that that was what the intent was nevertheless the cost of this project on the initial phase one is going to consume that budget is that what we're being told vice mayor and council member tomov based on the opinion of probable cost yes okay thank you um question council member mclark I I am confused as well but I understand now that proposal is to spend $185,000 to string up Cafe lighting from 58th drive to 58th Avenue along Glendale Avenue is that correct mayor or excuse me vice mayor and council member Clark the request before you today when we get to the end is is to increase that budget So currently there's 185,000 I understand I'm just going to talk about the existing amount agreed upon I know there's a request for even more money but I just want to confirm that according the original budget amount of 185,000 which we assumed would cover far more now only covers from 58th drive to 58th Avenue on Glendale Avenue is that correct vice mayor and council member Clark based on the work that's been done with the consultant to develop a fully vetted opinion of probable costs and to account for um exceptions that we do not yet know because of structural and electrical engineering yes we believe that the budget that we're requesting is going to cover phase one now I will characterize that as this is what we're proposing as a worst case scenario so you'll see when we get to the the last slide where we talk about the assumptions that we're making in this opinion a probable cost it accounts for those assumptions so full poll replacement if the the existing polls cannot be utilized because of the current Foundation that they have so there are a lot of unknowns in this project the reason why it's important for us to um have this conversation transparently is so that we all understand that um and I apologize if it wasn't clear in September that there are a lot of unknowns to this project based on the structural and electrical engineering that would be required so we just want to make sure that um we're sharing that with the council we continue to provide updates to the council and we'll know more about how we can manage the next two legs of this project if those are if that's what council's direction is based on what we learned from the construction of this particular project okay um here here's my concern is it going to come to the same amount to do each phase because we're up to nearly a quarter of a million dollar 221,000 if we approve the recommended action in here a quarter of a million dollars to do just one phase one small portion I I would assume that it would cost another nearly quarter of million dollars to do phase two and another quarter of million dollars to do phase three now now we're up to close to somewhere in the neighborhood of $750,000 we're talking real money I just wonder if that money couldn't be better utilized downtown than to pay for a lighting system so as I hear the costs go up and as has been indicated there are a lot of variables and uncertainties that I suspect will drive up the cost even further I I'm just not sold that this is a a a project we want to start and be saddled with for the next couple of years at the kind of costs we're talking about when I think that M money might be better spend on other projects in downtown thank you vice mayor go ahead Council Thomas um I just went back I haven't I'm not going to read the minutes right now but I did go back to the September um when this project was first presented to the council and we were presented with a dollar amount of $16,250 onetime construction so I just wanted to put that out there before we get where wherever we're going to end up today thank you vice mayor yes uh thank you um I I think we also need to take into account what what we asked staff to do we asked staff to go out evaluate this and now they're coming back saying we thought we could just string lights up with the existing polls but now we don't know that because those existing poles may be falling down if we put the lights up on them and I think we need to recognize those poles are going to have to be fixed anyway whether or not we put lights across them if there's structural problems with those poles now because and we can't put a light across them then I think we need to consider that they're going to have to be replaced anyway and the cost is going to go up so I get the concept of we thought thought we were going to get something for 185,000 but I think we need to recognize staff has done their job they've gone out they've said look we thought we could do this for $106,000 or whatever the number was but we've discovered that there are lots of problems just like when we went out to swar Ranch and realized that there are lots of issues at swar ranch with the awnings and and those uh those issues out there that need to be addressed that we weren't aware of and so I think I think as we discussed this we need to take into account the staff has done their job today they have come forward they've brought forward this this project they've said you know it's going to cost more because we found things that we didn't realize were there and uh I I don't think we can say well we can't do it now because it's over budget we need to look at it and say do we want to fix this problem with the potential light problems and the light polls or do we want to not just fix those problems and not put the lights up or do we want to go ahead and do it all at once and I think we need to decide as Council and and recognize staff is just doing their job when they come back with these increased proposals uh it's not because of Any fault of their own thank you vice mayor thank you Council Al thank you vice mayor um I I agree with council member melar here I've on several occasions I've heard individuals at that day as say that uh I didn't come prepared to negotiate from the from the podum um and that's one of the worst things that staff can do but but but it's what they do for us is provide estimates from the podium that's really difficult so I absolutely agree with the council member that that was just a high level estimate uh and it's clear right here that there's a ton of unknown so it's pretty obvious that the project isn't going to come in right at budget underneath budget uh but to council member Clark um downtown glendell is worthy of the lights um I agree it is a it's a large dollar amount but this isn't a project it's going to last just a couple years we're going to take it down that's why I said I wanted to make sure we're choosing the right lighting so we get 10 years out of that lamp and for another 20 30 years those things are up so uh we want to better downtown we want pedestrian traffic this is what it's going to take I think it's a great investment and I am very supportive of our staff uh bringing forward to us the unknowns and unfortunately that that's going to cost us more if we want to do it right the first time so I just want to share with our Council that downtown is worthy of it and I know we spend lots of dollars in downtown but it's part of our revitalization efforts thank you council member Clark thank you uh I do appreciate the work of staff and I do understand that their original proposal was an estimate but as costs continue to climbed for this project due due to getting more information on the unknowns the variable that they were not able to really inspect at the beginning of the project I as the costs continue to mount I will continue to question whether this is a wise investment in downtown I I appreciate council member alama's opinion that downtown deserves this uh and they deserve a lot of things and I'm not sure that that this is the ultimate project that is suddenly going to bring all kinds of people downtown um as I've said repeatedly until we develop a true destination location downtown downtown will continue to falter and I'm not sure that putting lights up remedies anything um and is almost a Feelgood project but I if I had my DS right now I would Fisher cut bait and say I don't want to do it I'd rather I'd rather use that money for something else thank you vice mayor vice mayor welcome council member um yeah along those lines you know some good good thoughts because I believe we are looking at doing some revitalization in the downtown area we have some upcoming uh workshops perhaps where we're going to talk about what we can do for downtown um perhaps it might be wise for us to include this discussion about these lights in that uh that might be an option um that uh you know I think I would defer to staff as well because they're putting you know they kind of understand where some of these things will all fall out maybe doing lights right now is a little premature maybe it won't fit exactly into how we end up with a downtown you know with a plan you know that could even come forward this year at least a plan so perhaps we do uh wait uh until we see what else we decide to do with downtown and put a plan together inclusive of the lights uh unless we really feel that these lights are going to make a big impact today uh is it going to make an an impression or a change in in today and I'd like to you know have some input on what uh we would expect from doing that today thank you welcome who said that oh go ahead than you vice mayor um just asked one question first before I continue the the council gave consensus to go forward with the project at 185,000 is that correct vice mayor and Council memal dumo yes that is correct thank you so to the council we felt it was important to have these lights at nearly a quarter of a million dollar at $185,000 staff is asking to do it right the first time in addition to 36,000 we weren't too far away from a quarter million dollars the first time around at 185 it cons it doesn't concern me but it just I take a step back and say staff's brought to us we can do it for 185 except for to do it right and do it safe it's an additional $36,000 it's not a lot to ask we were just as close to A4 million dollar at 185 than we are 221 I'm not saying we just throw money at the win here but we weren't that far away in the first place and we thought it was important all of a sudden we're changing directions here that maybe it's just not important to do it so I guess I am a little concerned that we were that close but now we're too close so I'll yield thank you may may no well thank you Council MD D just a second but um I agree with the comments I like the lights and I'm glad we're coming back with prices getting some better ideas on what it might cost and I I could hardly wait I see the the the pictures I think would' be great when it you know goes heads North also in the phases if you go to 51st and Glenn I bought a light over there and that was 30 years ago and it cost me $220,000 so I think um we're getting you know a pretty good price on polls at the same time but I'd like to hear from our city manager Mr vice mayor members of the council maybe some just some other kind of loosely tied together information that will help you as you're deliberating this um first of all just again to reminder that this is uh cdbg funding uh for beautification so it has some limitations on it and uh you know you know maybe you asked the broader question is is 185 or 200,000 for street lights if it were coming out of general fund that maybe funds your parks and your Public Safety yeah I think you have a little bit different conversation this is out of the beautification Grant and there is a timeline on that so we do have some uh you know some elements that we if if we don't aren't able to come up with the project it will go away what I I think the only way to look at this would be to look at not as a one-year cost but look at amortising the cost of the lighting out over a 10 year plus uh timeline I think that's a that's important to kind of think about it there and then with respect to the other legs I mean I think clearly all of us on the staff saw the numbers go a lot higher than we estimated there was no example for us to pull on uh to to even really develop an estimate we now have that after working with the consultant and so you may determine that legs two and legs three maybe are are not of the best value the main thing is you've got a a landing area as people come down our name sake city right adjacent to the park and what you may decide is maybe instead of lighting um on the um east side of Murphy Park we're going to be coming back to you with some concepts of potentially permanently lighting our downtown like in our Park area uh versus our annual and so you may say maybe the money would be better spent on a long term but I think I would look at that first phase as being it could stand alone it could certainly be expanded uh but you probably would want to look at that over a period of time and just remind yourself that there is kind of dedicated funding for that uh that does have some timelines to it thank you Mr Vice than council member Toma thank you vice mayor um I just think I mean I'm just I don't think we should not do it but I am a little bit surprised and I'm also a little bit surprised because I I did since I had a minute I went back to the minutes and it says mayor wirers recommended extending the area east of 58th Avenue in North to Glenn Drive and that is when the additional money was dedic so the original what was presented what was in the PowerPoint and I'm not I understand costs can change didn't have a complete scope of what needed to be but this is literally more than double um and then I'm also confused as to why since there was clearly a council consensus that the mayor recommend made this recommendation and there was a consensus to go down 58th Avenue why that is the last part of this project and not the next step of the project I don't know how that got changed whether that's got something to do with uh you know not being able to go around the corner I'm not exactly sure why so that's I think that's where my confusion is coming from is the last a lot has changed since the last time we talked about this so um the consensus was based on the minutes from the uh September 8th meeting to 106,000 and some change to do glendell Avenue take the rest of the money and go around the corner and there was discussion that it may take more money than that um but there there was clearly a consensus to not go east on glendell Avenue to go north on 58th Avenue so I'm just curious if the uh contractor could give us an explanation as to maybe what if that's going to be very expensive to do or why the phase the the next phase has changed vice mayor and council member tomov so the um the next two legs were always intended to be steady legs to understand opinion of probable costs and to find the cost estimate the direction that was provided by Council was yes we want to construct the first phase of the project between 58th drive and 58th Avenue and study those two additional which is what we're presenting to you today in order to get to the opinion of probable costs for those those other two legs um we can do that within the um existing um con the existing Consulting contract and we do intend to do that we do have an idea of what the leg between 58th Avenue and 57th Drive will look like we have we do not yet know what the the northern legue will look like it's not intended to be that staff has changed council's priorities we're studying um and we were directed