Council Regular/Special Meeting

MINUTES OF THE GILBERT TOWN COUNCIL, IN SPECIAL MEETING OF THURSDAY FEBRUARY 11, 2021 AT 8:00 AM, SOUTHEAST REGIONAL LIBRARY 775 N. GREENFIELD ROAD, GILBERT AZ- VIRTUAL MEETING 50 E CIVIC CENTER DRIVE, GILBERT, ARIZONA COUNCIL PRESENT: Mayor Brigette Peterson, Vice Mayor Yung Koprowski, Councilmembers Scott Anderson, Laurin Hendrix, Scott September, Kathy Tilque, and Aimee Yentes COUNCIL ABSENT: None STAFF PRESENT: Town Manager Patrick Banger, Town Clerk Chaveli Herrera, Deputy Clerk Judy Martinez, Town Attorney Christopher Payne, Assistant Town Manager Mary Goodman, Assistant Town Manager Leah Hubbard- Rhineheimer, Assistant Town Manager Dawn Prince, Public Works Director Jessica Marlow, Police Chief Michael Soelberg, Office of Budget and Management Director Kelly Pfost, Project Supervisor Jeanne Jensen, Environmental Services Manager Paul Montes, Project Supervisor Jack Gierak, Parks and Recreation Director Robert Carmona, Parks and Recreation Facilities Manager Marshall McFarlane, Development Services Director Kyle Mieras, Transportation Manager Christopher Bridges, Water Resources Manager Eric Braun, Tax Compliance Manager Sara Radbury AGENDA ITEM CALL TO ORDER Mayor Peterson called the meeting to order at 8:05 a.m. WELCOME- OPENING REMARKS Mayor Peterson welcomed everyone and discussed the history, intent and importance of the Retreat. She thanked everyone for the time they were investing in the process and stated that feedback was essential for staff. Town Manager Banger thanked several staff members for their time and in preparing the two-day event. He thanked Eric Garcia, Eugene Mejia, Judy Martinez, Chaveli Herrera, Zara Bish, Derek Konofalski, Heather White, Nathan Williams, Valerie Shaffer, Monica D’Ortenzio, Nikki McCarty and Debbie Dana as well Jennifer Lauria and the Parks and Recreation Team. He thanked everyone for their time and commitment and stated a survey would be sent out for input. He detailed the items on the agenda that 1  would be presented to Council. ADMINISTRATIVE ITEMS 1. Gilbert Budget Process Overview. Director Pfost encouraged Council for their feedback and to ask questions on the process. She stated that she would detail come of the budget process that directly interacted with Council while also explaining the behind the scenes processes. She stated that Council had the opportunity to bring up any specific areas of interest and staff would seek opportunities and options in those areas. She detailed the process of contingency requests and outlined the different level of approvals and discussed the importance of Council Retreats. She discussed some of the behind the scenes budget processes to include conservative budget practices, zero based budgeting, department requests, analyst review, Executive Team Review and finally Town Manager review. She stated that CIP Stakeholder meetings were also available and optional and then detailed the study session and preliminary adoption process. She discussed the final adoption of the budget and stated that changes would need to be made at the dais at this time. Mayor Peterson elaborated on the intent and benefit of the Study Session. Director Pfost discussed the process and commended staff on their efforts. Councilmember Tilque stated one of the most important things was to pass the budget based on core values and anticipate the need. She stated that there seemed to be a disconnect and she was hopeful study sessions would allow for those discussions and provide direction. Mayor Peterson spoke in support of having those discussions ahead of time at the Study Session. 2. Transportation Master Plan Update. Director Mieras provided an overview and discussed the intent of the Master Plan, he asked for Council feedback. He stated that it began in June of 2020 and was anticipated to wrap up in November 2021. He stated the intent was to incorporate additional transportation needs. He stated that it was intended in creating a vision for moving people; connecting people and places. He detailed the plan being multimodal to understand gaps and needs, creating a more viable network and creating a realistic action plan. He talked about the close coordination of the Master Plan and the bond effort going to the voters and said it was a town-wide effort. He outlined 7 tasks used to complete the Master Plan and talked about the overlap of each tasks and them building off one another. He presented a project schedule utilizing each of the tasks. He talked about the different focus areas of the Master Plan: Driving in Gilbert/ Roadways, Walking and Biking/ Trails, Public Transportation/Transit, Micromobility and Public Outreach. He talked about the advisory and focus groups assembled to help solicit feedback for the Master Plan. He described the variety of members of the focus groups and the data collection. He provided information on the current condition of the streets today in Gilbert and stated that it was helpful to use data to identify where improvements were needed. He talked about the importance of pedestrian movement and the need for accessibility. He talked about the partnering with Valley Metro regarding public transportation and incorporating a transit plan into the Master Plan. He talked about a Safety 2 Improvements report for Trail Crossings that was completed in September 2020 and talked about scheduled projects and crossings that have been identified, 42 trails were evaluated, and a prioritized method was developed to identify need. He talked about some of the trails being incorporated into the bond package. He stated the Master Plan would help identify safety concerns. He detailed where some of the trails existed and issues and concerns associated with trails and about the effort in coordinating the connection. He discussed micromobility and the emerging technology and detailed the importance of setting the Town up for success and being ahead of the curve. Lastly, he discussed the project website and talked about the upcoming full launch. He reminded Council of the Master Plan timeline and the final draft being brought forward in November. Councilmember Tilque discussed looking at the timing and expressed concern in asking voters to approve a bond regarding transportation dollars when they were not able to review Master Plan beforehand. She talked about how that would be perceived. Town Manager Banger stated that projects have been identified through various studies and he talked about the need for flexibility and the opportunity to pivot and identify anything that was missed or are more urgent. Director Mieras discussed the close coordination and having good information in order to answer any questions people may have. Vice Mayor Koprowski discussed her participation on the focus groups and talked about the variety in participants. She said there was a lot of great input that was received to go into Plan. She talked about the voices being heard. She discussed the delay of the bond, and stated that lot of planning