Council Regular/Special Meeting

MINUTES OF THE GILBERT TOWN COUNCIL, IN SPECIAL MEETING, FALL COUNCIL RETREAT – DAY 1, OF TUESDAY, NOVEMBER 6, 2023 AT 8:30 AM, SOUTHEAST REGIONAL LIBRARY, 775 N. GREENFIELD ROAD, GILBERT, ARIZONA COUNCIL PRESENT: Mayor Brigette Peterson, Vice Mayor Kathy Tilque, Councilmembers Scott Anderson, Chuck Bongiovanni, Bobbi Buchli, Yung Koprowski, and Jim Torgeson COUNCIL ABSENT: None STAFF PRESENT: Town Manager Patrick Banger, Deputy Town Clerk Judy Martinez, Town Attorney Christopher Payne, Assistant Town Manager Mary Goodman, Assistant Town Manager Dawn Prince, Assistant Town Manager Leah Rhineheimer, Office of Management and Budget Director Kelly Pfost, Assistant Town Engineer Susanna Struble, Assistant Public Works Director Eric Braun, Development Services Director Kyle Mieras, Code Inspections Supervisor Lorrie DeOrio, Fire Chief Rob Duggan, Police Chief Michael Soelberg, and Chief People Officer Nathan Williams OTHERS PRESENT: Facilitator Jim Lehrman AGENDA ITEM CALL TO ORDER The meeting was called to order at 8:38 a.m. AGENDA ITEMS 1 1. Retreat and Identified Priorities Overview Town Manager Banger welcomed everyone, reviewed some basic items about the Retreat format, and said that Matt Lehrman would be facilitating the two-day event. He asked everyone to participate, be present, ask probing questions, take time to digest the information, and to have a collaborative spirit. He highlighted some of Gilbert’s statistics including that the population was estimated at 275,359 as of 2022 and that 32% of that was comprised of children under the age of 18. Other highlights included that Gilbert had one of the highest median household incomes throughout the United States at $105,733, that 80% of Gilbert’s adult population had some college education or a college degree, and that the median home sales price in Gilbert was $567,000. He discussed challenges with affordable housing, then highlighted some of Gilbert’s awards and recognition. He summarized some of the pressures Gilbert was facing including construction inflation, aging infrastructure, leveling growth and revenue, staffing and retention, and supply chain shortages. He noted themes that came from the Spring Strategic Retreat including maintaining and furthering a positive community culture; fostering a productive work relationship between the Council and staff; conveying effective storytelling and communications to residents; ensuring adequate funding through current and future identified revenue sources; maintaining infrastructure resources for a sustainable future; continuing the focus on strategic development, redevelopment, and investment; and protecting and conserving water resources. He noted the participants had received a Strategic Retreat Summary with themes and priorities. He highlighted identified priorities and the topics. Facilitator Lehrman discussed how he would be facilitating the Retreat and asked the participants to speak in groups and share who they would like to thank for a decision made in the past. He noted the participants had the opportunity to set plans in motion that residents would thank them for in the future. He noted the importance of timing and sequence with planning. He said the Retreat would provide the opportunity to listen and share, to think out loud together and consider how it would affect residents, and to decide next steps and find alignment. He explained that he would be asking the Council to identify a color on the topics with green indicating that although the idea may not be perfect, they were in agreement with taking the topic to the next level of consideration; yellow indicating 2 the agreement to proceed but with caution, though they may need more information; and red indicating a strong concern or opposition to something being discussed. He noted it was fine to choose red, that it was both natural and necessary to have disagreement and to ask for clarity on items. He noted the Retreat was a place to lean into each other’s expertise, then noted the difference and crossover in functions of the Council and staff. 2. Budget and CIP Process Overview Office of Management and Budget Director Pfost discussed the budget process and calendar, noting it began in mid-September every year. She noted in September and November there were budget requests submitted and business case data was prepared. She noted the current step was the Council’s direction provided at the Fall Retreat and the efforts continuing toward the Council Study Session typically in mid-April, the preliminary budget adoption in May, and the final adoption in June. She discussed how departments submitted requests based on their needs, but said other needs were identified from citizen requests, elected officials’ one-on-one (1:1) meetings, emergencies and incidents, business community input, new laws that would affect