to move forward with constructing the first leg and studying the other two legs which is what we're continuing to do council member Clark uh I've already made my my opinion known with regard to feasibility of this project I will simply say this I liked what council member melar said if we're about to have a discussion on further options for downtown I would think that this would be an appropriate part of the mix of that discussion and when and I know the money is to look I appreciate all the work that you've done and when you work on a project you get invested in the project and you want to see the project happen I understand that too um but but if this money is to be used for beautification of downtown Glendale I can think of 10 other ways to use this money to beautify downtown Glendale and it isn't and it isn't Cafe lighting but um again I've made my position known I I've remain a minority position on this but I I don't think we should take this up until we've had a broader discussion on what's Happening downtown and and it's my understanding it's cdbg money it's got to be spent by July 1st by the end of the fiscal year we have is that correct vice mayor and council member Clark the uh various funding years for this project to spread out over three different funding years so there are various um timelines for expending the funds I would like to point out that when we met with you in December to talk about everything cdbg and all of our grants one of the things we talked about was we have Remnant funding from other projects that came in under budget um right now we know that there's about 550,000 you had provided Direction at that time to um set that aside for physical Improvement projects so that is funding in addition to this $185,000 that we're talking about additionally as we're continuing to reconcile projects we believe that there will be more Remnant funding that can be dedicated to fiscal Improvement projects and so I just want to make that point that um we're already having discussions with Mr friedline and his team specifically in transportation to talk about areas within the city and this is again something that we talked about in in December um where we can utilize this funding in our low-income census tracks to do um physical Improvement projects for the purpose of increasing neighborhood livability so areas where we're missing Street gutters sidewalk and things like that so what we're planning to do with the balance of that that funding is to work with Mr freedline to develop a shovel ready um list of projects that are run through a CIP screening Matrix to bring it to council to prioritize those Investments as well so I I would just like to point that out because it's important to know that making this investment of the $185,000 and if Council chooses to provide direction to increase the budget it's not not going to detract from our ability to do additional neighborhood projects I I understand that and I'm considering this strictly is a standalone project not what repercussions it has or does not have on other projects I will ask one final question what's the drop dead date to spend this money that we're considering uh vice mayor and council member clerk I'll have to get back to you um on that particular question the one thing that I will say is because we've already the direction that was provided by Council was to move forward with constructing phase one that was specific direction that was provided in September we've spent money on this project we've spent cdbg funding on this project which means we need to complete this project if we don't complete this project we will need to reimburse the um the cdbg funding how much money has been spent at uh I want to say approximately $32,000 U but I let me get back to you with a defin answer if we do not get consensus direction today right uh uh I've already made my opinion known I don't have any further comment vice mayor council member tomacha and quick question and maybe I missed it have we received other cost proposals or is this the only cost proposal we've received uh vice mayor and council member tomman chop we hired um the design consultant to give us an opinion of prob costs when we go out to do the structural engineering and the electrical engineering that's when those costs will continue to get refined um Mr fredine is there anything you would like to add on that yeah vice mayor city council if I could I think we're we're looking at slide 13 at the budget and it shows $221,000 and I can just say to you that uh if you give us some time as allow us to move forward with fine-tuning this I'll give you a simple example I'm going to call this worst case scenario um estimate and Mark can jump in and stop me anytime he wants but for just a simple example uh under uh the designation of polls that has $28,000 we have uh four polls that are existing the assumption would be my assumption would be we can use these polls uh there's $16,000 difference between that and uh what what would be in the final cost the contingencies uh you know we haven't fine- tuned those I can guarantee you that they're not less than what we think they are they're typically more than what they think we are and Mark can stop me anytime he wants uh there are also other uh potential differences with reference to getting this number down uh for example if you if you don't want color uh you know you can save up to over $30,000 if I'm not correct Mr freelance approximately $23,000 if Council would like to stay with a static white option and and what I'm thinking you know I I don't know what the trigger point is but you know I think uh this opinion of probable cause has a lot of Preparatory work and Engineering in it that doesn't have to be done a second and third or fourth time for other phases uh but that being said perhaps we can just move forward with uh just a little more design uh and come back with maybe a better uh framework for What specifically phase one is and uh estimates on Phase 2 and three it's just a suggestion like I say we it might be a bit unfair to create such a large estimate for a lot of Preparatory work and call it $221,000 uh and then it's of course a different issue with the other phases there're a different number of polls uh there's some variation uh if you look at phase two if it's too expensive perhaps we take out two polls and we still get the kind of look we want so I I still think we should continue down the road and come back to city council maybe with more options based on what we've heard today thank you council member malar yeah were you finished okay go ahead thank you um I I think um I think we should I think we should move forward I I think that this this is going to be it's an important thing that to do for downtown I think we're we were all a little bit surprised where we are with the cost I for one don't think the color is a big deal because you can't use red or green which means you can't do St Patrick's Day you can't do Christmas you can't I mean how many holidays are we going to be able to do with purple and orange so I mean to me the the cafe and I mean especially if you're thinking of um pyer square and places like that in Seattle I mean I don't think that they change the color of the lights the lights are the attraction so I I just don't know how many holidays you're going to be able to accentuate by not being able to use red and green because uh it's Valentine's Day um you know different H especially Christmas when we have the lighting in downtown I anyway I'm fine with just the white lights and I'm ready to I just want to know the I'd like for staff to try to stay within the 185,000 that's that might would make me comfortable with moving forward saying we're going to stay within the original we're going to try to tweak it as best we can if we go a little bit over but if we can stick to as best we can and by eliminating the colored lights if there's a consensus not to do that that would make that pretty doable to stay within the $185,000 so thank you else uh thank you vice mayor uh based on what's been stated here today I would be in favor of moving this project forward um as far as the lights uh can't see the colors that well anyway so but but I still like colored lights um so um I don't have a problem with the cuddle lights I think the thing I'm looking at is you know our our second and last page where it says you know the recommendations from staff um I think they've done a lot of hard work on this and uh they are making a recommendation that we we do um include the option for color uh they've studied it they've thought about it they rationalized why we'd want to do it uh so I would uh go along with the consensus uh of the council but uh I think we should go ahead and move forward with the staff recommendation thank you thank you council member Al D thank you vice mayor um so a little bit of what council member Clark was um mentioned earlier this is within the beautification category but that isn't all that the lights would create so downtown we're all trying to create a destination or more of a Destin destination for downtown these lights would do that we all want more walkable traffic these lights will help increase that we all want more business in downtown this will increase that and then we want our downtown to be a more modern type Historic downtown if you will this will help that uh this also went through the slag group so a lot of business owners weighed in on it and agreed that the lighting is what they would like to see so with that said I either colored or white I don't doesn't really make a difference to me all along it was white light so I'm okay with that I do appreciate staff saying here's what it looks like to have color um I think that's great thank you for bringing that but at the end of the day if it means these Cafe lighs go for without color I'm okay with that I have no problem whatsoever but I do want to thank staff for bringing all these numbers and the presentation and apologize to the architect who we bombarded and sir we Welcome to our meetings we we do that uh quite often but thank you so much and thank you vice mayor thank you council member council member Turner uh thank you vice mayor and thank you to the other council members for your input it's helped me kind of formulate my thoughts about this and also I'm appreciative that the city manager pointed out that perhaps we should look at this as a as amortizing the cost of this over the lifespan of of the uh projects the value that it would be there it's lifespan so that's 10 or 20 years um other than perhaps the bulbs themselves um I did have a question about the additional posts that would be added would those only be the vertical portion of the post or would it also include the are these priced at the cost of the horizontal arm and the Street Lamp as as well CU I'm not certain that we would need to add that to it yeah the the cost would be just the vertical post itself um there would be no need to add additional the one thing that we definitely looked at was that there uh the light levels uh were not in question in other words existing lighting levels um would be increased by these lights but we weren't looking to add any additional Street pole lights um also I I I want to add one little note too in the opinion of probable cost we we we're showing the cost of the light pole um based on some some facts of what they uh historically they've cost but has also contingencies in there but um ironically some of these post polls will be dead ends so to speak so there's really no power there the Stringer like it's its power from the pole on the one side goes to a dead end on the other side so um I think the costs are are based on the fact that they would need to have electrical so there's um a buffer there that I think once you get into the actual bidding time it it comes down instead of goes up uh thank you and to the point on the post you did give consideration to stringing these from the buildings where possible and decided against that we did look at that uh first of all the buildings uh two two issues with that the the height of the buildings and the distance does does make it longer and tougher to do that but also there there are multiple Heights and you get into several situations of uh figuring out how structurally to to mount those and also the the ownership of those and the maintenance to get to those connection points um a uh a place like High Street in Phoenix uh they have the Stringer lights over there and it was a big boom for them uh to get people to come and and uh the retail uh really appreciated um the the uh the Aesthetics that it brought and the people that it brought uh they had the ability to go from roof to roof and not need poles but they were all the same height and it's a little different there um thank you vice mayor and thank you for mentioning well first for I wanted to make sure that we had considered the building height and that it got a little bit of discussion here that the buildings just aren't appropriate um in our situation thanks for mentioning High Street um that's been my example of what we could accomplish with this type of lighting here if anybody's not familiar with it uh it certainly is worth looking at I think to see how it creates a sense of place um when you're there the uh um as in regards to the color changing option I've been an advocate of color changeable lights in our downtown and I remain an advocate of that except that in this situation I because these are the overhead lights and that they would visually conflict with the street the signal lights the the red green and yellows um I I don't think it would be wise for us to do that and I do know that from our experience with Glendale Glitters um that the street level lights The Pedestrian you know size lights with on the trees and such that gives us the ability to create color in our downtown and in a way that we could do in the future that would be changeable without and of course during Glendo Glitters it doesn't conflict with the uh traffic lighting so I think we still could have that opportunity in the future um with street level and and tree lighting to create the changeable downtown that we might want to have and have the full color array available to us not worrying about the conflicts um I do think we need to be mindful that uh I don't recall if we discussed this before but this would I can't imagine would it would not have an impact on uh the future of glitter and glow on these uh whatever streets we choose to put these uh lights in um maybe a a consideration too as to whether we you know the advantage of taking it down the side streets to speak of so in short those were my concerns and appreciate the input and I can support moving forward with what we've identified as phase one with the non-changeable lights if if I could address one thing that um I'm I'm a little less a proponent or uh for color or not in other words there there are pros and cons that um one one pro that I would like to make sure everyone understands is um if you get the color changing light they can be white also so in other words you do get that option that they're always white there are also um uh I want to say glitter effects with just white lighting there are are movement um the the one rendering I have actually I got I let me go back one page it's hard to see in this slide possibly