Others present: City Manager Greg Clifton; City Attorney Sterling Solomon.

Moved by Councilmember Jim McCarthy, seconded by Councilmember Miranda Sweet to approve the minutes of the City Council Regular Meeting of April 16, 2019, Work Session of May 14, 2019, Special Work Session of October 22, 2019, Combined Work Session/Special Meeting of November 8, 2022, Regular Meeting of November 15, 2022, Special Meeting of November 28, 2022, Work Session of November 29, 2022, Regular Meeting of December 6, 2022, Regular Meeting of December 20, 2022, Regular Meeting of June 6, 2023, Work Session of June 13, 2023, Retreat of June 23, 2023, Work Session of June 27, 2023, and Special Meeting of August 8, 2023.

Vote: 7 - 0 - Unanimously

Community Development Director Dan Folke recognized Planning Director Michelle McNulty for completing the Certified Public Manager program. He also recognized Senior Planner Ben Mejia, who had completed all the certification and testing requirements for his AICP designation.

Dennis Givens addressed Council and spoke about the May Hick’s house and how it should be saved for historical purposes.

Housing Planning Manager Jennifer Mikelson addressed Council to report that Housing had published a notice of funding availability for the rental incentive bond program. It was the first bond-funded project to be launched, and they were very excited to be at that point. She noted that applications were due Monday, February 19, 2024, at 4:00 p.m.

Andrew Baker and Bryan Bates submitted written comments encouraging the city to do whatever they could to stop the transport of raw uranium ore through Coconino County.

Mayor Daggett read and presented the proclamation.

Councilmember House read and presented the proclamation.

Vice Mayor Aslan reported that the Sustainability Commission reviewed and approved the FY 2023–24 Neighborhood Sustainability Grants. The commission hosted a presentation by Duffy Westheimer, Executive Director of the Townsite Community Land Trust, who discussed the importance of sustainability through affordable, owner-occupied historic homes. At their next meeting, last year’s grant recipients would present their project outcomes. The public was welcome to attend, and refreshments would be provided.

Vice Mayor Aslan also reported on the Tourism Commission and highlighted several events planned to promote tourism in Flagstaff in February. The Visitor Center would be hosting the annual Chocolate Walk on February 10, 2024, with 33 downtown businesses participating. Arizona Beer Week would also be celebrated by Discover Flagstaff and local breweries, attracting visitors from across the state. Lastly, the iHeart Pluto Festival would be held at Lowell Observatory on February 17, 2024.

Councilmember House reported that the Commissiono on Diversity Awareness was actively partnering with Sinclair Detrick-Jewels to support a Northern Arizona University event. The commission’s recent discussions included updates on the equitable restrooms policy, colored crosswalk initiatives, FUSD bus routes, and participation in Black History Month events. The commission continued its collaboration with the public library and ongoing efforts to promote equity and celebrate diversity in Flagstaff. Special thanks were extended for drafting this year’s Black History Month Proclamation and helping present the Pan-African flag, now adopted in recognition of the month.

Councilmember House also reported that the Housing Commission had begun early discussions on launching the bond-funded Homebuyer Assistance Program expansion. Ideas explored included interest rate buy-downs, counting accessory dwelling unit rental income for eligibility, including all home types in the program, and partnering with employers on housing support. The commission was brainstorming how to apply funds effectively to increase access to homeownership.

Councilmember McCarthy reported that he attended the grand opening of JoJo’s Place, the employee recognition event, and the Bicycle and Pedestrian Advisory Committee meetings where they discussed new engineering standards being considered, Butler Avenue speed limits, curbs and candlesticks on Butler, and grant money to do a complete streets upgrade of Butler Avenue.

Mayor Daggett reported that the Commission on Inclusion and Adaptive Living had formed a working group who were meeting every week to work on accessibility and sidewalk issues. She reminded everyone that they would be helping their neighbors if they cleared their sidewalks after the snow as well as not parking their vehicles on the sidewalk.

Mayor Daggett opened the public hearing.

Police Sergeant Nick Almendarez introduced the application and noted no concerns.

There being no public comment, Mayor Daggett closed the public hearing.

Moved by Councilmember Khara House, seconded by Councilmember Miranda Sweet to forward the application to the State with a recommendation for approval.