studies have been done to help refine the understanding. Councilmember Tilque discussed the importance in making sure people understand once the information was put out there. Councilmember Anderson talked about the master plan being over a longer period of time and the bond was targeting needs now. Mayor Peterson said it was important in how we tell the story and talked about projects changing and proprieties change. Town Manager Banger said there were additional requests for discussion on park and trails system talked about the deeper dive on an upcoming Study Session. Mayor Peterson talked about the recent activity in scooters and said a plan was in place. Councilmember Yentes discussed the bond and delay and the extra strain put on additional projects. She expressed support in putting the Master Plan on the General Election for more voter participation. She discussed concerns with the all mail-in election process and was in favor for greater voter turnout. Councilmember September discussed the timeline of the Master Plan being done by the time the voters voted for the bond. Town Manager Banger discussed the impacts of COVID and the pull back of the bond. He discussed the spending of last dollars on capital projects and concern in continuing to push it out due to the needs of the community. Additional discussion ensued on the timeline and intent. 3. Transportation and Infrastructure Ballot Initiative. Director Marlow provided an update on the original initiative and recommendation of the Citizens Transportation Task Force. She talked about the spring retreat in April and provided an overview of touchpoints with Council on the process. She discussed the maintenance of Gilbert’s long-term sustainability and what residents were saying. She outlined challenges 3 for the Town and provided feedback from the 2019 National Survey and social media feedback regarding traffic and projects. She talked about some of the issues with congestion and travel times and the need to address those issues. She talked about the City of the Future initiative and said that transportation and infrastructure was a key component to those initiatives. She talked about the 311 systems and requests received from the public. She discussed the rapid population growth and provided and overview on local transportation taxes and funding and transportation ballots from local municipalities. She talked about national importance of transportation- related ballot questions. She said that we have relied heavily locally on ballot/bond initiatives. She provided a history of ballot issues for the Town and talked about the need and assistance to the community. She showed a table of CIP street funding sources. She provided a graph to show the proposed transportation and infrastructure bond funding sources. She talked about the gap and staying head of growth and stated the need for the bond to help with critical need projects. She talked about adaptability of funds. She provided information on the timeline and provided an outline of current studies, projects, designs and updates that have been worked on and the importance of prioritization. She discussed the creation and intent of the Citizens Transportation Task Force. She thanked them for their time and recognized each member. She outlined their process and the input and feedback received by the task force. She asked the task force members present to introduce themselves. Assistant Town Manager Hubbard- Rhineheimer commended them for their time and efforts. Director Marlow discussed an updated bond package and provided information on some of the changes that occurred and the new needs that were identified. She discussed safety and congestion, reconstruction, multimodal investments, and transportation technology and redevelopment. She talked about the importance of partnering with the community and provided a project summary and objectives. She outlined some of the types of quantifiable impacts to include short term construction impacts with multiplier effects, log term value of reduced delays at intersections and development impacts for two case study projects. She talked about the Elliot and McQueen intersection and the Power Road Corridor. She outlined the annual tax revenue impacts and overall summary of finds that would create more jobs, reduction in travel time and potential developmental support in jobs, housing and annual taxes as well as labor income during construction. She talked about the financial aspects and touched on the property tax history for the town and the anticipated rate, she stated that it would stay at 99 cents and provided an outline on that would look like for homeowners. She outlined the next steps and Citizens Transportation Tax Force Chair, James Wright provided the updated recommendation. The recommendation was to approve the calling of a Transportation General Bond election in an amount of $515,000,000 for the purpose of transportation projects that provide safety, congestions management, reconstruction, multimodal enhancements, transportation technology enhancements, and redevelopment plan implementation improvements, and said bond is to occur on November 2, 2021. He provided additional insight and talked about the balance of capital and quality of life. Vice Mayor Koprowski discussed the quality of life, and economic impacts and growth of the community and said that having the package being at that level while remaining the same tax rate would allow the Town to not have to come back for future bond packages in the next few years and while covering major projects and address needs and making a long term 4 difference for the community while addressing major needs. Mayor Peterson spoke in support of looking at this way. Councilmember Tilque asked for information on the different buckets to get to the total amount being asked. She also asked about the new projects being added. Director Marlow provided clarification on two projects that were being added, she explained the Lindsay Road improvements that were originally being paid out of 2017 bonds. She talked about other drain improvements on Riggs Road and the rehabilitation needs of the project. Councilmember Tilque talked about the integrity of the ask of the Town. Mayor Peterson said great points were being made and she talked about the previous bonds and the need to make adjustments based on priorities. She discussed being guaranteed that funds are used in right way and used well. She discussed her own tax bill and outlined how the taxes were assessed. Councilmember Anderson asked if the bond was moved to 2022, how would projects be prioritized. Town Manager Banger talked about the stop of some capital projects due to funding. Director Marlow talked about funds being secured for active construction but talked about the lack of funding on any new projects on all levels and then look at impacts to community. Director Pfost talked about the tax rate and discussed the concern in waiting another year and the drop-in tax rates and the