operations, advances in technology, master plans and studies, and other data and metrics. She noted the importance of Phoenix-valley benchmarking. She summarized budget development including the zero-base budget and the emphasis on “available funds”. She summarized what the Council 1:1 Packet would provide including the proposed property tax and levy, fund overviews, transparency on notable budget items, revenue assumptions for the General Fund, zero-base summaries for changes made, new position requests, capital overlay listings for new and replacement vehicle purchases, and the Capital Improvement Plan (CIP) Project list. She said the feedback needed was for additional information that the Council wished to receive and if they were comfortable with the current levels of service. Vice Mayor Tilque asked what was the best time for Councilmembers to provide feedback, if between November and January was best. Director Pfost said the best time was as soon as there was interest, then said it should be done through a 1:1 with Town Manager Banger to prompt research on the idea; she noted the first opportunity to discuss the idea in public would be the Budget Study Session in April. Facilitator Lehrman summarized the thought 3 that it was never too early, but then asked when it would be too late. Director Pfost said after November it would be harder to change or add larger items. Assistant Town Manager Rhineheimer said the Executive Team and department directors worked together and would not go to the Council for asks, adding if the Council asked staff for things it would inhibit the work of staff as well. Councilmember Buchli asked for clarification in what services were being discussed. Director Pfost said any service provided by the Town of Gilbert. Facilitator Lehrman asked the Council to indicate if they were green, yellow, or red on moving forward; the Councilmembers unanimously noted they were “green” in agreement of moving forward. Assistant Town Engineer Struble summarized the CIP process including why it was needed, the basics of CIP and progression, and the Fiscal Year (FY) 2024 Capital Improvement Plan. She said the CIP was part of creating and maintaining Gilbert’s vibrancy, quality, efficiency, and reliability. She said CIP was important to build the City of the Future with the three focus areas of prosperous community, strong economy, and exceptionally built environment. She said CIP included a multi-year plan, a CIP project list, funding sources, and the operations and maintenance impact. She noted the CIP Project categories were Streets (ST), Traffic Control (TS), Storm Water (SW), Parks and Recreation (PR), Municipal Facilities (MF), Redevelopment (RD), Water (WA), and Wastewater (WW). She added that funding sources included System Development Fees (SDF ) which was from new growth; enterprise funds from Water, Wastewater, and Environmental; bonds; Street Funds; General Funds, rates, intergovernmental source, and miscellaneous. She discussed the Council engagement process and what was included in the 10-year CIP from FY2024-FY2033, then noted it included 421 projects at $4.88 billion. She said the current FY2024 budget alone consisted of 216 projects at $1.36 billion and highlighted the FY2024 funding sources. Lastly, Assistant Town Engineer Struble provided a FY2025 update noting there were 61 new project requests submitted and 51 of those were still under consideration, then said there was an escalation rate of 25%-45% expected. 4 Vice Mayor Tilque asked for an explanation of how Replacement Funds impacted CIP. Director Pfost discussed the need for money to be set aside to replace needed infrastructure. Facilitator Lehrman asked if the replacement fund consisted of money previously collected and set aside, or currently collect funds; Director Pfost answered it included some of both, some was collected and set aside while some was still coming in to use as needed. Councilmember Koprowski noted the importance of prioritizing since the costs would outweigh the needs. Assistant Town Engineer Struble agreed and said that items would need to be moved around in prioritization based on needs. Director Pfost said items would come before the Council to discuss imbalances and options. Facilitator Lehrman asked Councilmember Koprowski about the purpose of her comment; Councilmember Koprowski reiterated the importance of understanding prioritization and input. Facilitator Lehrman asked when it was too early to make comments into that process; Director Pfost replied that it was never too early to make comments on prioritization and discussed ways the Council could provide that feedback or ask questions. Councilmember Koprowski noted that the Public Works Advisory Board could be utilized to help discuss prioritization, as they were also citizens and could foster transparency. Town Manager Banger agreed that the