General Fund 2026-27 Preliminary Budget Status and Multi-Year Forecast -
Citywide

This report transmits the preliminary status for the General Fund (GF) Fiscal Year (FY)
2026-27 budget and a multi-year GF forecast through FY 2028-29 (Attachment A).
The multi-year forecast is being presented to the Mayor and City Council as an
essential tool in long-term budget discussions and decision making.

THIS ITEM IS FOR INFORMATION AND DISCUSSION.

Summary
The GF budget outlook for FY 2026-27 reflects a projected surplus and includes
resources that can be used for ongoing and one-time purposes. After taking into
account required resources for operational and financial continuity of $93 million
further described in this report, the remaining surplus is $62 million and includes $36
million in ongoing resources and $26 million in one-time resources. This positive
budget outlook reflects the City Council's leadership last year to adopt the budget
balancing strategies recommended by staff to resolve projected deficits including
increasing the Transaction Privilege Tax (TPT) and Use Tax rate from 2.3% to 2.8% to
offset the negative impacts of State action to eliminate residential rental sales tax and
implementation of the flat income tax.

While the outlook for FY 2026-27 is positive, continuing uncertainty remains over the
State's resolution to income tax conformity with the One Big Beautiful Bill. Decisions
on conformity will impact the City's state-shared income tax revenues beginning in FY
2027-28. Due to this uncertainty, staff has prepared two versions of the multi-year
forecast for comparison purposes (Attachments B and C). Attachment B reflects the
baseline forecast, which does not reflect any tax conformity reductions. Attachment C
assumes full tax conformity, which reduces state-shared income tax revenues by $21.5
million in FY 2027-28 and by $16.7 million in FY 2028-29. Additionally, staff continues
to closely monitor state legislative proposals, several of which would significantly
negatively impact City revenues if signed into law and represent a risk to the forecast.

The attached multi-year forecast report includes estimates of future GF resources and
expenditures for FY 2026-27 through FY 2028-29 based on several economic and


budgetary assumptions. The baseline forecast (Attachment B) projects a range of
ending balances, with a potential deficit of $(6) million to a potential surplus of $36
million in FY 2027-28 and a potential deficit of $(31) million to a potential surplus of
$47 million in FY 2028-29. The forecast reflecting full tax conformity (Attachment C)
also projects a range of ending balances, with a potential deficit of $(7) million to a
potential surplus of $35 million in FY 2027-28 and a potential deficit of $(48) million to
a potential surplus of $30 million in FY 2028-29. These forecasts are not intended to
precisely predict future GF capacity, but rather to present ranges of potential ending
fund balances to be used as a framework for decision making and strategic planning to
ensure a balanced budget going forward.

Staff will update revenue and expenditure estimates in the coming weeks as part of the
annual 7+5 technical review process and incorporate required changes to projections.
These projections will then be used to guide the FY 2026-27 proposed City Manager's
trial budget, which is scheduled to be presented to City Council on March 24.

GF FY 2026-27 Preliminary Budget Status
The projected positive ending fund balance in FY 2026-27 is good news and is
primarily due to additional revenue generated from the TPT rate increase from 2.3% to
2.8% effective July 2025. The increase was necessary to offset the ongoing revenue
losses caused by the State's action to eliminate residential rental sales tax effective
January 2025 and to lower the individual income tax rate to a flat tax of 2.5 percent
effective in tax year 2022. It also reflects the Council approved set-aside of the
projected $17 million surplus from last year's budget and $11.6 million in carryover
fund balance from FY 2024-25. Additionally, Budget and Research staff worked closely
with departments to identify savings through the 3+9 technical expenditure review
process, which frees up additional resources and benefits the fund balance.

As discussed last fiscal year, ongoing resources totaling approximately $18 million are
required in FY 2026-27 to continue services for the Office of Homeless Solutions to
provide services to individuals experiencing homelessness in our community due to
the expiration of American Rescue Plan Act funds; and for the Parks and Recreation
Department to add positions for Esteban Park included in the 2023 General Obligation
Bond Program and Lone Mountain Park both expected to be fully operational by FY
2027-28. Additionally, $75 million of one-time resources is recommended to be set-
aside to balance FY 2027-28 to ensure continuation of existing programs and services.
The remaining FY 2026-27 surplus of $62 million is made up of $36 million in ongoing
resources and $26 million in one-time funds. The proposed City Manager's trial budget
presented on March 24 will make recommendations on how to allocate the surplus,
which could be used for new programs and services for the community and negotiated
labor increases.



The GF preliminary estimated resources in FY 2026-27 are $2.289 billion, which is 4.5
percent higher than FY 2025-26 estimated resources. GF revenue for FY 2026-27 is
estimated at $1.987 billion, which is $65 million or 3.4 percent higher than the FY 2025
-26 revised revenue estimate of $1.922 million. These projections reflect modest
economic growth and the ongoing effect of the TPT rate increase. They also reflect the
negative impact to state-shared revenues from the incorporation of San Tan Valley,
which reduces state-shared revenues by more than $10 million in FY 2026-27.
Revenue projections also reflect lower state-shared income tax collections due to the
flat income tax and the elimination of residential rental sales tax. Staff will further refine
GF revenue estimates over the coming weeks in preparation for the proposed City
Manager's trial budget. More information on each resource category is detailed in
Attachment A.

The GF preliminary expenditure projections may change as cost estimates are further
refined in the coming weeks; however, at this time the preliminary FY 2026-27 GF
expenditures to continue existing levels of service are projected at $2.134 billion,
including contingency funds. This compares to the FY 2025-26 GF expenditure
estimate of $1.944 billion. The increase includes higher costs for employee salaries,
which continue to reflect the ongoing impact of the Classification and Compensation
Study. Public Safety pension costs also continue to rise, with projected FY 2026-27
costs almost $16 million higher than the FY 2025-26 budget. Notably, civilian pension
costs are forecasted to remain flat throughout the forecast, highlighting the positive
impact of prior pension reforms and continued progress in paying down the unfunded
liability. Other cost increases include higher fringe benefit costs and increases for
contractual, commodity, and vehicle replacement costs. These increases are partially
offset by lower GF costs for capital pay-as-you-go projects.

The FY 2026-27 preliminary GF budget also accounts for increasing the contingency
or "rainy day" fund from $92 million to $94 million to reflect 4.75 percent of operating
expenditures. In March 2010, the City Council agreed to gradually increase the
contingency with a goal of achieving five percent of GF operating expenses. Achieving
this goal will improve the City’s ability to withstand potential future economic declines.

GF Multi-Year Baseline Forecast
The attached multi-year forecast and preliminary GF status report includes economic,
resource and expenditure assumptions (Attachment D) used to develop the forecast.
The report also includes possible risks and unfunded needs. It does not assume any
period of recession but rather includes a baseline, optimistic, and pessimistic
projection, based on ranges for revenues and expenditures. The forecast assumes any
annual deficit is resolved by reducing the following year's expenditures to achieve a


balanced budget, as the City is required by City Charter XVIII Section 6 and Arizona
Revised Statute 42-17151 to pass a balanced annual budget each year.

The baseline multi-Year Forecast (Attachment B) includes a range of ending fund
balances to account for additional uncertainty with projections further out in the forecast
period, with a potential deficit of $(6) million to a potential surplus of $36 million in FY
2027-28 and a potential deficit of $(31) million to a potential surplus of
$47 million in FY 2028-29. The baseline forecast reflects surpluses of $15 million and$8
million in FY 2027-28 and FY 2028-29, respectively and requires a set-aside of $54
million to balance FY 2027-28. The forecast reflecting full tax conformity (Attachment
C) also projects a range of ending balances, with a potential deficit of $(7) million to a
potential surplus of $35 million in FY 2027-28 and a potential deficit of $(48) million to a
potential surplus of $30 million in FY 2028-29. This forecast reflects a surplus of $14
million and a deficit of $(9) million in FY 2027-28 and FY 2028-29, respectively and
requires a set-aside of $75 million to balance FY 2027-28.

The current baseline forecast assumes no changes to existing labor contracts or service
levels. It also does not assume any further negative impacts to the City from the current
State legislative session. Attachment D provides a list of potential bills that if signed
into law will have further negative impacts to City revenues and presents a risk to
projections. Staff will continue to closely monitor these bills.

The forecast accounts for anticipated cost increases for operating expenses associated
with the voter-approved 2023 General Obligation Bond Program, totaling$29 million
over the forecast period. It includes annual investments of $21 million toward
addressing critical City facility and capital equipment maintenance needs. It also reflects
efforts to reduce the City's vehicle backlog by allocating additional resources to vehicle
replacements, beginning with $28 million in FY 2026-27 and increasing to $44 million in
FY 2028-29. Additionally, pension costs are forecasted separately based on information
from the City of Phoenix Employees Retirement System and the Public Safety
Personnel Retirement System actuaries. These costs are anticipated to increase $46
million from FY 2025-26 to FY 2028-29 (Attachment H ).

Finally, the attached report includes stress testing for moderate and severe recessions,
which is an essential fiscal tool to evaluate how revenues respond to different levels of
economic crisis. Stress test simulations can help determine if an organization can
weather economic shocks or unexpected declines in revenues and is included for
illustration purposes only (Attachments E, F and G).






Next Steps and Community Engagement
On March 24, a balanced FY 2026-27 City Manager’s Trial Budget will be presented to
Engaging residents in the budget process is a priority of the City Council, and staff will
continue the practice of seeking community input on the proposed budget with multiple
opportunities for residents to participate through community budget hearings,
scheduled for late March through mid-April. Residents are also invited to contact the
Budget and Research Department directly to provide input on the budget. More
information is available on the Budget and Research Department's website:
phoenix.gov/budget. Feedback received from residents will be provided to the City
Council for consideration ahead of final budget adoption.

Responsible Department
This item is submitted by City Manager Ed Zuercher, Deputy City Manager Amber
Williamson and the Budget and Research Department.





ATTACHMENT A
B.R. REPORT NUMBER
2026-12
RESEARCH REPORT
BUDGET AND RESEARCH DEPARTMENT DATE ISSUED
February 24, 2026
TO: FROM:
ED ZUERCHER AARON MERTZ
CITY MANAGER BUDGET AND RESEARCH DIRECTOR
SUBJECT
MULTI-YEAR FORECAST AND FY 2026-27 PRELIMINARY GENERAL FUND BUDGET STATUS


BACKGROUND
Development and presentation of the multi-year forecast is an important step in the City's
budget process. Evaluating projected available resources and identifying potential ongoing
budget surpluses or funding gaps will allow City management and Council to develop strategic
plans to ensure the continuation of City operations and optimize services to the community.

The multi-year forecast estimates future revenues and expenditures of the General Fund for the
current fiscal year through fiscal year 2028-29. The purpose of this forecast is to identify key trends
in revenues and expenditures and to provide information about the financial landscape anticipated
over the next few years. The information contained in this forecast is based on data available
through January 2026.

The General Fund (GF) multi-year forecast (Attachments B and C) is provided to the City
Council and the community for consideration and provides City policy makers with:
• A strategic financial management best practice.
• A framework for strategic decision-making to ensure a balanced budget each fiscal year.
• The opportunity to make policy changes to maximize City resources and service delivery.
• A roadmap to continued fiscal health and award-winning budgetary and financial reporting.

The forecast is not an official policy or legal budget document and does not enact any budgetary
allocations. The forecast is also not intended to set or precisely predict future revenues or
expenditures. Rather, the forecast presents current estimates based on several economic and
financial assumptions of the future direction and ranges of growth rates for both resources and
expenditures. The economic, revenue, and expenditure assumptions are provided in Attachment
D.

The forecast is built on several assumptions outlined in Attachment D regarding:
• The national, state, and local economy.
• Population and job growth.




• Revenue and expenditure growth.
• Impacts of anticipated increasing sworn public safety pension liabilities.
• Effects of the State's action to eliminate residential rental sales tax effective January 2025
(Senate Bill 1131).
• Effects of the State's action to reduce the individual income tax rate to the current flat tax of 2.5%
(Senate Bill 1828).
• State-shared revenue reductions due to San Tan Valley’s incorporation.
• Negative impact of Arizona’s income tax conformity with the One Big Beautiful Bill Act.
• Ongoing costs for the Class and Compensation study.
• Cost management practices.

Certain assumptions are subject to change and are detailed further in this report.
Projecting future available resources and expenses over multiple years is complex and involves
several assumptions concerning how revenue and expenditures will grow over time. To model
potential future budgetary scenarios under varying economic conditions, a range is provided for
resources and expenditures for the outer years of the forecast. The differences between the upper
and lower ends of the ranges increase in the later years of the forecast reflecting additional
economic uncertainty. The top of each range represents the "optimistic" forecast, while the bottom
of the range represents the "pessimistic” forecast.

It is important to note, if any of these assumptions as described were to change or modeled
differently, the ranges of amounts presented in the forecast would need to be revised. Unexpected
economic shocks, recessions, legislation, unfunded mandates, or other risks to the forecast can
also adversely affect projections.

Additionally, even slight variances in the revenue and expenditure growth rates in the initial years
of the forecast result in substantial changes to the later years due to the compounding effect of the
changes. For example, a revenue growth variance of only 1% in FY 2026-27 could result in a $19
million change to the ending balance, which would impact the ending fund balances in the
subsequent forecast years. Long term forecasts become less reliable the further they are from
development because of the many underlying assumptions subject to frequent fluctuations.

Projections are formulated in the first six months of the fiscal year and are based on current
estimates of where staff believe resources and expenditures will be for the current fiscal year and
the subsequent three years. In order to create the most reliable revenue and expenditure
projections, staff relies on several economic sources, months of actual collections and extensive
technical reviews before recommending estimates to City management and ultimately the City
Council for final consideration.

