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Informal Meeting Minutes Monday, August 15, 2016 Board Members 10:00 AM Clint Hickman, Chairman, District 4 Andrew Kunasek, Vice Chairman, District 3 BOARD OF SUPERVISORS Denny Barney, District 1 Maricopa County, Arizona Steve Chucri, District 2 (and the Boards of Directors of the Flood Control District, Steve Gallardo, District 5 Library District, Stadium District, Improvement Districts, and/or Board of Deposit) County Manager Joy Rich "The mission of Maricopa County is to Clerk of the Board provide regional leadership and fiscally Fran McCarroll responsible, necessary public services to its residents so they can enjoy living in healthy and safe communities.” Meeting Location Supervisors' Conference Room 301 W. Jefferson, 10th Floor Phoenix, AZ 85003 BOARD OF SUPERVISORS The Board of Supervisors of Maricopa County, Phoenix, Arizona, convened in Informal Session at 10:00 AM on Monday, August 15, 2016, in the Supervisors' Conference Room, 301 W. Jefferson, 10th Floor, Phoenix, AZ 85003, with the following members present: Clint Hickman, Chairman, District 4; Andrew Kunasek, Vice Chairman, District 3; Steve Chucri, District 2; Denny Barney, District 1; Steve Gallardo, District 5. Also present: Fran McCarroll, Clerk of the Board; Lori Medaris, Minutes Coordinator; Joy Rich, County Manager; and Michelle Wood, Legal Counsel. ACTION Management and Budget 1. FY 2017 PROPERTY TAX LEVY RESOLUTION Adopt the following Resolution regarding the “Maricopa County 2016 Tax Levy” WHEREAS, pursuant to A.R.S.§ 42-17105 on June 20, 2016 the Board of Supervisors adopted the FY 2017 budget which included a budgeted property tax levy of $506,222,142; and WHEREAS, pursuant to A.R.S. §48-3620, on June 20, 2016 the Flood Control District of Maricopa County Board of Directors adopted the FY 2017 Budget which included a budgeted property tax levy of $58,463,580; and WHEREAS, pursuant to A.R.S. §48-252 on June 20, 2016, the Library District Board of Directors adopted the FY 2017 Library District budget which included a budgeted property tax levy of $20,091,335; and WHEREAS, pursuant to A.R.S. §48-954 on June 20, 2016, the Boards of Directors of the County Improvement Districts adopted the FY 2017 Budgets; each Budget indicating a corresponding budgeted property tax levy as detailed in the budget schedules adopted that day; and WHEREAS, pursuant to A.R.S. §42-17151 the Board of Supervisors is directed to “fix, levy and assess the amount to be raised from primary property taxation and secondary property taxation;” and “fix and determine a primary property tax rate and a secondary property tax rate;” Informal Meeting Minutes Monday, August 15, 2016 Page 2 of 4 NOW THEREFORE, BE IT RESOLVED BY THE MARICOPA COUNTY BOARD OF SUPERVISORS, 1. Pursuant to A.R.S. §§ 42-17151, 48-955, 48-3620 and 48-3903, and based on the budget duly adopted for Maricopa County, the Flood Control District of Maricopa County, the Maricopa County Library District and the Maricopa County Improvement Districts the Board of Supervisors determines and fixes tax rates as follows: • Fiscal Year 2017 (Tax Year 2016) Maricopa County Primary Tax Rate at $1.4009 per $100 of net assessed valuation with a levy of $506,222,142. • Fiscal Year 2017 (Tax Year 2016) Flood Control District of Maricopa County Secondary Tax Rate at $0.1792 per $100 of net assessed valuation with a levy of $58,463,580. • Fiscal Year 2017 (Tax Year 2016) Maricopa County Library District Secondary Tax Rate at $0.0556 per $100 of net assessed valuation with a levy of $20,091,335. • Fiscal Year 2017 (Tax Year 2016) for each of the assessable properties within County Improvement Districts the tax levy and/or tax rate as set forth in the “Maricopa County 2016 Tax Levy” compiled by the Department of Finance. 2. Based on the amount of taxes to be raised by property taxation determined by each governmental entity set forth in the “Maricopa County 2016 Tax Levy,” the Maricopa County Board of Supervisors has calculated the numerical tax rates necessary to raise the requested revenues, and pursuant to the direction of each such government entity, levies the amounts of taxes and sets the resulting tax rates, all as set forth in the “Maricopa County 2016 Tax Levy.” 3. Pursuant to ARS §42-18003, the Maricopa County Treasurer is directed to collect taxes as required by law from the persons listed on the tax roll. The County Treasurer is now therefore responsible for collecting the totals of all taxes levied on the roll. (C-49-17-006-2-00) Motion by Supervisor Kunasek for the approval of the Property Tax Levy Resolution which sets the Primary and/or Secondary tax rates for: Maricopa County The Flood Control District of Maricopa County Maricopa County Library District As well as tax rates or levies for the County Improvement Districts, and Pursuant to the direction of each governmental entity, levy the amounts of