Public Works Advisory Board could be utilized for such endeavors and could also look at the Long Range Infrastructure Program and the 5-10 year review to meet long term sustainability. Assistant Town Manager Rhineheimer spoke of the importance of the Repair and Replacement Fund, stating it was not just a nice thing to have or an optional savings fund. She said in reality the Town projected the end of the infrastructure and the Replacement Fund was a critical piece to make sure the Town could maintain those services. Facilitator Lehrman summarized that it was not a “slush fund”, but was absolutely necessary to manage infrastructure. Assistant Town Manager Goodman discussed prioritization and the importance of 5 documenting the needs so staff could plan around that. She said the worse thing was to not document a need moving forward, then spoke of balance forecasting and what those needs were. Councilmember Koprowski said Gilbert did a great job of identifying needs and prioritizing big projects that were serving much of Gilbert. She noted there were also smaller projects that should also be considered as they may be equally important to the full story. Facilitator Lehrman asked if escalation was basically because of inflation. Assistant Town Engineer Struble said yes, inflation and prices being more expensive with materials and labor, but added that things were taking longer which was also affecting design and planning as well. Facilitator Lehrman asked the Council to indicate if they were green, yellow, or red on agreement with the system and timeline that was in place; the Councilmembers unanimously noted they were “green.” 3. General Fund and CIP Funding Shortfall Office of Management and Budget Director Pfost discussed escalation or inflation and how it was affecting projects. She provided a case study example stating traditionally Gilbert had the capacity to fund some CIP projects out of the General Fund, but the capacity would reduce as Gilbert moved forward to buildout. She stated that FY2025 was going to be challenging, noting the numbers provided were preliminary but showed the pattern that was happening. She provided a listing of CIP request for the General Fund for FY2024 and said the General Fund did not have the funding to fund $153,281,000 of CIP requests and what was planned for FY2025 was not fully executable. She highlighted options for funding including General Obligation (GO) Bonds, Municipal Property Corporation (MPC) Bonds, sales tax, as well as options like reducing scope, delaying project timing, and pursuing grants and other funding. She said Council direction would be needed on upcoming CIP needs and funding options and there would be a workshop on Monday, December 11, 2023, to discuss this topic in depth. 6 Facilitator Lehrman asked what the slides with projects listed was representing and if the Council needed to provide feedback on those options. Director Pfost stated no feedback was needed now, but the workshop in December would be for that purpose. Facilitator Lehrman reiterated that it was only an overview of the process. Councilmember Koprowski stated it would be helpful to have some information on what other cities were doing and how they were taking strategies and risks for the workshop on December 11, 2023. Facilitator Lehrman repeated that the request was for some other community comparisons to help with benchmarking. Vice Mayor Tilque noted the CIP book showed what years a project would be funded, adding the bottom of the page also showed the funding sources. She said it was important to look at other funding sources as well. Director Pfost noted that in addition to the funding sources listed, there was also funding like regional money, sources like Maricopa Association of Governments (MAG) and Highway User Revenue Fund (HURF), as well as System Development Fees (SDF) for the new growth. Councilmember Bongiovanni discussed public-private partnerships. Councilmember Anderson noted they had previously received models of projections and revenues. Director Pfost said they typically would provide that at the Financial Retreat, adding that revenue would typically taper off. Facilitator Lehrman noted the purpose of the presentation was to lay the foundation for future discussions and no consensus was needed; there were no questions. 