GF Summary
For the first several years following the pandemic, strong economic performance, coupled with
inflationary pressures, supported growth in tax revenues. These gains were driven by higher
consumer prices, an expanding population, and rising income levels. However, the retail sector, the
City’s largest source of sales tax, has slowed since June 2022. In FY 2023-24, retail sales tax grew
by 3.1%, the slowest rate since FY 2012-13, and growth in FY 2024-25 was even more modest at
1.1%. This slowdown, combined with recent legislative changes, has negatively impacted overall
revenue collections. General Fund revenue reduction in the previous fiscal year totaled $59.4
million, representing a 3.1% decline compared to FY 2023-24. The reduction is primarily
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attributable to the State's elimination of the residential rental sales tax under Senate Bill (SB) 1131
and the implementation of a flat individual income tax rate of 2.5% under SB 1828. To address the
projected FY 2025-26 budget shortfall and maintain essential programs and services, the City
Council approved a revenue enhancement measure. On March 18, 2025, the Council authorized
an increase in the City Transaction Privilege Tax (TPT) and Use Tax rate from 2.3% to 2.8%,
effective July 1, 2025. However, significant economic uncertainty and a slowdown in sales tax
revenue collections in the first six months of FY 2025-26 require a cautious approach to
forecasting. The baseline revenue forecast projects a 4.1% increase for FY 2025-26 and a 3.4%
increase for FY 2026-27. This modest growth is mainly due to higher City TPT and Use Tax
revenues from the approved rate increase, though these gains are partially offset by reduced state-
shared revenues due to the San Tan Valley’s incorporation, lower state-shared income tax
collections resulting from the flat individual income tax rate, and the elimination of residential rental
sales tax.

Furthermore, the current state legislative session could impose additional fiscal challenges on the
City. The bills staff are currently monitoring are summarized on page 14 of this report and present a
potential negative impact of approximately $593 million if passed and signed into law.

Additionally, to better prepare for future challenges, this report includes stress testing of the baseline
forecast that incorporates tax conformity under moderate and severe recession scenarios, which is an
essential fiscal tool to evaluate how revenues might respond to different levels of economic crisis
(Attachments E, F and G).

OTHER INFORMATION

Staff are underway with the annual 7+5 expenditure and revenue technical review process and may
update estimates if necessary. The final estimates and recommendations to the City Council on how
best to allocate the GF surplus in FY 2026-27 to achieve a required balanced budget will be
presented in the proposed City Manager’s Trial Budget on March 24.
It is also worth noting the preliminary FY 2026-27 budget and forecast is based on existing state-
shared revenue models and statutory obligations. Any changes to state-shared revenue formulas,
or other revenue sources proposed in the Governor's budget or in legislative bills that would impact
the GF forecast, are not reflected, and would need to be addressed if adopted by the State.

General Fund FY 2026-27 Preliminary Budget Status

FY 2026-27 Resources - The chart below shows the preliminary resources projection:
2026-27 2026-27
Preliminary Preliminary
Estimate Projected Annual
GF Resource Category (in millions) Growth Rate %
Local Sales & Excise Taxes 1 $834 1.8%
State-Shared Revenue 2 $710 5.6%
Primary Property Tax 3 $232 4.1%
User Fees and Other $211 1.9%
Unused Contingency/Set-Aside from PY 4 $201 N/A
Transfers/Recoveries/Carryover Balance 4 $101 N/A
Total GF Resources $ 2,289 4.5%

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1 Reflects the negative impact to Local Sales & Excise taxes because of Senate Bill 1131, which

prohibits municipalities from taxing residential rental property starting January 1, 2025. Reflects 0.5
percentage point increase in the City TPT and Use Tax rates effective July 1, 2025.
2 Reflects the negative impact of San Tan Valley’s incorporation on State-Shared Sales Tax and Income

Tax revenues, and reflects the reduction in State-Shared Income Tax Revenue because of Senate Bill
1828, which reduces the individual income tax rates to a flat tax of 2.5% beginning in tax year 2022.
However, it does not reflect any impact on State-Shared Revenue resulting from the FY 2026-27 State
budget, nor legislative changes that have recently been proposed or discussed during the current
legislative session.
3 Assumes the continuation of the City Council adopted policy to maximize the primary levy in order to

preserve GF services. Any deviation from this policy would require an ongoing reduction or offset.
4 Estimates for unused contingency/set-aside from prior year (PY) and transfers/recoveries/carryover

balance are not derived from annual growth rate projections or broader economic factors.

Revenue Forecasting Model - In the fall of 2014, Budget and Research consulted with the University
of Arizona's Eller College of Management, Economic and Business Research Center (EBRC) to
enhance the City's sales tax revenue forecasting process. Dr. George Hammond, EBRC Director,
and Dr. Alberta Charney, Senior Research Economist, spent several months working with City staff to
develop an enhanced econometric sales tax forecasting model for all categories of city and state
sales tax. In the summer of 2017, staff worked with EBRC to update the tax forecasting model. In
March 2021, the EBRC revised the City's model again by including online sales tax. The City began
collecting sales tax from online marketplace retailers effective October 2019 just prior to the
pandemic, which helped to offset losses experienced in the leisure and hospitality sales tax
categories during the pandemic. The EBRC leads the State of Arizona Forecasting Project, which
provides in-depth economic forecast analysis and databases on a subscription basis to businesses,
organizations, and government via membership. The additional consulting with Dr. Hammond has
provided the City with solid, independent economic and statistical expertise used to develop a
statistically valid forecasting model specifically for the City of Phoenix. The projected growth rates in
each category of sales tax for the FY 2026-27 estimate and the outer years of the forecast are based
on projections developed with the enhanced econometric forecasting model. Revenue estimates may
change as more data becomes available and will be finalized in the coming weeks.

GF Expenditures - The preliminary expenditure estimates may change as cost estimates are further
refined in the coming weeks. Currently, FY 2025-26 and FY 2026-27 General Fund operating
expenditure estimates excluding contingency are projected to be $1.944 billion and $2.038 billion,
respectively. The increase includes the ongoing costs for the Class and Compensation study, and
increased costs for sworn public safety pension liabilities, contractual services, and commodities. The
outer years of the forecast assume personal services expenditures, excluding pension and estimated
operating cost impacts for the voter-approved 2023 General Obligation Bond Program, contractual
services, commodities, capital outlay, internal charges and credits, and other expenses grow by an
inflationary factor. Further details on expenditure assumptions can be found in Attachment D.

Pension Costs – Expected changes in COPERS and PSPRS pension costs are as follows:

• COPERS: GF pension costs in FY 2026-27 for civilian employees are estimated at $112
million and are expected to remain at $112 million in FY 2028-29. The overall stable trend in
COPERS pension cost has been driven by recent actuarial changes, plan earnings,
payroll growth and pension reform (Attachments B, C, and H).

• PSPRS: GF pension costs in FY 2026-27 for sworn Police and Fire are estimated at $375
million and are expected to increase to $401 million in FY 2028-29. The primary factors
contributing to the growth are recent actuarial changes, plan earnings, and changes to the
payroll base. As the multi-year forecast shows, GF public safety pension costs are estimated
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to increase by $26 million from the FY 2026-27 through FY 2028-29 (Attachments B, C, and
H), which adds pressure to the GF budget going forward and limits the City's ability to either
expand programs and services to residents or increase employee compensation.

Contingency Fund (Rainy Day Fund) – The Contingency Fund is assumed to decrease from
$201 million in FY 2025-26 to $94 million in FY 2026-27, as the FY 2025-26 amount includes a
$109 million set-aside to balance the FY 2026-27 budget. The contingency rate remains at
4.75% for the entire forecast period. Contingency/rainy day funds provide one-time resources for
possible emergencies and unanticipated costs that may occur after the budget is adopted. The
possibility of natural disasters, public or employee safety emergencies, public health issues,
economic shocks or declines, and geopolitical events that can impact the broader economy
necessitates maintaining adequate contingency funds. The Government Finance Officers
Association (GFOA) recommends cities maintain reserve levels as a financial best practice and
according to the Pew Charitable Trust, research also shows that contingency/rainy day funds
can affect a government's credit rating, which in turn has an impact on borrowing costs and
operating expenses. The role of the contingency/rainy day funds is to improve a city or town's
monetary stability by building up a safety net in case of adversity. They offer the capability to
meet a monetary crisis without hindering public services. Without a contingency fund,
unforeseen emergencies or economic declines may create budget deficits requiring reductions to
programs and services.

The GF preliminary FY 2026-27 budget status and multi-year forecast are provided for
information purposes only.


ATTACHMENTS

Attachment B Multi-Year General Fund Forecast

Attachment C Multi-Year General Fund Forecast with Tax Conformity

Attachment D Forecast Assumptions

Attachment E Background, Methodology and Assumptions for Stress Testing

Attachment F Stress Testing for Moderate Recession Scenario, with Tax Conformity

Attachment G Stress Testing for Severe Recession Scenario, with Tax Conformity

Attachment H Pension Cost Increases




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Multi-Year General Fund Forecast ($ Millions)
2025-26 2026-27 For Planning Purposes Only
Adopted Preliminary 2027-28 2028-29
Budget Budget Estimate Forecast Forecast
Resources
Local Taxes $841 $834 $862 - $874 $889 - $916
State Shared Revenues 682 710 737 - 748 765 - 788
Primary Property Tax 223 232 240 - 243 249 - 257
User Fees and Other 191 211 213 - 217 216 - 222
Other (Set-Aside ,Carryover Balance, Transfers, Recoveries) 168 101 104 53
Unused Contingency/Set-Aside from Prior Year 89 201 94 101 - 100
Total Resources $2,194 $2,289 $2,250 - $2,280 $2,273 - $2,336
Expenditures
Operating Expenditures $1,422 $1,476 $1,565 - $1,554 $1,593 - $1,579
Civilian Pension 116 112 111 112
Sworn Public Safety Pension 359 375 399 401
Contingency/Set-Aside 201 94 101 - 100 103 - 102
Pay-As-You-Go Capital 74 49 36 31
Operating Costs for GO Bond Program - - 9 20
Vehicle Replacements 22 28 35 44
Total Expenditures $2,194 $2,134 $2,256 - $2,244 $2,304 - $2,289

PROJECTED (DEFICIT)/SURPLUS: $- $155 $(6) - $36 $(31) - $47
ATTACHMENT B

BASELINE FORECAST (DEFICIT)/SURPLUS: $- $155 $15 $8

Key Resource Forecast Assumptions:
* The forecast assumes modest revenue growth with no recession from 2026-27 to 2028-29. The forecast includes the 0.5 percentage point increase in the City TPT and Use Tax rates effective July 1, 2025.
* The forecast includes tax rate reduction: Laws 2021, Chapter 412 (Tax Omnibus) reduced the number of individual income tax brackets from four in Tax Year (TY) 2021 to two brackets in TY 2022.
Starting from TY 2023, the individual income tax has been reduced to 2.5%.
* Relative population share used in calculating State shared revenues in 2026-27 was based on the 2024 Census Bureau Population Estimate. It was projected to remain flat throughout the forecast period
and accounts for the San Tan Valley’s incorporation. The actual share will change annually based on Census Bureau Population Estimates.
* The forecast includes residential rental transaction privilege tax reduction: Senate Bill 1131 prohibits municipalities from taxing residential rental property starting January 1, 2025.

Key Expenditure Forecast Assumptions:
* The contingency fund is set as 4.75% of the total General Fund operating expenditure from 2026-27 through 2028-29.
* Includes no additional future funding for program enhancements, unfunded mandates, expiring grants, etc.
* 2026-27 employee costs are based on projections under the current Council-adopted pay plan ordinance and employee contracts. No assumptions have been made concerning future labor contract
negotiations. Estimated costs of the Class and Compensation study are included in the forecast. Pension costs are based on required and projected contribution rates provided by the respective pension
system actuaries.
* Non-personnel related expenditures for 2026-27 assume expenditure growth is in line with recent historical averages, and the out years are anticipated to align with the estimated CPI growth.




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Other Forecast Notes:
* Ranges provided for revenues and expenditures. The upper & lower ends of ranges increase slightly in the outer years of the forecast reflecting additional economic uncertainty in the later years.
* Ranges include pessimistic and optimistic scenarios within assumptions provided by the primary sources of economic information mentioned in this report.
* When a baseline deficit or ongoing surplus is projected, the next year’s operating expenses are assumed to be decreased or increased by the baseline deficit/surplus amount prior to applying the
assumed annual projected growth rate, as the City is required by State Statute and Charter to balance the budget each year.




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Multi-Year General Fund Forecast with Tax Conformity ($ Millions)
2025-26 2026-27 For Planning Purposes Only
Adopted Preliminary 2027-28 2028-29
Budget Budget Estimate Forecast Forecast
Resources
Local Taxes $841 $834 $862 - $874 $889 - $916
State Shared Revenues 682 710 737 - 748 765 - 788
Impact of Tax Conformity - - (22) (17)
Primary Property Tax 223 232 240 - 243 249 - 257
User Fees and Other 191 211 213 - 217 216 - 222
Other (Set-Aside, Carryover Balance, Transfers, Recoveries) 168 101 125 53
Unused Contingency/Set-Aside from Prior Year 89 201 94 101 - 100
Total Resources $2,194 $2,289 $2,249 - $2,279 $2,256 - $2,319
Expenditures
Operating Expenditures $1,422 $1,476 $1,565 - $1,554 $1,593 - $1,579
Civilian Pension 116 112 111 112
Sworn Public Safety Pension 359 375 399 401
Contingency/Set-Aside 201 94 101 - 100 103 - 102
Pay-As-You-Go Capital 74 49 36 31
Operating Costs for GO Bond Program - - 9 20
Vehicle Replacements 22 28 35 44
Total Expenditures $2,194 $2,134 $2,256 - $2,244 $2,304 - $2,289

PROJECTED (DEFICIT)/SURPLUS: $- $155 $(7) - $35 $(48) - $30
ATTACHMENT C

BASELINE FORECAST (DEFICIT)/SURPLUS: $- $155 $14 $(9)

Key Resource Forecast Assumptions:
* The forecast assumes modest revenue growth with no recession from 2026-27 to 2028-29. The forecast includes the 0.5 percentage point increase in the City TPT and Use Tax rates effective July 1, 2025.
* The forecast reflects the projected fiscal impact of full tax conformity with the One Big Beautiful Bill Act, based on the Joint Legislative Budget Committee’s analysis dated December 5, 2025.
* The forecast includes tax rate reduction: Laws 2021, Chapter 412 (Tax Omnibus) reduced the number of individual income tax brackets from four in Tax Year (TY) 2021 to two brackets in TY 2022.
Starting from TY 2023, the individual income tax has been reduced to 2.5%.
* Relative population share used in calculating State shared revenues in 2026-27 was based on the 2024 Census Bureau Population Estimate. It was projected to remain flat throughout the forecast period
and accounts for the San Tan Valley’s incorporation. The actual share will change annually based on Census Bureau Population Estimates.
* The forecast includes residential rental transaction privilege tax reduction: Senate Bill 1131 prohibits municipalities from taxing residential rental property starting January 1, 2025.