Vote: 7 - 0 - Unanimously

Moved by Councilmember Jim McCarthy, seconded by Councilmember Miranda Sweet to approve the Consent Agenda as presented.

Vote: 7 - 0 - Unanimously

Moved by Councilmember Jim McCarthy, seconded by Councilmember Khara House to read Ordinance No. 2024-02 by title only for the final time.

Vote: 7 - 0 - Unanimously

Moved by Councilmember Jim McCarthy, seconded by Councilmember Khara House to adopt Ordinance No. 2024-02.

Vote: 7 - 0 - Unanimously

Sustainability Coordinator Tia Hatton provided a PowerPoint presentation that covered the following:

SUSTAINABILITY COMMISSION REQUEST TO CHANGE TERM MONTH
SUSTAINABILITY COMMISSION TERMS
TODAY’S PRESENTATION
SUSTAINABILITY COMMISSION CURRENT TERM
CHALLENGES WITH OCTOBER TERM MONTH
SUSTAINABILITY COMMISSION TERM RECOMMENDATIONS

Councilmember McCarthy asked if the terms ended at the beginning or end of the month. Deputy City Clerk Stacy Fobar stated that they ended at the first of the month.

Councilmember Harris asked when the terms would end for the current members of the commission. Ms. Fobar explained that commissioners were able to remain in their positions until a new commissioner was appointed.

Moved by Councilmember Jim McCarthy, seconded by Vice Mayor Austin Aslan to change the Sustainability Commission member start and end term month from October to February and adjust the terms of the currently seated Sustainability Commissioners to end in February of the following year.

Vote: 7 - 0 - Unanimously

Mayor Daggett opened the public hearing.

Zoning Code Manager Tiffany Antol provided a PowerPoint presentation that covered the following:

ZONING CODE AMENDMENT TABLE 10-40.30.060.B RESIDENTIAL USES IN THE PUBLIC FACILITY (PF) ZONE
PZ-23-00136
CITY’S PROPOSED ZONING CODE TEXT AMENDMENT
OVERVIEW OF PROPOSED AMENDMENT
CITY OWNED PUBLIC FACILITY ZONED PARCELS
STAFF RECOMMENDATION
FINDINGS FOR ZONING CODE TEXT AMENDMENT
FINDING #1
FINDING #2
FINDING #3
RECOMMENDATION

Councilmember Matthews asked if the amendment would help the city achieve what the citizens voted for with the housing proposition last election. Ms. Antol indicated that she believed that the amendment was one step forward in expanding opportunities for housing in Flagstaff.

Councilmember House referenced Create 4.3 in the 10-Year Housing Plan and the potential to add affordable housing as an allowed use within public facility zones. She asked about state-level limitations, specifically, whether the city was precluded from requiring affordable housing by law. She asked how far the city could go in codifying such a requirement and what mechanisms could be used to enable and prioritize affordable housing within this zoning framework.

Ms. Antol explained that affordable housing was not a listed land use in PF zoning. While the city could consider adding it, defining "affordable housing" in code was challenging due to its varying interpretations and the changing nature of housing markets. For example, while city-incentivized housing often targeted households at 80% of the Area Median Income (AMI), past projects have ranged from 60% to 125% AMI. What was affordable varied by income, so locking in a rigid definition could limit flexibility for future needs. The recommendation was to preserve flexibility rather than codify a specific affordability threshold, allowing the city to adapt to market shifts and project proposals. She also noted that rezoning city-owned land for affordable housing had been done before but it was a time-intensive process due to procedural requirements like neighborhood meetings, Planning and Zoning Commission reviews, and public hearings. To reinforce the city’s intent without binding future Councils, a separate resolution, similar to one already adopted for city-owned buildings, could be created to guide use of PF zoned land for affordable housing and would express policy direction without codifying inflexible standards.

Councilmember Sweet asked about a possible policy or intent statement so the process was not slowed down. It would explain why the city was prioritizing the way it was and that they would like affordable housing in it for future Councils and the public to know why it was included. Ms. Antol stated that she could coordinate with Housing to draft a resolution.