4. Utility Rates Assistant Public Works Director Braun discussed the Water and Solid Waste and Recycling rates. He spoke of the effects on the water supply including drought and pollution, as well as how infrastructure wore out over time. He discussed Policy Statement No. 11, Fees and 7 Charges, stating that rates funded those services and that utilities were separate financial entities and not subsidized by taxes. He said those fees and rates were not based on growth but were based on level of service. He then discussed Policy Statement No. 17, Minimum Unrestricted Fund Balance, and the critical importance of maintaining this policy. He said the four utility rates were Water, Solid Waste and Recycling, Wastewater, and Environmental Compliance, then said that for the current year they would only be evaluating Water and Solid Waste and Recycling. He said the directive of balancing the timing for rate changes allowed for impact to be spread out for customers, noting the Town had gone a while without raising rates but now needed to catch up. Assistant Public Works Director Braun discussed the reckoning coming to public water systems in America and highlighted different disasters nationally that came from vulnerable water systems; he then noted different incidents in Gilbert that could have been disastrous without planning and resources. He summarized utility fund components with rate revenue including operation and maintenance, one-time expenses (not based on new growth), and the Repair and Replacement fund. He highlighted water resource needs and pressures, including the Tier 1 shortage with the Colorado River and the Central Arizona Project (CAP) reductions. He also noted raw water cost increases and increased construction costs for capital improvement projects. He summarized the strategy for the Colorado River shortage and the acceleration of existing well projects with $56 million over two years instead of over 10 years. He discussed challenging market conditions and construction market volatility while highlighting the North Water Treatment Plant Reconstruction Project and the adjustments to costs including a current estimate of $671 million for the project that was projected at $545 million in September 2022. He summarized the capital program forecast and budget prioritization, noting the projection was to be below the minimum fund balance. Assistant Public Works Director Braun summarized the following three proposed water rate options: The first option was the Cash Funded Option which would collect and pay cash for all Capital Improvement Plan (CIP) projects within the five-year plan stating it would require an immediate increase of 130%. He said there would be no planned increase the following year 8 and would not result in new debt, would allow ongoing capacity of $6 million for one-time CIP in the Operating Fund, and ongoing Repair and Replacement Fund capacity of $3 million in FY2029. He said the average residential water bill of $34 would increase to $78 in April 2024. The next option was the Bond-Funded Option which would be to bond $205 million of CIP costs in the five-year plan and would require an immediate rate increase of 95%, with $205 million in new debt, $110 million anticipated interest paid in 20 years, and the ongoing capacity of $2 million for one-time CIP in the Operating Fund. He noted it would not include a planned increase in the following year, but would add Repair and Replacement Fund Capacity of $37 million in FY2029, and had the lowest overall rate increase by total percent. He said the average residential water bill of $34 would increase to $66 in April 2024. The third option of Cash/Bond Gradual Funded Option which would be a bond of $80 million in CIP costs with the 5 year plan and would require an immediate rate increase of 50%, followed by 25% in one year, and another 25% in two years. He noted it would bring $80 million in new debt, with $43 million anticipated interest paid over 20 years, ongoing capacity of $5 million for one-time CIP in the Operating Fund, ongoing Repair and Replacement Fund capacity of $66 million in FY2029, and would be a phased increase to allow customers to plan. He said the average residential water bill of $34 would increase to $51 in April 2024, $64 in 2025, and $80 in 2026. Assistant Public Works Director Braun provided an options comparisons that was previously shared with the Public Works Advisory Board, then provided a letter from that Board with their recommendation and main ideas. The main ideas shared by the Public Works Advisory Board included emphasis on the critical need to sustain efficient operation, maintenance, and repair of the water system; maintaining the existing level of service to the Town; and cost pressures and impacts. He stated the recommendation of the Public Works Advisory Board was as follows: “That the Gilbert Town Council approve a Notice of Intent to Increase Rates and Fees at its November 28, 2023 Council Meeting and set a Public Hearing date of February 6, 2024 • That the Town Council consider the “Cash/Bond Gradual Option” for the Water Fund, and the SWR increase as presented” • “The Public Works Advisory Board 9 recognizes that the selected option may have a significant financial impact on residents in Gilbert. As part of the recommendation to adopt these water and solid waste rates, we also recommend that the Council direct staff to research additional ways