painful change for residents with continuity. Director Marlow discussed the council approval and vetting process for any project approved to be funded by the bond and the importance of rates. Vice Mayor Koprowski asked Director Marlow to comment on the amount of current CIP Projects and discuss the project timeline of design through construction. Director Marlow talked about an example of an intersection improvement would be an average of 3 years from start to finish and even longer on larger projects. Councilmember Yentes asked about the pros and cons of different approaches in taking on smaller portions and smaller bond packages and anticipating the evolving space of transportation. Mayor Peterson asked for clarification on splitting bond packages as it was done in the past. Councilmember Tilque stated that she felt it was the appetite of the smaller community back then. Vice Mayor talked about not having an internal CIP group at that time. Director Pfost offered clarification about not having the bond capacity which would have limited the Town. She talked about doing package all together would be a better use of efficiencies and order of operations. She talked about the full scope of a project to avoid as much interest. Discussion ensued on issuances. Councilmember Tilque said one thing to keep in mind is approving authority not issuance to the citizens. Assistant Town Manager Hubbard-Rhineheimer talked about the short-term horizon of proposed projects. Director Marlow confirmed the breaking up of need and the scheduling of projects and addressing inefficiencies while accommodating growth. Mayor Peterson expressed her concern in the continued delay and continued issues with safety and congestion. Town Manager Banger said one of the areas that was consistently trending when benchmarking is traffic. Councilmember Tilque talked about the importance of moving goods and people and making sure people can get where they need to be. Talked about the changing dynamics and said she thinks the business community would be supportive. Councilmember Yentes asked what the timeline for repayment looked like. Director Pfost 5 said 20-year bonds were typical and provided information and there was discussion on paying bonds off early when able to do so, and other bond types. Councilmember Yentes asked about the chart of funding and said a level of bonding is necessary but it wasn’t safe to assume we would get MAG money in the future. Town Manager Banger talked about funding and who should bare responsibility based on use of roads. He talked about Prop 400 and winding down and the unknown of Prop 500. He talked about other ways to supplementing needs and the anticipation of receiving less funds and having these discussions in order to balance impacts in order to maintain infrastructure into the future. Councilmember Yentes did not want to take more money than necessary. Town Manager Banger talked about unpredictability and the possibility of receiving less funds. Director Pfost talked about the benefit of multi bond issuances and savings on costs of projects. Director Marlow talked about the process of submitting to MAG that are not currently in CIP or bond package in response to Prop 400. She talked about funding sources and matching on projects that we need funding for. She talked about flexibility. Councilmember asked about the transit center, Director Marlow provided clarification on the uses and said it would be evaluated. Councilmember Yentes talked about intersection improvements. Vice Mayor Koprowski provided details on the safety and congestion of improvements and additional capacities being evaluated. She talked about the cost benefit piece among others. Director Marlow provided additional clarification on improvements. Councilmember Anderson asked about the increase in the parking garage. Director Marlow talked about the Master Plan and stated that there would be additional studies before design. Councilmember Anderson asked about any perceived need for paid parking. Town Manager Banger stated that would be a discussion for the future and discussed maintenance costs and corresponding impacts. Councilmember September talked about the added benefit regarding parking. Mayor Peterson asked Council for their direction on this item. She discussed the regular election year and candidate elections rarely making it to the run-off at the General election. She spoke in support of bringing the item forward this year and said voters should have option to vote on packages themselves. Councilmember September discussed more participation at a regular election but expressed concern in continued delay. Vice Mayor Koprowski spoke in support of bringing item to an election this year. Councilmember Hendrix stated he would be more supportive of a 2022 election and stated he felt delaying it one year should not affect some of those 5- and 10-year plans in place. Councilmember Tilque stated that its been delayed twice and she would be supportive bringing it to a vote this year. Councilmember Anderson spoke in support and talked about the busy year ahead and talked about the importance in the voter turnout. Councilmember Yentes stated she was supportive of package but hesitant in having it on an off-cycle year and felt it was bad practice. She expressed concern with the all mail-in ballot process and said she felt strongly that it should happen on a regular election year, she stated she would like to explore options and get creative if there was a will to do so. Mayor Peterson offered clarification that any election this year would be all mail in and in person voting would be possible next year. Councilmember September asked about contingency funds to carry some of the projects over as to not lose momentum. Director Pfost discussed the practice in the use of contingency funds and having money in the bank. She stated she was not optimistic in finding enough funding needed for the capital improvement projects. There was additional 6 discussion on the bond practice and the importance of infrastructure. Councilmember September asked about the mail-in voting and Mayor Peterson provided information on our partnership with Maricopa County. She spoke in support with their processes. Councilmember asked if someone from the County would be able to present information on the process. Town Clerk Herrera stated she would look into coordinating something with the County. 