2023 General Obligation Bond Program Development and Report of the Fiscal
Capacity Committee

This report provides information regarding a potential 2023 General Obligation Bond
Program, documents the findings of the City Council-appointed Fiscal Capacity
Committee, and requests direction from Mayor and City Council to the General
Obligation Bond Committee.

THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.

Summary
General Obligation (GO) Bond programs provide a mechanism to fund construction
and rehabilitation of City facilities and infrastructure such as parks, libraries, fire
stations, streets and storm drains. Bond programs require voter approval, and cannot
be used to fund operating costs like staff salaries or to fund assets that are not owned
by the City. Since 1957, the City's approved GO Bond programs have totaled $4.6
billion. The most recent GO Bond program for $878.5 million was approved by voters
in 2006. This 16 year gap is the longest in the City's bond program history and has
resulted in a significant amount of unfunded capital needs.

Prior to the COVID-19 pandemic, Mayor and City Council began to lay the foundation
for a new GO Bond program, in recognition of the City's growth, aging facilities, and
needed infrastructure. After a pause to assess the economic environment, efforts
resumed over recent months by the Mayor and City Council-appointed Fiscal Capacity
Committee. The committee has recently completed its work and report on its findings.
On June 1, Mayor and City Council appointed the 2023 GO Bond Committee in
preparation for the next steps towards bond program development.

REPORT OF THE FISCAL CAPACITY COMMITTEE

In March 2019, the Mayor and Council appointed a Public Safety Bond Executive
Committee (Attachment A) to formulate recommendations for a potential November
2020 public safety bond election.




Page 5

In October 2019, Mayor Gallego appointed a Public Safety Bond Fiscal Capacity
Committee (Attachment B) (“the Committee”) to identify the financial parameters for
any bond program and the capacity for operations and maintenance, and to report its
findings to the City Council. The appointed Committee includes:

• David Krietor, Chair
• Ron Butler
• Deb Fisher
• MaryAnn Guerra
• Hope Levin

Committee meetings were held in December 2019 and January 2020 to formulate
recommendations; however, the City paused these efforts as a result of uncertainty
stemming from the COVID-19 pandemic. Subsequently, the City acquired the existing
building at 100 W. Washington St. to ultimately replace police headquarters -
addressing the most critical public safety need - and the Mayor and Council have
expressed support for a broader scope of projects for a future GO Bond program. The
Committee was renamed the Fiscal Capacity Committee and asked to assess the
City’s capacity for a potential November 2023 bond program, irrespective of its scope.

Six total Committee meetings were held:

• Dec. 13, 2019
• Jan. 10, 2020
• Jan. 17, 2020
• Jan. 24, 2022
• Jan. 31, 2022
• Feb. 7, 2022

This report summarizes the information presented to the Committee by staff in January
and February 2022, and the Committee's recommendations. Associated staff-provided
materials and meeting minutes are transmitted as Attachment C.

Summary of Considerations

The principal and interest payments on GO Bonds are typically backed by secondary
property taxes. Operations of City facilities are typically funded by General Funds and
Special Revenue Funds.

The City's financial ability to implement a GO Bond program is dependent upon:



Page 6

• The amount of secondary property tax revenue projected to be available to fund
additional GO Bond principal and interest, and when it will be available.
• Whether the City can fund additional operations and maintenance costs associated
with new systems and facilities.
• Implications on the City’s credit ratings.
• Constitutional debt limits.

Property Tax

The City levies a primary and a secondary property tax. The primary property tax is a
revenue source to the General Fund, the Parks Fund, and the Library Fund. The City
Charter limits the primary property tax rate to $1.00 per $100 net assessed value, plus
an amount restricted to Library use. The Arizona State Constitution places an
additional restriction on the City's primary property tax, calculated by formula. Based
on the provisions contained in the City Charter and State Constitution, the City’s
primary property tax levy is at its maximum allowable levy. The Fiscal Year 2021-22
primary property tax rate is $1.3055 per $100 net assessed value, generating a
primary property tax levy of $193 million. Staff's property tax model assumes that the
primary property tax levy will continue to be maximized.

The secondary property tax is a revenue source to pay principal and interest on
general obligation bond debt. The City's Fiscal Year 2022-23 secondary property tax
rate is $0.8141 per $100 net assessed value, generating a secondary property tax levy
of $120 million. Current secondary property tax revenues are below annual debt
service on outstanding general obligation bond debt; the remaining debt service is
currently being paid by an accumulated general obligation bond reserve fund. As a
result of a 2017 state law, that reserve fund is legally required to be reduced to 10
percent of annual principal and interest by the end of Fiscal Year 2022-23. Subsequent
to Fiscal Year 2022-23, annual secondary property tax revenues will effectively be the
sole funding source for annual debt service.

The amount of secondary property tax generated each year for a given tax rate is a
function of:

• Annual appreciation on existing property
• New construction
• Assessment ratios established by the state legislature

The taxable value of existing property is the lesser of its full cash value determined by
the County Assessor, or an amount 5 percent greater than the prior year's taxable
value - this is referred to as limited property value. Citywide, full cash value is


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approximately 47 percent higher than limited property value. This provides a buffer
against an economic downturn.

At its Feb. 7, 2022 meeting, the Committee endorsed the following valuation model
assumptions:

• Annual net appreciation on existing property of 2.0 percent through Fiscal Year 2025
-26 due to reductions to commercial property assessment ratios approved by the
Legislature.
• Annual net appreciation on existing property of 3.0 percent thereafter.
• Annual year-over-year growth on new construction of 2.0 percent.
• No change to legislatively-determined assessment ratios after Fiscal Year 2025-26.

The resulting model was used to determine projected primary and secondary property
tax rates for various bond program scenarios. The Committee reviewed various stress-
test scenarios in addition to these baseline assumptions and determined that realistic
stress-test scenarios did not materially impact the City’s fiscal capacity.

Operations and Maintenance

The primary property tax rate is currently maximized and is fully used to pay for
existing programs and services. The primary property tax rate could therefore not be
used as a source of new operations and maintenance revenue for new systems and
facilities, absent a corresponding reduction in existing programs and services. The
City’s ability to absorb new operations and maintenance costs in the future is
indeterminate. At its Feb. 7, 2022 meeting, the Committee recommended the City
Council minimize new operations and maintenance commitments for bond program
projects.

Program Scope

As program content was outside the scope of the Committee's charge, the Committee
did not review the magnitude or merit of identified public safety capital needs or non-
public safety capital needs. The Committee recommends that City management review
all public safety and non-public safety capital needs prior to convening the GO Bond
Program Executive Committee.

Ballot Timing

The Fiscal Capacity Committee unanimously recommended the City Council develop a
bond program for a November 2023 election.


Page 8


Tax Rate Informational Requirements

Projected tax rates relayed in this report are based on the valuation assumptions
endorsed by the Committee.

State Statute places different restrictions on assumptions conveyed in materials
distributed to voters. For the first five years, growth assumptions in voter materials
cannot exceed the average appreciation in the past ten years; thereafter, growth
assumptions in voter materials cannot exceed 20 percent of the average appreciation
in the past ten years. Modeled growth assumptions endorsed by the Committee for the
first five years are functionally equivalent to those required by statute, while modeled
growth assumptions thereafter are substantively higher. As a result, projected tax rates
conveyed to voters in later years will be overtly higher than those the Committee
believes are likely. Nevertheless, the statutorily required assumptions do not materially
change the City’s capacity for a November 2023 bond program.

Program Sizing and Bond Sale Timing

After reviewing property tax revenue models and remaining debt service on existing
general obligation bonds, at its meeting on Feb. 7, 2022, the Fiscal Capacity
Committee unanimously recommended the City Council develop a $500 million bond
program for a November 2023 election.

Absent unanticipated Legislative changes, or severe economic changes, the
Committee determined that a $500 million bond program can likely be supported
without any increases to the current secondary property tax rate of $0.8141 per $100
of net assessed valuation. Peak debt service is not anticipated to rise substantially
beyond the status quo maximum annual debt service of $155 million. A bond program
of this magnitude is not expected to adversely impact the City’s bond ratings.

Further, the Committee advises this approach strategically positions the City for
subsequent bond elections in five year increments with values of approximately $500
million each. Financial models indicate that routine bond programs of this magnitude
will continue to be sustainable without any material increases to property tax rates,
assuming no significant legislative changes.

2023 BOND PROGRAM DEVELOPMENT

The City's bond processes have traditionally been community-driven. Accordingly, on
June 1, the Mayor and City Council appointed a citizen's 2023 GO Bond Committee


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and eight subcommittees:

• Arts and Culture
• Economic Development and Education
• Environment and Sustainability
• Housing, Human Services and Homelessness
• Neighborhoods and City Services
• Parks and Recreation
• Public Safety
• Streets and Storm Drainage

City staff have begun the process of identifying critical unfunded capital projects.
Subject to the approval of the Mayor and City Council, the Bond Committee and
program-area subcommittees would be tasked with reviewing these projects, and
recommending funding priorities based on the needs of the community. Bond
Committee and subcommittee meetings would be held in public, with opportunities for
citizens to provide input both in person and virtually, from August through November.
The Bond Committee would provide recommendations to the Mayor and City Council
at the Policy Meeting on Dec. 6, 2022. The Mayor and City Council would ultimately
determine bond propositions and corresponding values to be proposed to voters in the
November 2023 General Election. The findings of the Fiscal Capacity Committee are
recommended as the financial framework for the Bond Committee.

Community Engagement and Next Steps

As mentioned earlier, community input is a priority to ensure bond projects reflect the
needs of Phoenix residents. Staff has developed a robust communications and
engagement plan, which provides multiple ways for residents to provide feedback on
proposed bond projects. The plan includes the following:

· Dedicated GO Bond website to include instructional video
· GO Bond interactive tool (available on dedicated website) to allow residents to
prioritize and recommend projects
· Press releases/PHX Newsroom
· Social media outreach
· Targeted emails
· Radio ads and interviews
· Print ads - Arizona Republic, AZCentral, AZ Informant, La Voz, Prensa
· Grocery TV ads



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· Flyer distributions via multiple City departments
· PAYS Newsletter

Additionally, community input will be solicited at all bond committee meetings, which
will be open to the public and residents will be able to attend in person or virtually to
request to speak or provide written comments. Bond Committee meetings are
scheduled to take place beginning in August 2022 though early November 2022.
Information about bond committee meetings, including the schedule and instructions
on how to participate will be made available on the GO Bond dedicated website in July
2022 prior to committee meetings commencing in August 2022.

Recommendations from the GO Bond Executive Committee are tentatively scheduled
to be presented to City Council in December 2022. Upon Council approval of bond
propositions, staff will bring the form of the ballot and publicity pamphlet materials to
the Council for approval in the Spring 2023 in preparation for the November 2023
General Election.

RECOMMENDED ACTION

Consistent with the recommendations of the Fiscal Capacity Committee, staff
recommends the Mayor and City Council direct the 2023 GO Bond Committee to:

• Review citywide unfunded capital needs, excluding Aviation, Phoenix Convention
Center, Public Transit, Wastewater, and Water facilities, but including cultural facilities
managed by the Phoenix Convention Center;
• Exclude project proposals that would result in net new ongoing operating costs,
except in critical cases;
• Identify the highest priority unfunded capital needs totaling $500 million for a
November 2023 bond election; and
• Report findings and provide recommendations to the Mayor and City Council by
Dec. 6, 2022.

Responsible Department
This item is submitted by City Manager Jeffrey Barton, and the Budget and Research
and Finance departments.




Page 11
$77$&+0(17A




To: City Council Date: March 15, 2019
From: Mayor Thelda Williams
Subject: Public Safety Bond Executive Committee – REVISED*


Historically, periodic bond programs have been a best practice for the City of Phoenix to
maintain and update the city’s infrastructure. Almost 13 years have passed since the last
General Obligation bond program, and significant public safety capital needs have accumulated.
The Police and Fire departments have identified priority facility and vehicle needs totaling
between $449 and $613 million. Addressing these needs will take a deliberate and sustained
effort.
In accordance with the timeline and process approved at the March 5, 2019 Policy Meeting,
I recommend the establishment of a Public Safety Bond Executive Committee to review and
refine the bond program’s scope and size, and to coordinate community engagement. The
committee will provide a final recommendation to Council in the Spring of 2020 in preparation
for a November 2020 bond election.
I recommend the following for appointment to the executive committee. Additional members
and subcommittees may be added as needed.
CHAIR
David Krietor, former CEO Downtown Phoenix, Inc. and former Phoenix Deputy City Manager

Claude Mattox, Molera Alvarez
Peggy Neely, Neely Public Strategies
Rick Naimark, Arizona State University
*Phil Gordon, former Mayor of Phoenix
Susan Ehrlich, former Arizona Court of Appeals Judge
Art Hamilton, The Art Hamilton Group, LLC
Sue Glawe, Blue Cross Blue Shield
Maria Baier, Phoenix Suns
Gail Knight, Protocol Communications
Verma Pastor




Page 12
ATTACHMENT B




Page 13
ATTACHMENT C
Fiscal Capacity Committee
Summary Minutes
Monday, Jan. 24, 2022
Virtual Meeting – Via WebEx
Committee Members Present Committee Members Absent
Dave Krietor, Chair
Ron Butler
Deb Fisher
Hope Levin
MaryAnn Guerra

1. CALL TO ORDER
Chairman Krietor called the Fiscal Capacity Committee to order at 11:05 a.m. with
committee members Ron Butler, Deb Fisher, Hope Levin and MaryAnn Guerra
present.
2. INTRODUCTORY REMARKS
Chairman Krietor welcomed committee members and staff and invited them to begin
with introductions. He explained the committee’s charge and history, and he
expressed appreciation to members for returning to reconvene the committee for a
potential 2023 bond issue.
Chairman Krietor discussed the planned schedule of meetings for the group to arrive
at a recommendation. He mentioned the fourth meeting on Feb. 15 had been
scheduled but may not be needed. He further explained the schedule would provide
staff time to review the recommendation with City Council and move to the next
stage of the potential bond issue.
3. REVIEW AND APPROVAL OF THE JANUARY 17, 2020 MEETING MINUTES
Committee member Ron Butler made a motion to approve the minutes of the Jan.
17, 2020 meeting. Committee member Deb Fisher seconded the motion, which
passed unanimously, 5-0.
4. STAFF UPDATE REGARDING POTENTIAL GENERAL OBLIGATION BOND
PROGRAM
Chairman Krietor introduced the item and City Manager Jeffrey Barton, Budget and
Research Director Amber Williamson, and Chief Financial Officer Kathleen Gitkin to
provide a staff update on the potential general obligation (GO) bond program.