that the Town may be able to provide or connect residents in need to financial assistance or utility bill relief should they need assistance with absorbing the initial impact once the new rates are in place.” Facilitator Lehrman asked for questions regarding the process and recommendation. Vice Mayor Tilque asked for confirmation that the recommendation shared did not include Solid Waste and Recycling, to which Assistant Public Works Director Braun confirmed. Councilmember Bongiovanni discussed the importance of getting the message out and explaining the reasons the rates were going up, reiterating the need for an understanding on the scope and reasoning. Councilmember Anderson requested information on what other communities were doing be added to the presentation. Assistant Public Works Director Braun said what Gilbert was considering was comparable to other cities. Facilitator Lehrman repeated that when it came to the Council, it was important to establish some context to show what other cities were doing in comparison. Councilmember Koprowski discussed the importance of the bond amount and that Gilbert was not taking on too much debt, adding a project like the North Water Treatment Plant reconstruction should last 75 years, it should be constructed to last that long, and there were some projects that made sense to bond over time. Facilitator Lehrman restated the Council’s desire to ensure that projects were bond-worthy and not just for the sake of convenience; Town Manager Banger agreed. Facilitator Lehrman welcomed discussion from the Council on which options were preferred and the pros and cons of each. Mayor Peterson discussed how municipal bonds were different from voter-approved bonds. 10 She said she was struggling with a recommendation because she did not like the debt idea and paying back the interest, but she also realized that residents were struggling and everyone was paying more. She said she liked the idea of the Cash Funded Option, but there could be too much impact, too soon. Councilmember Koprowski stated she appreciated the Public Works Advisory Board going through the options and acknowledging that the Cash/Bond Gradual Funded Option provided the financial needs to adjust for rate increases, but also time for re-evaluation and to review each year; she said she supported that. Councilmember Torgeson spoke of the advantages of the Cash Funded Option and discussed inflation, stating the Cash/Bond Gradual Funded Option gave opportunity to pivot a little bit. Councilmember Buchli stated in essence it was “bearable” but the numbers could go up or down, noting the chances were slim of them going down. She spoke of the need to educate residents and to put the information out there and say what the rate increase was for. She spoke of being honest to state that they did not know what the future held and that it could get worse. Assistant Public Works Director Braun stated the first two year rates were a promise, but after that it could change. Councilmember Buchli stated she did not like the interest and was leaning toward the Cash Funded Option and liked the idea of giving aide options to residents. Councilmember Bongiovanni stated he liked either the Cash Funded or Cash/Bond Gradual Funded Option, not the second option. He repeated the importance of messaging and a comparison to other cities. Councilmember Anderson agreed he wanted to see other types of fees customers were charged in other communities and see them weighted together. Assistant Town Manager Rhineheimer stated as staff brought forward the recommendation for a Notice of Intent they could bring forth that data, but she acknowledged that every agency was in a different phase 11 and Gilbert was being aggressive to maintain level of services, adding not every agency would be at that level. Councilmember Torgeson discussed looking at inflation in two years regardless of what option they chose. He and Director Pfost discussed bond rates; Councilmember Torgeson stated it may be smarter to bond and borrow money now. Vice Mayor Tilque discussed projects that may need to be moved up and how the bond money would be used. She said she was torn but leaning toward the Cash/Bond Gradual Funded Option, then discussed how looking at other fee increases across the board down the line would be helpful. Councilmember Bongiovanni asked the question: “Would you rather pay $40 more in a bill to save $43 million in interest?” Facilitator Lehrman asked if he was correct that none of the Councilmembers were considering Option 2, the Bond Funded Option; the Council confirmed. He then asked which of the other two options the Council would put in the lead. The majority of the Council was slightly in favor of the Cash Funded Option over the Gradual Option, but by a narrow percentage. Councilmember Koprowski was in favor of the Cash/Bond Gradual Funded Option. Town