MOTION BY Secretary/Treasurer John Cox, SECONDED BY Boardmember Robert Nobis to APPROVE the June 9, 2025 Public Improvement Corporation draft meeting minutes. The motion carried as follows:

AYE:

President Susan Schmelzer, Vice President Cindy Braun, Secretary/Treasurer John Cox, Boardmember Brian Murphy, Boardmember Robert Nobis

Passed - Unanimously

MOTION BY Boardmember Robert Nobis, SECONDED BY Secretary/Treasurer John Cox to ELECT Susan Schmelzer as President, Cindy Braun as Vice President, and John Cox as Secretary/Treasurer.  The motion carried as follows:

AYE:

President Susan Schmelzer, Vice President Cindy Braun, Secretary/Treasurer John Cox, Boardmember Brian Murphy, Boardmember Robert Nobis

Passed - Unanimously

Interim Deputy Director of Finance Mayette Bailey presented the debt prepayment plan, including an overview of Public Improvement Corporation (PIC) debt, the refunding strategy, and financial impacts.

The PIC, created by the city of Goodyear, financed major long-term capital projects. Debt issued in 2007 ($43M for the stadium) and 2008 ($56M for spring training facilities) is fully paid by the Cleveland Guardians and backed by City excise tax revenue streams. Susan Schmelzer, PIC President, asked if the Cincinnati Reds also pay or just the Cleveland Guardians and Mrs. Bailey stated that these bonds are just paid by the Cleveland Guardians.

In 2016, the City refinanced these bonds, now Series 2016A and 2016B, to lower interest costs and consolidate debt. The bonds become callable in the next few weeks, allowing for early redemption. In December 2024, Council previously reviewed the long-term debt strategy and supported using one-time funds to pay down this debt, freeing approximately $9 million in interest savings to be used for service expansion, including Phase II of the Goodyear Recreation Campus (GRC) and Public Safety staffing. Prepayment strengthens the general fund, reduces long-term obligations, and aligns with the FY2027 adopted budget.

Staff recommended adoption of Resolution No. 2026-01 authorizing acceptance of city of Goodyear funds to defease and redeem the outstanding Municipal Facilities Revenue Refunding Bonds, Series 2016A and 2016B. Mrs. Bailey stated that approval of this action is a key step in the City’s commitment to strong financial stewardship while preparing for future service expansion.

Ms. Schmelzer asked for confirmation that the monies we are using to pay off the bond are not a refunding of the debt and Mrs. Bailey stated that was correct.

Ms. Schmelzer asked if the City has been accumulating these funds or are we just in a good position. Mrs. Bailey stated we already have reserves and we are just deploying those funds for better use and creating interest savings.

Ms. Schmelzer asked whether the City anticipates any additional ballpark needs that might require issuing bonds. Ryan Bittle, Deputy Director of Finance, explained that the City is currently negotiating with the Teams. He noted that completing this step, in line with the commitment made to Council, gives the City more operational flexibility to issue additional debt if needed. With this obligation addressed, the City can better determine what it can realistically afford, which strengthens its position in discussions with the Teams regarding potential support.

Ms. Schmelzer asked whether any future debt would be issued as City General Obligation bonds or through the PIC. Andrew McGuire, Bond Counsel Attorney, explained that the PIC structure originated from an old case that allowed the city of Phoenix to use a revenue-based, non-voter-approved financing model. Many municipalities adopted similar structures. He stated that over time, many revenue-based financings have been completed without elections. The City is moving toward issuing revenue bonds directly, using essentially the same revenue source.

John Cox, PIC Secretary/Treasurer, asked whether there is still a need for the PIC since it was created primarily for ballpark funding bonds. Mr. McGuire responded that one PIC bond series is still outstanding. He explained that the City will return to the board to formally terminate the related leases, specifically those tied to the 2007 and 2008 indentures supplemented in 2016, once all conditions are met. If any further action is needed after the bonds are fully paid, staff will bring it back to the board.

Ms. Schmelzer asked for information about the outstanding bond series. Janelle Gold, Financial Advisor, responded that the one outstanding Series 2017 was new money for ballpark projects. She believes the final maturity is in 2027 and would be within one more cycle. There is less motivation to prepay it since it will naturally fall off in one more fiscal year.

Brian Murphy, PIC Boardmember, asked if the $9 million is unrestricted. Mr. Bittle stated it is unrestricted and was factored in as part of the FY2027 adopted budget for the additional public safety personnel and GRC Phase II. In the FY2027 adopted budget, GRC Phase II has design dollars and we will issue debt specifically for the construction. Mr. Murphy commended staff on being able to pay the debt off early.