Mr. Barton thanked the committee for their participation and discussed the impacts
of the COVID-19 pandemic on the potential bond program, which previously focused
exclusively on public safety. He highlighted the replacement of Police Headquarters
as an example of a project previously considered for the bond program, explaining




Page 14
the city had since acquired 100 West Washington, formerly the Wells Fargo building,
to house Police and other city operations. He stated this acquisition would provide
greater flexibility within the proposed bond program.

Mr. Barton emphasized the importance of setting up a process to have a bond
program every five to seven years, focused on maintenance and no new ongoing
costs, with virtually no increase to secondary property tax. He explained that, if
successful, the plan would lay the groundwork for four bond programs over the next
20 years and set the city up for success moving ahead.

Chairman Krietor recalled bond issuances in 1987, 2000, and 2006, with no other
bond issuances since that time.

Ms. Williamson provided an overview of the city’s current financial health, particularly
considering the COVID-19 pandemic. She stated the impact of the pandemic on
revenues was initially unclear, but that the city has done well financially. She shared
that staff was preparing a general fund status and five-year forecast to present to the
balance over the next few years.

Ms. Williamson stressed the importance of focusing on projects that would not result
in net new increases in operating expenses, as existing city infrastructure and assets
could be expanded, replaced, or renovated. She stated she would provide more
detailed information during forthcoming meetings, including challenges the general
fund would face.

Ms. Gitkin gave an overview of financial modeling and key metrics that would be
presented at forthcoming meetings. She explained the city had contained
expenditures remarkably well through the pandemic and acknowledged that the city
measured higher revenues than in the past, beyond receiving significant resources
from the federal government.

Ms. Gitkin emphasized the importance of thoughtful and methodical planning, as
well as relying on experts from Piper Jaffray to obtain exact market numbers for
financial modeling. She stated she would hire a financial advisor if the bond program
moved forward, to validate the information that would be presented.

Chairman Krietor discussed the tentative schedule for the potential bond program
process, explaining that the next meeting would be devoted to reviewing models and
figures. He stated the current meeting’s agenda would focus on a tutorial of how the
property tax works in Phoenix and the technical mechanisms for it.




Page 15
5. COMMITTEE TITLE
Chairman Krietor introduced the item and explained that it would be necessary to
change the name of the committee since it would no longer focused exclusively on
public safety projects. He asked Deputy Budget and Research Director Chris Fazio
to confirm the new proposed name for the committee.

Mr. Fazio stated the proposed name was Fiscal Capacity Committee.

Committee member Hope Levin made a motion to approve the committee name
change. Committee member Ron Butler seconded the motion, which passed
unanimously, 5-0.

6. PROPERTY TAX OVERVIEW
Chairman Krietor introduced Deputy Budget and Research Director Christopher
Fazio to provide an overview of property tax, specifically in Phoenix.

Mr. Fazio explained general obligation bonds were backed by secondary property
tax and reiterated the goal of the proposed bond program to proceed without raising
tax rates above current levels.

Mr. Fazio defined property tax, net assessed value, secondary net assessed value,
limited property value and full cash market value. He explained implications of
Proposition 117, distinguished the property tax levy from the property tax rate, and
provided the formula used to calculate municipal property tax levies. He identified
changes to Phoenix’s full cash value compared to two years earlier.

Chairman Krietor mentioned the calculation of net assessed value was particularly
relevant now because of significant appreciation seen in the market.

Mr. Fazio identified changes to Phoenix’s full cash value, primary tax levy, and
secondary rate and levy, compared to two years earlier. He stated the primary rate
remained $1.3055.

Chairman Krietor asked what years the new tax levies represented in terms of actual
assessed valuation.

Mr. Fazio stated the primary levy of $193 million was indexed approximately 12
months earlier and there would be some predictability moving forward because the
market was doing well.

Mr. Fazio discussed the functions of the primary property tax as a general fund
source and secondary property tax as supporting debt service for general obligation




Page 16
bonds. He briefly discussed the city’s current secondary property tax reserve, which
would be discussed in detail during the Jan. 31 meeting.

Chairman Krietor clarified that the committee’s recommendations could not rely
heavily on the existing reserve, which has preserved the city’s financial position in
rough times, as the state would be limiting the amount that could fund the reserve.

Mr. Fazio stated there would be less need for the reserve from a modeling
standpoint. He explained forecasting could be hindered by legislative action absent
major catastrophic situations that impact property values, due to the change with
Proposition 117.

Mr. Fazio gave an overview of a sample property tax bill and emphasized that the
city represented only one piece of the total bill. He presented the results of a study
benchmarking Phoenix’s tax rates against other cities in the region, which showed
the $2.12 combined primary and secondary rate exceeded only by Tempe. He
explained the secondary tax rate alone was one of the lowest and the city share of
median single-family residential was below average.

Chairman Krietor clarified the recommendation would focus on maintaining the
existing tax rate, but people may have to pay more taxes because assessed
valuations are increasing.

Mr. Fazio confirmed.

Committee member Maryann Guerra asked if a scenario would be presented that
assumed a market crash and decrease in property values.

Mr. Fazio stated this presentation focused on the baseline scenario, based on what
will most likely occur. He added Ms. Gitkin would discuss scenarios to look at
contingencies and explained a downturn or housing bubble over the long term would
tend to be smoothed out.

Chairman Krietor agreed that this is a question the committee would need to
understand to make their recommendation and acknowledged that a smaller bond
issue would attempt to mitigate the impacts of a downturn.

Mr. Fazio gave an overview of the baseline assumptions for the assessed valuation
forecast and discussed what had been presented two years earlier and adjustments
since then. He presented the staff net assessed valuation model reflecting long-term
growth and indicated stress scenarios would be discussed at the Jan. 31 meeting.




Page 17
Chairman Krietor clarified the modeled growth did not only reflect what had been
built and was appreciating, but also assumed new construction over time.

Mr. Fazio confirmed the model accounted for new construction, appreciation, and
new inventory each year. He mentioned one of the stress scenarios considered a
bubble in new construction activity.

Chairman Krietor asked if massive commercial projects such as the Taiwan
Semiconductor Manufacturing Company development, with tax abatements, would
be factored into the calculations.

Mr. Fazio stated the project would not be captured in fiscal year 2022, but it had
been factored into long-term new construction figures.

Mr. Fazio explained the statutorily required informational pamphlet accompanying a
general obligation bond election must ensure five-year appreciation would not
exceed the 10-year average.

Committee member Hope Levin asked if the pamphlet could be updated to reflect
changes in growth, since the vision of the program would be smaller, more frequent
bond sales.

Mr. Fazio stated each bond election would include its own assessment and
assumptions.

Ms. Gitkin confirmed the four proposed bond programs would each have unique
pamphlets to reflect new financial impacts.

Committee member Levin recalled a recent Madison School District bond override
and referred to the sample tax bill, which showed the city as only one part of the total
bill. She asked if there was historic knowledge of how appealing a municipal bond
program would be to voters when they have other bond proposals presented to
them.

Mr. Fazio stated there was no current data on other jurisdictions’ bond elections
presented to voters concurrently with a municipal bond election.

Chairman Krietor mentioned there had not been a failed bond issue in the time he
has lived in Phoenix, aside from a transit sales tax bond issue.

Committee member Ron Butler expressed support for the effort and appreciation for
the property tax tutorial to get back up to speed. He stated he would be interested to
see how inflation may impact the timing of the bond issuance.




Page 18
Ms. Gitkin stated the presentation for the following week would show modeling and
assumptions based on 5% interest rate loans to account for unpredictability. She
explained there had been historically low rates and inflation is taking time to catch up
to the market, particularly with municipal bonds.

Committee member Guerra asked for clarification on the Madison School District
and its effect on the Phoenix bond election.

Mr. Fazio clarified that on a property-by-property basis, there could be various
school districts involved, each with their own bond elections or overrides. He
confirmed those would be in addition to a Phoenix GO bond election.

Chairman Krietor thanked Mr. Fazio for his presentation and stressed the
importance of the committee’s knowledge of commercial and residential growth, and
forthcoming models and forecasting from staff, to arrive at a final recommendation.

7. FUTURE AGENDA ITEMS
Chairman Krietor discussed the items currently planned for the next meeting:
• Summary of Outstanding GO Bond Debt Service
• Constraints and Considerations for a New GO Bond Program
• New GO Bond Program Scenario Assumptions
• New GO Bond Program Scenarios
Chairman Krietor asked if there were other items the committee would like to
include. Committee members had no additions.


8. ADJOURNMENT
Chairman Krietor adjourned the meeting at 12:10 p.m.




Page 19
Public Safety Bond
Fiscal Capacity Committee

January 24, 2022




Agenda
1. Introductory Remarks
2. Approval of Minutes
3. Staff Update
4. Committee Title
5. Property Tax Overview




Page 20
Planned Meetings
Meeting Schedule (11 am):
Monday, January 24
Monday, January 31
Monday, February 7
Tuesday, February 15




Tentative Schedule
JAN/FEB 2022 – Fiscal Capacity Committee

MAR 2022 – Fiscal Capacity Report to Council

APR 2022 – Community Budget Hearings

MAY 2022 – Council Appoint Bond Committee

AUG 2022 – Start Bond Committee Work

DEC 2022 – Bond Committee Recommendations

NOV 2023 – Election




Page 21
Property Tax




Property Tax
Ad Valorem tax on real & personal property
Property valued by County Assessor & DOR
Primary & secondary rates established
Assessed and collected by County Treasurer
Distributed to taxing jurisdictions




Page 22
Formula
Property Tax Levy =
Net Assessed Value/100
x
Tax Rate




City assumes 1% of its levy is uncollected




Secondary NAV
Historically calculated off of market value
November 2012: Proposition 117
Now calculated off of limited property value
Change first reflected in FY 2016




Page 23
NAV = LPV x Ratio
Limited Property Value =
lesser of Full Cash (Market) Value or
Prior Year Limited Property Value + 5%




Phoenix’s current FCV > LPV by 38% 47%




NAV = LPV x Ratio
Established by State Statute
Residential: 10%
Commercial: 18% => 16%
Agricultural/Vacant: 16%



City assumes no change to these ratios
Legislation reducing commercial to 16%




Page 24
Levy = NAV x Rate
Established by taxing jurisdictions
Governed by legal limits




Primary Rate: $1.3055
Primary Levy: $173 million $193 million
Secondary Rate: $0.8241 $0.8141
Secondary Levy: $109 million $120 million




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Primary Property Tax
General Fund source
Ceilings:
Constitutional 2% Levy Limit
City Charter $1.00 plus Library Levy
Current Rate: $1.3055
Current Constitutional Limit: $1.3447 $1.3061




Secondary Property Tax
Debt service for general obligation bonds
Ceilings (2017 HB 2011):
Annual debt service costs
Reserve <= 10% by end of FY 2023




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Sample Tax Bill




+5%


+8%




Sample Tax Bill




Page 27
Sample Tax Bill




Sample Tax Bill



City Portion (this taxpayer):
($154 + $96)/($1,187) = 21%

City Portion (average for all taxpayers):
16%




Page 28
FY 2022 Tax Rates
Primary Secondary Combined


Tempe 0.8852 1.4816 2.3668

Phoenix 1.3055 0.8141 2.1196

Glendale 0.3848 1.3409 1.7257

Mesa - 1.1319 1.1319

Chandler 0.2426 0.8700 1.1126

Scottsdale 0.5039 0.5042 1.0081

Gilbert - 0.9895 0.9895




FY 2022 Tax Rates
Primary Secondary Combined


Tempe 0.8852 1.4816 2.3668

Glendale 0.3848 1.3409 1.7257

Mesa - 1.1319 1.1319

Gilbert - 0.9895 0.9895

Chandler 0.2426 0.8700 1.1126

Phoenix 1.3055 0.8141 2.1196

Scottsdale 0.5039 0.5042 1.0081




Page 29
FY 2022 Tax Bills
Median SFR
(City Share Only)

Tempe $397

Scottsdale $344
Average: $258
Phoenix $251

Chandler $226

Gilbert $216

Glendale $204

Mesa $170




Assessed Valuation
Forecast



Page 30
Staff Assumptions
Assessment ratios held constant
Assessment ratios held constant after FY 2026
3.5% 2.0% appreciation through FY 2026
3.0% appreciation thereafter
Annual new construction growth of 2.0%
12/2019 FY 2022 Projected NAV: $14.84B
Actual FY 2022 NAV: $14.80B (-0.3%)




Staff NAV Model
30,000,000,000


25,000,000,000


20,000,000,000


15,000,000,000


10,000,000,000


5,000,000,000


-




NAV NAV per historical calculation




Page 31
Informational Pamphlet
Required by statute
Growth years 1-5 <= prior 10-year average
0% ~5% growth assumption
Growth years 6+ <= 20% of prior 10-year avg.
0% ~1% growth assumption

Informational pamphlet must reflect long
range assumptions that staff considers
unlikely




Pamphlet NAV Max
30,000,000,000


25,000,000,000


20,000,000,000


15,000,000,000


10,000,000,000


5,000,000,000


-




NAV NAV per historical calculation




Page 32
Next Meeting Agenda

1. Summary of Outstanding GO Bond Debt
Service
2. Constraints and Considerations for a New GO
Bond Program
3. New GO Bond Program Scenario Assumptions
4. New GO Bond Program Scenarios




Questions




Page 33
Fiscal Capacity Committee
Summary Minutes
Monday, Jan. 31, 2022
Virtual Meeting – Via WebEx
Committee Members Present Committee Members Absent
Dave Krietor, Chair
Ron Butler
Deb Fisher*
MaryAnn Guerra
Hope Levin

*Joined at 11:11 a.m.