Manager Banger asked if that provided staff with enough clarification; it was asked if both the Cash Funded and the Cash/Bond Gradual Funded Options could be heard/considered by the Council. Assistant Town Manager Goodman asked if the Notice of Intent could include both options or if there was a legal reason not to post both. Town Attorney Payne stated the notice and agenda item could list both options for consideration. Assistant Public Works Director Braun discussed Solid Waste and Recycling, stating it was a separate fund. He provided information on both the Residential and Commercial Funds including tonnage and fees, cost pressures, and repair and replacement needs, noting a 25% increase to get rid of trash in the last four years. He summarized needs and concerns with fleet, including the difficulty of getting new trucks and how costs for repair had doubled. He said there was one option recommended that would allow them to remain in the minimum 12 fund balance. He said the recommendation was a 1-time rate increase of $8.52, going from $19.03 to $27.55 per month. He said for Commercial, it was more complicated because of different container sizes and frequency options for pickups, about a 25% increase. Councilmember Torgeson noted that some services were not fully used and that the containers were not often full, asking if it would make a difference to pick up every other week. Assistant Public Works Director Braun stated they were under contract to provide the service weekly. Mayor Peterson asked that homeowners’ associations (HOAs) receive the information as soon as possible since they prepared their budgets early. Assistant Public Works Director Braun stated they had already been notified in May 2023. Assistant Town Manager Rhineheimer asked if there were any questions or concerns regarding the timeline, noting implementation of the timeline was critical to maintain the financial status without dropping below the minimum fund balance. Facilitator Lehrman asked the Council for a green light that they understood the significance of the timeline; the Council agreed. 5. Community Preservation Ordinance Development Services Director Mieras stated his team had been working on this endeavor for quite some time. He named staff who had contributed and said they referenced an ordinance from the City of Phoenix as a template. He said the ordinance overview had the four parts of General Provisions, Maintenance Standards, Administration and Enforcement, and Abatement. He summarized the context of each part, then highlighted the existing provisions and new additional provisions under abatement. He said the ordinance was only meant to be a tool in the Town’s toolbox, then provided some comparisons with Phoenix, Chandler, Mesa and Scottsdale. He said the ordinance would allow the Town to address issues of blight beyond that which was currently authorized. 13 Code Inspections Supervisor DeOrio provided examples and photos of issues seen in Gilbert and expressed the challenges she and her team faced in some current situations. She discussed blight and safety issues, but said her team did a great job working with property owners to resolve issues. Examples included backyards with deteriorated roofing and unsound fencing or with trash, debris, and inoperable vehicles; dilapidated fencing and roofing; broken and boarded windows; and dead or hanging palm fronds that posed fire and infestation issues. She said they could address those issues with the new code proposal and noted the consideration that it needed to be fairly-applied. Director Mieras discussed the emergency and minor home repair program facilitated by another Town department and other programs that could assist. He said the recommendation requested was to move forward with ordinance and applied Town-wide to all residential and non-residential properties and to expand jurisdiction to include backyards. He said after the Council’s recommendation, the already-drafted ordinance would take 3-4 months to finalize with an implementation planned for the early part of 2024. Facilitator Lehrman asked if it was an update to the Town Code; Director Mieras answered that it would be a new ordinance, a new code. Councilmember Koprowski discussed a photo shown of a backyard with vehicles and asked what would be acceptable under the newly-proposed code. Supervisor DeOrio said within the new code, a person could have one inoperable vehicle, but the primary use should be the enjoyment of a backyard. Councilmember Koprowski discussed the need for definition and consistency. Councilmember Koprowski and Supervisor DeOrio discussed legal non-conforming cases. Town Attorney Payne stated they could expand on legal non-conformance, but it would likely be a case-by-case basis. 