4. Advocacy Center Project Update. Chief Soelberg discussed safety in Gilbert and stated that there were still crime trends within the community. He talked about the increase in Domestic Violence and Sex Related Crimes and compared the increase from 2020 to 2015 data. He talked about the current process of the department and utilizing local advocacy centers in Mesa and Chandler and other cases being handled at Gilbert facilities and hospital rooms. He outlined some of the existing advocacy centers in surrounding communities. He outlined the advocacy center team approach to include being victim-focused, having a Multi-Disciplinary Team (MDT) and the importance of collaboration in order to continue care and focus on the victim. He talked about the other units involved in the process and the types of cases handled by the Advocacy Center. He listed some of the benefits of the Advocacy Center and talked about the importance of creating a comforting and supportive environment. He discussed the Gilbert Community Needs assessment and the elements of safety and support in contributing to quality of life in Gilbert. He provided additional information on the recommendations from the needs assessment related to the creation of an advocacy center and visible community program to help reduce crime. He provided data on impacts of victim services on Crime as well as a cost benefit analysis. Lastly, he discussed the proposed location of the Advocacy Center, adjacent to the Gilbert Police Department and stated the ask from Council was to include funding for the Gilbert Advocacy Center in the 2021 Bond Election. The stated projected total cost of the project is $16,788,487. Mayor Peterson provided clarification that Chief Soelberg was asked to present on the Advocacy Center again due to the bond being delayed a year. Councilmember Yentes asked if existing space could be used. Chief Soelberg clarified that they did not have any existing space that would fit the needs and there was discussion on different cost models in using existing buildings/space. Project Supervisor Gierak discussed the different options they looked at and stated the most optimal option was building on Town owned land. He discussed land costs being volatile and location being challenging, there were additional discussions on costs for buildings and longevity. Councilmember Yentes asked if they looked at actual properties and Chief Soelberg clarified that they looked at the market and used data. There was discussion on purchasing an existing building and remodel building cost to which Supervisor Gierak confirmed it would have cost roughly $18,200,000 and provided information on the flexibility. Chief Soelberg discussed the importance of the feeling of comfort and support to those who use the facility. Mayor Peterson discussed the importance of the location of the facility. Councilmember Yentes made mention of the partnership with Queen Creek. Councilmember Tilque asked if the center had the ability to expand into difference phases for those instances where an issue has been identified but a crime has not been committed. Chief Soelberg talked about 7 the opportunities and capabilities of the center. Councilmember Anderson asked about non- profits performing the bulk of the work and Chief Soelberg stated that they will continually be relied on for their expertise and talked about providing space. He discussed the current disjointed process and the importance of trying to streamline and decrease time away in order to improve efficiency and provide important resources to the community while making connections. Councilmember Hendrix asked how this compared to other communities. Chief Soelberg talked about the variability in size and scope and stated that service was the focus. There was additional discussion on the importance and vision for the department. Chief Soelberg elaborated on what the center was trying to achieve and making important connections. Councilmember Hendrix discussed the problems in Gilbert and the next logical step. He talked about the non-profits and advocating responsibilities to other communities and concerns in addressing homelessness. Mayor Peterson spoke in agreement that we were overdue for a facility of this nature. There was discussion in victims going to other communities because they do not stay in the place the incident occurred and other would come to Gilbert. Assistant Town Manager Goodman stated that there were regional conversations about homelessness and discussed the upcoming homeless study and opportunities with grants. She said it was separate from this ask but was being talked about to identify needs and have those conversations. Councilmember Tilque spoke in support of this and said she hoped it opened additional dialogue. Chief Soelberg talked about the aggressive timeline and Councilmember Yentes asked if this would be its own question on the bond election. There was additional discussion on the preference and Assistant Town Manager Hubbard-Rhineheimer stated staff would do research and provide additional information to Council. 5. Gilbert Arizona State Retirement System (ASRS) and Public Safety Personnel Retirement System (PSPRS) Liabilities Status. Director Pfost provided information on the retirement systems for the Town. She detailed the different tiers related to the Public Safety Personnel Retirement System. She stated the ask to Council would be whether to continue the paring back of funding strategies based on funding success. She provided data on the Towns unfunded liability and the decrease of 17.1% in unfunded liability and target of 90%. She detailed the recommended changes of sending a one-time contribution of 10,000,000 and then continuing regular practices in FY2022. Councilmember Yentes asked if the Town has looked at our practices as it related to the ASRS being a pooled fund. Director Pfost stated that due to it being a pooled system it was the same for all jurisdictions and the Town did not have authority to make changes. Vice Mayor Koprowski asked about the improvement trajectory based on the ask and asked about estimations. Councilmember Yentes asked about changed rates. Director Pfost stated that there will be a continued contribution to unfunded liability, but the progress would be slower, she detailed some additional changes to assumptions and long-term processes. 8 Councilmember Tilque asked if our money was at risk due to the poor management of the pooled fund. Director Pfost discussed the poor track record of the PSPRS but stated they had a new President and have had a good experience so far. She stated the Town will never pull money out, the employee will and provided additional clarification. Councilmember Tilque asked if there was anything being given up with the contribution. Director Pfost stated that the Executive Team felt this was a top priority and felt it was important to bring forward to Council. She detailed some of the frustrations of the process and felt comfortable with the ask. Councilmember Yentes asked about Tier 1 and Tier 2 and employees working their way out. Director Pfost stated it was a 20-year retirement and provided clarification on the estimations. Assistant Town Manager Goodman stated if we don’t pay it this way we would be paying it another way and talked about the additional liability. There was support from Council to move forward. 