but um one thing that I would say is as a nice way to do a winter festival uh festive lighting is uh blue and white every other light fixture is a different color um the the other thing I would mention with this is everyone has seen the white lighting this would put you know your your city would be the first in town to do it um the we saw an example of it the uh inch Texas and in Las Vegas they did 11 blocks of it and we were able to kind of learn from uh what what they learned from it um however I'm going to say the the cons just the same is is the cost the reason there's the cost is someone does have to make these decisions on what color they're going to be um it has to be programmed it's it's uh can be on a timer but uh maybe you have a parade going through that you want for that parade just uh some special effect or whatever um and it can be kept white most of the time but that does entail uh programming cabling and um a location for a controller so that's the that's the reason it's it costs more as those the the light fixture looks exactly the same matter of fact on this page you can see the cut sheet um it's the same cut sheet for whether you want the white or the color it's uh a checkbox of which one you want basically but the controls do end up being very different thank you council member turn I agree with your comments on the color lights um I always thought that was set us up above other cities and making the point also that everybody has whites that would give us an opportunity to maybe have a jazz festival and we have the blue lights running I'm in favor of of moving forward with with the staff recommendation and still considering the the color lights do we have consensus to to move forward yes I'm convinced col lights okay we have it thank you thank you Miss B would you introduce item four Community Development investment strategy update fiscal year 20212 2 and cdbg cv3 vice mayor members of the council here to provide staff report on item number four today will be Jee Marino our director of community services and she'll be joined by Matthew hes our administrator for Community revitalization thank you Mr Phelps again good afternoon mayor and Council so today's presentation is to um provide an update on the fiscal year 2122 Public Service Grant applications um we discussed with uh the council in December at Workshop um regarding this process and then also some recommended changes to car's act Investments as a result of new Congressional um allocations of funding so we'll start off the presentation by providing you with a couple of program updates that are specific to those cares act funds that um Council had previously provided Direction on and then Mr hus will go through the fiscal year 2122 Public Service Grant applications overview we'll discuss the work that we've done with sedac um the Community Development advisory committee um around this new process that we've utilized this year and then ultimately um some staff recommendations so the one thing there's two pieces that I'd like to just point out one the grant process that we ran this year and the um review process um there was a significant amount of work put into creating a matrix um that the subcommittee of sedak really worked very hard on so I'm very proud of the work that they've done on that um and you know what the few few times that we've come and spoken to the council regarding these Investments we've talked about the changes that we're making and how we would like to um work with the council and sedak to invest these um dollars to ensure that they're the creating the highest benit for for our community and so um you'll see that reflected in these recommendations and then lastly the the the situation that we're dealing with with the pandemic and the continued um Investments by Congress into um relief programs is really requiring us to be agile and Nimble um as we're making these investments in our community so you'll see that reflected in our recommendations today as well um thank you vice mayor members of the council uh the first program that I would like to update you about is the pandemic small business assistance program that was um agreed upon by the council in December um you can see that uh we did award that that uh administration of that program to chos pacasa or cplc um that program launched uh towards the end of January and in the first couple of weeks uh we saw that there were 28 applications now uh this assistance was tailored to the smaller businesses the the Mom and Pops the uh those businesses with five or fewer employees and there's been um resounding interest um currently there are eight excuse me there are are four approved applications um with money has been dispersed and we are in the process of working with cplc to get reimbursement two them for those projects there are an additional three that are in underwriting are likely to be approved with probably within the next week or so and they have also 20 additional um applications that they have pre-screened and are moving towards ENT writing so of the money that we have allocated there is significant need um we have had a discussion with them recently about uh the possibility of accepting additional funds um and they have indicated that that is something that they would be able to accommodate and and spend money quickly the next two activities that we'd like to provide you with an update on are um unfund two unfunded applications that the council provided consensus to fund um back in December the one was uh first one is the Sojourner Center um this is a a scope change request there is no um additional money attached to this particular request um after we received the consensus we received um from Sojourner Center we received notice that they had already re um they had found that funding Gap and they requested that we change the scope of work from um lay legal services for their domestic violence victim uh clients to supporting their transitional housing efforts and so again this is um just a scope change but we felt that it was sufficiently different enough that it needed to have the councils uh we need to bring that forward to you the second unfunded application uh was related to Community Legal Services that was also one of the um one of the projects um that the council provided consensus to fund in speaking with Community Legal Services since then they were not confident that they are able they would be able to spend the full award um so they would like to um leave about $335,000 of the covid funding CBG cv3 which would um require that to be reallocated to a different activity which we will discuss in in future slides so in addition um since we met with you in December the um Congress approved about $32 billion in um an emergency Broadband program to be um administered by the um Federal Communication Commission and this particular funding is designed to and I'm going to read my notes because I don't want to get the details incorrect but the particular program is designed to provide a discount of up to $50 per month towards broadband service for eligible households and a one-time discount of up to $100 to purchase a laptop desktop or tablet from participating providers um the the you'll recall that when we met with the council we were recommending a couple of projects to make investments into to address digital connectivity issues in our community the first was the mobile hotspot program uh an allocation of $500,000 because of this new FCC emergency Broadband funding we do believe that this what we had proposed would likely create uh a duplication of benefit um and so we're recommending and we spoke to sedak about this recommendation so we're recommending that that funding um be reallocated due to the circumstances of this new $3.2 billion um additionally in working through the public housing Wi-Fi um project so you'll recall that the proposal that we had presented to council was to invest in Wi-Fi technology for our three public housing facilities so we engaged with technology and Innovation um to help in terms of understanding the initial feasibility and then also understanding the long-term viability because one of the things we need to be cognizant of is our ability to maintain um an investment of that nature over a period of time whether it's because we have a good Community Partnership with a provider or we need to account for that in the housing operating budget Etc so in working with um technology and Innovation the work is still underway and we are still going to continue to conduct feasibility but it's clear that it will take a little bit longer to really come to some recommendations um and some decisions about that funding and so we are also recommending um that that $500,000 also be reallocated and the reason being is because both of those programs were recommended for funding with covid um related funding so it is critical that to the degree possible we U move quickly and get that money out into the community and based on what we're seeing with the small business assistance program we do see that there obviously is a much greater need there additionally um we received more than two times the amount of um Public Service Grant applications than we could fund with fiscal year 2122 and um the car's act allows uh a waiver for investments in public services so we do have the ability to and we'll talk about this on future slides um should it be council's um desire to reinvest this million dollars into both um additionally funding small business assistance as well as fully funding um all of the grant applications that we received um through the process that was opened in December and Mr hus will talk in um detail about um those particular recommendations thank you Miss Morano um as she mentioned we we received approximately $750,000 of requests through 16 applications um there are approximately $370,000 available for fiscal year 22 um Public Services HUD has not given us a waiver for the 15% um which has been a part of the cares act funding this cdbg cv1 and cv3 that we've received so we are proceeding under the assumption that that 15% cap will apply to fy22 um so hence we we only have about $370,000 for the regular funding um to fund uh these applications now we did review these um as Miss Moreno had said um under the lens of having a covid related response and so that covers a number of types of activities that are directly related to covid um which could be funded with the uh portion of the cv3 money from the um the mobile hotspots including housing Senior Services tutoring basically anything related to um loss of employment or underemployment U related to covid um anything related to schools and helping students um Workforce Development Business Development those sorts of things um and particularly also seniors um are particularly hard hit by Co and so any any of those public service activities that address those would have a covid related um a CO related uh impact and again just to remind you um there is no Public Service cap on the cares act funding um which means we can use uh the available should the council wish to um reallocate that that would be available to supplement and fund each of the public service applications in full and just as a reminder uh in December the the the council provided direction to us uh to focus the cdbg public service dollars strictly on the vulnerable populations which you see up here these are primarily youth seniors um those with food insecurities veterans uh DB victims and and the disabled um although there are a couple of others uh applications that we did receive that um are not U service populations that are not on this list so just to continue with the um the scoring we did work with I should say staff worked with the sedak grant subcommittee that was created in September to create an objective um scoring ranking system um the cedc subcommittee and and the larger committee as a whole agreed to um create four broad areas to review one of which um and these were based uh much on Council priorities or Council direction that we had received one of which was um overall administrative funding uh this the subcommittee and the larger committee um decided to pick 10% as a a a good number um an efficient way of showing um administrative expenses and so we have all but but two of the proposals did um did have administrative costs below 10% um with the exception of Phoenix Rescue Mission which came in at 15.2% and cplc came in at 14% um the cedc did re is is making a recommendation to fund these in full um with either a combination of the cv3 or the regular cdbg funding um whereas it so in these two cases where you have the administrative fundings a bit higher than what this than than what we had um anticipated there is um quite a high impact so these applications rated consist ly much higher in other areas um but not too far off from that 10% that uh that the cedc subcommittee had decided on and if you look at the overall we have a really good range of um services and population serve so we have two that are focusing on youth five for the disabled one is for food insecurity um one uh will be servicing refugees and that's a a business assistance an employment assistance for refugees to to help integrate into um you know into American um business Society one servicing veterans three for seniors two for domestic viol excuse me domestic violence victims and one for legal services so the the community need for these is is very significant and this is a one-time opportunity as Co is continuing um the sedak felt that they would like to recommend um funding all of these uh in full because the the need um remains considerable through the covid pandemic and um all Investments would benefit um city of Glendale residents vice mayor council member be sure that I understand uh first of all I want to congratulate both of you on the information that you presented to council it was very thorough very well done very complete and very extensive and I know I am appreciative and I'm sure the rest of council is appreciative of the time that it took and the effort that it took to compile this information so I just wanted to say thank you for a job done well above expectation um now with regard to the recommendations that sedak made I just want to be clear um for for example uh Boys and Girls Club of the valley requested 15,000 and the minimum amount accepted will be 10,000 so will we be fully funding all of these requested amounts um 30,000 in new Lea YWCA 80,000 etc etc so is that the current recommendation that all of these be fully funded uh based upon the requested amount vice mayor and council member clct that is correct so in um in your packet you should have a chart that that is colorcoded yeah and the um requested amount is the amount that's reflective of the the total amount requested not the the minimum amount that they would accept Okay um was it taken into consideration the fact that some of these programs offer duplicative services they do exactly the same thing and what is the rationale for awarding funds to organizations that duplicate the services uh vice mayor uh council member Clark council members yes that was a consideration and um we did review each of these and they're not um duplicating services so someone that that offers transitional housing for example there's not another nonprofit that we're awarding to that also offers