MOTION BY Boardmember Robert Nobis, SECONDED BY Secretary/Treasurer John Cox to ADOPT CORPORATE RESOLUTION NO. 2026-01 AUTHORIZING THE ACCEPTANCE OF CITY OF GOODYEAR, ARIZONA FUNDS TO BE USED TO DEFEASE AND REDEEM THE CORPORATION’S OUTSTANDING MUNICIPAL FACILITIES REVENUE REFUNDING BONDS, SERIES 2016A AND MUNICIPAL FACILITIES REVENUE REFUNDING BONDS, SERIES 2016B; AUTHORIZING, SUBJECT TO THE DIRECTION OF THE MAYOR AND COUNCIL OF THE CITY OF GOODYEAR, ARIZONA, AND CAUSING THE REDEMPTION OF SUCH OUTSTANDING BONDS; AUTHORIZING THE TAKING OF ALL OTHER ACTIONS NECESSARY TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION; AND RATIFYING THE ACTIONS OF ALL OFFICERS AND AGENTS OF THE CORPORATION AND OTHERS WITH RESPECT TO THE TRANSFER, PREPAYMENT, DEFEASANCE, AND REDEMPTION. The motion carried as follows:

AYE:

President Susan Schmelzer, Vice President Cindy Braun, Secretary/Treasurer John Cox, Boardmember Brian Murphy, Boardmember Robert Nobis

Passed - Unanimously

Ryan Bittle, Deputy Director of Finance, presented an overview of the current state of data centers, covering business models, financial impacts, and common concerns. Mr. Bittle emphasized that the City is actively considering the full range of issues raised by residents, and that many technical, legal, and infrastructure factors are evaluated as part of the City’s decision-making process.

Mr. Bittle shared the top locations for data centers and that growth is not expected to slow down. The top two locations for data center development are Virginia, due to its existing infrastructure, and Texas, because it is a business-friendly state. Bullard Avenue is the City’s “technology corridor”. Data center models include hyperscale, colocation, enterprise, and cloud/AI. Economic benefits include high-paying jobs, construction sales tax, commercial lease tax, utility revenue, franchise fees, and increased property values. Arizona’s recent budget basically squashed the three-year use-tax moratorium for data centers; however, Mr. Bittle did not have specifics on the full impact, such as whether any facilities would be grandfathered in, what the timeline would be, or whether any exceptions apply.

Mr. Bittle then addressed common concerns, beginning with water use. He shared that the City plans to adopt a water resource allocation policy before the end of the year. When new users need more water than their allocation, Council approval will be required. Secretary/Treasurer John Cox asked whether water allocation is related to certain ZIP codes or specific industrial users. Mr. Bittle responded that it is based on the General Plan and average water use within similar zones, and that the City is working with a water attorney to prepare for various scenarios.

Robert Nobis, PIC Boardmember, asked whether cooling is the primary water use. Mr. Bittle confirmed that cooling is a major factor. Susan Schmelzer, PIC President, asked if there is a plan for managing the growth of data centers, and Mr. Bittle responded that growth is being managed.

Mr. Bittle discussed that noise is a common concern and that data centers must comply with the same requirements as other industrial users. Technologies have continued to improve, including liquid cooling, immersion systems, closed-loop systems that reuse water, and AI-driven optimization to reduce cooling needs. APS is also proposing rate increases to include data centers to ensure they pay their share of grid impacts. Development agreements help ensure that growth pays for growth.

Mr. Nobis asked for an estimate of the total revenue the City might receive from data centers, but Mr. Bittle said the City cannot disclose that information pursuant to A.R.S. § 42-2001 and A.R.S. § 42-2002. Mr. Cox discussed the Transaction Privilege Tax (TPT) at 2.5% and how the lease relationship between data centers and building owners generates substantial revenue. 

Brian Murphy, PIC Boardmember, asked whether the water allocation will change based upon conditions. Mr. Bittle responded that Water Services is considering these scenarios, and if the Colorado River allocation is reduced it could change. Water Services is factoring in potential cuts into the plan; however, we may need to reevaluate the allocation if that happens. The City’s first priority is our existing businesses and they take priority over any new growth. 

Ms. Schmelzer asked whether the 100-year water requirement is still factored in for new businesses, and Mr. Bittle confirmed that it is and that Arizona is a leader in water conservation. Goodyear continues to fall under the district that must demonstrate a 100-year water supply.

The PIC Board expressed appreciation to staff for the presentation on data centers.