6. Recycling Program Update with Residential Solid Waste Rates Overview. Director Marlow discussed the 2019 recycling survey and the feedback received. She discussed some of the market changes and the market volatility. She provided a graph that outlined the market volatility with United Fibers and Waste Management and detailed some of the unexpected residential tonnage increase and costs. She detailed some of the environmental services touchpoints and some of the proactive measures taken including reduction in costs. She stated that glass was one of the least sought-after commodities and the cost savings associated with removing it from program. She provided information on the recycling commodities and discussed the recycle pilot program and discussed the timeline of the pilot and audits from vendors. She provided information on preferred versus undesirable commodities, challenges with volatilities and provided the audit results from both Waste Management and United Fibers. She discussed the success of the pilot program and stated that the recommendation would be to implement the pilot program community wide with a focus on specific commodities to include aluminum, HDPE- natural, PET, HDPE- mixed, cardboard, and steel. She talked about excluding commodities in which there was a cost to process to include certain plastics, old news print, loose steel, and glass. She talked about challenges in making modifications and volatility in the market. She talked about sustainability and streamlining the program and optimizing costs. She talked about the reduction in the contamination rates from the pilot program and shown in the audit results. She talked about different education methods used. Proposal was to implement town-wide while focusing on only the five preferred commodities. Mayor Peterson talked about the increase in cardboard and coordination with online shopping. Councilmember Yentes stated she was surprised by the behavioral shift and asked if Director Marlow knew which method for education worked best in changing this behavior. Director Marlow talked about public outreach and education to the community. She said the outreach was going door to door, there was discussion on that not being scalable in a larger program and the need for additional outreach coordination. Councilmember September asked if the recycling drivers were aware of new residents and talked about opportunities to educate new residents. Mayor Peterson talked about the new resident social that used to be done. Discussion on the transition, council spoke in support of this item. 9 Director Marlow discussed contamination and commercial environmental services rates. She mentioned the recycling industry volatility, increased tipping fees, trash volume increase, increase in demand for services, large project cost escalation and overall time. She provided a timeline update and stated the rate study would be completed in the next three months. She discussed current rate pressures and showed a statutory timeline regarding the rate study. She talked about the notice of intent and public hearing and public outreach portion. She said without a rate change we will fall under our fund balances. She talked about the impacts of rates at the residential level and Valley benchmarking and regional service and rates and levels of services. discussed inflation versus environmental services residential rate. She talked about average level of frequency of service and showed the rate increase and provided a graph to demonstrate the Phoenix Consumer Price index versus ES residential rate and where Gilbert compares and how we would continue to compare with a rate increase. Councilmember Anderson asked if Director Marlow had been in contact with other communities that contract out their solid waste. Manager Montes talked about the expense in brining this service in house. Councilmember Anderson as ked if we charged for cans, or extra cans. Director Marlow said there was a charge for additional cans, which was assessed monthly, but not for can replacement. Councilmember Anderson asked how that compared with other cities. Manager Montes said most cities charge for extra cans, some charge for broken containers and fees are assessed for newly constructed home. Vice Mayor Koprowski asked if it was possible to adjust public hearing scheduling. Director Marlow talked about the statutory requirements. Director Pfost stated that there was not a lot of wiggle room and talked about the listed timeline being just long enough to get a consultant and information together. She expressed concern in waiting longer. Councilmember Yentes asked what percentage of our operating costs were attributed to bulk trash. Manager Montes did not have that information with him but would get the information to Council. Councilmember Tilque talked about studies conducted to express what was important to the community. She expressed concern in not wanting to come across as though we were punishing for using these services and impacts to behavior. Councilmember Tilque discussed the intent of the rate study and possible savings. Director Marlow talked about the 5-year plan and looking at long term impacts of the recycling program and how it would impact rates. There was discussion on rates and cost savings. Councilmember Yentes stated that she would like to see options, she talked about the bond initiative and fee increase and the ask of the community. She said all of this information needs to be looked at in aggregate. Assistant Town Manager Hubbard-Rhineheimer discussed the benefit of the program and said residents loved the program. She talked about the benefit of the pilot program and said there would be no down side to that. She talked about the residents being highly engaged in recycling. She talked about feedback from the survey and the engagement. Mayor Peterson asked how many people participated in the survey. Director Marlow said it was over 5000 which was highest at the time. Councilmember Tilque talked about looking at the full package and said it was hard to ask people to raise taxes and hitting them with increases. Vice Mayor Koprowski clarified the tax rate for the bond issue. Councilmember Tilque talked about the community perspective. Town Manager Banger said options could 10 be brought back to Council. Director Marlow clarified the direction that the pilot program will have more information as we move forward, and we will have more information on the rate study piece but will be moving forward from past direction. 