1. CALL TO ORDER
Chairman Krietor called the Fiscal Capacity Committee to order at 11:04 a.m. with
committee members Ron Butler, Hope Levin and MaryAnn Guerra present.
2. REVIEW AND APPROVAL OF THE JANUARY 24, 2022 MEETING MINUTES
Committee member Hope Levin made a motion to approve the minutes of the Jan.
24, 2022 meeting. Committee member Ronald Butler seconded the motion, which
passed unanimously, 4-0. Committee member Deb Fisher joined the meeting after
the motion passed at 11:11 a.m.
3. FISCAL CAPACITY ANALYSIS
Chairman Krietor introduced Chief Financial Officer Kathleen Gitkin to present on the
fiscal capacity analysis. He explained the basis of the analysis would assume one
$500 million bond issue every five years, for a total of $2 billion over a 20-year
period.

Ms. Gitkin began by sharing the history of the city’s general obligation (GO) bond
programs beginning in 1957, with 12 voter-approved programs totaling $4.6 billion
since then. She indicated the last GO bond program was in 2006 and the last new
money bonds issued associated with the authorization were in 2012.

Chairman Krietor reiterated that voters approved the last bond program in 2006, but
the last issue that went to market was in 2012. He asked if staff structured the sales
of individual bonds based on the demand generated by the approved projects, after
voters approved the bond issue.

Ms. Gitkin confirmed that after voter authorization is received, staff considers project
planning timeframes, procurement needs, and cash flows before there are capital




Page 34
expenditures and bond issuances. She added staff would not want to issue bonds
too soon and have unused cash.

Ms. Gitkin discussed the legal and statutory requirements and restrictions for GO
bonds. She explained the city could only issue bonds for major infrastructure and
capital expenditures with a long useful life, to ensure the debt could be repaid before
the end of its useful life. She added that bond sales could be adjusted to coincide
with the life of the asset.

Ms. Gitkin explained cost of issuance could also be paid, including bond counsel
fees, financial advisor fees, underwriter fees, and staff cost specifically related to
sale of the bonds.

Ms. Gitkin cautioned against using tax-exempt bond proceeds for private activity or
loans, using a Family Advocacy Center and a neighborhood clean-up loan program
as examples of activities that would not be permissible by the IRS as tax-exempt.
She explained a city-owned Family Advocacy Center operated by various non-profits
to offer services to the public, while serving the community and the city’s goals,
would be considered private activity and no longer a public use. She added that
there would be a small allocation for private activity and stated that if a program was
a priority for the city, taxable bonds could be issued, which had been done in the
past but could be more costly.

Ms. Gitkin stated action could only be taken based on what was written in the
proposition that would go before voters. She explained the proposition should be
written in a manner that strikes a balance between being clear for voters to
understand and flexible for how bond proceeds could be used. She cautioned
against omitting necessary language, using land acquisition for a municipal building
as an example where the language should clearly state that land would be
purchased, and a building constructed.

Chairman Krietor wanted to know how taxable or tax-exempt would be determined in
a situation where the city hypothetically planned to purchase the old Channel 12
headquarters and renovate it for use by the Southwest Center for HIV.

Ms. Gitkin stated the process the Budget and Research Department was
undertaking, asking departments to submit recommended projects early, provides
ample opportunity to get tax opinions early and discuss with departments.

Ms. Gitkin discussed the existing GO bonds, currently outstanding in the principal
amount of $919 million. She pointed out the period from 2022 through 2027 had
substantial debt service. Total GO bond debt service is fully paid off in 2034. She




Page 35
stressed the importance of being mindful of the maximum annual debt service
(MADS), the peak debt service, currently at $155 million in 2026.

Ms. Gitkin discussed two aspects that would impact the look of the debt stack, the
GO bond reserve and GO bond refunding opportunities.

Ms. Gitkin reiterated the impact of House Bill (HB) 2011 on the GO bond reserve,
which would require the city to deplete the reserve to less than or equal to 10% of
annual debt service by the end of fiscal year 2023. She discussed the history of the
reserve and explained a significant amount had been used to pay down debt service
from 2011 through 2016. She explained that by the end of 2022, $73 million would
remain in the reserve, which would be approximately $60 million higher than what
would be required by HB 2011. She detailed staff’s proposal to use approximately
$54 million of the GO Bond Reserve balance to pay off $58 million in debt service,
which includes interest, to drive down the MADS from $155 million to $146 million.

Ms. Gitkin stated there were approximately $280 million outstanding in 2012 GO
bonds, 30% of all city bonds, which could potentially be refunded for savings on July
1, 2022, and result in savings of approximately $15 million over the life of the GO
bonds. She detailed staff’s proposal to take advantage of refunding to target savings
early and increase capacity for a new GO bond program in 2023.

Chairman Krietor clarified there would be $54 million in the reserve and the
refunding would provide $15 million in savings, to give capacity to do additional
bonds, which would be almost $70 million.

Ms. Gitkin confirmed taking these actions would create additional capacity for
another bond program and could also help avoid a property tax rate increase in
2026, the peak year, even if a bond program is not done.

Committee member Hope Levin asked what the interest rate had been on the
previous bonds, and how time passing from bond approval to issuance could impact
the rate.

Ms. Gitkin stated there would always inherently be savings in a bond sale because
the city issues debt with a 10-year par call. She explained this meant the city could
call or pay off the bonds without premium or penalty in 10 years, even if they would
not be set to mature for another five to 10 years. She stated most likely in 2012, the
city paid around 4 to 5% yield, which would be 1.8% right now for a 20-year bond.
She emphasized the new refunding bonds would not go out beyond 2034 and the
city would not extend the life of the bonds.




Page 36
Finance Debt Manager Andrew Durket confirmed yields to 2034, the longest date of
maturity, was 3.75%, so the 1.8% to 2% yield would provide plenty of savings.

Committee member Maryann Guerra asked if paid down bond funds could be
reused, or if it would only serve to improve capacity for future bonds.

Ms. Gitkin stated legislation had been passed three to four years ago that prevented
the city from reusing authorization and the city could be penalized.

Ms. Gitkin provided an overview of the debt stack including the reserve payoff and
refunding opportunity, which would decrease the MADS to $135 million and build
approximately $20 million in capacity in the front end. She explained the scenarios
moving forward would assume both actions were taken, and staff would be going to

Ms. Gitkin discussed bond ratings and explained the city would take them into
consideration but not make decisions based on the rating agencies’ methodologies.
She explained that we do not want any increase to MADS or any negative impact to
fixed cost burden, and affordability of additional operating expenses would be
important.

Chairman Krietor asked if $155 million had been based on the rating agencies’ view
and wanted to know if that amount was the pain threshold.

Ms. Gitkin confirmed that was correct and the amount reflected the bond rating
perspective.

Ms. Gitkin discussed another major consideration was property tax affordability and
reiterated the intent to ensure capacity for $500 million of projects every five years,
with no increase to the current total property tax rate or the secondary property tax
rate.

Ms. Gitkin gave an overview of the final considerations related to legislative and
administrative mandates, including reduction of the GO reserve fund, growth rate
assumptions, the timing of infrastructure needs, and other legislative changes.

Ms. Gitkin discussed fixed cost burden as an impact to credit ratings and the
differences between the rating agencies’ methodologies. She explained Moody’s
considered pension cost, other post-employment benefits, and debt service fixed
costs, and added a disclaimer that this did not represent a generally accepted
standard and Finance did not believe it was an adequate methodology to measure
financial stability.




Page 37
Ms. Gitkin stated the city was rated AA+, stable outlook, with S&P; AAA, stable
outlook, with Fitch; and Aa1, negative outlook, with Moody’s. She explained the city
had been on a negative outlook with Moody’s since 2016, in preparation to
downgrade, primarily because of the fixed cost burden caused by pension costs.
She explained the city has paid its liabilities and more on pension costs than what
has been required, and stressed the importance of maintaining the debt below $155
million because Moody’s is watching those pension costs and the city would not
want to do anything related to debt to drive numbers up.

Committee member Guerra asked if the Moody’s rating had always been AA1.

Ms. Gitkin confirmed the city has long been rated Aa1 with Moody’s, and the
recession put the city on a negative outlook due to economic impacts. She added
S&P previously rated the city as AAA, but changed their rating methodology in 2013
to assess the city’s economy score based on the state’s economy score.

Chairman Krietor asked if exceeding $155 million threshold would result in a
downgrade.

Ms. Gitkin emphasized the significance of rising pension costs, specifically Public
Safety Personnel Retirement System (PSPRS) costs, risking a downgrade. She
explained that raising debt service costs above current levels could increase
potential credit rating concerns which the city would not want to be the reason
behind a downgrade.

Chairman Krietor acknowledged the difficulty of working around the state’s
requirements for PSPRS.

City Manager Jeffrey Barton confirmed the bigger concern with Moody’s was the
public safety pension costs and the limitations those presented on the city’s flexibility
from a general fund perspective. He mentioned the rating methodology around fixed
cost burden did not account for the city’s provision of other key public services.

Ms. Gitkin explained the rating methodology was called “treading water” and
assumed a rate of return of 3%, while both the public safety and civilian plans were
over 7%.

Chairman Krietor asked if the interest rate differential would be material if the city
were to be downgraded.

Ms. Gitkin confirmed it would not have a major cost difference, as the city already
has a split credit rating and would likely be priced in the AA range, which is what the
GO bonds currently price at.




Page 38
Committee member Levin asked if residents would be swayed by bond ratings.

Ms. Gitkin did not know how voters would react to the credit rating, but she
anticipated they would react similarly to bondholders, indifferent.

Mr. Barton agreed and added he believed there would be a larger political reaction
to the credit ratings.

Budget and Research Director Amber Williamson gave an overview of challenges
that could put pressure on the general fund, specifically challenges with forecasting
revenue and other operating budget needs. She highlighted the city’s strategic
approach with CARES and ARPA funding and the city’s nationwide lead in job
growth, net migration, and diversification of the economy over the last 20 years. She
stated the general fund was in a good position and forecasted a surplus but did not
anticipate it would continue this way as COVID-related federal aid works its way out
of the system.

Ms. Williamson emphasized the importance of being mindful of increasing net new
operating costs because of other outstanding operating budget needs, including
employee compensation increases, classification and compensation study impacts,
PSPRS costs, information technology needs, health insurance cost increases,
appropriate funding for trust fund reserves, and fleet replacements. She stated it
would be important to have resources available to meet those needs as well as City
Council and community demands for more programs and services, including
affordable housing, homelessness, and climate initiatives.

Ms. Gitkin reminded the committee of the three bond program options, and their
associated property tax rate impact, that were discussed in 2020. She shared the
final discussion with the committee centered on the impact of timing on bond sales
and the committee recommended Option 1, a $450 million program, or Option 2, a
$615 million program. She added the committee’s further recommendation that the
city postpone a bond election to Nov. 2021.

Ms. Gitkin discussed the city’s financial capacity for three new scenarios:
 No new GO Bond Program
 Four GO Bond Programs – No change to Total Rate
 Four GO Bond Programs – No increase to Total or Secondary Rate

Ms. Gitkin began by discussing the scenario in which there would be no new
program, which showed no tax rate increases above the current fiscal year 2022 rate
with the MADS at $135 million. She detailed the scenario modeling assumptions,




Page 39
which included an annual coupon payment of 5% on all new bond sales which would
build a significant cushion should any unforeseen fluctuations in the market arise.


Ms. Gitkin discussed the timing of the proposed bond programs and sales, which
laid out a plan to put $500 million bond programs before voters in 2023, 2028, 2033,
and 2038, and split bond sales into two $250 million tranches between each
election.

Chairman Krietor recalled the city had done a $2 billion bond program over the last
20 years, but there had been no strategic approach. He expressed appreciation for
the planned bond program schedule as it demonstrated a more strategic approach.

Ms. Gitkin presented the scenario of four new bond programs resulting in no
increase to the total rate, which showed increases in the secondary rate with a
MADS of $157 million. She stated this program would be achievable and the MADS
would increase slightly above $155 million in 2027 but go back down.

Ms. Gitkin continued by discussing the scenario of four new bond programs which
would result in no increase to the secondary or total rate with a MADS of $157
million. She explained this scenario would also be feasible, relying on the depletion
of the reserve fund to $4.4 million in the first five years of peak debt service. She
explained if that were to happen, there would be capacity after 2027 to start
rebuilding the reserve balance to 10% of annual debt service.