Michele James, Executive Director of Friends of Flagstaff’s Future, addressed Council and stated that they were generally supportive of the proposed zoning code amendment that would allow residential uses in the PF zone, especially as a tool to enable affordable housing development. She offered the following:

1. Simply allowing residential use does not guarantee affordable housing will be built. How would the city ensure that was actually achieved?
2. Concerned about the risk of 100% market-rate housing or vacation rentals on city-owned PF parcels, which could undercut the goal of increasing affordability.
3. She questioned whether a future Council could approve only market-rate projects on PF-zoned land and if that was consistent with current Council intent.
4. She urged staff to clearly outline any intended or unintended consequences of the amendment, especially those that could impact affordability.

This was a consequential policy change, and the city did have the authority through procurement and RFP processes to require 100% affordable housing on its own PF-zoned parcels. She recommended a separate policy document expressing the intent.

Charlie Silver addressed Council and stated that park land was zoned PF as well and he did not want to see encroachment onto park land which was a rare and limited commodity in Flagstaff.

Ms. Antol stated that she was confident that a draft resolution could address the prioritization of affordable housing and alleviate many of the concerns raised. She was committed to working toward greater clarity. She also addressed concerns about parks within the PF zone and noted that while many parks were PF zoned, some were in residential zones, and rezoning had not historically made them more vulnerable to redevelopment. She emphasized that parks already developed with infrastructure were unlikely to be repurposed for housing due to the high cost and value of those community assets. She also stated that staff had consulted with the Parks and Recreation Commission, who responded with strong support. She offered that additional language could be included in the resolution to reaffirm the city's commitment to protecting park lands while enabling affordable housing development where appropriate.

Housing Director Sarah Darr cautioned against requiring 100% affordable housing on PF zoned land, arguing that doing so could limit the city’s ability to meet broader housing needs, including moderate-income and workforce households. She emphasized the need for flexibility, especially to support employer-assisted housing and secure financing options. While there was strong support for affordable housing, she explained that not all housing needs fall under traditional affordability definitions, and the amendment could help implement Council goals without requiring full rezonings.

Councilmember House asked about park land being included within the PF zoning. Ms. Antol stated that parks were just one of many uses allowed in the PF zone, which also included things like airports, water tanks, and congregate care facilities. She acknowledged that past proposals to use park land for housing had left some community members wary but emphasized that the current zoning amendment was not aimed at redeveloping parks. She explained the difference between the PF zone, which allowed larger-scale development, and the Public Open Space zone, which was meant to limit development and preserve open space. The current amendment would not affect those protected open space areas. She indicated that they encouraged public-private partnerships that could add new parks alongside housing, especially when funding was tight. Housing and parks, like schools and churches, were generally considered compatible uses in residential zones, if designed thoughtfully to serve the community.

Councilmember McCarthy acknowledged the concern about the potential impact on park land. He suggested an amendment that would clarify that current parks would not be used for residential under the proposed amendment. He felt that it was important to include that in the code rather than trust a future Council to know the history of the situation.

Vice Mayor Aslan agreed and offered support for a resolution that stated the intentions of the Council so future Councils could be aware of.

There being no further comment, Mayor Daggett closed the public hearing.

Moved by Councilmember Jim McCarthy, seconded by Councilmember Miranda Sweet to read Resolution No. 2024-05 by title only.

Vote: 7 - 0 - Unanimously

Moved by Councilmember Miranda Sweet, seconded by Councilmember Khara House to read Ordinance No. 2024-03 by title only for the first time.

Vote: 7 - 0 - Unanimously

City Attorney Sterling Solomon provided a PowerPoint presentation that covered the following:

PROP 207 CLAIMS
BACKGROUND
ORDINANCE 2020-28
PROP 207 CLAIMS
OVERVIEW OF PROP 207
BINDING WAIVER OF ENFORCEMENT

Charlie Silver addressed Council and raised concerns about a Proposition 207 waiver related to an R1-zoned residential parcel near Swiss Manor. He questioned why the waiver was being considered, what existing property rights might be reduced, and whether any rezoning was planned that would impact the property. He also requested clarification on whether property use, value, or development potential was being affected.

Mr. Solomon responded that all prior waivers of that type had been approved, but declined to discuss specifics in the public meeting and suggested that Council could discuss in Executive Session if desired.

Moved by Councilmember Jim McCarthy, seconded by Councilmember Khara House to read Resolution No. 2024-06 by title only.

Vote: 7 - 0 - Unanimously

Moved by Councilmember Jim McCarthy, seconded by Councilmember Miranda Sweet to adopt Resolution No. 2024-06.