Key Expenditure Forecast Assumptions:
* The contingency fund is set as 4.75% of the total General Fund operating expenditure from 2026-27 through 2028-29.
* Includes no additional future funding for program enhancements, unfunded mandates, expiring grants, etc.
* 2026-27 employee costs are based on projections under the current Council-adopted pay plan ordinance and employee contracts. No assumptions have been made concerning future labor contract
negotiations. Estimated costs of the Class and Compensation study are included in the forecast. Pension costs are based on required and projected contribution rates provided by the respective pension
system actuaries.
* Non-personnel related expenditures for 2026-27 assume expenditure growth is in line with recent historical averages, and the out years are anticipated to align with the estimated CPI growth.




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Other Forecast Notes:
* Ranges provided for revenues and expenditures. The upper & lower ends of ranges increase slightly in the outer years of the forecast reflecting additional economic uncertainty in the later years.
* Ranges include pessimistic and optimistic scenarios within assumptions provided by the primary sources of economic information mentioned in this report.
* When a baseline deficit or ongoing surplus is projected, the next year’s operating expenses are assumed to be decreased or increased by the baseline deficit/surplus amount prior to applying the
assumed annual projected growth rate, as the City is required by State Statute and Charter to balance the budget each year.




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ATTACHMENT D
Forecast Assumptions

Economic Sources - Budget and Research staff relies on several different sources of economic
data and forecasts to assist with developing revenue and expenditure projections.

The list below includes the primary sources of information:
• State of Arizona Finance Advisory Committee (FAC) which includes several economists and
finance professionals from the private and public sectors
• State of Arizona Joint Legislative Budget Committee (JLBC)
• University of Arizona (UofA), Economic Business Research Center (EBRC)
• Global Insight, IHS
• Arizona State University (ASU) – WP Carey School of Business, and Western Blue Chip
• Arizona Department of Administration (ADOA) - Employment and Population Statistics Office
• JP Morgan Chase Economic Outlook Center
• Blue Chip Economic Indicators (BCEI) – National Level
• U.S. Bureau of Labor Statistics (BLS)
• U.S. Census Bureau
• U.S. Bureau of Economic Analysis (BEA)
• The Conference Board
• University of Arizona (UofA) Forecasting Project – A community-sponsored research program
within the Economic and Business Research Center providing project members with economic
forecasts for Arizona, the Phoenix-Mesa metro area, and the Tucson metro area. City staff
attends the Forecasting Project quarterly meetings and receives quarterly reports and
data/projections used to assist in developing our forecasts. Forecasting Project data relies on
Global Insight, IHS which is a well-known economics organization that provides
comprehensive economic and financial information. The data from this project is incorporated
into an econometric software program used to forecast sales tax.

Economic Outlook
By the end of 2025, the U.S. economy displayed both resilience and underlying challenges. Real
gross domestic product (GDP) increased at an annual rate of 4.4% in the third quarter of 2025,
according to the updated estimate from the U.S. Bureau of Economic Analysis. The increase in real
GDP reflected increases in consumer spending, exports, government spending, and investment.
Still, the road to 2026 remains challenging. The Blue Chip Economic Indicators (BCEI) consensus
projects that real GDP will grow at a slower pace, with an estimated growth of 2.0% in 2026 and
2.1% in 2027. Forecasters anticipate continued consumer spending support, though at a slower
pace. Persistent uncertainties – including tariff policy shifts, geopolitical tensions, elevated
consumer debt, housing affordability constraints, labor market frictions, and inflationary pressures –
are to weigh on confidence and investment decisions.
Arizona’s future economic performance, along with that of Phoenix, will be closely tied to national
and global trends. Arizona’s economy continues to grow, though at a slower pace than usual. Job
gains are modest due to reduced hiring and slightly higher layoffs. Arizona’s nonfarm job growth
has decelerated, shifting from roughly 1.2% in 2024 to 0.6% in 2025, according to the U.S. Bureau
of Labor Statistics (BLS). Income levels are rising gradually, reflecting post-pandemic normalization
in employment costs. For the 12-month period ending September 2025, wages and salaries for
private industry workers increased 2.6% in the Phoenix Metropolitan Area, down from 3.4% in
September 2024.


- 10 - 24
Despite these challenges, Arizona taxable retail sales, including remote sellers, increased by 4.3%
in December 2025. The rebound in taxable retail sales demonstrates resilient consumer activity.
However, December 2025 marked the fifth consecutive month with a year-over-year decline in
State TPT contracting revenue, primarily due to weakness in the residential construction sector.
After the COVID-19 pandemic, Arizona saw a surge in home and rent prices. Housing affordability
has remained a primary challenge for the state. Housing permit activity statewide has been weak
through the first eight months of 2025; seasonally adjusted total Arizona housing permits were
down 13.1% compared to the same period last year (EBRC Benchmark).
Looking ahead, the baseline forecast anticipates continued economic growth in Arizona in 2026,
supported by increased U.S. economic activity. However, gains are expected to remain modest
relative to historical trends due to federal policy uncertainty, higher costs from increased tariffs, and
demographic aging amid national immigration restrictions.

Other significant economic assumptions from trusted sources include the following:
• Personal income growth for the Phoenix Metro area is projected to slightly increase from
5.7% in 2025 to 6.0% in 2026 and range from 6.2% to 5.6% from 2027 to 2029 (UofA
Economic Business Research Center).
• Growth in population is expected to continue, but at lower rates than historical growth.
Phoenix Metro population is projected to grow by 1.5% in 2026 and 2027, and 1.4% for the
remaining forecast period (UofA Economic Business Research Center).
• Non-farm employment in metro Phoenix is estimated to increase from the growth of 0.9%
in 2025 to 1.6% in 2026 and range from 1.7% to 1.6% from 2027 to 2029 (UofA Economic
Business Research Center).
• Arizona unemployment rate is estimated to increase from 4.1% in 2025 to 4.4% in 2026
and range from 4.5% to 4.3% for the remaining forecast horizon (UofA Economic Business
Research Center).
• Arizona house price increases have slowed, but housing cost burdens remain elvated and
housing permit activity was down by 11.3% in 2025. Housing permits are projected to
slightly increase by 0.3% in 2026 and decline by 8.4% in 2027 (UofA Economic Business
Research Center).
• Stabilizing house prices have contributed significantly to reduced consumer price inflation
in the Phoenix MSA, which is running well below the U.S. The Consumer Price Index-All
Urban Consumers (CPI-U) West region is estimated to slightly increase from 3.1% in 2025
to 3.2% in 2026 and range from 2.6% to 2.2% for the remaining forecast period (UofA
Economic Research Center).

Resource Assumptions- Revenue growth rates are determined using information from our above-
mentioned trusted sources, analyzing actual revenue trends and averages, and factoring in any
known policy or enacted legislative changes.

Revenue assumptions for the baseline forecast beyond the broader economic considerations are
described below:
• No further period of recession with modest revenue growth for the forecast horizon.
• Annual revenue growth rates during the forecast period are expected to range from 3.4% to
4.1%.
• The forecast includes tax rate reduction: Laws 2021, Chapter 412 (Tax Omnibus) reduced
the number of individual income tax brackets from four in Tax Year (TY) 2021 to two
brackets in TY 2022. Starting from TY 2023, the individual income tax has been reduced to
- 11 - 25
a 2.5% flat tax rate.
• The relative population share used to calculate state shared revenues for FY 2026-27 is
based on the 2024 Census Bureau Population Estimate and has recently been adjusted
downward following the incorporation of San Tan Valley in September 2025 and its eligibility
for state-shared revenues. In addition, Laws 2021, Chapter 412 (Tax Omnibus) increased
the Urban Revenue Sharing distribution from 15% to 18% starting in FY 2023-24.
• The forecast includes residential tax rate reduction starting on January 1, 2025. The State
recently enacted Senate Bill 1131, which prohibits municipalities from taxing residential
rental property.
• The forecast includes the 0.5 percentage point increase in the City TPT and Use Tax rates,
effective July 1, 2025.
• The forecast with tax conformity reflects the projected fiscal impact of full tax conformity with the
One Big Beautiful Bill Act, based on the Joint Legislative Budget Committee’s analysis dated
December 5, 2025.
• Potential increases in revenue resulting from economic development efforts are not included in
the forecast.
• Ranges provided for revenues: upper and lower ends of ranges increase slightly in later years
of the forecast reflecting additional economic uncertainty.


Expenditure Assumptions - Assumptions regarding forecasted expenditures are described below:
• Annual operating expenditure growth rates, except for pensions, are based on historical
growth rates, estimated CPIs and account for the impact of the City Council approved Class
and Compensation (C&C) study throughout the forecast period.
• Pension costs are based on historical actuals and information provided by the COPERS and
PSPRS actuaries. The forecast does not attempt to predict future pension liabilities, assets or
other plan assumptions, but rather to account for the anticipated costs of both pension
systems.
• The forecast does not include the impact of additional potential reform measures for COPERS
or PSPRS or the impact of pending litigation or proposed legislation.
• The forecast includes no additional future funding for program enhancements, unfunded
mandates, expiring grants, etc.
• Pay-as-you-go capital costs are based on the preliminary estimates in the five-year
Capital Improvement Program and include costs for facility major maintenance,
roadway safety, flood hazard mitigation, information technology, and money earmarked
for future expenses.
• The contingency fund is set at 4.75% of the total GF operating expenditures from FY
2026-27 through FY 2028-29.
• The FY 2026-27 total compensation costs are based on projections under the current
Council adopted pay plan ordinance and existing employee contracts. Any negotiated
labor increases will reduce the resources available for programs and services.
• The Class & Compensation study continues to put upward pressure on personal services
costs as employees progress through the new pay scales.
• No other financial impact from changes to labor unit contracts resulting from current or future
negotiations is assumed.

- 12 - 26
• In forecast years with a projected baseline deficit or ongoing surplus, the next year's
operating expenses are assumed to decrease or increase by the baseline deficit/surplus
amount prior to applying the assumed annual growth projection, as the City is required by
Charter to balance the budget each year.
• Ranges provided for operating expenditures: upper and lower ends of ranges increase
slightly in later years of the forecast reflecting additional economic uncertainty.

Other Considerations to the Multi-Year Forecast - The items below will likely require additional
funding or could adversely impact the multi-year forecast as it is currently presented.
• The forecast incorporates the estimated annual ongoing operating costs in FY 2027-28 and
FY 2028-29 for the voter approved 2023 General Obligation (GO) Bond Program totaling $29
million over the two fiscal years. These costs have been factored into the forecast; however,
further resources may still be required.
• The forecast reflects the continued funding of approximately $21 million per year earmarked to
address aging City infrastructure and critical equipment. Examples of these projects include
upgrades and replacements of fire life safety, electrical, and cooling systems in City facilities.
Also, under the direction of the City Manager, staff continues to identify critical needs in all City
facilities and works with several external firms that specialize in facility assessments. Staff
have also taken active steps to enhance facility maintenance oversight by centralizing GF
facility maintenance funding and creating a review committee. This change has significantly
enhanced the prioritization of GF facility projects. However, additional resources may be
required to adequately maintain city infrastructure.
• GF vehicle funding is estimated at $28 million for FY 2026-27, $35 million in FY 2027-28, and
$44 million in FY 2028-29 to replace units in the fleet. Vehicle replacement costs have
experienced significant inflation in recent years. It should be noted the current GF backlog of
vehicles is estimated by Public Works at a value of $27 million, and more vehicle replacement
funding may be needed during the forecast horizon and beyond.
• Additional costs to the GF are anticipated to further the City's effort to help individuals
experiencing homelessness upon the expiration of American Rescue Plan Act funds.
Preliminary projections indicate an ongoing funding requirement of approximately $18 million
beginning in FY 2026-27.
• On November 5, 2024, Arizona voters passed Proposition 312. From January 1, 2025, through
December 31, 2035, the proposition allows property owners to apply for a primary property tax
refund from the Arizona Department of Revenue (ADOR) if they can document expenses
incurred due to a city's, town's, or county's failure to enforce certain laws or address a public
nuisance. The refund, which is equal to the documented expenses, is capped at the amount of
primary property taxes the owner paid to the municipality or county in the prior tax year and
can be requested annually. The State Treasurer will withhold state-shared revenues from the
affected City or county to cover the refund amount and reimburse ADOR for refund costs. The
City's expenses are unpredictable and depend on the volume of refund requests. While the
City has not noted significant impact from this action yet, it will monitor closely given the
impact of any state shared revenue loss.
• Beyond the potential risks and headwinds stated in the economic outlook section, several
proposed legislative bills would significantly reduce City revenues. For bills that can be
quantified with available information, the estimated impact to City revenue is approximately
$593 million per year (See Attachment D1 for details), weakening the City's financial position.
Additionally, some bills may increase expenditures, requiring additional resources and further
straining the City's budget. If passed, these changes could significantly affect the multi-year
forecast.
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ATTACHMENT D1
Proposed Legislation Current Session – Negative Revenue Impacts

SB 1106, SB 1638, and HB 2785 – Arizona state tax conformity with Federal 2025 tax changes
(estimated $21,500,000 reduction beginning FY 2027-28)

SB 1745 – Municipalities local excise tax rate limit (estimated $229,000,000 reduction beginning
FY 2026-27)

HB 2011 – expands allowable deductions from Arizona gross income (estimated $540
reduction beginning FY 2028-29)

HB 2269 – Tax deduction on gross proceeds/income from gas and electricity retail sales
(estimated $9,400,000 reduction beginning FY 2026-27)

HB 4096 – Withhold state shared revenue to compensate property owners for diminution in
property values caused by zoning ordinances or other City actions ($333,000,000 reduction
per year from FY 2026-27 to FY 2028-29)




- 14 - 28
ATTACHMENT E
Stress Testing

Background – According to the National Bureau of Economic Research, the longest economic
expansion on record was ended by COVID-19 in February 2020. The COVID-19 recession is one of
the deepest but shortest in U.S. history. With federal stimulus packages and more than anticipated
revenue collections, the City was not forced to cut the budget. The City exhibited remarkable
economic resilience during the pandemic. However, several risks currently threaten national and
local economies, potentially triggering a recession or economic slowdown. Thus, stress testing is
crucial, as it helps estimate potential financial shortfalls resulting from adverse events. To help the
City plan ahead, avert or limit a fiscal emergency and keep long-term priorities on track, staff
conducted stress testing for the General Fund.