14 Mayor Peterson discussed issues with rats. Supervisor DeOrio discussed not wanting inequity to occur but said did have latitude to address certain situations. Director Mieras stated the code could also be amended as needed. Councilmember Torgeson discussed the abuse of a complaint with homeowners’ associations (HOAs). Supervisor DeOrio said they did see some abuse of those types of situations but worked with HOAs also. Facilitator Lehrman asked if the ordinance spoke to egregious use of the code and should it address that. Supervisor DeOrio discussed how they dealt with such things, adding it was not intended for punishing people but for the betterment of the community. Facilitator Lehrman asked if Councilmember Torgeson wanted to see that codified. Vice Mayor Tilque stated it was complaint driven and should remain that way, especially when it was in someone’s backyard. She said that it should not supersede HOAs or we risked becoming the HOA. Facilitator Lehrman asked if there was anything with the ordinance that needed to be changed to balance expectations. Vice Mayor Tilque stated that it should be made clear that complaints were handled by Code Enforcement and not the Police Department. Supervisor DeOrio stated that property owner would sign something that would show what steps were taken and could allow for more time, but would set a plan of action. Director Mieras stated that a complaint would not start with a citation, there was a long process before that. Mayor Peterson asked if the ordinance would have to go before the Redevelopment and Planning Commissions. Director Mieras confirmed. Councilmember Anderson said the proposed ordinance was important to the community; the problem would be an impotence or weakness to the City of the Future initiative if those issues were not addressed and spread to neighborhoods. Councilmember Buchli asked if it would be retroactive to get things get cleaned up. Director Mieras stated it would be on a case-by-case basis and discussed considering the merits of each case and chance to reach out to property owners to proactively work to clean it up. 15 Supervisor DeOrio stated there was a first, second, and final notice before a potential citation, noting that Gilbert had a 99% compliance rate which was the best in the Phoenix-Valley. There was discussion on court-ordered abatements which were up to a judge if the property was in violation, noting there could also be a lien on the property. Councilmember Buchli asked if there needed to be Town approval for that; the response was no, not if it was court- ordered. Councilmember Buchli asked how staff were protected in that type of instance; Supervisor DeOrio said they could have officers in civil standby if it was court-ordered. Facilitator Lehrman asked the Council if they agreed on a green light to proceed with staff doing the work and return an ordinance for the Council to consider. The consensus was green to proceed with preparation of the ordinance. 6. Employee Benefits Assistant Town Manager Goodman introduced a Total Rewards or Employee Benefits update. She noted they continued to focus on benefits because employees were one of Gilbert’s greatest assets and they wanted to stay competitive but also to continue to be an employer of choice. She summarized follow-up items from the last retreat including the idea of Town-paid (or subsidized) retiree health coverage or other post-employment benefits (OPEB). She provided a currents benefits example and scenarios and impacts with 2047 estimates. She noted staff did not recommend those options given the significant liability the Town would incur and lack of identified funding. She said staff did recommend surveying the employee population to learn what benefits would add the biggest value, then asked if the Council was supportive of that direction. Police Chief Soelberg asked to clarify that “lifetime benefits” would be until they reached the age of 65 or Medicare/Medicaid eligibility; Assistant Town Manager Goodman stated that was correct, it was the industry definition of “lifetime benefits”. 16 Vice Mayor Tilque asked about health coverage and who actually paid the risk pool, with the Town being self-insured. Assistant Town Manager Goodman said the costs would be paid for by entire pool of employees as well as the Town’s contribution. Councilmember Torgeson asked for confirmation on the figures provided, and Assistant Town Manager Goodman stated the figures were likely understated a bit. Assistant Town Manager Goodman stated they were recommending looking at other options to engage employees through a survey from a new broker to best understand what benefit offerings would best suit employees and their families. Councilmember Bongiovanni asked how Gilbert did when benchmarked with other cities. Assistant Town Manager Goodman stated there was one neighboring agency that announced they would offer lifetime benefits to employees but she had not heard of others doing so; she added