transitional housing is that what I'm hearing uh vice mayor May council member Clark that's correct okay thank you thank you vice mayor that's all for now okay thank you um so the today's recommendations um we have about four of them here that we wanted to go over with the council so the first is recommendation is to approve the scope change for the Sojourner Center and again as a reminder that's for the fiscal year 1920 um change and scope of work it does not change the dollar amount um it just um the investment of $20,000 would be for um the change to providing transitional housing Services the second um recommendation that staff is making is to abandon the digital connectivity projects in favor of or because of the uh Congressional investment in the emergency Broadband program and then to um reallocate those funds so to fully fund the 2122 Public Service requests um utilizing and I want to I want to um note here that the fiscal year 2122 allocation that we're expecting is based on prior estimates HUD has not given us our um our allocation amount yet so when we go to adopt the annual action plan there may be some variance in this number if the amount that HUD gives us is different um our plan for addressing that we and we're you know hopefully we're not more than 15 or 20% off of what the estimated allocation is but the plan would be that we would make those adjustments um administratively and inform the Council of that when you adopt that annual action plan um but essentially what we're looking at is approximately $370,000 for the fiscal year 212 to allocation to fund those Public Service um Grant applications and then supplementing that with an additional 380,000 um again for to fully fund the 750,000 of the public service Grant applications and then lastly um to take the um additional funding um as a result of the million dollars that we're reallocating and um to invest that in the um small business assistance uh program because we do see that that's going to continue to be a need um at least over the next 18 to 24 months as well so with that we're looking at we're looking for consensus Direction on all four of those items today sir okay any other comments council member Tom thank you I do have a question on the FCC emergency Broadband program um h i mean have the details of that been laid out I know um Ryan and I have been working um through the NLC ITC committee to try to get some formal details on that I mean are we are we relatively certain we're going to be getting the money back through that program that we're reallocating uh vice mayor and council member tomman chop so I've been watching the website daily um just to make sure that I understand what's going on and what their website is saying right now is that program eligibility and participating provider details have not been announced but the FCC is mobilizing people and organizations to help share information about the program um I will be registering ing Glendale as an Outreach partner um what that means today I don't know because they haven't shared that much information but I will be registering as an Outreach partner I believe that the intent is not that the city of Glendale would receive that funding and be Distributing that funding but it is a broader program that will be offered by the service providers themselves and that you know potentially a role for the city again don't know how the program is going to lay out but a potential role for the city could be to feed them um eligible referrals vice mayor so if I could ask a followup so what would be the consequence if if it doesn't pan out if the FCC emergency Broadband doesn't fill the Gap that we were trying to fill with the digital connectivity product what would be the Fallout there uh vice mayor and council member Tom toach sorry um the the potential would be that we'd have to come back to the council and and process an action plan Amendment um typically what we would be looking at is any other program that um are not um expending the way that they should be expending we would again come back to you and request to reallocate funding from another program so essentially say as an example if we moved forward with increasing the small business assistance allocation to 653 but in two months the emergency Broadband for some reason doesn't happen um I will like I would like to note that it is Congress has already allocated that funding um specifically for that purpose but if for some some reason something happened we would evaluate performance of all of the other providers and come forward to the council if we felt like that there was you know a need to reallocate funding to support a a program like that but based on the investment that Congress has made um I don't I don't foresee that as being an issue currently all right thank you I yeah it appears that they're kind of figuring that emergency Broadband uh funding out as they go so um I just I but I I I agree I think that we probably need to move on from it and then we can um hopefully at least not directly the city but the residents benefit from the emergency Broadband funding so that's it for me thank you welcome any other council members do we have consensus to move forward with it do thank you thank you thank you Miss Bowers would you introduce item five please fund balance and Community investment project update vice mayor members of the council here to provide staff report today will be James millanes he's our engineering budget and CIP administrator and he'll be assisted by assistant city manager Jack freedline thank you Mr Phelps uh vice mayor of city council uh like to introduce uh James milanes our engineering Department's budget and CIP administrator uh he's been with us uh for several years and promoted into this position's helped us create a new process and systems to move our CIP program forward uh he's also been assigned the a cares projects coordination between the various departments and to ensure that we progress efficiently and collaboratively and we'll be providing this update and future periodic updates to keep city council informed of our progress thank you okay thank you Mr fredline uh vice mayor counsel the purpose of today's meeting is to provide an update on what's going on with the AC car's projects it's a slight misnomer we're calling the AC Care's projects but as I'll touch on later it's really a fun balance uh project that we're able to complete because of the AC carees funding so on October 27th staff had a lengthy uh workshop with you to talk about at first the revenue projections and the forecast for both the general sales tax and herf and all the revenues that the city is going to come in and then miss Marino gave a presentation on the federal Investments that are being made with the cares Act and the other Investments to directly help the community at that point Mr Phelps provided a uh a concept of there being a fund balance uh he requested that Council identify a stabilization fund for both the general sales tax and for herf as well as some funding to uh uh jump start the mega events for the Super Bowl that left approximately $1 19.5 million that Mr fredine and Mr Phelps then walk through one by one a series of 10 projects and a contingency amount at the end of that discussion there was leftover amounts and they requested that uh Council provide some additional projects Council provided three items and staff agreed to return in a month to provide better scope and pricing for those three projects so again that happened at the following meeting in November and listing of the projects is here with the approved authorized dollar amounts so what I'd like to do today is to walk through each of these projects in order with you to give you an update on where we are with the progress of the projects and the spend to date with the exception of hold back for contingency till the end of the project this is really a cross- departmental effort you can see here that we've we got uh field operations engineering uh public facilities Recreation special events and transportation staff all heavily involved in delivering these capital projects as Jack said one of my roles is to kind of coordinate the CIP uh within the city the the title 34 projects it's all the construction projects that we do and so I've got a very high level knowledge of all these projects however there might be an occasion if need be that the directors are available to answer specific questions um if they're not in this room they're next door so the first of the projects we'd like to talk about today is payment management I want to start actually by reminding uh Council of what happened in June when uh Mr EOL and Mr fredline presented a revised $10.2 million payment management plan that plan has not changed uh it's still planning on expending or still planning on treating 117 miles of roadway um and today we're at $5.7 million spent and that to date is probably about 2 weeks old um but we are well on Pace for delivering the program that was presented to you in June in the October meeting the first project was suggested was a $5 million investment into pavment management with that transportation and Engineering believe we complete 50 mies of roadway improvements we're currently at a spend of 27 $4,000 and the reason for that why you don't see a big spend is twofold one uh the question was asked uh during the October meeting does staff have capacity to deliver these projects we did without a doubt what we didn't necessarily have was the flexibility in our contracts and so we've asked Council to approve several contracts which you did in amendments in January so thank you for that the other thing you to keep in mind is with payment management it's seasonal we really want to start work early in the morning when the Pavements already above 60° it's hard to do that in January and February so what we are doing right now is all the prep work we're putting down crack seal um getting it ready for in March and April to really hit the streets hard we still believe that this goal of 50 miles can be accomplished by June 30th the next project that was presented was for the community centers that's for Rose Lane Glendale and O'Neal and the dollar amount was $5 million and I've broken this up into two uh parts and the reason is we've got one part that we can complete immediately and that's things like the roofing which is already complete at all three community centers we've got HV HVAC improvements going on that's already completed at O'Neal and will be complet at the other two in Glendale in April and Rose Lane in May and then we have the parking lots again similar to the pavement management we don't want to do any sort of surface treatments uh when it's P out so we're working to do that in March and April there's also an agreement before you tonight that's for more specific of parking lot treatments um it's a very similar treatment but again we want to get that for the flexibility so we're not taking away from pavement Management program that we can treat these community centers um as soon as we can in March and April the second part is this is a very large dollar amounts and what staff want to do is take a look at how these facilities operate how they're how they how do you get from point A to point B from the entrance to the programming and so the staff from public failes Recreation special events have recruited a design professional to help out with programming of these spaces that programming is underway right now and they will be coming back to you in April to talk to you more about that with that in mind we would like to defer some of the other improvements the Wi-Fi the painting flooring and the furnishings and tell you've had an opportunity to review those Concepts on programming we certainly don't want to get a situation where we're applying uh dollars to something that's just going to be redone later on down the line so our Ranch Park there was $2.4 Million committed that would be for the HVAC that's for the main house the Packing Shed and guest house those will be all be completed in may we also are looking at the exterior lighting throughout the park so we have a design professional or looking at that they're looking at solar LED and in the historical areas historical LED um and so that that report should be completed in May and we can provide you with more information at that point we're also negotiating with we've selected contractor we're negotiating with them on doing all of the remot repairs as you recall they're they're very large structures there's a lot going on with those um so we want to take our time make sure we've got the scope complete um and we should be bringing a contract forward for that soon I also want to touch on there's two slides related to SAR Ranch Park this was from the October meeting there's another discussion that happened at the November meeting so we'll I'll have that slide here in a little bit at the Foothills Recreation and Aquatic Center the dollar amount was $1.9 Million I'm happy to uh report that we've already completed replacing the flooring throughout the facility the Skylight has been repaired um as as the buing wall replacement which just happened last week the parking lot same thing applies that we talked about for the community centers we want to get that work done in March and April staff is working on a contract to replaster the pools and then they're also looking throughout the entire facility all the aquatics upgrades they can do keep in mind um I think Mr freedline mentioned early on in October that we don't know the scope of these projects till we really get into them and upgrades is is a great example of that imagine you're taking apart your pool equipment and you find out you got to take care of three other things because of one item so that list is building and the recreation staff is putting that together we also have fencing that will be repaired or replaced in May Heroes Regional Park sta or Council committed to an additional $1.25 million for Heroes Regional Park and that really bought you three things one it it ensured that we can keep the conceptual size of the lake two the project wasn't funded until fy22 so it meant we could not break ground until July 1 at the earliest we're now able to do so we're targeting for an April Start on construction there and that will allow the project to be completed in December we also enhanced and improved several amenities so we're able to add an additional rata add a fountain that is light lights up and is on a timer there's additional Turf and Landscaping instead of just DG uh the shade structures were expanded and a second fishing pier was added as wh our Ranch there are two slides for the Glendale Adult Center the first part is the discussion of the entryway uh the glazing and the metal uh was warped and was creating a potential safety hazard uh so staff have recruited an architectural firm and a structural firm to do an evaluation of that work um we believe the work can be completed by July however while the those professionals were on site they did identify several other areas of concern throughout the facility and so we're deeming that as potential phase two so they're looking at that right now and they're going give us a report on that information soon about what other potential cost can be expected um at that location Rose Lane pool it last last spring had