7. Commercial Solid Waste Rates Overview. Manager Montes discussed the lines of service with commercial collections and roll off collections. He discussed the budget pressures to include changing markets, increasing disposal and tipping fees, demand for services and additional capital projects and operational assessment. He provided data on increasing disposal tonnage and discussed some of the uncaptured operational costs on cardboard and recycling and discussed the increasing operational costs on maintenance and the reduction of operational costs due to optimizations. He outlined different optimizations with roll off and commercial collections and optimizing services and inventory. He discussed operational flexibility and provided data from 2019 versus 2020 regarding tonnage collected. He provided information on additional capital projects and new lines of service and compared revenue between 2019 and 2020. He detailed rates with other municipalities in regard to commercial public rates, commercial private rates, roll off public rates and roll off private rates, citing that Gilbert was competitive. Lastly, he discussed the impacts to the fund balance without a rate changed and stated that the ask of Council was to conduct a rate study to coincide with the residential rate analysis. Councilmember Tilque discussed the opportunity for businesses to choose this service unlike residential and discussed the competitive market. Councilmember Anderson asked if we need to get out of the market. Town Manager Banger confirmed that it was voluntary but stated that they were hopeful that some adjustments would put us in good shape but stated that we would need to continue to evaluate it. Director Marlow stated that even with some adjustments we would still be competitive, and she discussed cost savings. Mayor Peterson asked why the cardboard fee went away to which Director Marlow stated that she believed the service at one time paid for itself therefore there was no need to collect a fee. She discussed the current gap and contamination challenges. Assistant Town Manager Hubbard- Rhineheimer highlighted that most of the customers serviced are small businesses and benefit from the smaller rate the Town charges in comparison to others. Councilmember Hendrix asked that the rate study was going to tell us and if we look at revenue and expenses, to which Director Marlow explained that it would assess where our new rate should be at and stated we would be looking at all the data to determine where we are at in the market and what room we have. Councilmember Hendrix discussed his experience using the service and there was further discussion on the overall process. Councilmember Yentes asked about budgetary pressures in the replacement of cans and costs associated to which Director Pfost stated the cost was baked into the cost of all operations. There was support of Council to conduct rate study at the same time as the other rate study. 8. North Water Treatment Plant Project Update. Director Marlow provided information on the challenge statement, and the responsibility to the residents and the importance of investing in the utility. She provided an outline of the presentation and talked about the project history, project progress and project considerations. She discussed the importance of sustainability for the community. She 11 talked about the Facility background and touched on the service area, water production and economic driver. She a map concerning the NWTP Water Quality Heat Map and also provided data on the Water Quality sites redistribution. She talked about source water impacts and mitigating some of the challenges by pumping ground water. She discussed the safe yield and assured water supply and stated we were not using the full allocation of surface water due to water quality challenges. She discussed water system demands and stated the demand has outpaced projections and the need for additional capacity. She showed two graphs in order to demonstrate the need for additional capacity and water sources not being utilized. Lastly, she discussed the condition of the facility and stated it was constructed in 1996, she talked about the low bid construction methods and inadequacies. She showed pictures to illustrate the deterioration of the facility and the need for rehabilitation. She provided information on the several touchpoints to Council regarding the recommendation for reconstruction and years of effort to investigate appropriate investments. Supervisor Jensen provided an update on the project process and the various players in the process. She detailed of the stakeholder engagement and various design achievements. She outlined the new design and reuse of some of the facility and discussed design optimization comparing the current facility versus the reconstructed facility. She talked about the cost evolution and the evolvement of the project while keeping long term benefits of the community in mind. She also provided information on the cost development and the robust cost modeling approach, she detailed replacement, facility expansion, water fund and full project cost of $422,000,000 inclusive of all services. She provided a project schedule and detailed some of the challenges. She said the ask for today was provide direction on timing of rate implementation. Councilmember Anderson asked if security measures were being put into place. Director Marlow discussed some of the protective measures currently in place and Town Manager Banger offered additional conversations on those measures privately. Director Marlow said the ask for today was provide direction on timing of rate implementation. She detailed some of the current water rate pressures and considerations for long-term needs. She talked about the rapid increase in price of raw water and shortages in water with the Colorado river and the rising of prices and the delivering of water, she talked about current rate stabilizations and said the Town was planning for changes and implications in future years. She provided two timeline options, one was timing water rate study with the environmental services rate study. She said the benefit to this option is the smaller rate increase however there is an impact to residents doing rate changes simultaneously. The second timeline we distribute impacts and wait and bring to council in the beginning of 2022. She talked about spreading impacts over 9 months but talked about the higher rate increase with that option. She talked about the possibility of water fund falling below minimum fund balance in waiting. She showed a graph with inflation versus water rate and showed a Valley comparison which shows Gilbert as being one of the lowest rates in the Valley. She provided a visual with the two options. Councilmember Tilque asked if we were required to raise rates with the study or if we could do a study rate now and raise rates at a later time. Director Pfost talked about the possibility to have a lag in water rates and an effective later date. Vice Mayor Koprowski asked what the approximate percent increase to a household. Director Marlow stated the impact in scenario 1 would be about $7 a month and in scenario 2 it would be about $8.5 a month, 12 which would be roughly 14-17% Vice Mayor asked how that would compare to the increase with the Environmental Services rate increase. Director Marlow said that impact would be between $4 and $5, totaling roughly $12-$13 total impact. Mayor Peterson asked where that would leave us rate with surrounding communities. Director Marlow we would still be very competitive and on the water side still be amongst the lowest. Assistant Town Manager Hubbard-Rhineheimer stated that other jurisdictions are facing similar