Vote: 7 - 0 - Unanimously

Public Works Director Scott Overton addressed Council and stated that the IGA with Coconino County was to rebuild the landfill road. The IGA had been in discussions since 2019, and they had been able to reach an agreement with the county to pay a proportionate share. Coconino County would pay $2.4 million, and the city would pay $2.6 million.

Moved by Councilmember Khara House, seconded by Councilmember Miranda Sweet to read Resolution No. 2024-07 by title only.

Vote: 7 - 0 - Unanimously

Moved by Councilmember Jim McCarthy, seconded by Councilmember Khara House to adopt Resolution No. 2024-07.

Vote: 7 - 0 - Unanimously

Moved by Councilmember Miranda Sweet, seconded by Councilmember Jim McCarthy to approve the CMAR Construction Services Agreement - GMP 1 with Rummel Construction, Inc. for a Guaranteed Maximum Price (GMP1) in the amount of $4,887,944.86 and a contract duration period of 171-calendar days, an Owner's Contingency of $172,020.37, which is 4.25% of the GMP1, and authorize the City Manager to execute the necessary documents.

Vote: 7 - 0 - Unanimously

Real Estate Manager Bryce Doty provided a PowerPoint presentation that covered the following:

ZH HOLDINGS PROPERTY EXCHANGE
VICINITY MAP
BACKGROUND
AREA OF CITY PARCELS TO EXCHANGE
AREAS CITY WILL RECEIVE
CONTEXT

Moved by Councilmember Jim McCarthy, seconded by Vice Mayor Austin Aslan to read Resolution No. 2024-04 by title only for the first time.

Vote: 7 - 0 - Unanimously

Water Services Stormwater Manager Ed Schenk addressed Council and introduced Kathy Flaccus, President of the Friends of the Rio de Flag who provided a PowerPoint presentation that covered the following:

RIO DE FLAG WATERSHED PLANNING
WATERSMART GRANT
WATERSHED ALLIANCE FOR THE RIO DE FLAG (WARF)
WHO IS THE WATERSHED ALLIANCE
SKETCH MAP OF THE RIO DE FLAG WATERSHED
RIO DE FLAG AS AN ASSET TO FLAGSTAFF
WATERSHED PLANNING PROCESS
EXPLORE THE WATERSHED: SPEAKER SERIES (PUBLIC MEETINGS)
BIGGEST THREATS TO ECOSYSTEMS
MAIN TOPIC OF INTEREST
116 SITE SPECIFIC PROJECTS
TOP PRIORITIES FOR THE RIO DE FLAG WATERSHED PLAN
PROJECTS PRIORITIZED BY WARF PARTNERS
FIRES AND FLOODS
WARF REQUEST

Mayor Daggett praised Friends of the Rio and stated that they were a good example of residents caring about the area. She noted that elevating interest and knowledge of the Rio was beyond what the city could have done.

Councilmember Sweet asked how people could get involved. Ms. Flaccus explained that the best way was to go through the Sustainability Division’s Stream Stewards volunteer program. She referred people to their website www.friendsoftheriodeflag.com for information about upcoming activities.

Vice Mayor Aslan expressed his appreciation for the citizen engagement, leadership, and hard work surrounding the Rio de Flag. He indicated that he was looking forward to Sinclair Wash becoming a perennial amenity.

Councilmember McCarthy offered that riparian areas were the lifeblood of an ecosystem. The concentration of wildlife was much stronger in riparian areas. It was hard to maintain those spaces in an urban area and he thanked Friends of the Rio for their work to protect and preserve it.

Moved by Councilmember Miranda Sweet, seconded by Councilmember Jim McCarthy to read Resolution No. 2024-01 by title only.

Vote: 7 - 0 - Unanimously

Moved by Vice Mayor Austin Aslan, seconded by Councilmember Khara House to adopt Resolution No. 2024-01.

Vote: 7 - 0 - Unanimously

A break was held from 5:07 p.m. through 5:18 p.m.