a pretty big leak uh we repaired that over the summer Council committed to $450,000 to provide updates to that facility those are the pools so that's the play and lap pools repairing the pool surface the tile the rim gutters it's repairing the slide and play structures repairing the fiberglass painting and waxing them the fencing repair replacement um and painting were needed and also replacing the shade fabric on the shade structures all those items should be completed in May prior to the pool opening staff have also identified a need to replace the chlorine system at s on the site there are some environmental issues they are working through with that uh in addition there's other Aquatic systems as with Frack as they're replacing Valves and um other pieces of equipment at pools they're building a laundry list of items that need to be addressed and more information will be provided to council as that list is completed Park restrooms uh this was $1.2 Million to replace the exterior restrooms at three Parks bonsel O'Neal and Thunderbird poo there was a discussion at the October meeting of what that meant um you the the the concept of how those restrooms would look how that being said there are still tremendous amount of options on the Aesthetics of the exteriors of these uh restrooms and so staff are going to return turn in uh April with some options for Council we're also still trying to identify the best location for the rest and bonsel if you recall there was an issue with the existing sanitary sewer line so that location has to be moved but staff are just making sure that's at the best location to serve the public security cameras Mr St John presented a request for $250,000 at nine locations and that was to connect the existing cameras at all these locations and add some new ones to the realtime crime Center so that the police department is not forced to rely on uh Transportation cameras or private cameras uh in the area the design of that work has been completed um they're installing them and making those upgrades in in conjunction with other work that's happening at the locations I'd also like to add here that Mr St John uh did suggest that these cameras could be added at the other locations we're talking about today um and we can talk about that more as we get closer to the contingency discussion Murphy Park City Hall campus the work's complete all the black metal the ballards The Pedestrian lights have been repaired um and the clock has been cleaned and I can verify that it is working uh well at November at the November meeting Council suggested three items this is the first of them this is take a look at the Glendale adults Center second floor if you recall it's an open shell right now uh so staff have recruited a design professional to help out with programming and looking at two items one what can we do near term uh I believe there was a suggestion made should it be used for swing space as other facilities are renovated and then also taking a look at what the options are for recreation staff out there in the future so that report should be available in June the SAR Ranch entry and fence painting this is along the 59th Avenue alignment and also along Mountain View to the parking lot this was a large number that staff presented uh we've been able to negotiate some better pricing for this work um and we believe we can grow it over that initial portion that was discussed in fact right now I believe the uh current estimate is closer to $75,000 to complete the entire perimeter painting at so our Ranch Park um the uh last of these is the business support services program manager uh this was a bit of a discussion uh during the meeting in November uh I'm showing you two numbers here the first number is $151,700 started on January 14 so that will not be the full cost we're still waiting on the final dollar figures but should be right in that range of there was a significant risk of the cost being greater than what the initial ask was um we and I touched on several of these items today um with the aquatics needs at both frack and Rose Lane pools um there's a possibility uh at the adult center for any sort of structural issues uh should Council wish to use funding here for that um also it should there be desire to use the funds here to build out the second floor um and then uh as I touched on expanding the cameras at other locations I'm not asking for direction on the contingency today I just want to inform you that these items are coming up we are we do have the intent to come back in April at that time we should have much better information about all of these projects in addition to learning more from Mr Burke and his team about the community centers and the restrooms um and hopefully we can uh provide you some better information at that time with that being said is there any questions that Council might have goad vice mayor if I could just add a point of clarity uh uh James did mention uh the Saro Ranch U entrance fence and the idea that we might be able to paint all the fencing in and of itself up to a $75,000 estimate was looking for maybe shake a head's consensus that we can move up because we'd like to get that completed by the end of March do we have consensus to move that up yes yes you do thank you thank you council member do it too quickly now uh vice mayor yes uh I just uh compliments the staff for accomplishing all these tasks uh done a great job thank you you vice mayor yes council member James excellent presentation we don't get them consistently but when we do I think you should be recognized thank you any other comments questions thank you Miss Bowers we introduce item six presentation on public safety personnel retirement system unfunded pension liabilities and pension obligation bonds vice mayor members of the council here to provide staff report on the last item on today's agenda it'll be led today by Vicky Rios our assistant city manager and LC kamacho uh who's our director of budget and finance and they'll be uh joined by Kurt Freud of course we know is our managing director for RBC capital vice mayor members of the council uh we're going to take a minute here for Mr Frey to join us uh he should be stepping in any minute um I did want to just preface this by saying we're very excited about this item uh Mr fre is going to give you a lot of information there are a lot of numbers here um to look at but I'd like Council to um kind of focus on one particular thing and that is the concept that we're going to be talking to you about today and what this concept boils down to as Mr Frey will uh explain is basically replacing one type of expensive debt with another type of less expensive debt so the concept I think is a little bit more important than the numbers although we are going to go through those for you so that you have an understanding of it um and we also have planned in timing for another Workshop if uh needed for Council to uh debate or look at this a little bit more um but again the concept is fairly simple uh the idea would be to replace expensive debt with less expensive debt and so with that I going to turn it over to to Kurt thank you uh good afternoon council members uh nice to see you all or at least the ones that are up there right now uh my name is Kurt Frey as uh Miss Rio said happy to be with you today to talk about this issue um you have slide materials I think in front of you as well as on the screen and so I'll just launch into those uh I apologize on the front end that there are a bunch of numbers that kind of comes with the turf for me uh but uh we'll try to make them uh not too painful in the process so um I think all the council members probably know this that uh one of the big uh critical ISS issues financing issues that's facing cities and counties in the State uh is their pension liabilities and the level of unfunded pension liabilities and that's particularly acute in the public safety personal retirement system um the state retirement system is funded at a bit higher level it's a little bit different program Public Safety personal retirement system is a is a system that's a uh combined or centralized system but individual cities and Counties have individual plans within the system um given its size Glendale uh as you maybe would suspect has pretty significant unfunded liabilities and you can see them on the slide here so for the police plan uh the unfunded liability is about 193. n million and for the uh fire Personnel it's about 95.8 million um it's important I think to note that that's not unique the city is not unique uh By Any Means means uh relative to this in fact on the fire front you're funded uh in the mid 50s to high 50% level that's actually pretty high a lot of these plans are funded uh down in the 40% level um for police you're down lower uh en closer to that level and you can kind of see I put on the page as well just overall what the funding levels are for uh psprs uh or the public safety personal retirement system plan and you can see for the last three years overall it's running that 45% level so consistent with what I just said about the city uh by no means being unique and and I'll talk about why this came about uh so that you have a sense for that as well because it's not really anything that the city did it's just it's just the nature of how the systems funded and has been funded and so uh as Miss Rio said we've developed uh with the staff an approach to basically take this debt obligation this pension debt obligation that you have and refinance it with debt that's issued directly by the city at a lower interest cost is really what what the whole nud is here and we'll talk about that more um turning to the next slide just spend a minute talking about what causes unfunded liabilities so first the unfunded liability is if you think about a pension a pension is uh benefits you pay out to employees over time you take what those benefits are over time you put them in today's dollars and you compare that with the amount of money that you have on hand or assets on hand and the difference between those numbers is what's the unfunded amount so so pretty simple concept um but there's a lot of different factors that can that can cause unfunded liabilities um one is when when the actuaries run the numbers for a pension system they assume a certain rate of return on the assets that you have for Public Safety personal retirement system today that return ear is is 7.3% so think about it I'm I'm uh I have money in this pension plan as an actuary I'm going to assume that you earn 7.3% every year going out in time I have liabilities that grow over time and and so how much money do I need to put aside and I'll assume it grows at 7.3 but in reality that can that money in the plan can earn anything so sometimes it's lower than 7.3 sometimes it's higher higher than 7.3 that's what they think it is for the Long Haul over a 30-year Actuarial period and we'll talk about that so if you if you come in with actual returns that are below that you're going to create unfunded liabilities less than full funded if you change the benefits if the benefits are higher than what the actuaries assume then that's going to create unfunded liability if uh benefits have uh pension benefits have cost of living adjustments so the actuaries assume assume a certain level of adjustment if the adjustments that are made are higher or lower that'll affect your unfunded liability so all these all these factors can affect it and every year the actuaries go through a calculation to figure out how much they have to fund whether it's Glen Dale or Tempe or Phoenix or whoever the public entity is um the most significant factors that caused the significant unfunded liability that we have with a public safety personal retirement system and again this is not unique here it's it's uh in existence across the country a lot of public entities have this problem in many cases much greater than we do in Arizona but the biggest factor in Arizona was that the statutes previously provided for a permanent benefit increase if the investment return of the retirement system assets was above 90 %. so if you earn 12% in a year then they took 50% of the investment return above 90% and said well apply that to a permanent benefit increase and we'll just assume that it kind of pays for itself was a mistake frankly made by the actuaries and it was a benefit built in the statute that was not supportable for the Long Haul so that that was the biggest factor that caused the unfunded liabilities and then second uh the the Great Recession hit all pension plans pretty hard and so that further contributed to it yet had an unfunded situation that was unfunded it more because of investment returns over that roughly three-year period in there um many of you probably know that pension reforms were enacted a few years back in prop 124 and 125 uh importantly they eliminated the permanent benefit increase for uh in statute so that was a big change that was made that's probably most critical Factor they put a 2% annual cap on Cola increases or cost of living adjustment ments for the benefits um both of those were helpful there were other reforms that took place new actuaries were brought in uh that was very helpful I think to the system they brought in new investment managers they really retooled and uh over the last really year year and a half now they've really completely replaced the staff you've had some board membership changes as well there um and while all those reforms were good you'll also probably recall that the court said hey look you can't uh undo the employment contract you had with employees so what ended up happening was a tier one in tier 2 employee groups basically Legacy employees got created whose benefits stayed the same and then a tier three was created that's kind of On A New Path now and so uh while pension reform was very important and very useful and will be helpful for the long haul it didn't eliminate this unfunded balance uh unfunded liability associated with tier one and tier 2 employees in the system and and that's what we really talk about another change that was made and this was both uh good and bad um the uh pension system changed their uh Actuarial assumption in terms of investment returns used to be 88.1% it's gradually ratchet it down over time to now 7.3% and so you're all knowledgeable people pay attention to what's going on out there um you know if I said hey over the Long Haul I'm going to assume you're earning 88.1% you'd say wow that seems pretty high there's a likelihood I'll come under that on a regular basis and in fact you probably would um and so they they've brought it down 7.3 seems to be okay I might argue if I was budgeting and planning I'd budget and plan for a lower investment return than that but here's the bad side of lowering your investment return assumptions if you lower that in your actual calculations your unfunded liability goes up so they look to have a balance there between the two um an important thing to note when you're talking about uh pension liabilities is uh this is this is debt to the city um the city is given a number every year your annual required contribution we'll talk about that it's the amount of money that you have to pay into the pension system the actuaries calculate you pay it um it's a debt to the city and it's treated as a debt of the City by rating agencies