Mesa City Council unanimously approved the 78-unit Park North townhome rezoning and advance-adopted utility rate increases, while fielding significant public
MESA, ARIZONA — October 5, 2026

Mesa City Council unanimously approved the 78-unit Park North townhome rezoning and advance-adopted utility rate increases, while fielding significant public

Mesa City Council unanimously approved the 78-unit Park North townhome rezoning after multi-year community engagement, approved FY2026-27 utility rate increases, and fielded significant public concerns regarding hyperscale data center development, seasonal water charges, and civic accessibility.


Mesa Approves Park North Townhomes Unanimously; Hyperscale Data Center Controversy and Rate Increases Dominate October Council Meeting

On October 5, 2026, the Mesa City Council unanimously approved the 78-unit Park North townhome development after a lengthy community engagement process that transformed the proposal from apartments into townhomes, satisfying neighborhood opposition. The same meeting advanced utility rate adjustments and became a forum for substantial public concern about the NT10 Phoenix hyperscale data center project, with speakers warning of urban heat island effects and utility cost-shifting to ratepayers.

Key Speeches

"I became familiar with what we're now calling Park North a little over a year ago and met with Rob Stefen a time or two and was aware of some of the peculiarities and the difficulties with this particular parcel. We have the bridges and cross access and things like this. I think it's a great thing that everyone has been able to come together and agree on something that will benefit the neighborhood." — Council Member Adams

"We are grateful for those that came and spoke in support. It has been a very long and arduous process. Since I've come on board working with Rob Stefen and the neighbors that spoke in support, it's been a wonderful collaboration and process to get to something that we can stand and say we have the support of the community as we appear before you." — Brennan Ray, developer's attorney

"There's actually research coming out of Arizona State University that shows that in the area surrounding a data center like the NT10 Phoenix data center that I oppose, there would be an increase of 3 to 5 degrees Fahrenheit. So a nasty 111 degree day could turn into an unbearable 115 degree day if we were to build this campus." — Jagger Zenov, NT10 Phoenix data center opponent

Timeline

Park North Rezoning (Items 6A and 6B)

Utility Rate Notice of Intention (Item 7)

Opposition

Park North Rezoning:

Utility Rate Increases:

NT10 Phoenix Hyperscale Data Center (Citizens Present):

Support

Park North Rezoning:

NT10 Phoenix Hyperscale Data Center (Citizens Present):

Project Details

Park North Rezoning and Development Agreement:

FY 2026-27 Utility Rate Adjustments:

Vote Breakdown

Consent Agenda (Items 1–5, 6B removed):

Park North Rezoning and Development Agreement (Items 6A and 6B together):

Notice of Intention to Adjust Utility Rates (FY 2026-27):

Motion to Adjourn:

Outcome & Next Steps

Park North Rezoning: Mesa City Council unanimously approved zoning case 24-00708 for the 78-unit Park North townhome development. The project requires landscaping and pathway construction in an adjacent public park, with notice to residents of possible noise and light intrusion. The Planning and Zoning Board had unanimously supported the project (7-0 vote), and Design Review Board feedback was incorporated into final design. The multi-year community engagement process, which transformed the proposal from apartments to townhomes, resulted in support from the Superstition Springs neighborhood despite initial opposition.

Utility Rate Adjustments: Council approved the notice of intention for FY2026-27 utility rate adjustments on October 5, 2026. The notice sets the maximum rates that may be adopted on December 8, 2026. City Council will introduce utility rate ordinances on December 1, 2026, and may adopt final rates on December 8, 2026, effective February 1, 2027. Residential customers will see approximately $5.92/month impact for water, wastewater, and solid waste. The service charge adjustment from 4% to 3.5% (per Audit and Finance Committee recommendation) reduced the overall impact.

Automatic License Plate Reader Privacy Concerns: Council Member David Win Stanley raised privacy and oversight concerns regarding automatic license plate reader implementation, specifically: (1) consequences for authorized user misuse, (2) scope of personnel access beyond sworn officers (third-party contractors), (3) whether IT specialists are subject to same restrictions as sworn officers, (4) whether 30-day data deletion includes backups. Mayor indicated council would investigate the request.

Sign Language Interpretation Accessibility: Noah Markham requested sign language interpreters for live-streamed and YouTube-posted council meetings. Council noted the request without formal action.

NT10 Phoenix Hyperscale Data Center: No formal council action taken during the October 5, 2026 meeting. The project was discussed during the citizens present period, with Jagger Zenov opposing and Noah Markham supporting. Zenov raised concerns about urban heat island effects (3–5°F temperature increases), utility rate cost-shifting to ratepayers, grandfathering from environmental review ordinance, and AI industry distress risk. The matter remains before the city for future action.