Chairman Krietor asked what risks would be involved in depleting the reserve
further.

Ms. Gitkin stated the main risk would be flexibility to address unforeseen changes in
the market. She explained that if the interest rates skyrocket, net assessed valuation
drops, or a legislative mandate occurs, the city could use the GO reserve fund to
balance rather than increase property tax rates.

Ms. Gitkin reaffirmed that the city could afford a $500 million bond program but
presented alternative scenarios with a coupon rate of 6% or a $600 million program.
She explained these scenarios would have no increases to the total rate but would
increase the secondary rate and deplete the reserve fund to $5.9 million. She added
that an additional $5.6 million in other resources would be needed to maintain the
current secondary rate, which the city may not be able to afford.

Chairman Krietor clarified the amount of the bond programs after the first could
increase beyond $500 million.




Page 40
Mr. Barton explained it would depend on other resources the city would come to
bear in this same window. He stressed the importance of being strategic and
practical in creating a framework that could deliver for the City Council and the
community.
Chairman Krietor invited his fellow committee members to weigh in on the proposed
scenarios.

Committee member Ron Butler stated the first bond program seemed capped at
$500 million and graduated increases could occur in the long term. He expressed
interest in how the $500 million would be used.

Committee member Guerra wanted to understand the community’s critical needs to
determine the level of risk that would be taken financially.

Chairman Krietor asked what steps would need to be taken to get to a bond election
in 2023.

Ms. Williamson provided an overview of the timeline for the next two years, including
formal action by City Council, the solicitation of community input on the bond
program, developing and refining the total scope of projects, and working with the
City Clerk to get the bond program on the ballot.

Committee member Butler asked if it would be the committee’s recommendation on
the total amount of the bond program, the timing of the program, and direction on tax
rate impacts.

Mr. Barton stated he would defer to Chairman Krietor but explained staff’s
perspective would be to have no increase, or a minimal increase, given the political
appetite for tax increases.

Chairman Krietor recommended staff return to the committee with a report that
outlines the two scenarios with a $500 million program and a clear strategic
pathway. He stated during the next meeting, the committee could discuss those two
scenarios to develop a recommendation for City Council and that the small increase
above MADS for one year should be addressed.

Committee member Levin asked if the recommendation would become a strategic
plan for the City Council, and whether it provides them with flexibility in 2030 and for
future programs.

Mr. Barton explained it would be like a 5-year capital improvement program, where
the City Council would adopt the 2023 bond program as well as a strategic plan for




Page 41
the next 20 years, which would allow flexibility for future councils to make decisions
depending on market conditions.

Committee member Guerra asked if the committee should consider any negative
impacts using the GO reserve fund as proposed in the scenarios might have on
bond ratings.

Ms. Gitkin stated the rating agencies are familiar with this and there would be no
anticipated impact to ratings that should be considered.

Chairman Krietor asked if a bond issuance could be delayed, given any catastrophic
change in the market, since the bonds would be sold in two tranches.

Ms. Gitkin confirmed that this is possible and was done historically with the recent
water bond sale.

Chairman Krietor expressed his hope that the committee would be recommending a
structure that would avoid that situation.

Ms. Gitkin gave an overview of the legislative scenario and explained that the
legislation dictates the content of the pamphlet and how the numbers would appear.
She discussed the assumptions associated with growth in net-assessed value (NAV)
and how the assumed growth rate has increased since the committee first convened
in 2020. She explained that Deputy Budget and Research Director Chris Fazio had
looked at every potential scenario and this scenario seemed unlikely. She added
that the primary property tax levy would be impacted.

Ms. Gitkin went on to discuss the legislative requirement scenario and pointed out
that 2048 is when it would start to compound. She explained the city would only
have to show the first program in the pamphlet and it would not have a significant
impact on the city’s ability to do a bond program. She noted that a rate increase of
$0.13 may be a dramatic change to voters that would have to be noted in the
pamphlet.

Chairman Krietor clarified that that change would be in a future pamphlet.

Ms. Gitkin confirmed it would be in a pamphlet far into the future. She reaffirmed that
for the first five years there would be no impact.

Ms. Gitkin presented the stress scenario and discussed the assumptions, including
that the legislature continues incremental cuts to commercial assessment ratio to
10%, then appreciation of 2.5%. She described additional assumptions, such as new
construction slowing in the first year after the election, and that the primary rate is




Page 42
held constant unless there is a reduction required by the constitutional levy limit. She
explained that the scenario modeled an immediate impact in the first five years, but
not as dramatic as the legislative requirement scenario.

Ms. Gitkin explained the total rate would increase in this scenario in fiscal year 2027
by approximately $.04 and, after depleting the bond reserve, the city would still need
$3.2 million to fund with other sources. She stated there were things the city could
do now to alleviate that, such as another refunding opportunity and use of the
cushion built into the assumptions with 5% couponing. She stated that under an
extreme stress scenario, a program would be manageable.

Mr. Fazio reminded the committee that there was a window into the future with
property taxes, as there was a lag between market conditions and what is seen.

Chairman Krietor acknowledged special attention should be paid to this stress
scenario. He recalled commercial and industrial assessment ratios had been 2.5
times higher than residential.

Mr. Fazio stated commercial is currently at 18% and would be reduced to 16%. He
added there is a bill currently floating to take off two more half-percents.

Committee member Levin clarified if this impacts other cities in the county.

Mr. Fazio confirmed this has a statewide impact.

Chairman Krietor commended staff on their presentation, which built on the property
tax overview from the previous meeting.

Committee member Butler echoed Chairman Krietor’s comments and commended
staff on the presentation.

4. FUTURE AGENDA ITEMS
Chairman Krietor asked staff to return to the committee at the Feb. 7 meeting with a
draft report including the two scenarios discussed and a recommendation to
strategically position the city for recurring bond issues every five years.

Chairman Krietor asked if there were other items the committee would like to
include. Committee members had no additions.

5. ADJOURNMENT
Chairman Krietor adjourned the meeting at 12:47 p.m.




Page 43
Bond Program
Fiscal Capacity
Committee




January 31, 2022




Overview

Existing GO Bond Program


GO Bond Program Considerations & Constraints


GO Bond Program Capacity As Presented in 2020


2023 GO Bond Program Scenarios


2023 GO Bond Program Stress Scenario





Page 44
Existing GO Bond Program








Existing GO Bond Program

The City has a long history of issuing GO bonds
• Phoenix voters have approved 12 bond
programs since 1957, totaling $4.6 billion
• 2006 GO Bond Program was the last
• Last new money GO Bonds were issued in 2012
• GO bonds are issued for major capital
infrastructure throughout the City with very
finite legal restrictions




Page 45
Legal Uses of Bond Proceeds
• Capital projects (major infrastructure)
─ No operating costs or working capital
─ Long useful life
• Cost of issuance
─ Bond Counsel
─ Financial Advisor
─ Underwriter
• NO private activity or loans, unless bonds are
issued taxable
• Only what is written in the propositions






Existing GO Bond Debt Service
Annual GO Bond Debt Service (principal and interest) for
$919 Million Principal Amount of Currently Outstanding GO Bonds
$160

Millions $140

$120 • Debt service payments are made using
Secondary Property Tax Revenues
$100 • Maximum annual debt service (MADS)
is $155 million
$80

$60

$40

$20

$0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Principal Interest




Page 46
GO Bond Reserve
State Law
HB 2011 ‐ Existing general obligation reserve fund balance must be
<= 10% of annual debt service by end of FY 2023

$350 GO Bond Reserve Fund

$300 The City plans to use approximately $54
$250 million of the GO Bond Reserve balance

Millions
to pay‐off $58 million in debt service
$200

$150

$100

$50

$0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023







Existing GO Bond Debt Service
After Required Pay‐Off
Annual GO Bond Debt Service (principal and interest) for
$867 Million Principal Amount of Bonds Outstanding After Required Pay‐Off
$160

Millions $140

$120 Decreases MADS from $155 million to
$146 million
$100

$80

$60

$40

$20

$0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
GO Debt Service Pay‐Off




Page 47
GO Bond Refunding Opportunity
• The City has $280 million outstanding (30% of total) in 2012 GO Bonds
• The 2012 GO Bonds can be refunded for savings on 7‐1‐2022
• Total savings of approximately $15 million over the life of the GO Bonds

2012 GO Bonds Debt Service
$30

Millions
$25
$20
$15
$10
$5
$0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
2012 GO Bonds Savings from Refunding





Existing GO Bond Debt Service
After Pay‐Off & Refunding
Annual GO Bond Debt Service (principal and interest) for $843 Million
Principal Amount of Bonds Outstanding After Pay‐Off & Refunding
$160

Millions $140

$120 Decreases MADS from $155 million to
$135 million
$100

$80

$60

$40

$20

$0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
GO Bond Debt Service Pay‐Off + Refunding




Page 48
GO Bond Program Considerations &
Constraints








Bond Program
Capacity Considerations
• No increase to peak debt service, approximately $155 million
• No negative impact to fixed cost burden
Bond • Affordability of additional operating expenses
Ratings


• Capacity for $500 million of projects every 5 years
• No increase to current total property tax rate of $2.1196
Property Tax
Affordability
• No increase to secondary property tax rate of $0.8141



• Reduction of the GO Reserve Fund requiring pay‐off of debt
• Growth rate assumption in election pamphlet
Legislative
& Admin
• Timing of infrastructure needs (special initiatives)
Mandates • Other legislative changes (ratio or debt limitation changes)





Page 49
Fixed Cost Burden

Fixed Costs as a Percent of Operating Revenues
35.0%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%
2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 2025‐26 2026‐27
Forecast Forecast Estimated Estimated Estimated Estimated

Pension Other Post Employment Benefits Debt Service New GO Bond Program

Phoenix City Charter requires full payment of annual pension costs 12




Other Operating Budget Needs

• Employee Compensation Increases
• Classification & Compensation Study Impacts
• Public Safety Pension (PSPRS) Costs
• Information Technology Needs
• Health Insurance Cost Increases
• Trust Fund Reserve Levels
• Fleet Replacements
• Council and community demands for more
programs and services





Page 50
GO Bond Program Capacity
As Presented in 2020








Summary of 2020 Presentation

Option 1 $200 million FY 2022 6‐year interest only
$450 Million* $250 million FY 2024 4‐year interest only

Option 2 $200 million FY 2022 6‐year interest only
$615 Million* $415 million FY 2024 4‐year interest only

Option 3 $200 million FY 2023 5‐year interest only
$1.1 Billion* $900 million FY 2028 no interest only
*Assumed interest rates: FY 2022 – 4%
FY 2024 – 5%


• The final discussion with the committee centered on the impact of timing on
the bond sales
• The committee recommended Option 1 or Option 2
• The committee also recommended that the City postpone a bond election for
a year, November 2021 rather than November 2020




Page 51
Total Property Tax Rates from
2020 Presentation
$2.19
$2.1296
Current Rate
$1.99



$1.79



$1.59



$1.39



$1.19



$0.99



FY 2020 Rate No New Debt Scenario #1 Scenario #2 Scenario #3






2023 GO Bond Program Capacity

• No new GO Bond Program
• Four GO Bond Programs ‐ No
change to Total Rate
• Four GO Bond Programs ‐ No
increase to Total or
Secondary Rate








Page 52
No New GO Bond Program

• GO Reserve Fund Pay-off Secondary Fiscal
by 7/1/23 Total Rate
Rate Year
No Increases
• Refunding by 7/1/22 Above Current $2.1196 $0.8141 FY 2023
FY 2022 Rate $2.1130 $0.8141 FY 2024
$2.0447 $0.7521 FY 2025

Max Annual Debt Service $135 million FY 2023

Total Property Tax Rate
2.1196 2.1196 2.1130 2.0447 2.0387 1.9826
1.4927
1.4323 1.4239


FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030

Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed Values (NAV).
There is no guarantee that NAV forecast will be achieved.




Scenario Modeling Assumptions

• Four separate $500 million GO Bond Programs, every 5‐years

• Use of GO Bond Reserve Fund to pay‐off a portion of bonds

• Refunding of the GO Bonds, Series 2012A and 2012C

• Refunding assumes current market interest rates plus 50bps (.50%)

• First bond sale is interest only for three‐years; All others are interest
only for 2‐years

• 25‐year amortization for all bond sales

Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed Values (NAV).
There is no guarantee that NAV forecast will be achieved.







Page 53
Scenario Modeling Assumptions
(continued)
• Annual coupon payment of 5.0% on all new bond sales

City Sells $100,000 Bonds at a price of 120
and 5% Coupon with a ten‐year maturity


City Gets $120,000 from Bondholder



Bondholder Receives 5% per year for 10
years + $100,000 at maturity ($150,000)

The difference of $30,000 is the City’s
actual cost or yield, 3%

Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed
Values (NAV). There is no guarantee that NAV forecast will be achieved.