by investors by creditors Etc uh you don't not pay it um now there are jurisdictions around the country who choose not to pay it state of Illinois is a great example and their pension liabilities have just gone up and up and up but in Arizona no public entity uh fails to pay its contributions so it's like a debt and that debt amortizes at that 7.3% investment return so it's very costly debt you've all sat around well we've issued uh bonds for the city and you know that the borrowing cost of the city has been remarkably low compared to that you know 2% 3% Etc depending upon market conditions and so that's what sets up the opportunity here you're going to take pension debt at 7.3 and issue debt directly at a far lower rate that we'll talk about um the other the other uh concept here when you look at issuing debt directly versus uh the pension system debt in the pension system because the way the numbers are calculated and their percent of payroll Etc your contributions to pay off your pension liability go up over time and they go up significantly and so you can see on the bottom of this page for fiscal 21 your annual payment for the unfunded liability ability just that portion of the of the pension was 20.6 Million by fiscal 2037 it'll be 41 million so it's a very steep curve that it's going up over time and by issuing debt at a lower rate that you control you can stabilize the payments so that they're more level payments over time far better for you from a budgetary standpoint um if we go to this next slide then just to get into some of the numbers and we won't look at all these but but it'll give you some sense for it so um this shows you what is in existence right now this is what the pension system Public Safety personal retirement system says here's what Glendale has to pay based on your unfunded liability and the cost of the pension system right now and it's broken into contributions for police because that's one plan that you have versus fire which is the second plan that you have and when you look at pension payments that you make they fall into two Cate atories one is called normal cost and that's just the cost that's required to be paid to keep current with the benefits that are being provided given the number of employees you have given the assumed uh mortality rate of people how long they'll be retired payroll changes Etc a whole bunch of assumptions and so those normal costs are just that's what it costs to take care of your uh pension the U cost or unfunded acred liability costs is paying off off the unfunded liability so it's like a mortgage payment or a debt payment it's the amount that you'll pay each year for police under the U cost or fire under the U cost to pay off the dollar amount of unfunded liability that we share it on the first slide it's paid off between now and uh 2038 um and it's basically uring at 7.3% and and then you can see what the totals are that's the column that will look to tackle so you know it's pretty simple just if you think about it if I said hey those are at 7.3% I can replace them with payments at 2 and a half% um you'd all immediately raise your hand and go well of course I'd do that that's pretty straight forward that is a large part of what goes on here so this alternative approach uh we talk a little bit on page five and it involves the issuance of taxable debt obligations by the city um their taxable debt as opposed to tax exempt debt because under the federal tax code you can borrow for capital projects on the tax exent basis but you can't borrow for uh in effect operating costs this is this is an operating cost it's payment into your pension system obviously but it's not a capital P purpose so it has to be a taxable debt obligation um the nice thing about that right now is taxable interest rates like tax exempt interest rates are very low um at the time time I put this together you know the borrowing cost would probably be in the two two and a qu% range I ran the numbers in here at 2.45% just to be a bit more conservative but um compare that to 7.3% again that's the that's half of the juice if you will in this uh Idea Idea um the obligation proceeds so you borrow the money you take the proceeds you dump them into the pension system with psprs psprs runs an investment uh portfolio and an investment program that takes all of the assets from all the jurisdictions and invests them in a big gigantic portfolio and then their earnings are distributed back out to the individual PL so each individual plan doesn't have its own portfolio it's part of a bigger portfolio um and so they invested and as long as the investment return that you're earning is greater than your borrowing cost then you will be cash flow positive relative to doing this um and so part of what you have to assess and it's the second big element on this is do you think that the public safety personal retirement system will earn more than let's say 2 and a half% borrowing cost over the life cycle of this borrowing which is about 16 years history has shown that yes they would um you'll see I've run numbers at 7.3% I've run numbers at at lower rates as well and and you can see what impact that has but that's in a nutshell you know the one thing you take away is I have pension debt at 7.3 I replace it with debt at two two and a half I invest the money as long as I earn more than two two and a half I win I do better the higher I am above that level the better I do and the and the numbers are pretty strong as you'll see um let's see going to the next page then just to look at those numbers to give you some sense for it um this page uh tries to summarize that for you so uh the First Column the existing UA contributions that's what you're doing right now that's the page we looked at the other day this first page is for the police plan so those are the payments to amortise the unfunded liability right now doing nothing the next column then is an estimated revised uh unfunded liability contribution in this model talking with uh the manager and City staff we we funded at a level that gets you to an 85% funded level so for police right now you're at 41% so this would take you up to 85% we didn't go to 100% some cities in Arizona are in fact doing that me personally I I I don't like the idea of being overfunded I think being close to funded is is The Sweet Spot quite frankly and so these numbers we ran at 85% so that leaves a little bit of unfunded liability that you're still having to amortized and it's reflected in that column that's why those numbers go down but they still exist if you did 100% that column would be zero okay just so people are following Along on that front the next column then shows the estimated Debt Service for the debt that would be issued uh to fund up to the 85% level and you can see that that's a much flatter much more stable budgetary level right it doesn't go up big chunk at the at the tail end or over time and then that the next column is the estimated total of what the cost would be if you if you did this and then finally in the last column the estimated savings is the Delta between doing nothing or doing this proposal and you can see you know the dollar amount of savings over time adds up to about $75 million over a 16-year period now that's assuming that the money that's put in the pension system for the police plan which is what we're talking about here is invested at 7.3% the Actuarial assumption so we'll come back to that in a second so this page is for police the next slide is for the fire plan Fire doesn't have as big as an unfunded liability it's not as big a plan right so it's about half the size of the police plan you get the sense the numbers same sort of drill in this case over that 16-year period you're saving about 33 34 million okay estimated basis and then and then the next page following that is combining the two so the city council has a feel for it um so overall if you earn 7.3 and you borrow it at 2.45% as shown in here you'd save about 108. 7 million over 16 years certainly a very sizable number and that's why that's why this concept A lot of cities uh both here in Arizona and counties uh as well as across the country are doing these financings right now because interest rates are so low it sets up the opportunity for it to work now as I mentioned 7.3% is uh you know if you talk if you talk to the investment managers at psprs you talk to a lot of investment people they'd say that's not a bad number me personally I'm I live on the cons conservative uh side of the freeway um and so I I think you should as a public entity always kind of be more conservative when you think about these things and if they work great if they work better in reality super but it's the downside you got to watch for so we ran this at an assumed 6% rate psprs is return over the last 10 years has been in the 6 and a half% right overall um so below that level and you could you could run it down to whatever l level you want this is on the combined police and fire just for comparative purposes The Columns are all the same except your savings are lower so your savings here are 89.1 million versus on a combined basis when we ran it at 7.3% they were 108. 7 so still very significant level of savings but significantly lower too if the if the earnings rate is higher than 7.3 right if it's lower you know the lower you get if you bring it down to a 22% investment return then it's kind of a wash okay everybody following that vice mayor a question if I could um can you explain why in each of these examples the uh the Savings in fiscal year 2022 is significantly more than it is in any of the other years great that's a great question um uh it is because I designed it that way but I'll tell you why um you can design it any way you want right the reason I did it that way is because one of the things when you go down this path that I think is important to do from the city standpoint but also from a rating agency standpoint is to take some of the Savings in the earlier years and put it aside in a in a reserve a Reserve at the city level why well um every year year the actuaries calculate what the liability is of the pension system right I can guarantee you unequivocally 100% that all of the numbers that actually happen won't align with what the assumptions are in there so you're going to have changes so you could fund the system at 100% you could totally fund it at 100% And I guarantee you that at some point you'll have unfunded liability again the return every year is not going to be 7. 3% or greater some years it's going to be lower people are going to live longer than the mortality tables that the actuaries assume you're going to give bigger you know payroll increases any number of factors there's a whole slew of them could change that and so uh part of the concept is fund it up to 85% create a little Reserve cushion so that a year two years three years five years down the road when the numbers don't align you have a pot of money that you can dump to solve the problem like that as opposed to having that unfunded liability build up over time vice mayor um so then that pot of money yes sir um you're pot you're a pot of money obviously not a literal pot of money yes sir um it is alloc it's over and above our Reserve Fund in the general fund and it's allocated yes as a you know in essence like almost an escro account or whatever it's sitting there somewhere it would it would be uh uh Reserve account solely for retirement purposes so not generally available that you'd put aside what a lot of the Cities out there are doing is they're actually borrowing money to put into a reserve which you could do um I personally favor taking some of your savings and doing that so you borrow less um but you could do either way but doing it is an important issue from like I said a credit rating standpoint but also from a budgetary standpoint for the city and vice mayor if I could continue the that then Reserve fund we'll call it instead of a pot money with a better word yeah our Reserve um is that fund then protected uh solely by the will of the council or is it protected under federal law or some other means well uh it it wouldn't be protected under federal law I know Miss Rios wants to speak to this but I think you'd set it up as a as a fund uh restricted fund at the city level but go ahead vice mayor members of the council that that's correct it would be set up as part of the borrowing to put that excuse me in reserve and it would be um some type of um action by the council and then it would take some type of action by the council to to use it in the future so if we were using it uh there would either be rules associated with it or we would would require a council action to then unreserve it or or use it uh for a purpose and if I may vice mayor so the rules uh regarding its use would be established by this Council uh vice mayor members of the council that's correct such that we could in essence at least restrict future C or this Council and future councils from tapping into that fund without notifying the the members of our our employees and and retirees to whom we intended that fund to benefit um vice mayor if uh if I understand the question again it would take a council action so yes there'd be public notification and all of those types of things if it were going to be uh used for uh any purpose the vice mayor Miss Rios all due respect to present past and future councils and and management and all it's not always as transparent perhaps as we would want it to be so but again that's up to this Council to if we need to if we feel we need to safeguard this money through the rules that we set up that's up to us to do it and of course the police members of our police and fire and the retirees out there would have a interest probably in discuss discing that with us and making sure that we get it done as right as possible to start with personally I think it would be a shame if at some point down the road it was discovered that even though it was all publicly noticed it maybe slipped through without awareness thank you welcome go ahead council member mner I just had a question regarding that um I mean I I get the point of of safeguarding our our retirement fund part of this action is to save uh if the numbers were to work out on the 6% for example that at the end of what is that 20 years that we would have $89 million in this fund so I mean I'm talking in the saving in savings mayor M and that's what I don't quite understand is are we putting that all into a fund no mayor members of the council don't don't misunderstand what what we're saying we're saying you would take a portion of your savings and set it aside probably up to some dollar limit and Mr Frey would certainly advise us as to what the that would be and once you reach that dollar limit and we'll just make up a number and say it's $15 million that you decide to set aside in reserves then you don't continue it's not all of your savings it's just some portion that you design or that you designate uh again we would use Kurt's advice on that matter and then um and it could take a year to get there because you could set it all aside at once as Mr F said some cities are borrowing and setting it aside we don't see in our case the need to do that but you could set aside and I'll just you know make up a an idea and say you could set aside half your savings every year for 5 years until