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

Nadine Hart addressed Council regarding affordable housing and housing choice. 

Dennis Givens addressed Council regarding Northern Arizona University Housing and how they were contributing negatively to the Housing crisis. He also stated he did not support the additional plane routes.

Abel Estrella addressed Council regarding the CATS homeless shelter and stated that he and the Sunnyside Association were against the shelter. He asked for Council to remove homeless encampments in the neighborhood and enact similar legislation to Tucson regarding homeless encampments.

Discover Flagstaff Director Trace Ward shared some words about National Eco-Tourism Week.

Vice Mayor Aslan read and presented the proclamation. 

Councilmember Harris read and presented the proclamation. 

Mayor Daggett read and presented the proclamation. 

Councilmember House read and presented the proclamation. 

Councilmember House shared the Commission on Diversity Awareness continued discussions of support for the Pride in the Pines and Juneteenth events. She also stated that she joined the most recent meeting of the African American Legislative Committee who were hoping to focus in on local Juneteenth events. 

Councilmember Sweet shared that MetroPlan received a grant award from Safe Streets. She added that the Cheshire Slow Down Art Project was complete and that there was a drone video online. She stated that she attended the multicultural art exhibit ribbon cutting at the Liz Archuleta Park. 

Councilmember McCarthy stated that he recently met with Sustainability staff.

Councilmember Harris shared that she attended the ArtX kickoff event and lecture. 

Councilmember Harris requested that items 7A and 7E be pulled for discussion. She noted that she had a potential conflict of interest on both items and would like to recuse herself from voting.

Moved by Councilmember Khara House, seconded by Councilmember Miranda Sweet to approve the Consent Agenda with the exception of Items 7A and 7E.

Vote: 6 - 0 - Unanimously

Moved by Councilmember Jim McCarthy, seconded by Councilmember Miranda Sweet to approve Consent Items 7A and 7E.

Vote: 5 - 0

Councilmember House confirmed that the amendment added Juneteenth and Indigenous Persons day to the list of City approved holidays.

Moved by Councilmember Khara House, seconded by Councilmember Miranda Sweet to read Ordinance No. 2024-15 for the final time.

Vote: 6 - 0 - Unanimously

Moved by Councilmember Khara House, seconded by Councilmember Miranda Sweet to adopt Ordinance No. 2024-15.

Vote: 6 - 0 - Unanimously

Community Investment Director David McIntire introduced Economic Development Administrator Creag Znetko, and Laura O’Blenis, Adam Peabody, and Jenna Evans from Stiletto, who provided a summary of the last presentation to Council and provided a brief history of the exercises that went into creating the plan.
They discussed the community participation, the priority sectors, the pillars for impact, impacts over time, and the ways they implemented feedback from the last meeting. 

Councilmember Sweet asked if there were more opportunities after tonight for community input. Mr. McIntire stated that there would be a lot of opportunities for community input during the implementation. 

Mayor Daggett asked Ms. O’Blenis to further speak about the awareness of economic opportunities. Ms. O’Blenis stated that the mechanism of sharing the information to the community about the initiatives were happening could be improved through branding and advertising. Mr. Peabody added that the community wanted to hear more about the success stories. 

Mayor Daggett asked Mr. McIntire whether he had compared the plan with ECoNA’s plan or other regional plans. Mr. McIntire shared that there were comparisons between other communities and that they used the plan from Sedona as an example for developing the RSOQ. He added that there were differences between this plan and ECoNA’s since they are regional and they were focusing on Housing, whereas the City had a Housing Division. He added that ECoNA was a stakeholder in the development of the plan and that there were comparisons with other community plans and with ECoNA. Ms. O’Blenis stated that Stiletto reviewed the plan from ECoNA and other neighboring communities as well as more broadly to help augment what was already happening in the community and ensuring that there was not duplication.  

Written public comment was received from Michele James, representing Friends of Flagstaff’s Future with suggestions on the plan. 

Moved by Councilmember Miranda Sweet, seconded by Councilmember Khara House to approve the City of Flagstaff Economic Development Strategic Plan 2024-29.