challenges and looking at similar investments. Councilmember Anderson talked about the perfect storm and needs coming together at the same time. Town Manager Banger talked about the variety of factors and impacts and evaluating the needs and examining best options and the importance of communication to residents. Discussion on impacts to residents and making decisions that add to the best quality of life for the residents and the challenges associated in raising rates and investment in the community. Councilmember September asked about the financial impact in not maintaining the quality standards. Town Manager Banger talked about losing confidence of our residents and the perceptions of the public. He also talked about fines associated for repeated violations on water quality. Director Marlow confirmed on the potential financial penalties and elaborated. Councilmember Tilque asked what the rate increase was paying for. Director Pfost talked about the several components and talked about like for like replacement and additional support to the replacement fund. She talked about associations with water quality concerns and capacity available to pay for it. She provided additional information on funding and funds for debt service payment and operating items needed in water fund. There was additional discussion on debt payment and operating costs. Vice Mayor Koprowksi stated she was leaning towards separating the rate studies as its presented and talked about impacts being spread out. Councilmember September stated he would support holding this off. Councilmember Yentes stated she had mixed feelings with the Environmental Services increase and rather evaluate service options in order to get more input in how those are balanced. Councilmember Tilque talked about the priority of this item and talked about balancing additional needs with the bond. Town Manager Banger stated the cost is not driven by recycling and said staff was seeking direction to do the rate studies but will come back with recommendations prior to any decisions. There was discussion on the timelines. Councilmember Tilque said she would recommend doing the studies all at one time and then communicate when we could do the notice of intent. Director Pfost talked about cost savings if we know the implementation and discussion ensued. There was discussion doing the studies now with different implementation dates and Director Pfost talked about concerns in delaying the implementation and not meeting the minimum fund balance. An ask was presented to have the consultant run two scenarios to which Director Pfost stated in doing so we would not meet minimum fund balances in Environmental Services and discussed a violation of our policies and credit ratings. Vice Mayor Koprowksi asked if the changed could be made to commercial but not residential. Director Pfost said neither would meet minimum fund balances. Vice Mayor Koprowski asked about one-time monies used for this and Director Pfost talked about internal practice of not subsidizing. There was discussion on CARES monies and Councilmember September asked if the rate increase could be accelerated to August. There was confirmation on the need for the rate study. Manager Braun talked about the process and stated that he did not feel it was possible to get it done in six weeks. There was further 13 clarification on doing rate studies at the same time with potential two different implementation periods. Mayor Peterson recommended pushing forward with the Environmental Services study and then the water rate study too but it could go out a little longer. She spoke in support to what Vice Mayor stated in implementing at the same time but in January. Director Pfost provided information on the possible subsidies needed. Town Manager Banger recommended polling residents and seeing what their preferred. Councilmember Tilque stated that they were all in agreement that it needs to be done and expressed concern in the timing and what is being jeopardized. Councilmember Anderson spoke in agreement. Councilmember Yentes discussed looking at other areas where the council could do a better job in understanding they are less critical and talked about what is palatable for residents. Additional discussion on CARES Act funding to our policies and credit ratings. Director Pfost said there would not be an impact. The monies received have been allocated but unsure if additional money would be available. Discussion on looking at other opportunities in CARES funds unused in grants loans. Town Manager Banger asked for clarification on the direction to proceed with rate studies and scrutinize CARES funds to see it there are funding options there, and delay rate increase together once studies have been completed. There was additional conversation about money out of the loan program and utilizing money from there. There was discussion the timeline for implementation and with the possibility of monies from the loan program staff asked for a couple days to determine timeline for implementation. 9. Water System Development Fee (SDF) Fund Update. Director Pfost provided clarification on what a System Development Fee (SDF) was and stated they were updated every 5 years per State Statute. She provided information on the current SDF’s for the Tow. She talked about some of the SDF’s that will be going away and outlined some of the internal loans for SDF’s. She provided information from the last Council Retreat and the review of the SDF fund balances. She stated the ask for Council was to update the Water SDF and authorize an internal loan for Water SDF. She provided information on the North Water Treatment Plant Expansion, associated needs and demand calculations and the Water SDF cash flow and the process and statutory timelines. Councilmember Yentes asked if the update was for all categories of SDF which Director Pfost clarified it would just be for water since there were substantial changes. Councilmember Tilque asked about the previous Fire SDF due to rapid growth and asked about the process of internally loaning money to be repaid to general fund. Director Pfost confirmed and provided information on the process and the internal capacity. Councilmember Tilque asked about changing assumptions on perceptions on funding for projects. Director Pfost discussed the growth related to the cost and stated that SDF’s are not being used to increase levels of service. There was discussion on how extensive the process would be and the need to engage a consultant. Councilmember Yentes asked how we anticipate the reaction of the development community would be and Director Pfost discussed the portion attributed to growth and said she would make sure any concerns would be fully defensible. Councilmember Yentes talked about the 5-year review being 2 years ago and asked if any of the current issues were assumed. Director Pfost stated that we did not know some of the issues until a couple months ago. Councilmember September asked if this would affect the 14 credit