you reach some dollar amount and then it would just be there and again it's meant to be there for fluctuations up or down in that um unfunded liability in the future so it's specifically for that use and Council would designate either the rules under which it would be used or some mechanism for it to then take a public action to use it to send it back to the retirement system at that time thank you does that help yes please okay um Mr vice mayor members of the council just to add to that um just so that it's clear so right now you're making your pension payments out of your out of the general fund so the the way i' think about this is you're reducing the amount of money you spend out of the general fund to support pensions um and to the extent you can do that that's great and and then as Miss Rios just said part of what you're doing then is you're taking part of that as opposed to borrowing money and putting it aside as a as a reserve you're taking part of the savings and putting it in a reserve because you know you're going to have changes in the numbers over time that help vice mayor remember Turner it not only perhaps is a hedge against fluctuations in returns but it also could help uh supplement that 15% that 80 we're only funding we're only borrowing to fund at 85 but it could also that 15% we could be growing that sure you could you could apply it in that way but but that would be the thought ideally you'd use it as a buffer you know think about where you're at right now you're 41% funded in the police uh plan you're going to take it up to 85% the goal or the hope the the idea the financing structure you'd create would be to avoid going back to 41 if you capture it early your ability to avoid that is increased and so that's kind of the concept it's like hey we're going to get to 85 let's try to hang pretty close there if you take it to the 100% level and you said I have no unfunded liability I'm fully funded you know maybe that's an easier way to think about it you kind of go okay well if I get underfunded I'm going to take the money in my in my Reserve get me back to 100% so it's that kind of concept okay ice mayor yes council member M Clark I just have I think this is a brilliant idea whoever figured it out is one smart dude really very good very very good I just have one question and and I I there's no page numbers it's under the slide entitled City financing options for funding pensions yes and it it would be the second bullet excise tax revenue obligations slash pledged Revenue obligations there's a remark there's generally not used by cities as it uses excise tax debt capacity in other words sales tax capacity what is the downside to our general fund of using this sales tax capacity for this purpose oh great uh vice mayor uh council member Clark um why don't we go to this slide and I'll answer that question and going through it uh if that works okay so uh we get the concept so then the question is well how do you borrow the money you know if you're the city and there's really three legal options available one uh the one we were just uh mentioning is excise tax revenue obligations the city should council members should be familiar with this you go out and issue excise tax obligations they're secured by City sales taxes and state shared sales taxes and income taxes um you've issued it for arena Deb other sports facilities other things of the city um couple things in that regard uh in the answer to the councilwoman's question um you only have so much capacity there right and we've looked at that recently this financing concept given the level of unfunded liability and funding at 85% would involve issuing about $225 million of debt more debt than you have capacity to issue for against your excise taxes so it doesn't work so well the other thing that happens even if the numbers did work it crowds out your ability to use that for other purposes so you know if you decide uh you know you want to make uh improvements to City Hall and you don't want to issue General obligation bonds that the voters have to authorize that affects the property tax you might say oh I'll go out and issue sales tax debt excise tax obligations so doing the pension financing um doesn't allow you to do that excise tax bonds have a uh have a legal Covenant that compares the historical amount of of sales taxes to the maximum amount of annual Debt Service payments and so there's a limit on them okay does that answer that question does that help in that regard it sure does um so let me just follow up so these would be our three options in terms of financing this and and based upon your comments that scratches number one option number one does not work very well to fund it up to 85% and it uses your debt capacity in that area is is not what I'd recommend for you it's not what any city in Arizona has done to date um skip to the bottom one on the page General obligation bonds you all know what those are right they're they're secured by and payable from property taxes they require voter authorization perfectly fine mechanism but no city has gone to their voters and asked to issue Geo bonds obviously you couldn't do that in the short term because you'd have to go out for a vote generally speaking you know most councils have not wanted to go that way but you know what that's about the middle one certificates of participation is the one that that I'd recommend to you given the time frame and it's the one that all cities that have done this and all cities that are considering doing this are using um and we'll we'll talk about it in length um certificates of participation are are uh paid for out of your general fund and it's a it's a pretty simple concept if I say it to you and then we'll go through it in more detail but basically you take physical assets property assets that you have and you leverage them to borrow money it's like a home equity loan except you don't give up your house in this case your assets you only ground lease them out it's a very common financing approach used by cities and counties and state government not only here but but across the country um you know like I say it leverages your assets and so uh that's the one that I would focus on uh the source of payment for your pension debt is general fund source of payment for this debt would be general fund kind of matches off well uh and so if we go to the next page I can talk about that in a little bit more detail um like I said it's a common approach that leverages existing uh facilities to the city so what what you would do is you'd go out and look at the assets that the city has and you'd look for assets that don't have a lean on them I don't have debt on them um and aren't utility related because utility related properties uh support utility bonds that you've issued so think of the Wastewater system as an example you you wouldn't take a Wastewater Plant and use it for this uh because the money from running the Wastewater Plant pays your Wastewater revenue bonds and so you look at a building like this building and you'd say hey it's worth 15 million or whatever it's worth I'm G to ground lease it out for the term of the financing 16 years I'm gonna lease purchase it back all in one Fell Swoop when I ground leas it out I ground lease it out to a bank trustee just a just a the trustee for the transaction um and they have a ground lease they don't have ownership in it you retain ownership you use the facilities Etc um what that does is it allows you to borrow money against the asset value of those facilities you make the lease payments uh out of your general fund and at the end of the financing term the property just reverts to you the ground lease cancels property is yours free and clear you don't owe anything and so when when you do this it doesn't feel any different I mean there's still your buildings you still maintain them you still ensure them you still do everything relative because you still own them um you've just ground leased them out if you don't pay the lease payment the trustee takes the building and for the duration of the ground lease can lease it to someone else and so uh when these financings are done um investors the last thing an investor wants to do is be a landlord they don't want your Convention Center they don't want your library they don't want any of that stuff they just want you to make the annual payment and so if you think about it right now you make your annual payment for your pension system right we don't not make our payments same is true with the least purchase you don't not make the payment if you if you actually said oh I think I won't make the payment you could never borrow the money because no one wants to be the landlord so you take what are essential facilities um and you ground lease those out and you lease them back and and then people go oh yeah they're going to pay this and it works fine their uh lease purchase financings these certificates are participation they look like bonds they're they're debt instruments um and they're highly rated so generally speaking they're rated one notch one category below what a general obligation Bond would be rated general obligation bond is your highest credit because it's secured by an unlimited property tax so they end up getting high rtings because they get high ratings they have low interest rates and it's uh the financing structure that works vice mayor questions about that I I just want to make sure I understand in essence what you're suggesting is we substitute the annual pspr payment with making a ground lease payment instead and theoretically that ground lease payment is cheaper or lower than what the PS PR payment is correct is that it in a nutshell it's it in a nutshell one one correction it's not the ground lease payment you're making you're ground leasing it out and you're leasing it back so it's a lease payment but same concept exactly right okay um and so and so just to crystallize on that CU it's important I think uh from your standpoint for sure you'll borrow at a lower cost it'll be a lot lower 2 and a half versus 730 that's easy the other piece is what you invest at you don't control the investment Public Safety personal retirement system controls it so you got to get comfortable with that side of it I'm comfortable I think your staff is comfortable but but you know it's important to to kind of understand that um and and but that's how it works um next page just real quickly and then I'll wrap up here for you um this page just gives you sense lots of people are doing these we're we're working with a bunch of cities and Counties in Arizona all of them are kind of going yeah this is a good opportunity a good time to do this my colleagues across the country because we're a national firm are doing a lot of these as well um you know if you think about it if interest rates are higher it still works but it doesn't work as comfortably right because again same thing happens if I borrow at 5% but I earn 7.3 I'm ahead of the game but you don't feel as comfortable that you'll be at 7.3 when you've borrowed at five the Delta between two and a half and 7.3 or whatever the return is is broader that's why it makes it a popular idea right now uh and then lastly steps in the process uh if the council decides to go forward I thought it'd be good to summarize this so uh if you decide to go forward one of the things that has to happen is the staff has to identify the properties that youd ground lease out and Lease back from the city council standpoint you shouldn't care what those are what what they would go through is they'd say hey let's find properties and I've said um if we find properties worth uh from an insurance standpoint worth 50% of the amount of debt we're borrowing then that'll work um you might think well Kurt how could that be you know like like if we don't pay and we're only leveraging at 50% value the investors will come up short gets back to what I said earlier the investors don't want your property they just expect you to pay your governmental eny you pay your debts you're doing this for a reason just like you pay your pension debts so um that's why you can do that um they'll do that and and that would be fine you know we can report back on that at some point um if in fact it's helpful to the council to have an additional work study session after you absorb this and go home and say God that guy talked about numbers for a long time um you know there's room on the schedule to do that uh the thought would be to come to the council uh uh at its March 30th meeting if you decide to do this adopt a resolution that authorizes going forward with a with a financing it and not to exceed dollar amount um we'd meet with radian agencies uh staff and and myself toward the end of April sell the certificates or the debt obligations in early June and close toward the end of June so that come the beginning of July you'd have the money to deposit with Public Safety personal retirement system and get after it um importantly the other thing that what need to happen is you need to budget for making that payment of 225 250 million whatever the dollar amount is that equates to the numbers uh in your budget for next year so that that you all have provided authorization to spend the money from the proceeds uh with that I think that's the last thing I wanted to say council member Tom thank you vice mayor um thank you Kurt very thorough presentation um how how are the who dictates the lease terms then when how do you structure that part of it it's a great question um the uh lease purchase the structure of the lease purchase uh are is pretty boiler plate so it's designed uh you're not negotiating with like a landlord or anything like that so you you take your properties let's say we take this building we ground Le sit to a bank trustee the bank trustee is just a a bank serving in a trustee capacity who gets the lease payments from you and makes the payments out to the investors okay the investors are like those people in the bond market and so we go out you know through undering firms we go out and we sell in$ 5,000 denominate dollar denominations or up we go out and sell their right to get a portion of the lease payments okay they don't want the land so what the lease purch agreement says is hey the city's least purchasing this property that it ground leased out to the trustee it's making semiannual lease payments you're responsible for insurance you're responsible for maintaining the building you you you have ownership of the building and so there's nothing in it from the city standpoint where you go oh I don't like that you're not negotiating with anyone we we're writing the terms of what the lease purchase says happy to share it with you all but it's it's really pretty boilerplate type document I'm I'm just that's you don't need to do that I'm just curious I'm just C always curious about details it does but how do you who determines how do you determine value uh what we do is we uh take uh the replacement value of the properties that uh your staff calculates for your audit uh for insurance purposes so you do that on an annual basis as part of your financial statements as other jurisdictions do and and we take that again recognizing that the value of the property isn't hyper critical we're going to do 50% so by definition if you don't make the lease payment the uh trustee is going to have buildings that are