Timing of Bond Programs & Sales


$500 Million $500 Million $500 Million $500 Million
Bond Program Bond Program Bond Program Bond Program
to Voters to Voters to Voters to Voters
November 2023 November 2028 November 2033 November 2038

1 2 3 4




1 2 3 4
$250 Million $250 Million $250 Million $250 Million
Bond Sale Bond Sale Bond Sale Bond Sale
FY 2026 FY 2031 FY 2036 FY 2041
1 2 3 4
$250 Million $250 Million $250 Million $250 Million
Bond Sale Bond Sale Bond Sale Bond Sale
FY 2024 FY 2029 FY 2034 FY 2039







Page 54
Four GO Bond Programs – No Increase
to Total Rate
Secondary
Total Rate Fiscal Year
Rate
$2.1196 $0.8141 FY 2023
Increases in $2.1130 $0.8141 FY 2024
Secondary Rate
$2.1130 $0.8204 FY 2025
$2.1130 $0.8264 FY 2026
$2.1130 $0.8351 FY 2027

Max Annual Debt Service $157 million FY 2027

Total Property Tax Rate
2.0411
1.9970 1.9553
2.1196 2.1196 2.1130 2.1130 2.1130 2.1130




FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030

Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed Values (NAV).
There is no guarantee that NAV forecast will be achieved.




Four GO Bond Programs – No Increase
to Total or Secondary Rate
Secondary
Total Rate Fiscal Year
Rate
GO Bond Reserve $2.1196 $0.8141 FY 2023
No Increases in
Fund balance is Total or Secondary $2.1130 $0.8141 FY 2024
depleted to $4.4 Million Rates $2.1067 $0.8141 FY 2025
$2.1007 $0.8141 FY 2026
$2.0920 $0.8141 FY 2027

Max Annual Debt Service $157 million FY 2027

Total Property Tax Rate
2.0411
1.9970 1.9553
2.1196 2.1196 2.1130 2.1067 2.1007 2.0920




FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed Values (NAV).
There is no guarantee that NAV forecast will be achieved.




Page 55
Total Property Tax Rates

$2.17
Total Total Property Tax Rates

Prope $2.1196
Current Rate
$1.97
rty
$1.77
Tax
$1.57 Rates
$1.37
Rate reflects
primary only
after 2034
$1.17



FY 2022 Rate No New Debt Increase to Secondary No Increase to Secondary





Four GO Bond Programs – 6% Coupon
or $600 Million Program Amount
Secondary
Total Rate Fiscal Year
• GO Bond Reserve Fund is Rate
depleted to $5.9 Million $2.1196 $0.8141 FY 2023
• Maintaining secondary rate No Increases in $2.1196 $0.8207 FY 2024
of $0.8141 would require Total Rate
$2.1196 $0.8270 FY 2025
approximately $5.6 million
in other sources $2.1196 $0.8330 FY 2026
$2.1196 $0.8417 FY 2027

Max Annual Debt Service $162 million FY 2027

Total Property Tax Rate
2.0411
1.9971 1.9551
2.1196 2.1196 2.1196 2.1196 2.1196 2.1196




FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed Values (NAV).
There is no guarantee that NAV forecast will be achieved.




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Legislative Scenario Modeling
Assumptions
• Growth in NAV in the first five‐years cannot exceed the
actual 10‐year average growth rate in NAV, assumed 5%

• Growth in NAV in year six and on cannot exceed 20% of
the 10‐year average growth rate in NAV, assumed 1%

• This assumption is not within the realm of any economic
situation either realized or envisioned

• The primary levy amount is impacted

Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed
Values (NAV). There is no guarantee that NAV forecast will be achieved.






NAV Growth –
Legislative Requirement
Estimated NAV
(in millions)
NAV Growth Fiscal Legislative
5.50% Year Forecast Requirement
5.00% 2024 $16,063 $16,063
4.50%
2025 16,723 16,723
4.00%
3.50% 2026 17,403 17,403
3.00%
2.50%
2027 18,278 18,273
2.00% 2028 19,186 19,180
1.50%
1.00%
2029 20,128 20,122
0.50% 2024
2025 2030 21,106 20,323
2031 22,120 20,527
No Increase to Secondary Legislative Requirement
2032 23,173 20,732
2048 46,392 24,310






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Total Property Tax Rates in Pamphlet –
Legislative Requirement
Secondary Property Tax Rate
Total Property Tax Rates
Fiscal No Legislative Difference $2.25
Year Increase Requirement $2.20
$2.1196
Secondary $2.15 $2.1197
2024 $0.8141 $0.8139 ‐0.0002 $2.10
$2.05
Total Current Rate



0.8141

0.8141
0.8269

0.8239
0.0128

0.0098
$2.00
$1.95
Propert
2027 0.8141 0.8417 0.0276
$1.90
$1.85 y Tax
2028 0.7714 0.7716 0.0002 $1.80

2029 0.7352 0.7354 0.0002
$1.75
$1.70
Rates
2030 0.7010 0.7280 0.0270 $1.65
$1.60
2031 0.6688 0.7207 0.0519 $1.55

2032 0.6317 0.7061 0.0744
FY 2022 Rate No Increase to Secondary Legislative Requirement
2048 0.1511 0.2883 0.1372







Stress Scenario Modeling Assumptions
• Legislature continues incremental cuts to commercial
assessment ratio, until it reaches 10% (to match
residential)
• After that, appreciation is 2.5%
• First year after the election, new construction slows two
years in a row, down to levels similar to construction
during the financial crisis
• Primary rate is held constant, unless a reduction is
required by the constitutional levy limit

Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed
Values (NAV). There is no guarantee that NAV forecast will be achieved.




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NAV Growth –
Stress Scenario
Estimated NAV
(in millions)
NAV Growth Fiscal Stress
5.50% Year Forecast Scenario
5.00%
2024 $16,063 $16,063
4.50%
4.00% 2025 16,723 16,633
3.50%
3.00%
2026 17,403 17,153
2.50% 2027 18,278 17,683
2.00%
1.50% 2028 19,186 18,223
1.00% 2029 20,128 18,775
0.50% 2024
2030 21,106 19,337
No Increase to Secondary Legislative Requirement 2031 22,120 19,910
Stress Scenario 2032 23,173 20,496
2048 46,392 33,449






Total Property Tax Rates
Stress Assumptions
Total Property Tax Rates
$2.25
$2.20 $2.1196 2.1625
$2.15
$2.10
Current Rate
Total
$2.05
$2.00 Propert
$1.95
$1.90
• The increase to total rate in fiscal year
y Tax
$1.85
$1.80
2027 of $0.0429 equates to approximately
$7.6 million Rates
$1.75
$1.70 • Using the $4.4 million remaining in the GO
$1.65 Reserve Fund would leave $3.2 million to
$1.60 fund with other sources
$1.55


FY 2022 Rate No Increase to Secondary Stress Scenario




Page 59
Questions and Additional Discussion








Page 60
Fiscal Capacity Committee
Summary Minutes
Monday, Feb. 7, 2022
Virtual Meeting – Via WebEx
Committee Members Present Committee Members Absent
Dave Krietor, Chair MaryAnn Guerra
Ron Butler
Deb Fisher
Hope Levin

1. CALL TO ORDER
Chair Krietor called the Fiscal Capacity Committee to order at 11:01 a.m. with
committee members Ron Butler, Deb Fisher, and Hope Levin present.
2. REVIEW AND APPROVAL OF THE JANUARY 31, 2022 MEETING MINUTES
Committee member Ron Butler made a motion to approve the minutes of the Jan.
31, 2022 meeting. Committee member Hope Levin seconded the motion, which
passed unanimously, 4-0.
3. FINANCIAL CAPACITY RECOMMENDATIONS
Chair Krietor recommended the committee discuss comments, suggestions, or
changes they had on the drafted recommendation.

Chair Krietor stated the report was reflective of what the committee learned and
what had been discussed in previous meetings. He listed three suggestions based
on his review of the drafted recommendation:
1. List the names of the committee members, dates the committee met, and
attaching staff reports that were reviewed during the reconvened meetings
2. Update the language in the last paragraph of the Program Sizing and Bond
Sale Timing section to state the committee is “strategically positioning” the
city to allow for subsequent bond elections
3. Update the tone of the second paragraph in the Tax Rate Informational
Requirement section to avoid an appearance of negatively characterizing
statutory requirements

Chair Krietor stated the report looked consistent with the analysis and modeling that
had been discussed, and he opened the floor to the rest of the committee for
suggestions or changes.

Committee member Hope Levin referred to the last paragraph in the report and
requested clarification that the report needed to state the tax rates are meeting the
statutory requirements so that could be disclosed to the voters. She stated that the




Page 61
last sentence in the report appeared to be missing information and asked where the
different scenarios would be included.

Chair Krietor asked for suggestions from staff on how the Tax Rate Informational
Requirements section could be revised, based on Committee member Levin’s
feedback.

Mr. Fazio stated the committee could consider moving the Program Sizing and Bond
Sale Timing section to the end of the report, which would have the report end with
the overall recommendations.

Committee member Levin expressed her support for the change, explaining it
provided her with clear direction that the committee was supporting the $500 million
bond program and intended not to increase rates.

Chair Krietor expressed support for moving the section up in the report and
requested the language be tempered so that the City Council would not have the
impression that the committee was demeaning the State’s legislative actions.

Committee member Levin said she was fine with the final sentence in the Tax Rate
Information Requirements section, as it was factual and expressed the impact to the
voters. She suggested updating the sentence before it to state, “The committee
believes the statutory requirements have been analyzed and are used in our
recommendation.”

Chair Krietor stated he was fine with that change. He stated he wanted to remove
“misleading” but would be amenable to leaving in “pessimistic”.

Committee member Levin asked if “pessimistic” was understated and requested
clarification that higher growth rates could not be used.

Chair Krietor explained his understanding of the sentence was that the state statute
was forcing the use of a more pessimistic model, where the tax rate could be
impacted.

Mr. Fazio explained the biggest difference was that the modeled tax rates would be
higher than they otherwise would be, and that the statutorily required model shows
rates higher than what staff believes they would be.

Chief Financial Officer Kathleen Gitkin stated what was being conveyed was that the
modeling for the first five years almost exactly mimics the state requirement, which
was more restrictive than staff’s modeling which had built in a generous cushion.
She explained the thought process was that the committee evaluated the first five




Page 62
years, and the growth assumption was similar and could be endorsed but going out
further would be risky because the difference would be drastic.

Chair Krietor asked if the section could state that the statute would be reflected in
the modeling, and the modeling for the first five years would be consistent with state
requirements, since the committee would only be officially recommending the first
bond program.

Mr. Fazio clarified how the state statute might impact the information that would
appear in the pamphlet, explaining that the rates would reflect higher than what staff
would otherwise show them to be, and modeling would reflect more than five years
of debt service in the pamphlet.

Chair Krietor summarized the feedback received from the committee, including the
recommendation to move the Tax Rate Information Requirements earlier in the
report, and updating language to communicate to the City Council how the state
statute might have an impact.

Committee member Butler agreed with Chair Krietor’s comments and asked if the
Ballot Timing section could be written similarly to the Program Timing and Sizing
section, which stated the committee would be recommending to City Council to
develop a 2023 bond program.

Chair Krietor confirmed that was correct. He asked Committee member Butler if he
was recommending changes to the language which stated, “the Fiscal Capacity
Committee unanimously recommended the City Council develop a $500 million bond
program for a November 2023 election”.

Committee member Butler confirmed that his recommendation would be to make the
language similar to what was written in the first paragraph of the Program Sizing and
Bond Sale Timing section, where it describes the program as one portion of a larger
long-term strategy.

Chair Krietor asked if there were any issues with updating the language.

Mr. Fazio confirmed the change could be made.

Chair Krietor reconfirmed the changes requested in the recommendation would be to
adjust the wording, move the Tax Rate Information Requirements earlier in the
report, and conclude with the recommendation. He asked if one of his fellow
committee members would offer a motion to approve the report.




Page 63
Committee member Levin made a motion to approve the report as finalized and that
the recommendation supports the committee’s desire to see the city of Phoenix offer
a $500 million bond program that would be brought before the voters on the ballot in
November of 2023. Committee member Deb Fisher seconded the motion.

Chair Krietor asked staff if the motion was sufficient.

Budget and Research Director Amber Williamson confirmed the motion was
sufficient and explained that staff would make edits to the document and send the
finalized report to the committee within 48 hours.

Chair Krietor agreed that it would be important to review the revised language and
provide an opportunity for all committee members to see the final recommendation.

The motion passed unanimously, 4-0.

4. FUTURE AGENDA ITEMS
Chair Krietor thanked the committee for returning for this effort. He detailed the next
steps would be to receive a final draft of the recommendation from staff with
language that was consistent with the discussion and motion. He requested
clarification on when the item would go to the City Council for approval.

Budget and Research Director Amber Williamson explained she was awaiting
confirmation from the Mayor’s Office on timing of City Council briefings and
agendas. She stated she would let the Chair know once direction has been received.

Chair Krietor reiterated his appreciation for the work of staff and the committee
members. He canceled the Feb. 15 meeting and requested a motion to adjourn the
meeting.

Committee member Ron Butler made a motion to adjourn. Committee member Deb
Fisher seconded the motion, which was approved unanimously, 4-0.

5. ADJOURNMENT
Chair Krietor adjourned the meeting at 11:25 a.m.




Page 64



Report

American Rescue Plan Act Second Tranche Strategic Plan

This report serves as a follow-up to the City Council discussion during the April 12,
2022 Policy Session that focused on a draft strategic plan for the second tranche of
American Rescue Plan Act (ARPA) funds. This report provides City Council with a
revised strategic plan (Attachment C) based on direction and feedback from the
previous meeting and requests City Council approval. Also included in this report is a
summary detailing how COVID-19 relief dollars have been spent to date.

THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.