Methodology/Assumptions - "Stress test" in financial terminology, is an analysis or simulation
designed to determine the ability of a given entity to deal with an economic crisis. Instead of doing a
financial projection on a "best estimate" basis, a company or its regulators may do stress testing to
estimate how robust an entity performs in certain negative circumstances, a form of scenario
analysis. There are two scenarios for this stress testing: moderate and severe recession scenarios.
The stress test model also accounts for the anticipated fiscal impact of full tax conformity with the
One Big Beautiful Bill Act, as outlined in the Joint Legislative Budget Committee’s analysis dated
December 5, 2025.

Attachment F shows a hypothetical moderate recession estimated to start in FY 2026-27. This
scenario assumes that General Fund revenue, except state-shared income tax, will decline by 1% for
two consecutive years. According to Moody's Analytics, a recession typically affects budgets for at
least two years (except for the COVID-19 recession, which was interfered with the federal stimulus
packages). Although a moderate recession may impact revenue by more than 1%, the model is
simulated with a 1% decrease. State-shared income tax distributed to cities and towns is based on
the collections from 2 years prior, so the state-shared income tax decrease due to a moderate
recession will not affect revenues until FY 2028-29.

Attachment G shows a hypothetical severe recession that is estimated to start in FY 2026-27. This
scenario assumes that General Fund revenue, except state-shared income tax, will decline by 3% for
three consecutive years. Although a severe recession may impact revenues by more than 3%, for
simulation purposes, this stress test used a 3% decrease. Similar to the moderate scenario, the state-
shared income tax decrease caused by the economic recession will not affect revenues until FY 2028-
29.

Assumptions for recoveries, fund transfers and expenditures remain the same as the model shown in
Attachment B. However, the expenditures for the forecast period will be different due to the
methodology applied in the model. When a deficit or surplus is projected, the next year's operating
expenses are assumed to be decreased or increased by the deficit/surplus amount prior to applying
the assumed annual projected growth rate, as the City is required by Charter to balance the budget
each year.




- 15 - 29
Multi-Year General Fund Forecast – Moderate Recession Scenario, with Tax Conformity ($ Millions)
2025-26 2026-27 For Planning Purposes Only
Adopted Preliminary 2027-28 2028-29
Budget Budget Estimate Forecast Forecast
Resources
Local Taxes $841 $806 $789 - $801 $814 - $839
State Shared Revenues 682 693 704 - 715 709 – 731
Impact on Tax Conformity - - (22) (17)
Primary Property Tax 223 220 217 - 220 249 - 257
User Fees and Other 191 202 198 - 201 200 - 207
Other (Set-Aside, Carryover Balance, Transfers, Recoveries) 168 91 131 53
Unused Contingency/Set-Aside from Prior Year 89 201 94 98
Total Resources $2,194 $2,213 $2,111 - $2,140 $2,106 - $2,168
Expenditures
Operating Expenditures $1,422 $1,474 $1,510 - $1,500 $1,467 - $1,456
Civilian Pension 116 112 111 112
Sworn Public Safety Pension 359 375 399 401
Contingency/Set-Aside 201 94 98 97
Pay-As-You-Go Capital 74 49 36 31
Operating Costs for GO Bond Program - - 9 20
Vehicle Replacements 22 28 35 44
Total Expenditures $2,194 $2,132 $2,198 - $2,188 $2,172 - $2,161

PROJECTED (DEFICIT)/SURPLUS: $- $81 $(87) - $(48) $(66) - $7
ATTACHMENT F

BASELINE FORECAST (DEFICIT)/SURPLUS: $- $81 $(68) $(29)

Key Resource Forecast Assumptions:
* The forecast assumes moderate recession in 2026-27 and 2027-28. The forecast includes the 0.5 percentage point increase in the City TPT and Use Tax rates effective July 1, 2025.
* The forecast reflects the projected fiscal impact of full tax conformity with the One Big Beautiful Bill Act, based on the Joint Legislative Budget Committee’s analysis dated December 5, 2025.
* The forecast includes tax rate reduction: Laws 2021, Chapter 412 (Tax Omnibus) reduced the number of individual income tax brackets from four in Tax Year (TY) 2021 to two brackets in TY 2022.
Starting from TY 2023, the individual income tax has been reduced to 2.5%.
* Relative population share used in calculating State shared revenues in 2026-27 was based on the 2024 Census Bureau Population Estimate. It is projected to remain flat throughout the forecast period
and accounts for the San Tan Valley’s incorporation. The actual share will change annually based on Census Bureau Population Estimates.
* The forecast includes residential rental transaction privilege tax reduction: Senate Bill 1131 prohibits municipalities from taxing residential rental property starting January 1, 2025.

Key Expenditure Forecast Assumptions:
* The contingency fund is set at 4.75% of the total General Fund operating expenditures from 2026-27 through 2028-29.
* Includes no additional future funding for program enhancements, unfunded mandates, expiring grants, etc.
* 2026-27 employee costs are based on projections under the current Council-adopted pay plan ordinance and employee contracts. No assumptions have been made concerning future labor contract
negotiations. Estimated costs of the Class and Compensation study are included in the forecast. Pension costs are based on required and projected contribution rates provided by the respective pension
system actuaries.
* Non-personnel related expenditures for 2026-27 assume expenditure growth is in line with recent historical averages, and the out years are anticipated to align with the estimated CPI growth.




- 16 -
Other Forecast Notes:
* Ranges provided for revenues and expenditures. The upper & lower ends of ranges increase slightly in the outer years of the forecast reflecting additional economic uncertainty in the later years.
* Ranges include pessimistic and optimistic scenarios within assumptions provided by the primary sources of economic information mentioned in this report.
* When a baseline deficit or surplus is projected, the next year's operating expenses are assumed to be decreased or increased by the baseline deficit/surplus amount prior to applying the assumed annual
projected growth rate, as the City is required by Charter to balance the budget each year.




- 17 -
Multi-Year General Fund Forecast – Severe Recession Scenario, with Tax Conformity ($ Millions)
2025-26 2026-27 For Planning Purposes Only
Adopted Preliminary 2027-28 2028-29
Budget Budget Estimate Forecast Forecast
Resources
Local Taxes $841 $787 $753 - $765 $729 - $752
State Shared Revenues 682 686 689 - 700 664 – 686
Impact on Tax Conformity - - (22) (17)
Primary Property Tax 223 216 208 - 211 200 - 207
User Fees and Other 191 198 190 - 193 183 - 188
Other (Set-Aside, Carryover Balance, Transfers, Recoveries) 168 90 97 53
Unused Contingency/Set-Aside from Prior Year 89 201 94 98
Total Resources $2,194 $2,178 $2,009 - $2,038 $1,910 - $1,967
Expenditures
Operating Expenditures $1,422 $1,474 $1,510 - $1,500 $1,362 - $1,351
Civilian Pension 116 112 111 112
Sworn Public Safety Pension 359 375 399 401
Contingency/Set-Aside 201 94 98 97
Pay-As-You-Go Capital 74 49 36 31
Operating Costs for GO Bond Program - - 9 20
Vehicle Replacements 22 28 35 44
Total Expenditures $2,194 $2,132 $2,198 - $2,188 $2,062 - $2,051

PROJECTED (DEFICIT)/SURPLUS: $- $46 $(189) - $(150) $(152) - $(84)
ATTACHMENT G

BASELINE FORECAST (DEFICIT)/SURPLUS: $- $46 $(170) $(118)

Key Resource Forecast Assumptions:
* The forecast assumes severe recession from 2026-27 to 2028-29. The forecast includes the 0.5 percentage point increase in the City TPT and Use Tax rates effective July 1, 2025.
* The forecast reflects the projected fiscal impact of full tax conformity with the One Big Beautiful Bill Act, based on the Joint Legislative Budget Committee’s analysis dated December 5, 2025.
* The forecast includes tax rate reduction: Laws 2021, Chapter 412 (Tax Omnibus) reduced the number of individual income tax brackets from four in Tax Year (TY) 2021 to two brackets in TY 2022.
Starting from TY 2023, the individual income tax has been reduced to 2.5%.
* Relative population share used in calculating State shared revenues in 2026-27 was based on the 2024 Census Bureau Population Estimate. It is projected to remain flat throughout the forecast period
and accounts for the San Tan Valley’s incorporation. The actual share will change annually based on Census Bureau Population Estimates.
* The forecast includes residential rental transaction privilege tax reduction: Senate Bill 1131 prohibits municipalities from taxing residential rental property starting January 1, 2025.

Key Expenditure Forecast Assumptions:
* The contingency fund is set at 4.75% of the total General Fund operating expenditures from 2026-27 through 2028-29.
* Includes no additional future funding for program enhancements, unfunded mandates, expiring grants, etc.
* 2026-27 employee costs are based on projections under the current Council-adopted pay plan ordinance and employee contracts. No assumptions have been made concerning future labor contract
negotiations. Estimated costs of the Class and Compensation study are included in the forecast. Pension costs are based on required and projected contribution rates provided by the respective pension
system actuaries.
* Non-personnel related expenditures for 2026-27 assume expenditure growth is in line with recent historical averages, and the out years are anticipated to align with the estimated CPI growth.




- 18 -
Other Forecast Notes:
* Ranges provided for revenues and expenditures. The upper & lower ends of ranges increase slightly in the outer years of the forecast reflecting additional economic uncertainty in the later years.
* Ranges include pessimistic and optimistic scenarios within assumptions provided by the primary sources of economic information mentioned in this report.
* When a baseline deficit or surplus is projected, the next year's operating expenses are assumed to be decreased or increased by the baseline deficit/surplus amount prior to applying the assumed annual
projected growth rate, as the City is required by Charter to balance the budget each year.




- 19 -
ATTACHMENT H
Pension Cost Increases

The chart below illustrates the rise in General Fund (GF) pension costs for PSPRS and
COPERS. The forecast for fiscal years 2025-26 through 2028-29 is based on information from
plan actuaries and on the valuations dated June 30, 2025. Projected amounts account for
updated salary, inflation, and demographic data. The PSPRS Board continued the decrease in
the payroll growth assumption from 1.5% to 0.75%, resulting in an increase to the employer
contribution rate.


General Fund Pension Forecast
GF COPERS GF Fire PSPRS GF Police PSPRS % of GF Expenditures
$600
$46M Increase FY25-26 to FY28-29
29%
$510 $512
$486
$500 $466
$439 $442 27%


$400 24.2% $364 25%
$338
$324
23.8% 24.0% 23.9% 23.7% 23%
$300 23.4%
23.0% 22.8%
22.4%
21%
$200
19%

$100
17%


$0 15%
Actuals Actuals Actuals Actuals Actuals Forecast Forecast Forecast Forecast
FY20-21 FY21-22 FY22-23 FY23-24 FY24-25 FY25-26 FY26-27 FY27-28 FY28-29




- 20 - 34



Report

This report presents to City Council a review of the 2025 heat season and proposed
updates to the City of Phoenix Heat Response Plan for 2026. The Heat Response
Plan outlines the programs and services designed to protect residents and visitors
from heat-related illness, death, and other severe health consequences resulting from
both indoor and outdoor heat exposure. Staff are seeking approval of the 2026 Heat
Response Plan and requesting authorization to proceed with six related items:

1. Authorization to lease real property located at 20 W. Jackson Street from Sunrise
Equities, LLC.
2. Authorization to enter into contract with UMOM New Day Centers for Family Heat
Respite Operator and Supportive Services.
3. Authorization to enter into contract with Community Bridges, Inc. and Justa Center
for Heat Related Respite Operator and Supportive Services.
4. Authorization to enter into contract with AllThrive365 to serve as the distribution
partner for the Community Heat Relief Supply Program.
5. Authorization to enter into contract with Wist Office Products Company to provide
Heat Relief Supplies.
6. Authorization to enter into contract with Ninja Tropic to provide Heat Relief Online
Training Curriculum Services.

THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.

Summary
Extreme Heat and Public Health
Each year, the City of Phoenix implements a comprehensive Heat Response Plan to
address the significant public health impacts of extreme heat. Extreme heat impacts
the health and quality of life of many community members. In 2025, the Phoenix Fire
Department responded to more than 1,700 calls for service for heat-related
emergencies in Phoenix, and the Maricopa County Department of Public Health
reported 425 heat-related fatalities countywide. The City of Phoenix's Heat Response
Plan is revised annually to ensure that Phoenix's approach is adapted to meet evolving
community needs in the pursuit of improvements in heat-related public health
indicators.




Review of 2025 Heat Season and City Programs
The 2025 heat season was among the most severe in Phoenix's history, with an
average daily temperature of 92.4°F (fourth highest all-time), 37 days at or above 110°
F, and 31 Extreme Heat Warning days. Despite these extreme conditions, heat-related
deaths as reported by the Maricopa County Department of Public Health decreased by
more than 30 percent with approximately 200 fewer fatalities reported than the prior
year. Heat-related deaths have now declined for two consecutive years in Maricopa
County.

The City of Phoenix continued to make significant investments in programs and
services intended to prevent heat-related illnesses and deaths last year. The Heat
Response Plan includes a wide range of actions that address strategic priorities
including providing publicly available cool space and water, supporting cool and safe
home environments, and protecting workers. Among the major investments supporting
heat response efforts in 2025 was the continued operation of a 24/7 heat respite and
navigation center at 20 W. Jackson Street. Additionally, the City offered extended
operating hours until 10 p.m. daily at Harmon, Yucca, and Cholla Libraries, three public
cooling centers located in areas with high heat-related emergency calls. The extended
hour and overnight heat relief locations were supported by dedicated staff with
expertise in navigation services, mental and behavioral health, as well as dedicated
security services. On-site health and medical support was provided by volunteers with
the Arizona State University Nursing Program and Terros Health. Operations at these
sites were coordinated by a cross-departmental Unified Command Team with
leadership from the Phoenix Fire Department, Library Department, Office of
Emergency Management, Office of Heat Response and Mitigation, Office of Homeless
Solutions, and Office of Public Health.