Vote: 6 - 0 - Unanimously

Planner Wesley Welch provided a PowerPoint presentation that covered the following: 

JUNIPER POINT PARCEL 2 
REQUEST OVERVIEW
VICINITY MAP
JUNIPER POINT BACKGROUND
PARCEL 2
PARCEL 2 – PRELIMINARY PLAT
REQUIRED FINDING #1 ZONING CODE (TITLE 10)
RESOURCE PROTECTION PLAN
REQUIRED FINDING #2 ENGINEERING STANDARDS (TITLE 13)
REQUIRED FINDINGS #3 SUBDIVISION STANDARDS (TITLE 11) 
RECOMMENDATIONS 

Moved by Councilmember Jim McCarthy, seconded by Councilmember Miranda Sweet approve the Preliminary Plat in accordance with the findings presented in the staff summary, the following conditions, and the Planning and Zoning Commission recommendation of approval.

1. The Final Plat shall adjust the plat boundaries to include the remainder of Juniper Point Parcel 1 Tract G.
2. The Final Plat and Engineering plans shall adjust the plat boundaries to include all areas that are being utilized for Resource Protection calculations.

Vote: 6 - 0 - Unanimously

Housing Director Sara Darr and Housing & Grants Administrator Kristine Pavlik provided a PowerPoint presentation that covered the following: 

CDBG FUNDING AVAILABLE
PROGRAM YEAR 2024 RECOMMENDATIONS

Councilmember McCarthy questioned whether helping only two families was a good use of funds. Ms. Pavlik responded that increasing affordable housing has as much value as completing larger projects like The Lantern.

Councilmember Harris expressed concern about how tenants are selected and whether the process ensures ethnic diversity. Staff clarified that Housing Solutions is HUD-approved and must comply with fair housing laws, which prohibit targeting specific demographics. However, Councilmember Harris emphasized the need to ensure outreach reaches diverse populations and raised concerns about institutionalized racism.

Mr. Clifton read a statement from Housing Solutions' Executive Director, which did not satisfy Councilmember Harris’s concerns. Staff offered to review the outreach and selection process with her directly.

Housing Director Sara Darr explained that while they cannot target specific groups, they use broad outreach and prioritize eligible residents in transitional housing. She emphasized the program’s focus on equity and inclusion.

Councilmember House asked about the safety needs at The Lantern and clarified that the funding for Housing Solutions would not fully meet that need. She supported the allocations and echoed concerns about disparate impacts. She also asked about flexibility in the Public Services Fund, and Ms. Pavlik confirmed there was some due to increased funding.

Mayor Daggett highlighted that the two affordable units would be deed-restricted in perpetuity, benefiting more than just two families over time.

Council discussed balancing immediate housing needs, equity in access, and long-term impact of the proposed funding allocations.

Abel Estrella addressed Council and spoke against the CATS Mobile Resources and Outreach Bus. Mayor Daggett clarified that the project the CDBG funds would be used for ongoing services. Mr. Estrella stated that the Sunnyside Community Association was against the project in whole.

Wendy White address Council and thanked the Housing Staff for their consideration of the CATS in the CDBG application and stated that she was disappointed that the community did not see the value of their project. She presented some of the accomplishments of the program. 

Councilmember House stated that there was convolution of two conversations regarding the Community Action Teams of Flagstaff’s requests and that there needed to be care to have a conversation about community engagement rather than where to house the unsheltered population. 

Moved by Councilmember Jim McCarthy, seconded by Councilmember Khara House to read Resolution No. 2024-17 by title only.

Vote: 6 - 0 - Unanimously

Moved by Councilmember Jim McCarthy, seconded by Councilmember Khara House to adopt Resolution No. 2024-17.

Vote: 6 - 0 - Unanimously

City Manager Greg Clifton and Senior Deputy City Manager Shannon Anderson provided a PowerPoint presentation that covered the following: 

CONSIDERATION OF USING COUNCIL INITIATIVE FUNDS
FLAGSTAFF COMMUNITY BAND
OTHER FUNDING CONSIDERATIONS
FUNDING REQUEST FOR ELEVATE PREK
BUDGET TEAM DISCUSSED ALTERNATIVES

Mr. Clifton explained that while the budget process is not formally finalized, staff has prepared the key components and explored alternative allocations to fund Elevate PreK, acknowledging Council’s support for early childhood education.

Mayor Daggett clarified that the discussion was for the current fiscal year and asked about a proposed $1,000 allocation to the Flagstaff Community Band.

Councilmember House supported the reallocation of funds as presented by staff.

Vice Mayor Aslan, a volunteer board member of the Community Band, noted that a $1,000 sponsorship would be appreciated and reaffirmed that Council Initiative Funds are not meant to be ongoing sources of funding. He emphasized that funding requests should originate from Councilmembers, not the public, and supported Elevate PreK and future STEM projects.