Water Services Director Shannon Jones introduced Water Resources Manager Erin Young, along with Andrew Burnham and Carole Malesky with Stantec who provided a PowerPoint presentation that covered the following:

WATER, RECLAIMED WATER, AND WASTEWATER COST-OF-SERVICE STUDY – DIRECTION ON CAPACITY FEES
AGENDA
SCOPE OVERVIEW
PATH TO UPDATED RATES AND FEES
HOW WE FUND OUR WATER NEEDS
DEVELOPERS AND CONTRACTORS EVENT SUMMARY
REQUESTED COUNCIL DIRECTION
COUNCIL DIRECTION – METHODOLOGY
CAPACITY FEES METHODOLOGIES
COMBINED METHOD RECOMMENDED BY WATER COMMISSION

Councilmember Matthews asked if the combined option included future projects. Mr. Jones indicated that it did not consider future water supply or wastewater projects. Ms. Malesky clarified that while the slide did not include a future water supply or wastewater treatment project, the methods could include those values.

A majority of Council supported the Combined Method.

COUNCIL DIRECTION – LEVEL OF SERVICE
LEVEL OF SERVICE DISCUSSION
ACTUAL USE RECOMMENDED BY WATER COMMISSION

Mayor Daggett asked how they charged what was actually being used while contemplating that for some projects that may hit closer to the design standards in terms of usage. Ms. Young stated that both methods were industry standards, however using design standards was more common. The decision was made in the last rate study to use actuals and that had carried into the current rate study as a comparison.

Mayor Daggett asked about a project that came in with a usage closer to the design standards, but the city was charging actual use; she asked if there was a mechanism to account for the higher water usage. Ms. Young noted that the city still had to build the capacity projects, and they collected less from capacity fees and put the remainder of the project costs on the rates. The larger water users would pay the higher rate so essentially, they were paying for the differential between the design standards and actual use.

Mr. Jones added that capacity fees were one-time charges paid at the time of development, based on anticipated infrastructure usage. Once paid, there was no mechanism to retroactively increase the fee if actual usage exceeded projections. While ongoing water usage generated revenue to cover operating costs, it did not contribute to infrastructure reimbursement. The infrastructure installed was based on design standards tied to projected use, and the capacity fee helped recoup past and planned investments but was finalized at the time of initial development.

Councilmember McCarthy explained that if the city was building the infrastructure to design standards but only charged actual use, then the infrastructure that the city built would not be covered by the capacity fees and would have to be subsidized in some other way. He offered his support for actual use rather than capacity fees.

Mayor Daggett shared her concern about not having enough money to install what was needed and that it was evenly distributed.

COUNCIL DIRECTION – FUTURE WATER SUPPLY PROJECTS
WATER CAPACITY FEE OPTIONS USING THE COMBINED METHODOLOGY
LEVEL OF SERVICE ESTIMATED IMPACTS ON REVENUE REQUIREMENTS

Council discussed the need to increase revenue for future infrastructure projects, with an emphasis on starting early to minimize long-term financial impact. There was a comparison of financial projections under different capacity fee scenarios, showing that while the rate revenue needed remained similar in the near term, it began to drop off later if higher capacity fees were adopted now.

Council asked for clarification on what a 15% figure meant. It was explained that it represented the required annual increase in rate revenue to meet all financial obligations, not a direct impact from the proposed capacity fee changes. Capacity fees were collected separately from customer water rates but increasing them now reduced pressure on rate revenue in future years due to compounding effects.

There was also concern about the time it took to complete large projects and questions about why bonding was not being used more instead of relying so heavily on rate and capacity fee increases. Staff explained that bonding was part of the financial strategy and was included in their models, but it still required rate revenue to service the debt, so it was not an independent solution. They also noted that all financial tools, including grants, bonds, fees, and rates, were considered in long-term planning.

Following discussion, Councilmembers provided their preferred method between actual use or design standards and water capacity fee options. A majority of Council supported actual use rather than design standards and a majority of Council supported Water Capacity Fee Option 1.

COUNCIL DIRECTION – NEW WASTEWATER TREATMENT FACILITY
WASTEWATER CAPACITY FEE OPTIONS USING THE COMBINED METHODOLOGY
LEVEL OF SERVICE ESTIMATED IMPACTS ON REVENUE REQUIREMENTS

A majority of Council supported Option 1B to collect capacity fees toward the cost of a new wastewater treatment facility.

COUNCIL DIRECTION – FLOW ONLY OR FLOW AND LOADINGS

A majority of Council supported Option 1D for Actual Flow + Loadings.

Council requested that the Introduction to Rate Design presentation be held to the February 13, 2024 meeting.

None

None