Summary
The federal government allocated $396 million to the City of Phoenix in the American
Rescue Plan Act. On June 8, 2021, City Council approved the ARPA Strategic Plan
that allocated $198 million, the first tranche of funds, to various City programs with
nearly 75 percent of allocations targeted in community investment. The City anticipates
receiving the remaining $198 million from the U.S. Treasury within the next few days. It
is important to again allocate ARPA funds to transformational one-time investments
that improve the prospects of impacted residents and address economic and social
disparities that have continued and worsened during the COVID-19 pandemic.

According to federal guidance issued to date, ARPA funds may only be used to cover
costs that are necessary expenditures caused by COVID-19 incurred between March
3, 2021 and Dec. 31, 2024. Per the Final Rule, funds can only be used:

· to respond to the public health emergency with respect to the Coronavirus Disease
2019 (COVID-19) or its negative economic impacts, including assistance to
households, small businesses, and nonprofits, or aid to impacted industries such as
tourism, travel, and hospitality;
· to respond to workers performing essential work during the COVID-19 public health
emergency by providing premium pay to eligible workers of the state, territory, or
tribal government that are performing such essential work, or by providing grants to
eligible employers that have eligible workers who perform essential work;
· for the provision of government services to the extent of the reduction in revenue of



Page 65

such state, territory, or tribal government due to the COVID-19 public health
emergency relative to revenues collected in the most recent full fiscal year of the
state, territory, or tribal government prior to the emergency; or
· to make necessary investments in water, sewer, or broadband infrastructure.

As of May 31, 2021, nearly $85 million of ARPA funds have been spent on various
programs such as COVID-19 testing and vaccinations, resident meal deliveries,
nonprofit and artists grants, bus cards, rental assistance, landlord incentives, business
assistance, and premium pay. Attachment A details each current ARPA program with
its allocation and expenditures as of May 31, 2022. More information can be found on
the City's ARPA website which can be accessed at www.phoenix.gov.

The summary below outlines the City's community investment to date with relief dollars
since the beginning of the pandemic. The file then includes information regarding the
draft second tranche strategic plan for City Council approval.

CRF Review
Established through the 2020 CARES Act, the $150 billion Coronavirus Relief Fund
(CRF) provided payments to local, state, and tribal governments navigating the impact
of the COVID-19 pandemic. The City of Phoenix received $293 million CRF dollars.
Programs included small business assistance, rent/mortgage and utility assistance,
distance learning and Wi-Fi access, food delivery services, personal protective
equipment, and COVID-19 testing. In June 2020, City Council strategically approved
using $143 million to offset public safety salaries to preserve City services. The
transfer of the one-time resources into the General Fund and public safety funds
preserved services that would have been reduced due to the projected negative
impact of COVID-19 on City revenues. This fund was closed with the U.S. Treasury on
July 9, 2021.

ERA Review
The City received $51.1 million in Emergency Rental Assistance (ERA) 1.0 funds and
launched its ERA Program on March 8, 2021. Under ARPA, the U.S. Treasury
allocated $55.3 million in ERA 2.0 funding to the City. The City began disbursement of
ERA 2.0 dollars in October 2021 and in total has distributed $90.7 million in ERA 1.0
and ERA 2.0 dollars. Approximately 12,530 households, totaling over 32,700 residents,
have received ERA services since the inception of the program. At the end of
November 2021, the City requested $35 million in additional ERA 1.0 funding and
received all funding on March 22, 2022.




Page 66

ARPA Second Tranche Strategic Plan
Previously Approved Allocations
previous council meetings. The U.S. Treasury guidance states that ARPA funds can be
used to provide premium pay to essential workers for work performed during the
pandemic. On Dec. 15, 2021, City Council approved up to $29 million of premium pay
for employees from the second tranche. This allocation has since been revised to $22
million after staff analyzed current data and expenditures to date in this program.
Additionally, it was previously discussed that funds are needed to cover the increased
cost of workers' compensation claims and health care claims related to COVID-19. As
of Sept. 30, 2021, the Health Care Benefits Trust has paid over $14 million of COVID-
19 related expenses. The City has also had nearly 800 workers' compensation claims
filed and accepted for COVID-19, resulting in approximately $6 million of incurred
costs. Consistent with U.S. Treasury guidance, staff recommended allocating $28
million to the City's health care trust and workers' compensation program to cover
current and projected COVID-19 related expenses paid by the Health Care Benefits
Trust and the Workers' Compensation Program.

On Feb. 2, 2022, City Council approved $25 million of the second tranche for at-home
COVID-19 tests, personal protective equipment, emergency and community outreach
services, and other expenses related to COVID-19. Of the $25 million, $15 million was
dedicated to community testing and vaccine services and $10 million was dedicated to
the creation of Combating COVID Kits, which include at-home tests, high quality
masks, sanitizing wipes, and informational materials. Since this approval, staff
determined only $4 million was needed for the Combating COVID Kits and the
remaining $6 million was returned to the unallocated portion of the second tranche.

On March 29, 2022, City Council approved the City of Phoenix 2022 Heat Response
Plan, including the allocation of $2.6 million in ARPA funding to support the shelter at
2739 E. Washington St. After further analysis, staff requested City Council approval of
an additional allocation of $13.4 million for capital improvements and ongoing
operational costs that will fund the shelter until Dec. 31, 2024. This approval occurred
at the April 12, 2022 Policy Session.

Lastly, as part of the June 8, 2021, approval of the first tranche, City Council approved
$15 million for the Workforce Training Facility and Training Program. Additionally, on
April 12, 2022, City Council approved an allocation of $3.5 million in the second
tranche of funding for building rehabilitation costs. City Council approved the purchase
of the former Kmart building located at 2526 W. Northern Ave. during the April 20, 2022



Page 67

Strategic Plan Programs
During the April 12, 2022 Policy Session, staff indicated the second tranche allocation
was oversubscribed by approximately $14 million and required feedback to balance
the allocation. Attachment B documents revisions that occurred since the April
meeting. Staff was able to shift four previously proposed ARPA programs to be funded
by Community Development Block Grant funds after a thorough analysis performed by
Neighborhood Services staff. As stated previously, the Premium Pay and Combating
COVID-19 Kits programs' allocations were decreased and are closer to current
expenditures with little to no expectations of exceeding revised allocations. A
remaining $1.8 million was added to the Financial Assistance for Phoenix Refugee and
Asylee Community after community feedback and Council discussion. Attachment C
is the draft strategic plan for the second tranche and includes several focus areas such
as affordable housing and homelessness; workforce and education; neighborhood
sustainability; resilient food system; better health and community outcomes; and city
operations.

Staff is seeking City Council feedback, direction, and possible action on the proposed
strategic plan. Approval of the draft strategic plan will provide staff with an opportunity
to begin contract and agreement development early with hopes of having agreements
ready for approval shortly after Council returns from summer break.

Responsible Department
This item is submitted by City Manager Jeffrey Barton and the City Manager's Office.




Page 68
Attachment A
Program Allocation Expenditures
Phoenix Arts, Business, and Employee Assistance
Workforce Training Facility and Training Program $18,500,000 $22,585

Funds will procure a facility to be used to create workforce training programs to
assist the huge service sector job loss that occurred in this area of the City.

The corridor where this facility is located is consistently a source of violent crime,
prostitution, drug use, trespassing, blight and other quality of life concerns. The ease
of access to this area, along with challenging hotels, motels and apartment
complexes, have created an area where crime can flourish with few impediments.
These challenges were exacerbated by the pandemic as this segment of the
community was hit much harder than others due to density, distrust of government,
and loss of service sector jobs that are the primary source of employment in the
area. This area is also in Qualified Census Tracts. Utilizing the building for workforce
programs will improve the safety and quality of this neighborhood and bring
pandemic- and downturn-resistant employment training to the community.

Workforce Wraparound Tuition/Apprentice Program $10,000,000 -
For this program, $8.5 million will be used to offer free training and education to
residents who have been impacted by the pandemic in the hardest hit industries of
hospitality, food service, retail, and families with young children. The program will
offer short-term and long-term training in fields, such as bioscience, healthcare,
construction, IT, and more (industries negatively impacted by the pandemic).
Participants enrolled in training will receive monthly financial assistance to help with
emergency expenses such as transportation and childcare. Additionally, $1.5 million
will be used to partner with a community-based organization to expand workforce
services with a focus on families with young children. The organization will target
families not enrolled at a Maricopa Community College.

There is strong evidence that vocational training can help dislocated workers regain
employment. As such, participants will self-attest as part of their application their
negative economic COVID-19 impact, such as job and income loss. Supportive
services are also recommended in programs like this and participants will receive
support to limit barriers to accessing training and employment.

Micro and Small Business Assistance Program $8,000,000 $7,844,366
Based on lessons learned from the CRF program, the micro and small business
programs were combined. Award amounts range from $3K to 15k and are based on
the applicant's number of employees. Funds assist businesses that have been
impacted by COVID-19 and/or are located in Qualified Census Tracts. Many
businesses struggled to stay open due to the pandemic and these resources allowed
businesses to stay open, pay employees, and cover operational costs due to the
downturn in business. All eligible businesses completed an online application
process to demonstrate need.

# of applications awarded - 1,146




Page 1
Page 69
Attachment A
Program Allocation Expenditures
Nonprofit Arts & Culture Stabilization Grants $2,750,000 $2,650,000
This program provided two-years of funds to help nonprofit arts and culture
organizations manage their operations, personnel, and programming as they
welcome back audiences, guests, and patrons to their services. The program
awarded recovery grants to eligible organizations of all sizes who demonstrate intent,
commitment, and strategies to sustain well beyond the COVID-19 pandemic.
Organizations must have been in operation prior to March 1, 2020 and had to
complete an online application process to demonstrate need.

# of grants awarded - 87

Small Business Workforce Program $2,000,000 $200,000
This program provides assistance to small businesses (less than 100 employees) in
Phoenix through. PHXb!zConnect, an exclusive-for-Phoenix businesses social
media platform, gives small business owners connections to each other, business
webinars, and city resources. This program also provides grant funding for small
business training programs and/or demonstration projects that benefit the Phoenix
entrepreneurial/small business community

# of small businesses registered on PHXB!ZConnect website - 629

Arts Career Advancement Grants $500,000 $497,184
Grants support working artists or arts workers who have experienced job loss,
indefinitely postponed or canceled events and residencies, or terminated contracts
due to the pandemic. Program funds provides financial assistance, support services
to grow artistic skills, equipment or business operations recovery costs, and
participation in an exhibit, festival, vendor showcase, or artist residency.

# of grants awarded - 208

Artists to Work $1,000,000 $49,550
This program enables the City to contract artists to develop temporary projects,
installations, and performances. These commissions would reactivate a wide range
of public spaces, including parks, trails, community centers, and neighborhood areas
not usually defined or programmed as cultural spaces. Four mural projects have
been created in various parts of the city to date. The Office of Arts and Culture has
devised a program plan for the remainder of funds, including artist project grants, an
artist roster, and artist residencies.

Arts and Culture Internship Program $500,000 -
profit creative industries to hire full-time interns for 400 hours. The internships
provide undergraduate students with meaningful on-the-job training and experience
working in the cultural sector. The program ultimately strengthens Phoenix's
workforce by providing access to high-quality opportunities for college students of all
backgrounds to gain experience, understanding, and transferable skills relevant to
careers in and out of the arts, the creative economy, and engagement in public life.
The program launched the first round in April 2022, and 23 organizations were
awarded funds to hire student workers after July 1. The second round will launch in
spring 2023.


Page 2
Page 70
Attachment A
Program Allocation Expenditures
Personnel/Technical Assistance $250,000 $39,469
Funds allow for continued technical assistance and professional development in
financial sustainability, business practices, and reopening strategies. The Office of
Arts and Culture has conducted several workshops for the field, offered scholarships
to the statewide nonprofit alliance conference, and contracted with consultants to
conduct a comprehensive asset mapping of neighborhoods in Phoenix that have
received limited arts support from the City. An overarching goal of the Office of Arts
and Culture is "to identify and eliminate barriers that have prevented marginalized
groups' full participation from the agency's programs and to strengthen equity,
diversity, and inclusion in the arts and culture sector for all Phoenix residents," the
results from asset mapping the community will clarify what strengths to build from
and what challenges exist in developing and growing arts programming for
community members.

Mitigation and Care for Vulnerable Populations
Homelessness and Mental Health $10,500,000 -
The City has contracted $9 million with Mercy Care to provide outreach, behavioral
health, substance abuse, physical health, and transportation services to residents.
This will include screening for Medicaid (AHCCCS) eligibility and assistance in
applying. Additionally, City Council approved $1.5 million to provide services to those
experiencing homelessness along the Salt River Project (SRP) canals and other
areas throughout the City. This includes increased services for individuals in these
areas as well as pilot project to train and pay individuals experiencing homelessness
to conduct beautification projects and landscaping duties (Phoenix Rescue Mission).

The pandemic exacerbated the national crises of individuals suffering from mental
health disorders and homelessness. Social services were limited in 2020 and the
economic consequences of the pandemic have put more Americans at the risk of
entering homelessness. Several studies claim anxiety and depression and
substance abuse worsened for individuals and were negatively impacted by the gap
in care. This program strives to increase access to services for disproportionately
impacted groups.

Edison Impact Hub $5,000,000 -
Funds will be used to retrofit the historic children’s hospital from a vacant, dilapidated
building to a community services center that will provide medical offices and other
services to the community.

U.S. Vets and Veteran Relief $4,500,000 $61,515
Funds will provide relief for Veterans experiencing or at risk of homelessness during
the pandemic. Many of our vets are more vulnerable to COVID-19 due to living
conditions, age, and chronic health complications. funds could also provide
additional operational support needed by the US Vets Organization to transition into
the property purchased earlier this year with COVID Relief Funds.