The four extended-hour and overnight heat relief locations experienced significant
daily use in the 2025 heat season, with more than 44,500 visits recorded from an
estimated 5,000 unique individuals. On-site staff supported nearly 2,300 requests for
additional assistance, which resulted in widespread community benefits including more
than 700 placements into housing, shelter, or related services. An emergent trend in
2025 was a high volume of requests for assistance from families with minor children at
the extended hour and overnight heat relief locations.

Heat Response Plan Updates for 2026
The 2026 City of Phoenix Heat Response Plan (Attachment A) builds on lessons
learned from 2025, with targeted and data-driven adjustments to further protect
residents throughout the heat season. Key insights shaping the 2026 plan include
maintaining a strong focus on high-need areas such as downtown Phoenix and the I-


17 corridor, improving heat relief services for families experiencing homelessness, and
continuing to strengthen the promotion and accessibility of City programs to
disproportionately impacted neighborhoods and populations.

Four key updates to the Heat Response Plan are proposed for 2026:
1. Modifications to the locations and service model for extended hour and overnight
heat relief sites, including offering extended hour heat relief services in partnership
with the Justa Center in downtown Phoenix and offering dedicated heat relief
services for families in partnership with UMOM.
2. Developing a new training program for City of Phoenix employees who support heat
relief network locations, with the goal of increasing the capacity of public-facing
employees to connect residents to heat-related services and resources.
3. Restructuring and formalizing the City's heat relief supply assistance program for
community partners who participate in the regional Heat Relief Network.
4. Expanding community outreach efforts for mobile and manufactured home
communities and senior residents in partnership with the Red Cross and Arizona
Mobile and Manufactured Homeowners Organization.

Staff will continue to improve coordination and reporting strategies that increase cross-
departmental and public situational awareness of all heat response plan actions status.

Budget Impact
In 2025, the total cost for extended hour and overnight heat relief sites and services
was $4.3 million funded by the City of Phoenix (American Rescue Plan Act ARPA and
Opioid Settlement funds) and Maricopa County (ARPA funds). The approximate project
need for the 24/7 Heat Respite and extended hour cooling center sites in 2026 is $5.25
million with proposed funding sources including Maricopa County ARPA, Opioid
Settlement, Community Development Block Grant CARES Act, and the General Fund.

Concurrence/Previous Council Action
· On October 12, 2021, City Council approved the Phoenix Climate Action Plan.
· On March 2, 2022, City Council adopted the 2021 Maricopa County Multi-
Jurisdictional Hazard Mitigation Plan.
· On March 25, 2025, City Council reviewed the 2025 Heat Response Plan.
· On March 25, 2025, City Council approved amendments to an Intergovernmental
Agreement (IGA) with Maricopa County (Ordinance S-50701).
· On December 9, 2025, City Council approved the Phoenix Energy Access Plan.






Responsible Department
This item is submitted by Assistant City Manager Lori Bays, Deputy City Manager Gina
Montes, the Phoenix Fire and Library departments, and the Offices of Emergency
Management, Heat Response and Mitigation, Homeless Solutions, and Public Health.





ATTACHMENT A




Heat Response Plan




DRAFT FOR REVIEW
2/13/26




Table of Contents
Executive Summary 3
Purpose and Planning Process 4
Weather and Climate Assessment 6
Health Assessment 8
Heat Response Programs and Services 10
Table of Strategies and Actions 11
Strategy 1: Equip First Responders for Effective Heat Response 12
Strategy 2: Provide Publicly Accessible Cool Space and Drinking Water 13
Strategy 3: Support Cool and Safe Homes 17
Strategy 4: Support Cool and Safe Mobility and Recreation 19
Strategy 5: Implement Heat Safety Measures for Workers 20
Strategy 6: Educate the Community and Engage with Partners 21
Acknowledgements 23





Executive Summary
The Heat Response Plan details the programs and services that Phoenix delivers to residents
and visitors to prevent illness, death, and other serious and immediate adverse health outcomes
associated with indoor and outdoor heat exposure. Extreme heat impacts the health and quality
of life of many community members, with thousands of heat-related illnesses and hundreds of
heat-related fatalities reported annually in Maricopa County. Preliminary reporting shows 425
heat-related fatalities in Maricopa County in 2025, indicating that significant public health
challenges persist. However, this total represents a reduction of approximately 30% from the prior
year and would mark the second consecutive year of declines after more than a decade of
consistent increases. The City of Phoenix’s Heat Response Plan is revised annually to ensure
that Phoenix’s approach is adapted to meet evolving community needs in the pursuit of
continued improvements in heat-related public health indicators.

The 2026 Heat Response Plan contains 23 specific heat response actions for which the City
holds a leadership role, organized into six broad strategies:

1. Equip first responders for effective heat response.

2. Provide publicly accessible cool space and drinking water.

3. Support cool and safe home environments.

4. Support cool and safe mobility and recreation.

5. Implement heat safety measures for workers.

6. Educate the community and engage with partners.

Notable updates to the plan for 2026 include:

1. Modifications to the locations and operations of the 24/7 heat respite center and extended
hour cooling centers

2. Building new heat-focused educational resources for City of Phoenix employees

3. Restructuring the City’s heat relief assistance program for community partners

4. Expanding outreach efforts to mobile home and senior living communities in partnership
with the Red Cross


The 2026 plan draws from lessons learned over the past several years, with expanded services,
data-driven adjustments, and stronger partnerships, ensuring enhanced coordination, accessibility,
and outreach to protect residents during extreme heat events.


Purpose and Planning Process
The City of Phoenix Heat Response Plan outlines programs and services intended to protect
public health and quality of life from the threats of hot weather. Extreme heat is a leading cause
of weather-related deaths in the United States and exerts a significant public health burden in
Phoenix. The most acute impacts include heat-caused and heat-related fatalities, as well as
heat-related illnesses that require emergency medical service and hospital care. Many other
health challenges are also known to be related to prolonged, frequent, or severe heat exposure
but are not systematically documented. These challenges include cases of heat illness that are
unreported, disrupted sleep patterns, and anxiety over high electricity bills.

While everyone is potentially vulnerable to heat-related illness, certain communities account for
a disproportionately high share of the public health burden of extreme heat. Public health
reports in Arizona point to people experiencing homelessness and substance users at especially
high risk of adverse heat-related health outcomes. Studies also show that rates of heat-related
illness and/or death are higher in communities that have lower incomes, lower quality housing, a
higher prevalence of elderly individuals, a higher prevalence of people of color, and other
indicators of social vulnerability.

Managing the public health risks associated with extreme heat is an integral component of
hazard preparedness for the City of Phoenix owing to its geographic positioning in the Sonoran
Desert. Prolonged, hot summers are a part of the regional climate. However, the experience of
summer heat is highly variable between different neighborhoods in Phoenix and between
individual residents. Historical development patterns and varying topography across Phoenix
lead to neighborhood-to-neighborhood air temperature differences of 10°F or more on summer
days. Personal heat exposure is even more variable depending on daily activity patterns and
access to air-conditioned spaces. Over time, the severity of summer heat in Phoenix is being
amplified beyond background conditions by urban development and global-scale climate
change. Summer daytime and nighttime temperatures have increased in the City of Phoenix for
several decades and temperatures are projected to continue to rise.

To address the significant, inequitable, and growing public health risks associated with extreme
heat, the Phoenix City Council unanimously passed the City’s first Heat Response Plan in 2022.
This document is the fourth annual update to the Heat Response Plan.

The process to update the Heat Response Plan began in late summer 2025 and was
coordinated by an Executive Heat Response Leadership team. This team is comprised of senior
staff from Emergency Management, Fire, Public Health, Homeless Solutions, Library, and Heat
Response and Mitigation. The Executive Heat Response Leadership team initiated several
different types of program evaluation to identify opportunities for improvement toward the goal
of preventing heat-associated illness and deaths. Those evaluation activities included a formal
after-action analysis of the City’s enhanced efforts during summer 2025 and review of
operations with city departments and regional stakeholders that operate programs and services
relevant to the heat response mission.


The 2026 Heat Response Plan contains 23 specific heat response actions for which the City
holds a leadership role, organized into six broad strategies:

1. Equip first responders for effective heat response.

2. Provide publicly accessible cool space and drinking water.

3. Support cool and safe home environments.

4. Support cool and safe mobility and recreation.

5. Implement heat safety measures for workers.

6. Educate the community and engage with partners.


The goal of the Heat Response Plan is to enhance public health and community resilience by
alleviating adverse effects of heat. Key performance indicators include:

• Heat-related mortality: Strive for year-over-year reductions in the number of fatalities
attributed to heat exposure in the City of Phoenix

• Heat-related illnesses: Strive for year-over-year reductions in the number and severity of
medical service calls related to heat exposure in the City of Phoenix.

Confirmed heat-related deaths in Phoenix for the 2025 heat season were approximately 30%
lower than totals reported for 2024, marking the second consecutive year of declines.
Emergency calls for service for heat-related illnesses to the Phoenix Fire Department increased
by approximately 25% from 2024 to 2025.

The City of Phoenix also implements and invests in a wide range of other programs and
services that support the goals of the Heat Response Plan but are not specifically activated or
emphasized for the heat season, and as such are not listed as actions in this document.
Examples of those related initiatives include:
• Investments in affordable housing units and shelter beds
• Operation of housing repair and weatherization programs
• Installation of shade structures at transit stops and in the public right of way
• Increases in urban tree canopy
• Actions proposed in the Shade Phoenix Plan, Energy Access Plan, Climate Action
Plan, and other municipal plans.





Weather and Climate Assessment
The City of Phoenix Heat Response Plan defines May through September as the operational
season for heat response efforts. In 2025, programs operated during this time period as planned
with no early activation or extension of programming timelines.

Heat Season 2025 Review

The 2025 Heat Season was among the most severe in Phoenix’s history. By many metrics, the
2025 heat season ranked 4th hottest all-time, behind only 2024, 2023, and 2020. Temperatures
at Phoenix Sky Harbor Airport hit at least 110°F on 37 days and there were 31 days with
National Weather Service Extreme Heat Warnings in effect. Daily highs exceeding 115°F were
recorded five times, including a seasonal high of 118°F on July 9 and August 7. Nighttime
temperatures failed to drop below 90°F at Sky Harbor on 23 days, including a seasonal high
overnight low of 95°F on July 10. August was the hottest month of the summer and was the
month with temperatures farthest above the climatological average, with daytime highs
exceeding normals by more than 4°F. The figure below shows daily high temperatures from the
2025 heat season as compared to climatological normals, and the table provides a month-by-
month summary of daily average high and low temperatures.




2025 Normal 2025 2025 Normal 2025
Month
Avg. High Avg. High* Rank** Avg. Low Avg. Low* Rank**
May 95.6°F 94.5°F 34 71.2°F 69.5°F 12
June 106.2°F 104.2°F 16 80.9°F 78.6°F 10
July 107.6°F 106.5°F 12 86.2°F 84.5°F 8
August 109.3°F 105.1°F 4 87.1°F 83.6°F 5
September 100.5°F 100.4°F 30 79.8°F 78.1°F 5
Heat Season
103.8°F 102.1°F 6 81.1°F 78.9°F 3
(May – Sept.)
*per the official 1991–2020 U.S. Climate Normals adopted by the National Oceanic and Atmospheric Administration
**out of 130 recorded years; 1 indicates hottest on record

Climate Data for Planning

The table below presents weekly averages, ranges, and probabilities of exceedance based on
2016–2025 observations from Phoenix Sky Harbor Airport. Statistics are based on the previous
ten years rather than the official 30-year normals established by the National Oceanic and
Atmospheric Administration to ensure that the most recent observations are used and to
acknowledge non- stationarity in regional temperature trends. Data are presented for each week
of the 2026 Heat Season starting on May 1; October data are included to support decision-
making regarding potential extensions of the operational period beyond September 30.

Week Date Daily High Temperatures Daily Low Temperatures
Average Highest 100°F or 110°F or Average Highest 90°F or
(°F) (°F) above* above* (°F) (°F) above*
1 5/1 92.7 108 19% 0% 67.0 76 0%
2 5/8 93.5 106 30% 0% 68.3 81 0%
3 5/15 95.4 105 31% 0% 70.8 82 0%
4 5/22 96.1 108 36% 0% 70.2 79 0%
5 5/29 101.1 113 67% 6% 75.1 87 0%
6 6/5 104.9 115 86% 13% 78.8 87 0%
7 6/12 106.4 118 89% 31% 79.7 91 9%
8 6/19 108.1 119 94% 37% 82.1 92 11%
9 6/26 108.2 116 97% 40% 83.9 95 13%
10 7/3 109.9 118 100% 57% 86.5 95 26%
11 7/10 109.7 118 96% 59% 88.0 95 43%
12 7/17 108.2 119 97% 34% 87.3 97 37%
13 7/24 107.2 119 87% 51% 85.7 95 31%
14 7/31 108.1 118 91% 49% 85.9 93 31%
15 8/7 106.5 118 91% 27% 85.3 94 21%
16 8/14 106.4 117 86% 33% 84.0 93 19%
17 8/21 105.4 115 89% 27% 83.3 92 11%
18 8/28 106.1 117 90% 19% 84.6 93 10%
19 9/4 105.4 116 87% 21% 83.5 93 4%
20 9/11 103.2 113 71% 4% 80.0 90 1%
21 9/18 99.2 109 53% 0% 76.6 85 0%
22 9/25 98.0 117 49% 7% 74.5 88 0%
10/2 95.9 113 29% 6% 71.4 86 0%
10/9 92.0 108 19% 0% 68.6 81 0%
10/16 90.7 105 11% 0% 66.0 75 0%
10/23 88.3 100 3% 0% 63.6 76 0%
*Probabilities of exceedance indicate the percent of days within the given week that temperatures have reached the
indicated temperature over the past decade.





Health Assessment
Heat-related deaths are tracked in Maricopa County by the Maricopa Department of Public
Health (MCDPH), in partnership with the Maricopa County Office of the Medical Examiner.
Heat-related deaths include those that are directly attributable to heat exposure (heat-caused
deaths) and those where heat played a contributing role but was not the primary cause of death
(heat-contributed deaths). The Maricopa County heat-health system is widely recognized as a
national and international best practice. Heat-related deaths have been recorded using
consistent methods since 2006.