only worth 50% and they can't sell them they can only lease them out to some other use right so it it's really not designed to ever be taken in that way um and and that's kind of what makes it work so the investors don't look at the property and go gez I wonder what I could use the convention center for if I had to lease it they go are these essential facilities for the city of Glendale and will the city make its annual lease payments on that basis given the credit quality of the city etc etc and if they say yes which they would then they're fine one last question if I could vice mayor um well one statement up first I I thought our unfunded liability was around 260 million so I was a little surprised to find out that it's closer to 290 million um based on those numbers so that's a a little a little more alarming than I thought it was um but I just wanted to ask what is the appetite in the market for this type of um investment vehicle uh I mean it's a you know I mean rates are low they're these are taxable so just curious what the what the appetite in the market is for for this type of a vehicle we got a very good question um it's been very strong uh uh particularly in the short term that's why interest rates are so low shortterm being the last uh six months in particular but but even going back the last couple of years and so uh you know if you think about it a governmental entity most governmental entities are very good credits right um your financials are very good your likelihood to pay is very high Municipal governments generally don't default on their debt and so there's uh a huge appetite for Municipal debt and taxable the taxable Market is a gigantic Market um so all of the issues that have been sold have way more investor interest than obligations available to sell I'm sorry I do have one more question vice mayor if I could um because of the debt does it affect our our rating um well the goal would be no so again if you think about it you're swapping pension debt that rating agencies when they write up your credit report and they look at your credit they say how much debt do you have in your pension and how much opep other uh uh po post-employment benefit debt do you have and you calculate that as part of your uh financial statements so it's reported in your financial statements so they basically look at it and go if you have a good plan that's where this Reserve comes into play and you're swapping this debt for pension debt like you're at the same sort of spot now you got to be smart about the debt you're issuing that's why I say we're not going to issue excise tax obligations you need to put a reserve aside you know things like that they like but generally speaking doing this has been viewed as neutral or positive by the reging exti all right very good thank you council member manard uh thank you m vice mayor uh just one question it seems to me that if many cities in the state of Arizona went to this process that it would it would reduce the pressure on the fund administrators that administer this large fund to perform can you address that um well yeah uh I I uh can I'm not sure if I have a perfect answer this is my take on it um my take would be that uh I think the changes that the public safety personal retirement system has made uh are beneficial I think the new team from the management to the investment managers is uh all positive right um I think quite frankly it was not managed particularly well and I I don't think that that's a big secret in the past they had problems that's why it's funded at a lower level than as an example the state retirement system um all that said no guarantees you know like do I think that the investment yields will go up and down yes do I think it's a reasonable proposition that they'll earn more than your borrowing rate definitively can I guarantee it I can't so that that's kind of how I look at it I wouldn't be here talking to you about it though today if I thought it was a bad idea and not not how I live you know uh and so I've looked at it quite a bit you know I I like a lot of the things that they have going on I think that uh it's a huge amount of money that the city could save uh there are very few things that the city will look at that will have the potential to save this kind of money for you and so on that basis I think it's something that that you should definitely strongly consider um you know this I look at it I don't know if that's fully responsive but in part yes yes do you have more of an answer Vicki did you want to speak or I Yes actually I I kind of wanted to kind of uh summarize or and and get us um where I'd like us to be if we could but uh we are looking for uh some direction and some consensus of the council today to move forward with this and we're prepared we've already begun many of the steps including having Mr fre do the analysis for us and getting the uh properties so we can start identifying which properties could be used as collateral um we have also in addition to that the staff has met with the staff at psprs uh in theory again talking to them about if they were to receive this large dollar amount somewhere around the time frame of July 1st um or shortly thereafter would they be ready how would they invest it uh would they be uh willing to continue to talk to us throughout uh the process and be uh open to um to us and to us talking to them about their investment strategies and that type of thing and so we did meet with them uh we do feel comfortable that they aren't going to uh shift their investment strategy for some reason and take the pressure off themselves to uh perform so we've anticipated some of that I don't know if that helps answer your question but um we we we believe that we'll stay on top of them and there are still there are a lot of cities doing this that also have that expectation so um if council is amenable to it and agreeable and kind of has a consensus we're prepared to continue to work with uh Kurt's staff and the staff at Greenberg trow rig to prepare an ordinance for Council to put this into the budget for uh next year and to go ahead uh with the sale as mrroy said um and and credited me with the brilliant idea of doing it which I appreciate very much there are very few opportunities that we will have or that I will have in my lifetime to save this much money for a city it is very impactful we feel very uh strongly that it is a good uh move on the city's part and with that I'll I'll let the council make their uh consensus any questions or comments from the council council member Turner uh thank you vice mayor um at what point will management and Council discuss specific properties we might be considering uh mayor members of council or vice mayor if that's something Council would like to see once we've identified them we can certainly send you out a a list as Mr Frey mentioned it's it's it's kind of a formality of the way that it works and so it's not that impactful as to which buildings uh they are but um but if that's important to the council we can certainly get you that information once we've got them all identified um vice mayor thank you m Rios um it as I think was mentioned they need to be Mission critical um properties and uh and I also think that you know there's a public and PR component to this that you know needs to be thoroughly explained you know or at least an explanation needs to be thoroughly available so that public has confidence I've seen other um political entities enter to enter into these certificates of participation and it generally does raise questions in the public so we need to you know be sure that we've you know we're confident in what we're doing and and that we can you know that we can build public confidence in it as well so I would be interested in seeing the proposals and having a conversation and about that uh vice mayor and Council um once you said that I remember too that because there are ground leases involved that those will all be publicly disclosed and they'll all need to be part of that final package when it comes forward um and I and just for the um for the council what this is something that again if we decide to go forward we will work with our public relations Pi office to get information out to the public um about it so that uh everyone understands and we are transparent about what we're doing and the benefits to um the city of Glendo thank you council member Tom chop vice mayor so um so I guess by giving consensus would we be giving consensus to come back to a March 23rd Workshop to have a final discussion before we actually move forward with it one of the things is that there's two people missing from today's meeting so really only need three for a consensus so I'm just curious I'd like to I'd like to have one more discussion before we actually move forward with it mayor I mean vice mayor members of the council that's entirely up to the council to tell us if they'd like to have another meeting or not we put it into the schedule it's up to you if you're ready to move forward or not okay council member Mark I I again this is a very good idea I understand the mechanics I don't think it's necessary other than informationally letting us know what properties are included I don't think it needs further discussion other than bringing back to us the relevant resolutions and actions to be taken I think this is the Germain meeting where where we decide whether the concept is viable and if so move forward and let staff work it out thank you very thank you do you want to speak or go ahead yes yes please thank you uh vice mayor uh I I agree with council member Turner on this uh I think we need to uh move forward I I support the concept of moving forward but I I would like to see some detail on both the the property and again I know it's Germaine but I I I it's going to be a PR thing for me uh and I would like to make sure that our PR uh is in place uh that's the most important to me because I know how some of the citizens in my district will react and I want to make sure that we have the right message out there uh and that I can convey the correct message to what we're doing and why okay thank you do I have consensus to move forward there you have it right thank you very much thank you next next on our agenda is a city manager report Mr phelp is there anything from your office pardon me is there anything else yes got a couple just items to brief the Council on real quickly I'll try to be quick it's been a long day um just want to alert you to something uh last week Luke Air Force Base began to send letters to uh residents and customers uh who received drinking water um just east of the Air Force Base uh from Valley utilities water company and um the letter informed them that uh that at least one of their samples exceeded an EPA Health advisory limit and that there was a a potential contaminant uh in the water um and so the base now has begun uh delivering bottled water uh to these customers I want to be clear first none of these are Glendale water customers even though they may have a glendell address uh it's only an assigned address but they are they do reside in unincorporated uh uh city of Glendale and so uh you may be getting questions from your constituents about that our water samples uh are continually monitored uh we we actually post our water uh Reports online where the the citizens can go and and get updated um so if you have any questions uh Craig Johnson and his team will put together a more detailed report to be coming to you um but just want to make sure you aware that this was not a Glendale water supply issue um the um we you know from uh Jordan Sparks and Marty Robbins we now have another um uh celebrity that Hells from the city of glendell and if you're for those of you who follow NASCAR uh Michael mcdal um who is a uh born and raised here in Glendale along with his wife uh one one of the most storied um racing events in all of racing which is the Daytona 500 and um so we're very excited for him um the mayor was able to reach out to him and talk to him and congratulate him on behalf of you and the City of glendell and we're working on some ways uh when he's going to be he'll be here in March for the Nascar race here and we're going to try to find some ways uh to uh you know to acknowledge Him uh in the community there'll be more to be following on that uh quick up economic update a couple of you were able to go to the Brooklyn Bedding uh ribbon cutting uh um as you know they're getting ready to break ground on a new 650,000 sqare foot uh headquarters and man manufacturing facility here in Glendale it's in the acail district which in an area that's been long uh time an area for manufactur industrial but not a lot of Redevelopment or new projects as of late so this is really exciting I think for this area uh they will add approximately up to 250 new jobs here in the area and um so this is a a great project and again our team helped put that together and to make that come about um Portillos um is uh which is a very famous Chicago area restaurant is coming to Glendale and uh our econ development team has been uh supporting their hiring efforts as they get ramped up uh they are planning on opening in April of this year their location will be between 79 around 79th and Bell in the Arrowhead mall area and um and so we're excited about this this kind of follows the most recent opening of of the bario Queen uh which will be opening in late 21 um also we um are excited that the Land Rover Jaguar uh officially opened on Friday uh of last week um and um so that follows of course the opening of Volvo uh in December of last year and then in 2018 of the BMW in talking to the operator uh they had a very good first weekend that sales have been robust and there seems to be a lot of excitement for uh for for those new uh agencies and with that Mr vice mayor that concludes my report thank you our next item is the city attorney's report Mr guber thank you vice mayor no report at this time thank you next item on the agenda is Council items of special interest each council member will have the opportunity to indicate topics they would like to have discussed by the council at a future Workshop council member Clark nothing at this time May vice mayor thank you council member malar uh nothing today mayor thank you council member tracha mayor I do have one item today um I was thinking you know with the with covid and with the um you know it's talking about our budget and um employees and I'm wondering how what's happening with the employee leave Banks because I'm sure there were a lot of employees that didn't take their vacation and it probably only affects people who've already accumulated the 400 hours um but I just I'd like to have a discussion about you know how we are addressing um employees who there's really no reason I don't think any of us probably went on vacations in this past year and if we're going to you know need to establish some sort of policy or something to um it's kind of an anomaly this year with employee vacations and if we wanted to have a discussion about what we're going to do thank you thank you council member Turner nothing today Vice may I have nothing do I have a motion to go into executive session they'll move they have a motion by council member Turner second by council member tomacha any other discussions all in favor vote I I any oppose going to session e e