Page 3
Page 71
Attachment A
Program Allocation Expenditures
Summer Heat Respite $3,000,000 $2,077,350
A sprung structure was constructed to provide a place of respite during the summer
for individuals experiencing homelessness. The sprung structure has been
completed and provides guests with a place to socially distance due to COVID-19
and include meals, outreach, and other supports. It has evolved from a summer
respite to a space where individuals homelessness can properly social distance and
receive case management services. Funds were also used to provide temporary
shade structures in the summer of 2021.

The pandemic exacerbated the national crises of individuals suffering from
homelessness. Social services and safe, open spaces were limited in 2020 and the
economic consequences of the pandemic have put more Americans at the risk of
entering homelessness. This structure will increase access to services for
disproportionately impacted groups such as those experiencing homelessness as
they will be able to find respite in times of extreme heat and make contact with social
service agencies.

# of individuals who used 2021 temporary shade structures - 13,426

Financial Assistance for Phoenix Refugee and Asylee Community $3,000,000 -
Funds will be used to support nonprofit agencies serving the refugee and asylee
community.

Families enter the United States with little to no resources and need assistance
navigating their new community. The pandemic exacerbated this need as social
services were limited in 2020. The goals of the program are to assist residents who
were disproportionately impacted by COVID-19 with services to find employment,
temporary housing, and resources for medical care.

Memory Café Program $2,000,000 $470
Funds expand the City’s Memory Café program for senior center members and their
caregivers. Memory Cafes stimulate participants through music therapy, art and
memory exercises, and are a key contributor to the Dementia Friendly City initiative.

Area Agency on Aging's Goods2Home $2,000,000 -
Funds continue to support the Area of Agency on Aging’s Goods2HOME program
which the City supported with CARES Act funds in 2020. This program delivers
critical medication, sanitation, and nutrition supplies to low-income, disabled, and
homebound seniors.

Justa Center $1,000,000 -
The City has contracted with Justa Center to provide COVID-19 supportive services
for seniors experiencing homelessness. Funds will expand outreach and
engagement services, non-urgent facility-based care and housing supportive
services such as move-in kits, classes on independent living, weekly check-in visits
from a social worker, assistance with scheduling health care appointments, and
transportation to health care appointments if needed.

# of unduplicated clients served - 622
# of clients who move to a positive housing situation - 21


Page 4
Page 72
Attachment A
Program Allocation Expenditures
Bus Stop Shelters $500,000 -
As part of the T2050 plan, the Public Transit Department has a goal of installing 80
new bus shelters per year. This additional funds will increase this goal to 100
shelters per year over the next two years. Bus shelters play a role in improving
neighborhood livability and sustainability. Bus shelters will be placed in locations
currently without shade and provide heat relief to transit users who reside in
Qualified Census Tracts. This contract begins July 1, 2022.

Transit Heat Relief Program $82,000 $65,662
The goal of this summer program was to provide a 40-foot bus at the Human
Services Campus where individuals experiencing homelessness are located to
prevent heat-related illnesses and deaths among vulnerable populations. The
program ran from July 2021 to September 2021. Total number of individuals on the
bus was tracked by the hour each day. These numbers may have been duplicated
throughout the day.

# of passenger visits - 12,830

Households and Residential Assistance
Family Assistance Resource Program $12,000,000 $12,000,000
This program is providing 1,000 families with children a $1,000 per month financial
assistance grant for 12 months. Eligible households include Emergency Rental
Assistance applicants, residents of City-owned public housing properties, and
Section 8 voucher holders. Selection occurred via a lottery system.

Many households experienced a loss of income or a job loss as a result of the
COVID-19 pandemic. This program's objective is to provide monthly assistance to
help families stay in their homes, maintain current employment, and provide
childcare assistance. All families experienced a negative economic impact as a
result of the pandemic as they previously qualified for emergency rental assistance,
reside in public housing, or receive a Section 8 voucher.




Page 5
Page 73
Attachment A
Program Allocation Expenditures
Utility and Rental Assistance $10,000,000 $5,254,742
This program has three parts: $4 million to serve Phoenix households unable to
meet the Emergency Rental Assistance program (ERA) federal criteria, $5 million to
initiate the Deferred Payment Arrangement Recovery Program, and $1 million for the
Landlord Incentive Program.

One key finding from the City’s ERA Program is that many Phoenix households
above the 80% AMI threshold were also in need of rental and utility assistance as
they experienced a COVID-19 impact, such as loss of employment or loss of
income. Because of the increased demand from this unserved population, the City
determined it would expand the eligibility threshold between 80%-120% AMI and
allow for self-attestation to a negative economic COVID-19 impact. Serving Phoenix
residents who make less than 50% AMI still remains a priority within the ERA
Program.

The Deferred Payment Arrangement Program is serving low-income residents who
are unable to pay their City Service bill, which includes both the water and solid
waste utility. Residents are self-attesting to a negative economic COVID-19 impact
to receive services. Lastly, the Landlord Incentive Program is provide housing
incentives to landlords to accept Section 8 Vouchers from residents. The COVID-19
pandemic made it more difficult for households to achieve housing stability as many
faced the prospects of homelessness. This program aims to increase housing
stability by providing affordable units to residents.

# of total incentives paid to landlords - 445
# of residential accounts assisted with DPA - 6,261
# of households served w/ utility and/or rental assistance - 131

Airport Childcare Facility $5,000,000 $42,223
The department will utilize $4 million to allocate funds to provide vouchers to airport
employees for use at childcare facilities. There is a current assessment of the
Aviation Annex at 3430 E. Sky Harbor Blvd in Terminal 3 to review if it is a potential
site for a childcare facility. Based on the assessment, up to $1 million will be used in
facility upgrades.

Airport employees struggling to pay for childcare services will receive a scholarship
to use at a local childcare facility. Applicants will need to meet the household income
criteria to be considered eligible. Many families struggled to balance both
employment and childcare needs during the pandemic and this program aims to
increase access to child care, increase stability of care, and increase employment
retainment for applicants.

Bus Card Subsidy Program $1,000,000 $669,888
Funds provide subsidies and fare assistance to residents that rely on public
transportation. Various nonprofits have been provided a number of passes to provide
to low-income families in need at a number of locations throughout the City. Passes
are providing access to employment, child care, medical services, grocery stores,
and more.

# of monthly (31-day) passes distributed - 20,291 (of 31,250)


Page 6
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Attachment A
Program Allocation Expenditures
Youth Sports, Recreation, Education, and After-School
Citywide Wireless Network Project and Partnership with Phoenix Union $10,000,000 -
Funds will be used to continue building the community wireless network project that
was initially approved by City Council using the Coronavirus Relief Fund. The project
is a partnership between the City, Phoenix Union High School District, and others.

The goal of the program is to increase academic achievement and instruction for
families residing in the wireless network neighborhoods, which are neighborhoods in
Qualified Census Tracts. Families in this area of the City experienced negative
economic and educational COVID-19 impacts. The lack of access to reliable internet
widened the learning gap for students and made it more difficult for families to
access services, such as school instruction, employment, social services, and more.

Early Childhood Education Expansion $6,000,000 -
Funds will be used to create a program to increase access to early childhood
education for 300 preschool children, ages four to five. The proposed program would
mirror performance standards, quality control, and curriculum of the Head Start
Program while allowing eligible families to be at 200% of poverty level rather than the
Head Start mandated 100% of poverty level.

After-School Grant for Phoenix Schools $2,500,000 -
Funds will be available for school districts and charter schools who commit to
providing free or affordable after-school programs in-line with the Phoenix After-
School Center (PAC) program. Schools are located in Qualified Census Tracts and
will assist students who have experienced negative economic impacts as a result of
the pandemic. The goal of the program is to increase access to school services and
child care services for families.

Wi-Fi Connectivity for Community Centers and Public Housing Properties $2,300,000 $23,044
Funds will provide access to internet connectivity in community centers and public
housing properties to bridge the digital divide that impacted communities during
pandemic. The goal of the programs are to increase access to care and mental
health services, increase financial stability and health outcomes, and improve well-
being and increase social connectedness. Several community centers in Qualified
Census Tract lack Wi-Fi connections for the public and are unavailable to be used
by the public. Additional, public housing tenants lack access to reliable Wi-Fi and this
program seeks to increase this access to achieve the stated outcomes.

StartupPHX @ Burton Barr $1,400,000 -
Funds will be used to provide a broader range of services to the community by
expanding the Hive @ Central. The expansion would include the addition of two
meeting rooms, a graphics station, and technical assistance for small business
owners. For programming, funds would be used to contract with a vendor to provide
the Business Roadmap and MAPA Para Us Negocio series for teens and adults. The
contracted vendor would be responsible for curriculum development and facilitating
all sessions in English and Spanish.




Page 7
Page 75
Attachment A
Program Allocation Expenditures
College Depot Assistance for Students $1,000,000 $56,552
Funds have allowed the Library Department to have additional staff to expand
current College Depot services for high school students. This includes the following:
prepare students for postsecondary access and success, identify students without
access to the technology necessary to be successful in their educational goals,
provide case management to help students overcome barriers, and build
relationships with high school counselors and teachers to identify students in need.
Staff is also assisting with the circulation of laptops and hotspots to provide students
access to reliable internet services.

Abrupt shifts to remote learning over the past two school years have affected
students, negatively impacting their social, emotional, and mental well-being and
academic achievement. The preexisting achievement and learning gaps widened as
a result of the pandemic. This program aims provide students a supportive and
learning environment to access services to close these gaps.

# of people (unduplicated) served - 904
# of Career Online High School students enrolled - 124

Library Bookmobile $700,000 $704
The Library Department is in the process of procuring a large bookmobile that will be
used to provide services to the community at 67th Avenue and Lower Buckeye.

PHX Works at Burton Barr and Ocotillo $600,000 -
Funds will be used to expand the PHXWorks space on the second floor of the
Burton Barr Central Library. PHXWorks supports residents in their job searches,
career development goals, and on their path to becoming career-ready and part of
the workforce. As part of the expansion, a new meeting room will be added for
workforce programming, and smaller study room spaces will be added that can be
used by community partners to provide one on one services, or by customers to
conduct workforce related business, such as online interviewing. In addition, a new
study room space will also be added at the Ocotillo Library that can be used by
community partners to provide one on one services, or by customers to conduct
workforce related business, such as online interviewing.

Parks After-School Programs $500,000 -
Funds will be used to expand PAC programming to 10 additional sites. This
affordable after- school recreation and enrichment program provides youth ages six
to 13 a fun, supportive, and educational atmosphere during crucial afterschool hours.
The expansion of PAC programming is occurring in schools in Qualified Census
Tracts. These school serve low-income families and offering after-school program
options will help families retain/find employment and provide an option for child care.




Page 8
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Attachment A
Program Allocation Expenditures
Youth Sports League Grants $500,000 $59,481
Funds will be used to offer financial assistance or stipends to at-risk, underserved,
and low- income youth to participate in youth sports and recreational leagues. At the
height of the pandemic, recreational leagues were closed and low-income families
continued to struggle to pay for recreation leagues for their children. This program
strives to increase access to recreation programs and increase physical activity for
youth.

# of new participants engaged - 2,094

Early Literacy Tutoring Support $300,000 -
The Library has partnered with Arizona State University (ASU) to provide 1:1 reading
tutoring to emerging readers in 1st through 4th grade who lost ground due to the
pandemic. The program aims to close the education gap experienced by students
who experienced remote learning for a long period of time due to the pandemic and
are in need of additional services to maintain grade-level comprehension and
understanding, such as in reading and math. Tutoring would be provided by ASU
students and the library will provide Wi-Fi provisioned tablet computers to facilitate
virtual tutoring as needed.

Library Technology, Capital, and Staff Support $3,000,000 -
Funds will provide technological and capital enhancements identified by Library staff
including but not limited to online catalog enhancements, tablets and hotspots for
lending and onsite use, outdoor signage upgrades, and automated materials handler
replacement at Mesquite Library.

Phoenix Resilient Food System
Resilient Food System - Outreach and Support Staff $200,000 $103,508
Funds are used to provide advertising and outreach efforts to ensure funds allocated
under this program is fully maximized. Additionally, funds are used to hire two full-
time positions to manage and monitor all activities for the Phoenix Resilient Food
System programs in the Office of Environmental Programs.

Resilient Food System - Meals That Work $655,000 $632,697
This program prepared and delivered 1,000 meals for 26 weeks to social service
organizations, such as St. Vincent de Paul, schools, and more. Fourteen food
service employees at the Convention Center were utilized to prepare the meals.

# of meals delivered - 26,000




Page 9
Page 77
Attachment A
Program Allocation Expenditures
Resilient Food System - Economic Development and Innovation $3,400,000 $2,670,553
This portion of the Resilient Food System includes three programs. The first is the
Feed Phoenix Program which is a continuation of the CRF program where Local
First Arizona Foundation delivers meals to the community. The second is the Worker
Cooperative Sustainable Food System Business Incubator program that focuses on
developing worker cooperatives for sustainable food business enterprises through a
collaboration with the private sector. The third is the Agri-Food Technology Grants
that provides funds and incentives to encourage food system entrepreneurs and
innovative food businesses to expand or locate in the City.