Heat-related deaths have increased considerably in Maricopa County since 2014. Particularly
large year-over-year increases were evident from 2015 to 2016 (+83%), 2019 to 2020 (+62%),
and 2021 to 2022 (+25%). Another large increase is evident from 2022 to 2023, with an
increase of more than 47% to the record high of 625 cases in Maricopa County that was
recorded that year. However, heat-related deaths have declined in Maricopa County for each
of the last two years, including a decline of approximately 30% from the 608 cases confirmed in
2024 to 425 confirmed cases in 2025 (as of 12/31/2025; 9 cases remain under investigation).
declined in Maricopa County from 2023 to 2024. City-specific totals for 2025 will be released by
MCDPH at later date.





MCDPH produces comprehensive annual reports that detail key risk factors and characteristics
of heat-associated deaths, including demographic information, details about housing status, air
conditioning availability, and indications of drug/alcohol use. The preliminary report for the 2025
heat season has not yet been released, but the current MCDPH Dashboard shows that county-
wide risk factors for heat-related death remain generally consistent with prior years. Among the
key metrics as of December 31, 2025:

• 52% of reported deaths were heat-caused and 48% were considered heat-contributed.
Heat-caused deaths are those in which heat was directly involved in the sequence of
conditions causing deaths.

• 74% of heat-related deaths were among males.

• 58% of heat-related deaths were among persons 35–64 years of age

• 73% of heat-related deaths had an outdoor place of injury

• Among indoor heat-related deaths, 89% occurred in a home where air conditioning was
present, but was turned off or not functioning

• People experiencing homelessness accounted for 48% of heat-related deaths

• Substance use was involved in 64% of deaths; this ratio is a modest increase from the
prior three-year average of 57%

Another key lesson learned from MCDPH and Arizona State University (ASU) analysis of heat-
associated death and illness data is that serious health impacts from heat are not confined to
only the hottest summer days. While the hottest days do bring the highest risk of heat-
associated death and illness, cases begin to be seen at temperatures that would be considered
mild by most Phoenicians. In 2025, 37% of heat-related deaths in Maricopa County occurred on
days with the HeatRisk was designated by the National Weather Service as Major or Extreme,
and 63% of deaths occurred on days when the HeatRisk was designated as Moderate, Minor, or
None. These findings imply that a seasonal approach to heat management, rather than one only
focused on intermittent “heat waves” is necessary.





Heat Response Programs and Services
In 2026, the City of Phoenix will take the lead or play a significant role in operating 23 heat
response programs and services. This comprehensive portfolio comprises a mix of ongoing
programs continuing from previous years, revised existing programs, and new initiatives. The
responsibility and support for these programs and services, encompassing budget and staffing
needs, are distributed across more than 15 different City departments and functions. While
many actions in the plan continually evolve and improve from year to year, there are four
notable updates for 2026:

1. Modifications to the locations and operations of the 24/7 heat respite center and extended
hour cooling centers (Actions 2.2 and 2.3)

2. Building new heat-focused educational resources for City of Phoenix employees (Action 2.8)

3. Restructuring the City’s heat relief assistance program for community partners (Action 2.9)

4. Expanding outreach efforts to mobile home and senior living communities in partnership
with the Red Cross (Action 3.4)

The subsequent pages feature an inventory of all programs and services organized by strategy,
presented in table format. Following the table, a short narrative is provided for each action to
provide a more complete perspective of the components of the Heat Response Plan.





Strategies Actions (* denotes actions with notable updates for 2026) Lead Depts.
Equip First 1.1 Activate summer heat protocols including cold immersion techniques FIRE
Responders for
Effective Heat OHS, OHRM,
Response 1.2 Equip Homeless Outreach Teams with Cooling Resources
OPH
2.1 Designate City Facilities as Heat Relief Network Cooling Centers LIB, OHRM
LIB, OHS, OEM,
*2.2 Offer Extended Hours at City of Phoenix Cooling Centers
OHRM, OPH
OHS, OEM,
*2.3 Operate a 24/7 Respite and Navigation Center
OHRM, OPH
Provide
PRD, HSD,
Publicly 2.4 Designate City Facilities as Heat Relief Network Hydration Stations
OHRM
Accessible
Cool Space 2.5 Operate Safe Outdoor Space OHS
and
Drinking 2.6 Provide Shade and Cooled Rest Areas at The Key Campus OHS
Water
2.7 Expand Smart Chilled Drinking Water in Public Spaces Initiative INNOV

*2.8 Improve Heat Response Educational Resources for City Employees OHRM, HR

*2.9 Provide Heat Relief Supplies to Community Partners OHRM
NSD, HSD,
3.1 Promote and Enforce Cooling Ordinance for Rental Housing Units
COMMS

Support Cool 3.2 Provide Emergency Utility Assistance HSD
and Safe
Homes 3.3 Offer Low-flow Water Services Program WSD

*3.4 Deploy Heat Outreach Teams to Mobile Home and Senior Communities OHRM
PRD, OHRM,
4.1 Deploy Outreach Teams to Select Trailheads
FIRE
Support Cool
and Safe 4.2 Close Select Trailheads on Extreme Heat Warning Days PRD
Mobility and
Recreation 4.3 Attend Community Events to Share Heat Safety Resources OHRM

Implement 5.1 Annually Update Heat Safety Plans in City Departments HR
Heat Safety
Measures for FIN, LAW, HR,
5.2 Promote and Enforce Heat Safety Ordinance for City Contractors
Workers OHRM
6.1 Operate a Comprehensive Heat Response Public Education Campaign COMMS
Educate the
Community OPH, OHRM,
6.2 Improve Engagement Strategies for People Who Use Substances
and Engage OHS, COMMS
with Partners
6.3 Participate in Cross-Agency Work Groups and Research Initiatives OHRM, OEM


Department key: OHRM – Office of Heat Response and Mitigation; COMMS – Communications; VOL – Volunteer Programs; OAC –
Arts and Culture; HSD – Human Services; HR – Human Resources; NSD – Neighborhood Services; OPH – Public Health, OEM –
Office of Emergency Management; PWD – Public Works Department; PRD – Parks and Recreation Department; WSD – Water
Services Department; PTD – Public Transit Department; LRT – Light Rail Transit; OHS – Office of Homeless Solutions; FIN –
Finance Department; INNOV – Office of Innovation.





 Activate Summer Heat Protocols Including Cold Immersion Techniques Action 1.1
The City of Phoenix Fire Department continues to respond to all heat-related calls in which the
safety, health, or lives of residents are threatened during our summer months. The Fire
Department's life-saving measures for heat emergencies include ice and cold-water immersion,
chilled intravenous therapy, and other innovative strategies to reduce case severity. The Fire
Department Heat Stress Management Standard Operating Procedure (MP 206.19) provides a
robust framework for minimizing the effects of heat stress on first responders, which would
have a cascading adverse impact on the community. The framework focuses on health
assessments, rest, hydration, and temperature regulation for personnel exposed to high
temperatures. Protective directives are implemented when temperatures exceed 105°F,
deploying additional resources and implementing enhanced rehabilitation measures. Training
exposures comply with ADOSH guidelines, further ensuring personnel's well-being.
TARGET POPULATION CITYWIDE
LEAD DEPARTMENT(S) FIRE
RESOURCES / MORE INFO. https://www.phoenix.gov/fire/publications/standard-operating-procedures




 Equip Homeless Outreach Teams with Cooling Resources Action 1.2
The Office of Homeless Solutions deploys outreach teams year-round for proactive engagement
with people experiencing homelessness and to assist in providing transportation and connection
to homeless services. During the heat season, outreach teams are equipped with heat relief kits
to distribute to community members in need, including water, hats, cooling towels, and other
essential supplies. Staff also receive information about publicly available cooling resources to
share during their engagements. In the 2025 heat season, 1,579 people benefitted from this
program, which is supported by a three-year grant from the Gila River Indian Community.
TARGET POPULATION PEOPLE EXPERIENCING HOMELESSNESS
LEAD DEPARTMENT(S) OHS, OHRM
RESOURCES / MORE INFO. N/A





 Designate City facilities as Heat Relief Network Cooling Centers Action 2.1
The regional Heat Relief Network is coordinated by the Maricopa Association of Governments
(MAG) and consists of Respite Centers, Cooling Centers, Hydration Stations, and Donation
Sites. Cooling Centers are indoor, air-conditioned locations that also offer hydration. 17 City of
Phoenix Library locations served as Cooling Centers throughout the 2025 Heat Season and the
City will continue this commitment in 2025. All participating City facilities are listed on a publicly
accessible web map and directory hosted by MAG.
TARGET POPULATION CITYWIDE
LEAD DEPARTMENT(S) LIBRARY, OHRM
RESOURCES / MORE INFO. https://azmag.gov/Programs/Heat-Relief-Network



 Offer Extended Hours at City of Phoenix Cooling Centers Action 2.2
Updated for 2026. Participating facilities in the regional Heat Relief Network typically provide
services coincident with their normal hours of business operation. This model creates gaps in
network availability, particularly in the late afternoon and evening hours, as well as on
weekends. To address this deficiency, the City of Phoenix will extend the hours of one Cooling
Center—Cholla Library—to 9pm each day of the week and add capacity from noon to 9pm on
Sundays throughout the heat season. This location was selected to address elevated heat-
health risks along the I-17 corridor north of downtown Phoenix, as a complement to the City’s
investment in heat respite locations in the downtown core. Similar to the 2025 heat season, full
library services will be offered at Cholla Library during the extended operating hours, with
additional staffing support provided by Community Bridges, Inc.
TARGET POPULATION CITYWIDE
LEAD DEPARTMENT(S) LIB, OHS, OEM, OHRM, OPH
RESOURCES / MORE INFO. N/A





 Operate 24/7 and Extended Hour Respite and Navigation Centers Action 2.3
Updated for 2026. To further improve the capacity of the regional Heat Relief Network, the City
of Phoenix will operate one 24/7 Heat Respite and Navigation Center for the entire heat season
as well as a second site with afternoon and evening hours. These locations will serve as safe,
cool indoor spaces for refuge from the heat and provide water. They will also provide resources
for people experiencing homelessness including navigation and transportation, to help people
access a wide range of other City of Phoenix services. The locations were chosen based on
analysis of public health and community vulnerability data as well as operational capabilities.
This year, the City will again offer 24/7 heat respite at 20 W. Jackson St. and additional
availability at the Justa Center, located at 1001 W. Jefferson St. Both locations are in downtown
Phoenix in the primary hotspot for heat-related 911 calls citywide. Both of these sites will have
staffing and security support from the Office of Homeless Solutions, Community Bridges, Inc.,
and the Phoenix Police Department.
TARGET POPULATION CITYWIDE
LEAD DEPARTMENT(S) OHS, OEM, OHRM, OPH
RESOURCES / MORE INFO. N/A




 Designate City Facilities as Heat Relief Network Hydration Stations Action 2.4
The regional Heat Relief Network is coordinated by the Maricopa Association of Governments
(MAG) and consists of Respite Centers, Cooling Centers, Hydration Stations, and Donation
Sites. Hydration Stations are indoor or outdoor locations that offer bottled water and may offer
other heat relief resources. All City of Phoenix senior centers, community centers, and swimming
pools served as Hydration Stations during the 2025 Heat Season and the City will continue this
commitment in 2026. All participating City facilities are listed on a publicly accessible web map
and directory hosted by MAG.
TARGET POPULATION CITYWIDE
LEAD DEPARTMENT(S) PRD, HSD, OHRM
RESOURCES / MORE INFO. https://azmag.gov/Programs/Heat-Relief-Network




 Operate the Safe Outdoor Space Action 2.5
The Safe Outdoor Space at 1537 W. Jackson St. is a key component in the city’s strategy to
address homelessness around the Key Campus. It is designed as an alternative for those not
yet ready for indoor shelter and provides a safer, shaded environment with essential services to
aid individuals in ending their homelessness. The unique property offers both outdoor and
cooled indoor spaces. The operation of the Safe Outdoor Space aligns with recommendations
from the 2020 Strategies to Address Homelessness Plan.
TARGET POPULATION PEOPLE EXPERIENCING HOMELESSNESS
LEAD DEPARTMENT(S) OHS
RESOURCES / MORE INFO. N/A




 Provide Shade and Cooled Rest areas at The Key Campus Action 2.6
Multiple City of Phoenix investments made over the past several years are providing shade and
cooled space to individuals experiencing homelessness at the Key Campus. These investments
include shade structures and evaporative coolers that are activated on the Campus during the
heat season. Phoenix coordinated and funded the construction of a cooling tower at the center
of the Campus that became operational in 2025.
TARGET POPULATION PEOPLE EXPERIENCING HOMELESSNESS
LEAD DEPARTMENT(S) OHS
RESOURCES / MORE INFO. N/A




 Expand Smart Drinking Water in Public Spaces Initiative Action 2.7
Access to chilled drinking water is a fundamental need for health and well-being. This project
expands access to chilled drinking water in high-density areas of the city, with locations near
public transportation stops and hubs, City buildings, and public spaces. The project takes a
data-driven approach to understand the needs of the Phoenix community and identify optimal
locations. Each unit has a remote monitoring system to provide usage data and alerts for
system issues and potential leaks. The initiative includes partners, including Downtown
Phoenix Inc. and HandsOn Greater Phoenix, as well as community members to support the
upkeep and sustainability of each unit. As of early 2026, 11 units have been installed with four
additional units to be installed later in the calendar year. To date, the initiative has delivered the
equivalent of more than 270,000 single-use plastic bottles of water to residents, without the
plastic waste. The project won an IDC North America Smart Cities Award in 2025.
TARGET POPULATION CITYWIDE
LEAD DEPARTMENT(S) OFFICE OF INNOVATION
RESOURCES / MORE INFO. https://www.phoenix.gov/administration/departments/innovation/chilled-
drinking-water-initiative.html