rating. Director Pfost confirmed they would not. Councilmember Tilque asked about enterprise funds and Director Pfost stated those operations were self-contained. Council supported the item before them. 10.Long-Range Infrastructure Planning (LRIP) Implementation. Director Carmona Robert Carmona talked about the importance of the LRIP and future goals and projects. He provided information on some of the accomplishments to include developing assets and infrastructure inventory, useful life, maintenance programs, evaluated life cycles and funding policies. Director Marlow discussed the enterprise funding for the various funds. She discussed the inventory and assets in the Streets fund in the amount of $2.8 billion, and outlined the streets fund financial strategy. She outlined the fund cumulative R & R needs and then outlined some of the completed projects in FY20 and upcoming projects. She provided the same information in the Water fund, to include information on the inventory and assets in the amount of $4 billion as well as the fund financial strategy and R & R needs and then discussed completed projects from FY20 and upcoming projects. The last fund she discussed was regarding the Wastewater fund to include inventory and assets in the amount of $1.7 billion. She detailed the fund financial strategy, cumulative R&R needs and discussed completed projects in FY20 and upcoming projects. There was discussion on some of the spikes in the graphs and Director Marlow discussed life expectancy on some of the inventory. She discussed evaluating the long term needs of the community and in the various funds. Manager McFarlane detailed the General Fund and stated it included Parks, Facilities, Aquatics and Trails. He outlined the inventory and assets in the amount of $381.9 million. He discussed the fund financial strategy and the fund cumulative R&R needs. He provided information on the facility condition index (FCI) and stated it was a standard used to track condition. He discussed the operationalization of facilities and parks and outlined the committee to recommend and prioritize LRIP items to assist with transparency. He discussed upcoming facility projects and park projects. Lastly, he ended with stating that the total in LRIP assets for the town was $8.9 billion. Councilmember Anderson asked about the education center in the Riparian Preserve. Town Manager Banger said staff will follow up with the request. Mayor Peterson discussed things happening behind the scene and unexpected expenses. Director Carmona discussed bringing on new projects and useful life of the projects. He discussed the importance of knowing replacement schedules and stated it wasn’t always being done and said it was important to keep the practice for long term viability. Town Manager Banger recognized Directors Marlow and Carmona for bringing this project to a close and stated he was unsure how many other municipalities had a complete understanding of their assets. Councilmember September spoke in support and stated it was impressive. 11.Food Tax and Revenue Streams Overview. Director Pfost stated thee was a lot of requests for this information and said the ask was for direction or discussion on food tax. She showed a graph and outlined Gilbert revenue streams. She discussed what a food tax was defined as and stated it was a sales tax charged on food for home consumption, subset of retail sales, its been a part of Gilbert’s history since 15 1987 and its paid based on location of store not citizen. She provided information on some of the exempted items from food tax and discussed ongoing sales tax revenue within the community. She provided regional comps between Gilbert and other communities in the Valley and how others are staying stable. She outlined that everyone paid for services in different ways and provided comparative information on primary property tax, food tax and retail tax regionally. She provided information on the options to change a food tax and stated the rate could be changed by a municipality, but the definition of included/excluded items were controlled by Model City Tax Code. She stated that any reduction or elimination of food tax would require a match in order to rebalance the General Fund and she detailed some impacts to various departments. Councilmember September asked about the annual revenue for food tax to which Director Pfost clarified the annual revenue was roughly $14,000,000 annually and stated the total sales tax would be north of $108,000,000. Councilmember Yentes asked about extra revenue from wayfair money. Director Pfost asked Manager Radbury, she said we are still seeing about $250,000- $300,000 a month but clarified that it was not an amount that could be broken out due to confidentiality. Councilmember Anderson asked how much money was brought in through bed tax last year. Manager Radbury said it was $820,000. Councilmember Yentes talked about the low money on wayfair money, Sarah replied that it could be roughly $3,000,000 on the low end talked about the volatility due to nexus rules. There was additional conversation in reporting and the nexus rules. There was confirmation that bed tax was restricted and couldn’t be used the same way as sales tax. Councilmember Tilque asked for clarity that no changes are being requested but just information presented, which Director Pfost confirmed. Mayor Peterson stated she was concerned with any changes at this time. Vice Mayor Koprowski stated she would support no change. Councilmember Yentes talked about the importance of the conversation and taking measures for relief of tax payers. She said the information is offered for food for thought but discussed asking the residents to pay more and looking for opportunities to provide relief. Talked about the tax policy driving social policies and talked about the healthy push and pull and recognizing what the citizens have felt. Councilmember September said it would be a conversation worth having and giving back to community. Councilmember Tilque agreed that it was a bigger conversation. Vice Mayor Koprowski talked about residents having options to go elsewhere. There was discussion on balance and Mayor Peterson talked about being open to additional conversations. ADJOURN Mayor Peterson thanked everyone for their attendance and support. Town Manager Banger stated that presentations will be sent to Council and copies would be provided for Fridays presentations. He thanked everyone for their participation. ADJOURN Mayor Peterson adjourned the meeting at 4:56 p.m. 16  ATTEST: ___________________________ ___________________________________ Brigette Peterson, Mayor Chaveli Herrera, MMC, Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the regular meeting of the Town Council of the Town of Gilbert held on the 11th day of January 2021. I further certify that the meeting was duly called and held and that a quorum was present. Dated this ____ day of ____________________2021 . ___________________________________ Chaveli Herrera, MMC, Town Clerk 17