taxes and set the resulting tax rates for each as set forth in the “Maricopa County 2016 Tax Levy”; and Pursuant to statute, direct the Treasurer to collect taxes as required by law from the persons listed and the tax roll, All as more specifically detailed in the Tax Levy Resolution printed in the agenda as item #1 and the “Maricopa County 2016 Tax Levy.” Motion was seconded by Supervisor Barney. Ayes: Hickman, Kunasek, Chucri, Barney, Gallardo Informal Meeting Minutes Monday, August 15, 2016 Page 3 of 4 PRESENTATION Management and Budget 2. ECONOMIC FORECAST PRESENTATION Presentation regarding the Economic Forecast. Elliot D. Pollack, Elliot D. Pollack & Co. (C-49-17-002-P-00) Elliott Pollack, Elliott D. Pollack & Co., presented the 2016 Second Half Economic Forecast. He noted that retail sales are failing to perform as hoped and a reason for this has not been determined, so the County needs to be cautious and consider alternatives. The County is now facing: 1. A potential slowdown in economic activity. 2. A potentially diminishing contingency fund, at a time when it should not be diminished. 3. The last few months of sales tax growth have been very slow and this will impact 2017 forecasts. The economy as a whole is beginning to slow. Mr. Pollack explained that consumer debt is low and consumer liquidity is improving, Consumer confidence is back to normal. Net worth is improved and real income has grown while inflation remains low. Mr. Pollack stated that all of these statistics are positive, but he warned that this is the slowest economic growth in history with an annual growth rate of 2.1%. He explained the reasons for such slow growth as being: Higher taxes Oppressive and unsteady regulation Barriers to trade Monetary policy He noted that the State of Arizona had a significant recovery in both absolute and relative terms. The statistics look bad only when comparing pre-2007 to post-2007. The reasons that Arizona has had subpar growth is due to: Sub-normal national recovery Slowdown in population flows Slow housing recovery Local factors Mr. Pollack explained that the state has moved from a manufacturing society to a society that provides services and most industries have yet to regain lost jobs. The problem with these statistics is that manufacturing jobs pay above average wages and these are being traded for lower paying jobs in the service industries. Population flows is a national phenomenon and has caused the state’s movers to be down by 24%, so the conclusion is that due to the lack of national, international and instate population flows: 1. Jobs that would have been created by the domestic demand from people moving here have also been reduced. 2. It has taken longer to absorb the excess inventory of single family, offices, etc. and construction employment has suffered. Informal Meeting Minutes Monday, August 15, 2016 Page 4 of 4 Mr. Pollack reiterated that recovery will be very slow with an average of 20,000 single family units being built each year from 2015 through 2020. Potential home buyers are being kept out of the housing market because of: Negative equity FHA Loan Limits Foreclosures Short Sales Millennials Student Loans Tougher Loan Standards The market for office space is improving fairly rapidly at a rate of 15%. Mr. Pollack stated that under reasonable employment growth it will be at least 2017 to 2018 before significant office construction occurs. The Greater Phoenix area will have no traditional boom until the population increases more rapidly and housing makes a more meaningful recovery. Maricopa County needs to operate with expected growth at a pessimistic level where the budget could be off by $10 million. It will be very important to have reserves in place. Supervisor Kunasek stated he values the guidance and assistance provided by Mr. Pollack. Supervisor Chucri said most people automatically assume things will get back to normal before another downturn but this is not always the case. He stated the Supervisors are exhibiting wisdom in building reserves and other County Electeds need to realize this too. He thanked Mr. Pollack for his service. Chairman Hickman asked when Mr. Pollack was going to make this presentation to the legislature. Mr. Pollack responded the presentation would be made in October. 3. EXECUTIVE SESSION Vote to convene in Executive Session to consider items on the Executive Agenda dated August 15, 2016, for Board of Supervisors and relevant Special Districts pursuant to statutory authority listed for each item. Motion to approve by Supervisor Chucri, seconded by Supervisor Barney Ayes: Hickman, Kunasek, Chucri, Barney, Gallardo MEETING ADJOURNED After discussion on the executive items and there being no further business to come before the Board, the meeting was adjourned. _______________________________ Clint Hickman, Chairman of the Board ATTEST _____________________________ Fran McCarroll, Clerk of the Board