Councilmember McCarthy asked for clarity on the $1,000 allocation to the band and supported funding both the band and Elevate PreK. Mr. Clifton noted that about $4,000 would remain for Elevate PreK after the band allocation.

Councilmember Sweet expressed that such issues should be addressed earlier in the budget development process. She asked about leftover Aid to Tourism, Travel, or Hospitality funds. Finance Director Brandi Suda confirmed some grant funds were unspent due to low applicant turnout and supported reallocating $35,000.

Economic Vitality Director Heidi Hansen added that although funds were allocated to stakeholders, not all followed through to collect them.

Councilmember Harris supported Elevate PreK funding but wanted to understand why the request was being made now, and expressed interest in hearing public input on the matter.

Overall, there was general support for funding Elevate PreK and the Community Band, but concern was raised about timing, process, and source of funding requests. 

Public comment:

Scott Pettit and Liz Archuleta addressed Council in support of Elevate PreK. Councilmember McCarthy clarified with Mr. Pettit that the classroom was a pilot project and after the data was collected, they would figure out future funding. 

Ms. Archuleta asked Council to change Elevate PreK’s request to $30,000 from the City so that they do not impact the City’s initiative funds. She added that United Way would find the funding through grants and donor contributions. 

Vice Mayor Aslan asked if United Way would accept the allocation of the Council’s Initiative Fund if the Council directed it that way. Ms. Archuleta stated that they could use the money. 

Mayor Daggett stated that she was fully in support of the program and she was grateful to the United Way for taking it on. She added that she was supportive of the ARPA funds and the use of the remainder of the Council Initiative Fund to Elevate PreK. She asked Council if they would prefer to give the Community Band $1,000 or $1,499. 

Councilmembers Harris, McCarthy, Sweet, and Mayor Daggett supported $1,499 to the Community Band.

Moved by Councilmember Jim McCarthy, seconded by Councilmember Khara House to allocate $1,499 to the Community Band and the remainder of the Council Initiative fund be allocated to Elevate Pre-K.

Vote: 6 - 0 - Unanimously

A break was held from 5:25 p.m. through 5:37 p.m.

Water Resources Manager Erin Young introduced the Stantec consultants, Carol Malesky, Andrew Burnham, and Zac Koch.

Vice Mayor Aslan shared his gratitude to Ms. Malesky, Mr. Burnham, and Mr. Koch for coming in person to the last meeting. 

Ms. Malesky introduced her team and continued the PowerPoint presentation to Council. 

FINANCIAL PLANNING SCENARIOS
DEBT FACTORS
INCREASED PERCENTAGE OF DEBT
PROJECTED DEBT FINANCED PROJECTS
WATER FUND FAMS CONTROL PANEL – INCREASED BORROWING AND RATE PROJECTIONS
INCREASED BORROWING ON RATE PROJECTIONS

Councilmember McCarthy raised concerns about the use of debt funding for city projects. H stated that he is uncomfortable with applying debt to cover maintenance-related issues. He questioned whether the proposed debt capacity would be used for both categories. In response, Water Services Director Shannon Jones confirmed that the debt would indeed fund a combination of long-term capital projects and maintenance needs.

Mayor Daggett followed up by asking where the funds to repay this debt would come from. Finance Director Malesky explained that the primary source of repayment would be through existing water rate revenues. Additionally, a portion of the repayment would be supported by capacity fee revenues, which are typically collected from new developments to offset the impact on public infrastructure.

CIP FUNDING
CIP FUNDING AND EXECUTION REDUCTION 
WATER FUND FAMS CONTROL PANEL – CAPITAL FUNDING AND RATE REDUCTION 
REDUCED CIP IMPACT OF RATE PROJECTIONS

Councilmember McCarthy asked about the impact of not doing CIP projects. Mr. Jones said it would slow needed infrastructure replacement, like water pipes, which they hope to increase from 2 to 4 miles per year.

Mayor Daggett asked about the cost of issuing debt. Ms. Malesky said projections use a conservative interest rate and the debt cost would be a weighted average.

PROJECTED BILL IMPACTS
WATER RATE STRUCTURE – CIP REDUCTION RATE PROJECTIONS
WATER PROJECTED AVERAGE BILL IMPACTS – CIP REDUCTION SCENARIO
WASTEWATER PROJECTED AVERAGE BILL IMPACTS – CIP REDUCTION SCENARIO
ADDITIONAL QUESTIONS
LEVEL OF SERVICE ESTIMATED IMPACTS ON REVENUE REQUIREMENTS WATER CAPACITY FEES
LEVEL OF SERVICE ESTIMATED IMPACTS ON REVENUE REQUIREMENTS WASTEWATER CAPACITY FEES
CAPACITY FEE COMPARISON PER ERU

Mayor Daggett asked why Tempe's fees were lower than Flagstaff’s and if it was due to fewer infrastructure needs. Mr. Burnham explained that Tempe's needs were not primarily infrastructure-related and confirmed they are currently conducting a rate study.