 Improve Heat Response Educational Resources for City Employees Action 2.8
Updated for 2026. A new training program is being developed for staff members who support
PHXYou platform, will help build employee awareness of the full suite of heat relief programs
and resources available to the public. This content includes information about programs and
tools offered by city departments as well as local partners. The training program is being
collaboratively developed with input from ten city departments. A pilot version of the training
program will be launched for the 2026 heat season, with feedback from the pilot used to
enhance the program for widespread implementation in 2027. This action is supported by a
FEMA Building Resilient Infrastructure and Communities Grant.
TARGET POPULATION EMPLOYEES
LEAD DEPARTMENT(S) OHRM, HR
RESOURCES / MORE INFO. N/A



 Provide Heat Relief Grants to Community Partners Action 2.9
Updated for 2026. Dozens of community organizations participate in the regional Heat Relief
Network, expanding options available for city residents to access cool space, drinking water,
and important programs and services. These organizations participate in regional heat relief
efforts on a voluntary basis, often absorbing additional costs to do so with no or very limited
financial resources. The City of Phoenix has been offering heat relief assistance programs to
these organizations since 2022. Last year, 18 local organizations received supplies including
hats, electrolytes, sunscreen, resumable water bottles, and lip balm with a total allocation of
more than $100,000. In 2026, the heat relief assistance program is being restructured with new
formal contracts for a heat relief supply provider and distribution manager to improve program
efficiency. All participating organizations must be registered with the regional Heat Relief
Network with operations in the City of Phoenix.
TARGET POPULATION CITYWIDE
LEAD DEPARTMENT(S) OHRM
RESOURCES / MORE INFO. N/A





 Promote and Enforce Cooling Ordinance for Rental Housing Unit Action 3.1

The Neighborhood Services Department enforces the City’s cooling ordinance, which sets
minimum temperature requirements for cooling systems in all single- and multi-family rental
housing units. Each unit must be able to safely cool all livable rooms to 86°F when using
evaporative cooling and 82°F when using air conditioning. The Human Services Department
oversees a Landlord-Tenant education program that helps parties understand their rights and
responsibilities concerning this ordinance and the Arizona Residential Landlord-Tenant Act. The
City actively promotes these and related programs throughout the heat season. In 2025,
Neighborhood Services completed 200 service calls related to enforcement of the cooling
ordinance.
TARGET POPULATION RENTERS
LEAD DEPARTMENT(S) NSD, HSD, COMMS
https://www.phoenix.gov/nsdsite/Documents/NPD%20Documents/Cooling%20Ordinance%2
RESOURCES / MORE INFO.
0Flyer.pdf


 Provide Emergency Utility Assistance Action 3.2
The Human Services Department operates the City’s utility assistance program for residents,
which aids in covering costs for electricity, water, and gas services. Assistance is provided
through federal, state, and local utility assistance funding initiatives. Funding is provided on a
first-come, first-served basis; however, those who meet emergency criteria will be prioritized for
consideration if funding is available. Priority will be given to households with children under 24
months, individuals aged 60 and older, or those with special medical needs. The Human
Services Department staff offer case management services, education, and utility provider
coordination to help residents to effectively manage their finances, enroll in appropriate utility
plans, and advocate to prevent disconnection or facilitate reconnection of utility services when
appropriate.

The utility assistance program operates year-round and is promoted as a heat response
strategy during the heat season. In 2025, 59% of financial assistance was provided during the
heat season and 57% of total households were served during the heat season, with the most
assistance provided and households served occurring in September.
TARGET POPULATION CITYWIDE
LEAD DEPARTMENT(S) HSD
RESOURCES / MORE INFO. https://www.phoenix.gov/humanservices





 Offer Low-Flow Water Service Program Action 3.3
The Water Services Department is continuing its innovative Low-Flow Water Service Program.
This program provides a vital lifeline for customers experiencing difficulty paying their water
bills, offering essential water services for up to three months. By ensuring continued access to
water for basic needs, such as hydration, while residents work to resolve challenges with bill
payment, the City strives to alleviate financial burdens during the heat season.

TARGET POPULATION CITYWIDE
LEAD DEPARTMENT(S) WSD
RESOURCES / MORE INFO. https://www.phoenix.gov/waterservices




 Deploy Heat Outreach Teams to Mobile Home and Senior Communities Action 3.4

Updated action for 2026. The City will partner with the Red Cross and the Arizona Mobile and
Manufactured Homeowners Association to coordinate a volunteer-led outreach program for
residents of mobile and manufactured homes as well as seniors. The partnership will focus on
educating residents about available resources and promoting heat safety. In 2025, this effort
included five outreach campaigns that engaged 445 residents, with the support of 38
participating volunteers. Staff and partners are seeking to expand efforts for 2026 in
coordination with the Neighborhood Services and Human Services Departments and Offices of
Public Health and Sustainability.
TARGET POPULATION MOBILE HOME RESIDENTS, SENIORS
LEAD DEPARTMENT(S) OHRM
RESOURCES / MORE INFO. N/A





 Deploy Outreach Teams to Select Trailheads Action 4.1
From May through September, the City of Phoenix supports the “Take a Hike. Do it
Right.” campaign with outreach teams deployed to promote safe hiking practices and reduce
heat-related illnesses and rescues. Volunteers from the Community Emergency Response
Team (CERT) and Park Stewards are stationed every Saturday and Sunday from 7–10 a.m. at
entrances to trails that have higher rates of heat-related illnesses and/or those where rescue
operations are more technically complex, including trails at Camelback Mountain, Piestewa
Peak, and South Mountain. Volunteers provide heat safety education, hydration resources, and
distribute cooling supplies such as water, electrolytes, and towels. Last year, 265 volunteers
contributed more than 800 service hours and recorded 17,300 engagements. The program
also made new infrastructure investments in 2025 to make ice immediately accessible at select
locations to support Phoenix Fire during mountain rescues.

TARGET POPULATION HIKERS
LEAD DEPARTMENT(S) PRD
RESOURCES / MORE INFO. N/A




 Close Select Trailheads on Extreme Heat Warning Days Action 4.2
The Parks and Recreation Board established the Trail Heat Safety Program in 2021 to reduce
risks for hikers and first responders during extreme heat. The program restricts access to select
trails when the National Weather Service issues an Extreme Heat Warning. In March 2025, the
board expanded the program to restrict access to three trails at South Mountain Park /
Preserve: Holbert Trail, Mormon Trail, Hau ‘pal Loop Trail, and the National Trail from Pima
Canyon Trailhead, while keeping more than 100 miles of trails open.

TARGET POPULATION HIKERS
LEAD DEPARTMENT(S) PRD
RESOURCES / MORE INFO. https://www.phoenix.gov/parks/trails/take-a-hike-do-it-right to receive alerts



 Attend Community Events to Share Heat Safety Resources Action 4.3
The Office of Heat Response and Mitigation will help raise awareness of heat response
initiatives by supporting requests to participate in community gatherings and outreach events
throughout the heat season. Staff will provide an information booth and engage with attendees
to raise awareness about heat safety measures, distribute educational materials, and provide
guidance on accessing community cooling resources.
TARGET POPULATION CITYWIDE
LEAD DEPARTMENT(S) OHRM
RESOURCES / MORE INFO. N/A



 Annually Update Heat Safety Plans in City Departments Action 5.1
The Human Resources Safety & Worker’s Compensation Division has developed written Heat
Injury and Illness Prevention Plans with departments whose employees face heat safety
dangers during their work duties. These plans work to minimize or eliminate employee
exposures to heat related hazards that may lead to serious injuries, illnesses or death. The
plans outline each department’s safety controls and policies to mitigate heat-related hazards,
procedures to follow should a heat-related illness or injury occur and training to ensure
employees are familiar with their department’s plan.
TARGET POPULATION CITY EMPLOYEES
LEAD DEPARTMENT(S) HR
RESOURCES / MORE INFO. N/A



 Promote and Enforce Heat Safety Ordinance for City Contractors Action 5.2
In April 2024, the City Council adopted a heat safety ordinance that applies to businesses that
have contractual, leasing, or licensing relationships with the City of Phoenix. The ordinance
requires these businesses to have compliant heat safety plans that ensure appropriate measures
to protect employees are in place. At the time of ordinance adoption, the City Council also directed
staff to create an advisory committee to guide the implementation of the ordinance.
The advisory committee was formed in early summer 2024 and submitted recommendations to the
City Manager in September 2025 to guide the implementation of the ordinance into the future.
TARGET POPULATION WORKERS
LEAD DEPARTMENT(S) HR, LAW, FINANCE, OHRM
RESOURCES / MORE INFO. N/A





 Operate a Comprehensive Heat Response Public Education Campaign Action 6.1
The City will continue to increase the reach of public messaging related to heat response in
2026 through a comprehensive multimedia public education campaign. The goal of the
campaign is to maximize community awareness of heat safety information and available
resources. The campaign includes both print and digital channels and is updated each year.
Resources are made available in both English and Spanish and target heat-vulnerable
populations as well as the community at large. In 2025, thousands of pamphlets were distributed
to community partners, multiple newsletters included heat safety information, resources were
promoted on bus shelters and billboards as well as other advertising venues, and more than
300,000 impressions were earned on social media. Additionally, staff will proactively pursue
media coverage and participate in requested media interviews to further build public awareness
of heat safety strategies and resources. In 2025, the Communications Office coordinated more
than 100 stories from local, national, and international outlets related to the City’s Heat
Response Plan and programs.
TARGET POPULATION CITYWIDE
LEAD DEPARTMENT(S) COMMS
RESOURCES / MORE INFO. https://www.phoenix.gov/pio/summer



 Improve Engagement Strategies for People Who Use Substances Action 6.2

The Office of Public Health, in partnership with the Communications Office and Offices of Heat
Response and Mitigation and Homeless Solutions, will continue efforts to improve heat related
outcomes for people who use drugs and alcohol. Substance use was a factor in approximately 57%
of heat-related fatalities across Maricopa County between 2022 and 2024. Efforts in 2026 will
include the continuation of heat outreach and expanding education on the risks of substance use
and heat as well as overdose signs, symptoms, and response. Training modules for staff and
volunteers supporting heat relief sites as well as the public will be updated and published. In
addition, staff will develop and implement heat risk messaging and communication tools in
partnership with overdose and disease prevention agencies supporting people who use
drugs. Existing partnerships that will be leveraged for this work are the City’s Public Health and
Harm Reduction Working Group, Health Advisory Executive Committee, Community Mental Health,
Wellness, Public Health, and Safety Task Force, and the Phoenix Substance Use Coalition
Collaborative.

TARGET POPULATION SUBSTANCE USERS
LEAD DEPARTMENT(S) OPH, OHRM, OHS, COMMS
RESOURCES / MORE INFO. https://www.phoenix.gov/healthsite/Pages/Naloxone.aspx





 Participate in Cross-Agency Work Groups and Research Initiatives Action 6.3
The City will continue to participate in and lead heat response initiatives across a wide range of
governance scales to ensure that resources are deployed as effectively as possible. Phoenix
was a member of multiple county- and state-level coordination teams in the 2025 heat season
and participated in pre- and post-season statewide meetings coordinated by the Arizona
Department of Health Services. City staff will continue to serve on the steering committee for the
Arizona Heat Resilience Research and Data Work Group, which meets monthly throughout the
year. Staff are also actively engaged with the Ten Across Network, which facilitates peer-to-peer
learning among sustainability and resilient professionals across the American Sun Belt. Staff will
also facilitate the City’s engagement with research initiatives that offer high potential for
benefitting regional heat response efforts.

TARGET POPULATION CITYWIDE
LEAD DEPARTMENT(S) OHRM





Acknowledgments
The City of Phoenix appreciates the efforts of all community partners who are working to reduce
the adverse impacts of extreme heat. The organizations listed below participate in actions listed
in the Heat Response Plan, have provided guidance on the City’s heat response strategies, or
have published plans and reports from which the Heat Response Plan draws content and
inspiration.

Office of Mayor Kate Gallego
Office of Ann O’Brien, District 1
Office of Jim Waring, District 2
Office of Debra Stark, District 3
Office of Laura Pastor, District 4
Office of Betty Guardado, District 5
Office of Kevin Robinson District 6
Office of Anna Hernandez, District 7
Office of Vice Mayor Kesha Hodge Washington, District 8

Arts & Culture, Aviation, City Manager’s Office, Communications, Environmental Programs,
Fire, Heat Response and Mitigation, Emergency Management, Homeless Solutions, Housing,
Human Resources, Human Services, Innovation, Library, Light Rail Transit, Neighborhood
Services, Parks and Recreation, Police, Public Health, Public Transit, Public
Works, Sustainability, Volunteer Programs, and Water Services.

Local, Regional, and National Partners
AllThrive365, Arizona Department of Health Services, Arizona Faith Network, Arizona Heat
Resilience Work Group, Arizona Public Service, Arizona State University, Bloomberg Associates,
C40 Cool Cities Network, Centers for Disease Control and Prevention, Community Bridges,
Inc., Crisis Response Network, Healthy Giving Council, Justa Center, Keys to Change,
Maricopa Association of Governments, Maricopa County Department of Emergency
Management, Maricopa County Department of Public Health, National Oceanic and
Atmospheric Administration, National Weather Service Phoenix Forecast Office, Nature
Conservancy Arizona Healthy Cities Program, Phoenix Community Emergency Response
Team, Phoenix Parks Foundation, Phoenix Parks Stewards, Phoenix Revitalization
Corporation, Red Cross, Salt River Project, Sustainable Cities Network, UMOM, University of
Arizona, Valley Metro, and Valley of the Sun United Way.

Funding Partners
The City of Phoenix Heat Response initiatives benefit from financial resources made available
through grant programs offered by the Gila River Indian Community, Maricopa County Department
of Public Health, and Federal Emergency Management Agency.








Report

Authorization to Lease Real Property Located at 20 West Jackson Street from
Sunrise Equities, LLC. (Ordinance S-52627) - District 7

Request to authorize the City Manager, or his designee, to enter into a lease with
Sunrise Equities, LLC., for use of improved property located at 20 West Jackson Street
to provide a heat respite site for the Office of Homeless Solutions. Further request
authorization for the City Controller to disburse all funds related to this item.

Request the City Council to grant an exception Pursuant to Phoenix City Code § 42-20
to authorize inclusion in the documents pertaining to this transaction of indemnification
and assumption of liability provisions that otherwise would be prohibited by Phoenix
City Code § 42-18, which is a necessary condition of the lease.

THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.

Summary
The Office of Homeless Solutions requests authorization to lease a 21,048 square-foot
building located at 20 West Jackson Street for the purpose of operating a 24/7 heat
respite site during the 2026 summer season. The structure will provide individuals and
families a cool, indoor space for relief from the heat. The rental rate is $40,000 per
month, plus applicable taxes, which is in the range of market rents as determined by
the Real Estate Division. Lessee is responsible for utilities and common area
maintenance.

Contract Term
The term of the lease is five months beginning April 24, 2026, through September 30,
2026, with an automatic option to continue thereafter on a month-to-month basis, until
terminated with 30 days written notice by either Party. The lease may be canceled
Pursuant to Arizona Revised Statute 38-511 and may contain other terms and
conditions deemed necessary by the City.

Financial Impact
Rent during the term of the lease will be $40,000 per month, plus applicable taxes.
Funding is available in the Human Services Department's operating budget and via
existing federal, state, and county grant funding.




Concurrence/Previous Council Action
Agreement 162845-0, authorized by Ordinance S-51722, adopted March 25, 2025.

Location
20 West Jackson Street
Assessor's Parcel Number: 112-22-103
Council District: 7

Responsible Department
This item is submitted by Deputy City Manager Gina Montes, the Office of
Homeless Solutions and the Finance Department.








Report

Authorization to Enter into Contract with UMOM New Day Centers, Inc. for Heat
Related Respite Operator and Supportive Services (Ordinance S-52628) - District
8 and Citywide

Request to authorize the City Manager, or his designee, to enter into contract with
United Methodist Outreach Ministries (UMOM) New Day Centers, Inc. to provide heat
respite, connections to resources, and services for families with minor children
experiencing homelessness. The total value of the contract will not exceed $300,000.
Further request to authorize the City Controller to disburse all funds related to this
item.

THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.

Summary
Office of Homeless Solution (OHS) seeks to contract with UMOM for the 2026 heat
season to provide heat respite seven days per week to families with minor children
experiencing homelessness, referred by other heat relief sites and City of Phoenix
outreach workers. UMOM will assess the needs of each family for potential diversion
and shelter those who are not able to be diverted. In addition, UMOM will provide hotel
vouchers as an alternative for respite overflow.

Procurement Information
In accordance with Administrative Regulation 3.10, standard competition was waived
as a result of an approved determination memo based on the following reasons:
Special Circumstances without Competition and award of a grant (Phoenix City Code
43-2(B)(3)). The Special Circumstances without Competition Determination is based
on the need to have a dedicated heat respite space for families who can provide the
support and navigation services needed for this population. UMOM is the largest family
shelter provider in the state of Arizona and is the family coordinated entry provider,
managing the shelter and housing waitlist for families with minor children in the region.

Contract Term
The contract will begin on or about April 1, 2026 and end October 31, 2026.





Financial Impact
The total contract value will not exceed $300,000. Funding is available in the Office of
Homeless Solution's operating budget and via existing federal, state, and county grant
funding.

Location
Council District: 8 and Citywide

Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Office of
Homeless Solutions.








Report

Authorization to Amend Emergency Shelter/Heat Related Respite Operator and
Supportive Services Qualified Vendor List and Increase Authority, and to Enter
into Contracts with Community Bridges, Inc. and Justa Center for Heat Related
Respite Operator and Supportive Services (Ordinance S-52629) - Districts 1, 7 &
Citywide

Request authorization for the City Manager, or his designee, to amend authorization
for the Emergency Shelter/Heat Related Respite Operator and Supportive Services
Qualified Vendor List (QVL) to increase funding in an amount not to exceed
$3,230,000, for a new not to exceed aggregate amount of $66,856,295, and to allow
use of any available Office of Homeless Solutions' (OHS) funding source to fund QVL
contracts up to the not-to-exceed amount. Further request authorization for the City
Controller to disburse funds for the life of the QVL.

Further request authorization to enter into contract with Community Bridges, Inc. (CBI)
to operate heat relief and cooling centers and to connect people experiencing
homelessness to services. The total contract value will not exceed $2.6 million.
Additionally, CBI is a vendor on the Emergency Shelter/Heat Related Respite Operator
and Supportive Services QVL and Pursuant to City Council Ordinance S-50419,
Section 2, staff is seeking Council approval.

Further request authorization to enter into contract with Justa Center to operate a heat
relief and cooling center and connect people experiencing homelessness to services.
The total contract value will not exceed $130,000. Additionally, Justa Center is a
vendor on the Emergency Shelter/Heat Related Respite Operator and Supportive
Services QVL and Pursuant to City Council Ordinance S-50419, Section 2, staff is
seeking Council approval.

Further request authorization for the City Controller to disburse all funds related to this
item for the life of the contracts above. Funding is available in the Human Services
budget.

THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.

Summary



The Office of Homeless Solutions (OHS) provides support and services for persons
experiencing homelessness and is committed to ending homelessness through a
comprehensive, regional approach to housing and services. The City of Phoenix
remains committed to supporting annual heat relief activities for individuals
experiencing homelessness. Qualified vendors from the Emergency Shelter/Heat
Related Respite Operator and Supportive Services QVL are awarded contracts for
specific projects when opportunities become available. Contracts awarded include
assistance with City-owned shelter and heat-respite projects, contractor-operated
temporary emergency shelter and heat related respite programs, as well as supportive
services to individuals or families experiencing homelessness.

Ensuring people experiencing homelessness have access to adequate hydration and
cooling through temporary, emergency heat respite and cooling centers throughout
Phoenix during the hot summer months is a priority for OHS. Through the Emergency
Shelter/Heat Related Respite Operator and Supportive Services QVL, OHS seeks to
contract with the following providers for the 2026 summer heat season to operate the
designated cooling/respite centers, as well as provide navigation services which
include but are not limited to supportive services, connecting people experiencing
homelessness with housing resources, mental and behavioral health services, and
other resources:

· Community Bridges, Inc. - Cholla Library - 10050 N. Metro Parkway East (cooling
center);
· Community Bridges, Inc. - 24/7 Heat Respite Location - 20 W. Jackson Street
(daytime and overnight respite);
· Justa Center - Justa Center - 1001 W. Jefferson Street (cooling center).

Additionally, as part of heat response efforts, funding is being provided to Saint Vincent
de Paul (SVdP). Funding is provided through the QVL via their existing Contract
163316 as an option to extend will be exercised to continue providing emergency
overflow shelter services, heat respite, and access to care coordination for individuals
experiencing homelessness seven nights a week at the SVdP Phoenix Dining Room.
The SVdP Phoenix Dining Room is located on the Key Campus located at 1075 W.
Jackson Street. SVdP can accommodate up to 170 individuals.

Because this item will have Citywide impacts, staff is requesting consent of the full
Council under Section 2 of City Council Ordinance S-50419, which requires additional
Council approval for certain uses of the QVL.

Contract Term



The term of the QVL will remain unchanged, beginning February 1, 2023, through
June 30, 2028.
The term of the contracts with CBI and Justa Center will begin on or about April 1,
2026, through October 31, 2026.

Financial Impact
The aggregate cost of the contracts will not exceed $66,856,295 over the life of the
QVL. Funding is available in the Human Services Department's operating budget and
via existing federal, state, and county grant funding.

The total cost of the CBI contract will not exceed $2.6 million. The total cost of the
Justa Center contract will not exceed $130,000. The cost for overflow operations with
SVdP will not exceed $500,000. Funding is available in the Human Services budget.

Concurrence/Previous Council Action
• On January 25, 2023, the City Council approved the QVL with Ordinance S-49352.
• On May 15, 2023, the City Council approved additional $10.5 million in funding with
Ordinance S-50884.
• On June 28, 2023, the City Council approved an additional $13.3 million in funding
with Ordinance S-49924.
• On December 13, 2023, the City Council approved an additional $6,752,847 in
funding with Ordinance S-50419.
• On March 20, 2024, the City Council approved an additional $1,388,933 in funding
with Ordinance S-50706.
• On January 15, 2025, the City Council approved an additional $15 million in funding
with Ordinance S-51541.
• On June 4, 2025, the City Council approved an additional $6,511,615 in funding for
the QVL with Ordinance S-52012.
• On January 7, 2026, the City Council approved an additional $172,900 in funding for
the QVL with Ordinance S-52535.

Location
Cholla Library, 10050 N. Metro Parkway East
24/7 Heat Respite Location, 20 W. Jackson Street
Justa CEnter, 1001 W. Jefferson Street
Key Campus SVdP Dining Hall, 1035 W. Jackson Street
Council Districts: 1, 7, and Citywide

Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Office of
Homeless Solutions.




Report

Heat Relief Supply Distribution Management - RFP GGS-26-0100 - Request for
Award (Ordinance S-52630) - Citywide

Request to authorize the City Manager, or his designee, to enter into a contract with
FSL Programs dba AllThrive365 PRO to provide Heat Relief Supply Distribution
Management for the Office of Heat Response and Mitigation. Further request to
authorize the City Controller to disburse all funds related to this item. The total value of
the contract will not exceed $300,000.

THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.

Summary
This contract will provide secure storage facilities, inventory control, and logistical
coordination for essential heat relief supplies such as bottled water, cooling items, and
related materials. These supplies will be received, stored and distributed to designated
heat relief partners throughout the City to ensure timely and equitable access for
vulnerable populations during extreme heat conditions. This service is necessary to
maintain an organized and efficient supply chain that supports public health and safety,
reduces operational delays, and ensures resources reach those most in need during
periods of excessive heat. The Contractor will also collaborate with City staff to
implement streamlined processes for storage, distribution and reporting, which will
ensure accountability and effective program delivery.

Procurement Information
A Request for Proposal procurement was processed in accordance with City of
Phoenix Administrative Regulation 3.10.

One vendor submitted a proposal deemed responsive and responsible. An evaluation
committee of City staff evaluated this offer based on the following criteria with a
maximum possible point total of 1000:

Method of Approach (400 points)
Qualifications and Experience (350 points)
Pricing Proposal - Low Cost (250 points)




After reaching consensus, the evaluation committee recommends award to the
following vendor:

FSL Programs dba AllThrive365 PRO, total score 920

Contract Term
The contract will begin on or about March 1, 2026, for a five-year term with no options
to extend.

Financial Impact
The aggregate contract value will not exceed $300,000. Funding is available in the
Office of Heat Response and Mitigation budget.

Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Office of Heat
Response and Mitigation.








Report

Heat Relief Supplies Contract - IFB-26-0046 - Request for Award (Ordinance S-
52631) - Citywide

Request to authorize the City Manager, or his designee, to enter into contract with Wist
Business Supplies & Equipment Co. dba Wist Office Products Company to provide
heat relief supplies for the Office of Heat Response and Mitigation. Further request to
authorize the City Controller to disburse all funds related to this item. The total value of
the contract will not exceed $2.6 million.

THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.

Summary
This contract will provide the City of Phoenix with essential heat relief supplies and
related services to support its summer heat mitigation efforts from May through
September. The awarded Contractor will furnish items such as bottled water, cooling
products, and other heat relief materials, along with inventory management and
delivery/distribution services. These supplies will be delivered to more than 60
designated City locations, including Maricopa Association of Governments heat relief
network sites, which serve vulnerable populations such as individuals experiencing
homelessness, low-income families, and others at high risk of heat exposure. This
contract is necessary to ensure timely and equitable access to life-saving resources
that help prevent heat-related illnesses and fatalities, which is in alignment with the
objectives of the Office of Heat Response and Mitigation. By providing a reliable
supply chain and efficient distribution process, this agreement supports public health
and safety during periods of extreme heat.

Procurement Information
An Invitation for Bid procurement was processed in accordance with City of Phoenix
Administrative Regulation 3.10.

Five vendors submitted bids deemed to be responsive to posted specifications and
responsible to provide the required goods and services. Following an evaluation based
on price, the procurement officer recommends award to the following vendor(s):





Selected Bidder
Wist Business Supplies & Equipment Co. dba Wist Office Products Company

Contract Term
The contract will begin on or about March 1, 2026, for a five-year term with no options
to extend.

Financial Impact
The aggregate contract value will not exceed $2.6 million. Funding is available in the
Office of Heat Response and Mitigation budget.

Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Office of Heat
Response and Mitigation.








Report

Heat Relief Online Training Curriculum Contract - RFQ-26-0144 Request for
Award (Ordinance S-52632) - Citywide

Request to authorize the City Manager, or his designee, to enter into a contract with
Pyro eLearning Solutions, LLC dba Ninja Tropic to provide heat relief online training
curriculum for the Office of Heat Response and Mitigation. Further request to authorize
the City Controller to disburse all funds related to this item. The total value of the
contract will not exceed $92,000.

THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.

Summary
This contract will provide an online training curriculum for staff operating heat relief
network sites including libraries, community centers, senior centers and external heat
relief network sites within City of Phoenix boundaries. This training program will
guarantee a uniform curriculum across all heat relief network sites ensuring staff follow
the same guidelines and procedures while also clearly defining roles and
responsibilities and improving operational efficiency.The program will be scalable and
adaptable, which will allow easy on-boarding of new staff or expansion to additional
sites.This training will directly impact the community and strengthen the heat relief
network by equipping staff with knowledge, skills and ability to serve vulnerable
populations including seniors and those without access to cooling and contributing to
public health and safety goals during extreme heat conditions.

This item has been reviewed and approved by the Information Technology Services
Department.

Procurement Information
A Request for Quotation solicitation was processed in accordance with City of Phoenix
Administrative Regulation 3.10. One vendor submitted a bid deemed to be responsive
to the posted specifications and responsible to provide the required goods and
services. Following an evaluation based on price, the procurement officer recommends
award to the following vendor:





Selected Bidder
Pyro eLearning Solutions, LLC dba Ninja Tropic

Contract Term
The contract will begin on or about March 9, 2026, for a two-year term with three
additional one-year options to extend.

Financial Impact
The aggregate contract value will not exceed $92,000.

Funding is available in the Office of Heat Response and Mitigation through Federal
Emergency Management Agency's Building Resilient Infrastructure and Communities
grant, which was awarded to the City by the Arizona Department of Emergency and
Military Affairs.

Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Office of Heat
Response and Mitigation.