they would do a scan of other cities. Police Chief Soelberg discussed restrictions established by that neighboring community. Councilmember Bongiovanni asked about rates used for employee assumptions and what numbers they were based on. Assistant Town Manager Goodman discussed other possibilities including a retirement health savings account or a subsidy/incentive for someone to get on the State’s retirement plan; she added they had tasked the new broker with being creative in gathering information and data. Councilmember Torgeson asked about other measures like preventative scans. Town Manager Banger reiterated they were exploring other options. Facilitator Lehrman asked for confirmation that the Council understood staff was not recommending the proposal; they gave a reluctant green light for postponing. Councilmember Torgeson asked if there would be more opportunities to look into the matter in the current fiscal year; Assistant Town Manager Goodman confirmed. 17 Assistant Town Manager Goodman followed-up on the proposal for the Town to make contributions to the Deferred Compensation Program. She said the Town offered a 457 Plan but did not currently contribute to it. She provided some sample figures stating for every 1% contribution it would equal about $1.2 million, adding that number would continue to rise. She said the recommendation was to hold for now, pending the outcome of the employee survey. She noted funds were limited and it could curtail other opportunities, then asked if the Council was supportive of that direction. Councilmember Koprowski stated that employees may not understand the specific of the benefits that may be offered, such as tax benefits to a 457 plan, then asked that some education on options be added when the employees received the survey. Facilitator Lehrman confirmed that the Council was a reluctant green light but looked forward to hearing more options. The next follow-up item was on pay practices for sworn and non-sworn staff which they were able to implement. Assistant Town Manager Goodman stated that effective July 1, 2023, Sworn personnel who were “topped out” or at their max step for their position and who received an “achieved” or better on their annual evaluation were eligible for a lump sum payment. She shared those numbers. Chief People Officer Williams noted the Town had moved forward with a new broker, Alliant Benefit Services. He said that broker could offer robust reporting and data visualization, collaboration with staff and trust board, had public entity experience, and their fees for services was lower than incumbent. He shared the upcoming total rewards survey questionnaire with sample questions, then discussed possible survey outcomes and timelines. He said the possible outcomes could be the highest monthly premiums or Buy Up Plan, mid-high monthly premiums or the Basic Plan, and the lowest monthly premiums or a High Deductible Plan. He said the plan was to work with Alliant to finalized the survey details before the end of the calendar year and bring forward staff’s recommendations to the Council. He noted the need for informed decisions and different options, such as increased 18 co-pays to prevent significant premium increases and retirement health savings account contributions. Assistant Town Manager Goodman stated if the plans were left alone it would lead to significant increases and the goal was to avoid significant premium increases for employees and the organization and to find ways to better use funds. It was noted they would gather data from the survey responses and any potential plan design changes and/or additional changed benefits would be brought to the Council for consideration in the Spring of 2024. Mayor Peterson stated she thought they were heading in the right direction and agreed with surveying employees to learn their needs, adding the Town was always looking for more options for Gilbert employees. Councilmember Torgeson reiterated his request to have more options to consider by Spring 2024. It was noted that some options would have to go before the Self-Insured Trust Board first. Vice Mayor Tilque noted the importance of proactive measures such as body scans to reduce risk to the entire pool. 7. Day 1 Closing Remarks Facilitator Lehrman reminded the group that the day would conclude with senior bingo and dinner. ADJOURN The meeting adjourned meeting at 2:57 p.m. 19  ATTEST: ___________________________ ___________________________________ Brigette Peterson, Mayor Chaveli Herrera, Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the special meeting of the Town Council of the Town of Gilbert held on the 6th day of November, 2023. I further certify that the meeting was duly called and held and that a quorum was present. Dated this ____ day of ____________________. ___________________________________ Chaveli Herrera, MMC, Town Clerk 20