DEFERRED CIP IMPACT ON RATE PROJECTIONS

Mayor Daggett asked if the rate increase was pushed forward, could there be additional rate increases in the future. Ms. Malesky stated that was correct. 

COMMUNITY COMMENTS
COMMENTS AND FORWARD-LOOKING OPPORTUNITIES

Councilmember McCarthy asked whether a higher fixed charge could be implemented to ensure seasonal residents—those in Flagstaff for only three months a year—pay their fair share for infrastructure use.

MATRIX OF FACTORS FOR DECISION 

Councilmember House noted the report focused on single-family homeownership and did not include multi-family or rental housing. Mayor Daggett asked why water rates hadn’t increased in four years. Ms. Young explained delays due to COVID and staffing, with a study only beginning last year. Ms. Suda added that rates could be changed legally without a study but larger changes typically require one.

Mayor Daggett inquired if current capacity fees fully covered growth-related projects. Mr. Jones said fees contributed but weren’t enough to cover all growth costs. Ms. Malesky noted raising fees would have minimal impact and effects would be seen further in the future.

Michele James, Executive Director of Friends of Flagstaff’s Future (F3), addressed Council stated that F3 was concerned about equity issues regarding water rate changes. She suggested that Council hold a meeting regarding equity issues and the water rate and to delay the completion of the rate study. 

Vice Mayor Aslan asked Ms. James if anything discussed tonight moved the needle for F3. Ms. James stated that they assumed that if equity issues were discussed in the water rate study that it would cause a delay. She added that the water rate studies out of ASU would be worth considering.  

Steven Puhr addressed Council asked for clarification from Stantec on some of the expenses. He stated that the 6% inflation of costs for chemicals and other consumables was not accurate. 

Mayor Daggett clarified that the escalation rate Mr. Puhr discussed was regarding chemicals. He confirmed that it was and that there was 0.43% annual growth when averaged over the past ten years when the outliers are removed. 

Vice Mayor Aslan thanked Mr. Puhr for his perspective. He asked Mr. Puhr if he felt that he had been heard throughout the process and that the process had been transparent. Mr. Puhr replied that the hour meeting that he had to meet with the consultant and staff was not enough. He added that he had not heard anything wrong with his assumptions.   

Written public comment was received from Ryan Martin and Ben Ruddell in support of the change. 

Ms. Malesky expressed concern about salary increases of 3% to 5% annually, which felt high compared to the 2.4% growth projection. She emphasized using a conservative approach despite past criticism. Councilmember Harris argued the pandemic was an anomaly and should not heavily influence forecasts. Mayor Daggett requested updated comparisons of capacity fees at different rates, which staff agreed to provide.

Ms. Young outlined the timeline staff hoped for Council direction that night to meet deadlines for a draft in June and first reading by mid-June. Vice Mayor Aslan clarified that a majority vote would decide if Council was split.

Councilmember Harris raised equity concerns about rate impacts on vulnerable residents, asking about assistance programs. Ms. Young described existing programs and payment plans but noted new low-income programs might not be available until after the rate study is complete. Harris stressed resolving equity issues before moving forward, while Mr. Jones confirmed pandemic-era shutoff moratorium resources had ended.

Vice Mayor Aslan supported moving forward with the rate study despite the equity concerns, noting peer cities’ rate increases and emphasizing the need for capacity funding. He preferred medium-to-high growth and debt financing levels. Councilmember House largely agreed, favoring 90% CIP funding and prioritizing equity discussions. Councilmember Sweet supported yearly water reviews and continued equity focus.

Council weighted in on growth, escalation, CIP funding, and debt levels, with slight variations but general agreement on cautious growth (around 1%), moderate escalation (about 3.5%), and significant CIP funding (80-90%). Councilmember McCarthy suggested using property taxes to help lower water costs for low-income residents.

Mayor Daggett highlighted the Council’s responsibility to ensure high-quality water services and sustainable water resources for Flagstaff. Mr. Solomon noted that the Council’s input showed consensus, and direction would be averaged accordingly.

Councilmember Sweet added that the team worked very hard and that she could not thank them enough for their time. 

Mayor Daggett also shared her thanks.

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