# of meals prepared and delivered - 133,119
# of local food producers supported - 21
# of individuals trained - 19

Resilient Food System - Equity and Inclusion $2,369,700 $1,816,835
This portion of the Resilient Food System includes three programs. The first is the
LISC Phoenix Funds to Feed Program which is a continuation of the CRF funds
program that provides funds for community/grassroots organizations and school
districts. The second is the Urban Agriculture Fellowship which provides funds for a
one-year fellowship for youth with local food producers with 60% for Black,
Indigenous, and persons of color participants. The third is the Council District Food
Action Plans or Initiatives which focuses on districts with food deserts, high food
insecurity, and hunger rates to identify food projects.

# of families served - 11,242
# of meals delivered - 79,681
# of schools assisted - 6
# of farms participating - 9

Resilient Food System - Food Banks and Pantries Support $1,300,000 $800,000
Funds provide resources for local food banks and food pantries to provide food and
other resources for struggling families. There has been broad engagement with
small, medium and large foodbanks and pantries ensuring outreach and emphasis
with smaller community-based food banks and food pantries.

# of individuals/households served - 169,493

Resilient Food System - Local Food Consumption/Production $1,530,300 $760,382
This portion of the Resilient Food System includes two programs. The first is
Farmland Preservation which is a partnership with nonprofits and land trusts to
assist in the purchase and preservation of up to 100 acres of land for agriculture.
The second is the Backyard Food Production Pilot which provides installation of a
garden system with training and education for one year to residents located in food
deserts.

# of acres of farmland preserved - 3.3
# of backyard gardens installed - 38




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Page 78
Attachment A
Program Allocation Expenditures
Resilient Food System $245,000 -
Funds are providing grants to farms for advancing technologies and methods that
address growing food in our changing climate.

# of projects funded - 6

Better Health Outcomes & Community Testing & Vaccines $28,900,000 $13,957,456
Funds are used to provide resources needed to ensure resident COVID-19 testing
and vaccination efforts remain available through the duration of the public health
emergency. This includes education, outreach, and incentives, with a focus in
communities of color. Funds have also been used to purchase PPE and other public
health related materials for the community as needed. This funds allocation includes
the purchase of items for the Combating COVID-19 kits that have been distributed to
schools and City facilities.

# of COVID-19 tests administered - 118,640
# of COVID-19 vaccines administered - 16,483
# at-home COVID-19 tests distributed at van events - 35,722
# of Combating COVID-19 Kits/at-home tests distributed to organizations - 125,096

City Operations
Premium Pay $22,000,000 $20,072,750
Premium pay was provided to eligible City of Phoenix staff performing essential work
during the COVID-19 public health emergency, intended for those who have been
and continue to be relied on to maintain continuity of operations of essential critical
infrastructure sectors, including those who are critical to protecting the health and
wellbeing of their communities. As determined under the Final Rule, this does not
include work performed by teleworking from a residence that involves regular in-
person interactions with the public or co-workers of the individual who is performing
the work or regular physical handling of items that were handled by or are to be
handled by the public or the individual’s co-workers. The City of Phoenix provided up
to a $2,000 one-time premium pay payment to eligible full-time employees and up to
a $1,000 a $250 one-time premium pay payment to eligible non-seasonal part-time
employees.

# of employees - 12,374

Infrastructure, Technology, and Capital Needs $23,000,000 $5,992,450
Funds are intended to be used to provide resources needed to address capital
needs. This category consists of two projects: 1) the rehabilitation of the 27th
Avenue Recycling Facility and 2) stormwater projects in collaboration with the Flood
Control District of Maricopa County.

Revenue Replacement $22,400,000 $5,840,596
Funds will be used to replace lost revenue at the Convention Center. COVID-19 has
had a severe impact on the Convention Center bookings. It is likely that large
conventions and the associated hospitality industry will be among the slowest to
recover and revenue will continue to be weak.




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Page 79
Attachment A
Program Allocation Expenditures
PPE/Cleanings/Sanitizing/Testing and Vaccine Distribution $600,000 $103,330
Funds have been used to procure necessary PPE, cleaning, and sanitizing materials
for vulnerable populations in the City. Additionally, staff is using funds to purchase
other necessary items to assist with heat relief in 2022. Items will be distributed to
the public throughout the summer and includes pop-up shelters, water bottles, and
evaporative coolers.

Administrative Oversight, Compliance, and Outreach Efforts $4,000,000 $522,044
Funds are intended to be used to provide staffing necessary to support federal
compliance efforts. Staffing additions will also assist with enhancing community
outreach to improve service delivery and to increase transparency on city progress
for all approved programs via an enhanced website.

TOTAL $242,482,000 $84,887,386




Page 12
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Attachment B
American Rescue Plan Act Second Tranche Strategic Plan Updates

April ARPA CDBG Final ARPA
Program Allocation Allocation Allocation
Affordable Housing Program $12,000,000 $12,000,000
Community Land Trust Program $5,000,000 $5,000,000
Landlord Incentive Program $4,000,000 $4,000,000
Homelessness Projects $26,500,000 $26,500,000
Heat Response/Temporary Shelter 16,000,000 16,000,000
St. Vincent de Paul Transitional Housing $6,000,000 $6,000,000
Project
Homeless Youth Reunification Program $1,000,000 $1,000,000
Digital Divide Program $12,000,000 $12,000,000
CED Support Staff $400,000 $400,000
Tuition Assistance Program $5,000,000 $5,000,000
Workforce Training Facility and Training $3,500,000 $3,500,000
Program
Mobile Career Unit $500,000 $500,000
Wi-Fi Connectivity for Public Housing $3,000,000 $3,000,000
Properties
Public Housing Tablet and Data Program $1,500,000 $1,500,000 $0*
St. Joseph the Worker’s Workforce Village $2,000,000 $2,000,000
Program
Starfish Place Wraparound Services $800,000 $800,000
Program
Burton Barr Expanded Support for $1,000,000 $1,000,000 $0*
Educational Success
Library Hotspot Lending Program $600,000 $600,000
Library Bookmobile for Underserved Areas $500,000 $500,000 $0*
Vacant Storefront Improvement Assistance $2,000,000 $2,000,000
Financial Assistance for Phoenix Refugee $3,500,000 $5,300,000**
and Asylee Community
Residential Tree Equity Accelerator & Tree $6,000,000 $6,000,000
and Shade for Schools
Home Weatherization Assistance Program $4,500,000 $4,500,000
Shade Structures $3,000,000 $3,000,000
Phoenix Parks Improvements $2,900,000 $2,900,000
Green Infrastructure and Mobility $5,000,000 $5,000,000 $0*
Improvements Program
Phoenix Resilient Food System Programs $7,000,000 $7,000,000
Combating COVID Kits $5,000,000 $4,000,000**
Better Health and Community Outcomes $15,000,000 $15,000,000
Premium Pay $29,000,000 $22,000,000**
COVID-19 Health Care Expenses $28,000,000 $28,000,000
TOTAL $212,200,000 $8,000,000 $198,000,000
*Denotes change in final ARPA allocation compared to allocations discussed at the April 12, 2022, City Council Policy Session. Programs will be
CDBG funded.
**Denotes change in final ARPA allocation compared to allocations discussed at the April 12, 2022, Cit Council Policy Session. Programs
increased/decreased in value.


Page 81
Attachment C
American Rescue Plan Act Second Tranche Strategic Plan
Revised June 7, 2022

Affordable Housing and Homelessness - $70,500,000
Housing
$12,000,000 Affordable Housing Program
Pending federal guidance, continue to explore possible ways to create and
preserve more affordable housing by providing gap financing to developers.

$5,000,000 Community Land Trust Program
Pending federal guidance, continue to explore funding an all-inclusive
(acquisition, housing development, rehabilitation, down payment assistance
and administrative costs) Community Land Trust.

$4,000,000 Landlord Incentive Program
Continue Landlord Incentive Program with $2,000 incentive payment as
executed by Housing Assistance Payment contract.

Human Services
$26,500,000 Homelessness Projects
Proposal includes three major components:
• Lease of hotel operated by a nonprofit for bridge housing, includes
wraparound services
• Purchase hotel for long-term housing, including wraparound services
• Operate pocket emergency shelter in partnership with a nonprofit,
including wraparound services

$16,000,000 Heat Response/Temporary Shelter
Provide temporary shelter and wraparound services for people experiencing
homelessness. This program will partner with Maricopa County to enter into a
lease agreement for a building and begin by providing critical heat relief and
additional wraparound services for up to 200 people this summer and
continue the program for at least two additional years.


$6,000,000 St. Vincent de Paul Transitional Housing Project
Provide funding to St. Vincent de Paul to build 100 new transitional housing
beds for people experiencing homelessness in the City of Phoenix. The facility
will include wraparound services to remove barriers to end homelessness.
Maricopa County is matching funding for capital costs.




Page 82
$1,000,000 Homeless Youth Reunification Program
Connect youth experiencing homelessness with housing and social support
needs. The program will allow youth to be reconnected with family/friends,
pay for housing deposits and other move-in needs and unexpected barriers
that prevent youth from exiting homelessness.

Workforce and Education - $27,800,000

Community and Economic Development

$12,000,000 Digital Divide Program
Continue the community wireless network project that was initially approved
by City Council using the Coronavirus Relief Fund and received $10 million in
ARPA Tranche 1. The project is a partnership between the City, Phoenix
Union High School District, and others.

$400,000 CED Support Staff
Funding will allow the Community and Economic Development Department to
continue temporary positions to support current ARPA programming, including
the Digital Divide Program.

$5,000,000 Tuition Assistance Program
Tuition assistance program targeting two-year and four-year degree
programs.

$3,500,000 Workforce Training Facility and Training Program
Provide additional funding for rehabilitation efforts for workforce training
building.

$500,000 Mobile Career Unit
Purchase equipment and software for the Mobile Career Unit including
translation software, virtual reality, job searching, employer matching, and
resume technology.

Housing

$3,000,000 Wi-Fi Connectivity for Public Housing Properties
Provide Wi-Fi infrastructure, hardware, training, and service throughout Public
Housing properties.

Human Services

$2,000,000 St. Joseph the Worker’s Workforce Village Program
Expansion of St. Joseph the Worker’s Workforce Village program to support
services that assist individuals experiencing homelessness with finding full-
time employment and managing finances.





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$800,000 Starfish Place Wraparound Services Program
Funds will provide childcare wraparound services for individuals searching for
employment for residents at Starfish Place and includes ability to offset cost of
childcare when an individual becomes employed for up to one year, including
home childcare support funds. This includes a Workforce Development
Specialist to support the program.

Library

$600,000 Library Hotspot Lending Program
Continue hotspot lending program to provide broadband access for individuals
who lost access because of pandemic-related challenges.


Neighborhood Sustainability $23,700,000


Community and Economic Development

$2,000,000 Vacant Storefront Improvement Assistance
Provide financial assistance to retail/commercial building owners in qualified
census tracts to maintain and enhance exterior of properties, such as building
façade, landscaping, signage, parking lot or sidewalk repairs, etc. Additionally,
coordinate facility assessments of vacant City-owned property to support
reuse efforts.

Human Services

$5,300,000 Financial Assistance for Phoenix Refugee and Asylee Community
Continue to provide services to refugee and asylee community.


Office of Heat Response and Mitigation

$6,000,000 Residential Tree Equity Accelerator & Trees and Shade for Schools
Fund Residential Tree Equity Accelerator to triple the tree canopy coverage
and create paid Community Forester opportunities in 15 neighborhoods with
very low tree equity scores. Additionally, fund tree planting and installation of
shade structures at 75 schools/preschools in qualifying neighborhoods in
partnership with tree-focused community-based organizations.

$4,500,000 Home Weatherization Assistance Program
Expand Home Weatherization Assistance Program to assist up to 200
additional homes in qualifying neighborhoods to receive energy efficiency
enhancements and related housing repairs.





Page 84
$3,000,000 Shade Structures
Fund 25 free-standing shade structures in the public right-of-way to improve
walkability in neighborhoods with limited shade coverage. Commission local
artists to design structures that reflect local context and culture and meet
engineering and safety standards for public infrastructure.

Parks and Recreation

$2,900,000 Phoenix Parks Improvements
Improve Phoenix parks in three main areas:
• Incorporate new and/or adaptive playground elements and features to
new and existing playgrounds where feasible to increase accessibility
to outdoor play for youth with all abilities.
• Resurface, renovate and/or convert athletic courts in eight parks with
underutilized courts and/or parks experiencing negative activity to help
further activate the park with meaningful recreational opportunities for
youth.
• Install additional WalkPHX paths and fitness stations at eight parks to
increase accessibility to free fitness equipment and opportunities.


Phoenix Resilient Food System - $7,000,000

Office of Environmental Programs

$7,000,000 Phoenix Resilient Food System Programs
Continue ARPA Phoenix Resilient Food Systems current programs, which
includes the worker cooperative sustainable food incubator and training, agri-
food tech incubator, agrivoltaics pilot project, backyard garden, farmland
preservation, funds to feed, food waste and composting education, farm to
food banks, feed phoenix, food system transformation grants and outreach
and support.


Better Health and Community Outcomes - $19,000,000

Public Works

$19,000,000 Better Health and Community Outcomes
Continue COVID-19 community testing and vaccination events across the city
for an additional year. This includes $4 million to support Combating COVID
kits that include at-home rapid antigen tests, supportive resources for positive
tests, information about COVID-19 vaccines, and KN95 masks.





Page 85
City Operations - $50,000,000

Human Resources

$22,000,000 Premium Pay
employees at the Dec. 15, 2021 Formal meeting.

$28,000,000 COVID-19 Health Care Expenses
Provide funding to cover current and projected COVID-19 health care
expenses paid by the City and the Workers' Compensation Program.





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