Controversies & Context

Park North General Plan Consistency Questions:

Anthony Kelly, a former opponent of the Ascend at Longbow High Point development, testified that he faced significant barriers when trying to use the general plan to block that prior project. Planning staff and attorneys cited general plan inconsistencies as obstacles, yet those same barriers do not appear to apply to Park North. Kelly quoted a planner as saying "because they can" when asked how percentages were selected in the general plan, and claimed the planner stated "we don't go by that anyway." He requested council members explain the apparent inconsistency in general plan application between Ascend and Park North.

Council Member Adams acknowledged the parcel's "peculiarities and difficulties" (bridges, cross access) and recalled that Ascend was not unanimously supported by Planning and Zoning Board. The Mayor noted Park North was "not an easy process" and "not an overnight thing," spanning several years. However, the council did not provide detailed responses to Kelly's general plan application consistency questions.

NT10 Phoenix Hyperscale Data Center—Urban Heat Island and Utility Cost-Shifting:

Jagger Zenov, who identified himself as having studied urban heat island effects and worked in data center industry, raised substantial concerns about the NT10 Phoenix hyperscale data center project from Tokyo-based company:

  1. Urban heat island effect: Research from Arizona State University shows 3–5°F temperature increase in areas surrounding data centers; a 111°F day becomes 115°F.
  2. Waste heat radiation: Hundreds of megawatts of heat dumped directly into air.
  3. Utility rate cost-shifting: Ratepayers will bear grid upgrade costs, not developer; trend projections show 15–40% increase by 2030, but data center industry debt is "increasingly distressed," creating risk of failed projects saddling public with full cost.
  4. Grandfathering from environmental review: NT10 was exempted from Mesa's new data center environmental review ordinance.
  5. Public opposition: Zenov described the issue as "8020 issue" with vast majority opposed; noted "more than three" protestors outside council meeting unable to speak due to three-speaker limit; compared to careful apartment vetting ("very careful").
  6. Double standard: Alleged signs banned and protest footage "scrubbed from internet."

Noah Markham, speaking in support, emphasized economic development benefits, good location near airport, Japanese technical expertise, and noted that water use (72% of Arizona water is irrigated agriculture) is not primary data center concern. Markham also raised concerns about threatening rhetoric from data center opponents directed at supporters and called for policy to address threatening behavior.

Utility Excess Water Search Charge—Seasonal Dormancy Unintended Consequences:

David Winstanley, representing Encore East Mark HOA board of directors, identified a mathematical flaw in the excess water search charge criteria. The HOA operates 49 acres of landscape common area, of which 16 are grass, approved by city in 2014. The HOA turns off water December through February, creating a near-zero winter water average. The excess search charge threshold is calculated as summer-to-winter water average ratio of 100–150%, but Encore East Mark's ratio exceeds 600–700% due to dividing by near-zero winter denominator. This creates an inadvertent penalty for landscape dormancy despite city-approved plan and active pursuit of xeroscaping and conservation measures. Winstanley requested postponement of excess search charge change to allow "more rational discussion" of ornamental versus functional grass distinction.

Council did not directly address this concern during the meeting, though Mayor indicated council would "wait till December 8th" for rate decision.

General Fund Transfer Transparency:

Winstanley also requested detailed justification for 30% constant rate applied to general fund transfer calculations, questioning whether $11M public safety increase is necessary. He stated he does not doubt funds would be "put to good use" and does not wish to diminish fire and police budgets but requested council explanation. No council response recorded.

Duration

Other Notable Items

Liquor License Applications (Items 3A–3F, on Consent Agenda): Six applications approved on consent: Blue Dragon Smoke and Vape (430 North Dobson Road), Harbor Seafood and Cinjun House (2711 South Alma School Road), Sacred Pint (214 West Main Street), Alter by Pinnacle Brewing (10 West Main Street), Buddha's Brew Coffee Cafe (710 East Main Street), and Oshima Sushi (1902 East Baseline Road). No opposition or comment recorded.

Fire Department Equipment and Printing Services (Items 4A–4B, on Consent Agenda): Approved on consent: $1 cyclone chassis 95-foot rear mount platform for Mesa Fire and Medical Department (funded by apparatus public safety bond) and three-year term contract with two-year renewal options for large format commercial printing for business services department. No opposition or comment recorded.

View source transcript ▼

Source: City Council Meeting - 10/5/2026 — October 5, 2026. Auto-generated YouTube transcript; may contain transcription errors.

Thank you. Welcome to our Mesa City Council meeting for October 5th, 2026. Council members are present with Mr. Heredia uh on Zoom. Mr. Ready, can you hear us? Yes. Thank you. Uh we'll begin the meeting with a moment of silence and then followed by a pledge of allegiance by Bel from Troop 3054. If you'll please stand for a moment of silence and then the pledge of allegiance. Thank you, Briel. You want to come forward for the pledge?

I pledge algiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Thank you, Belle, taking the time to come over here. And you're welcome to stay or leave if you like. With that u before we do our consent agenda, Miss Mosley, can you say the names of the three people who will be speaking under items from citizen present? Yes. So the order selected will be Jagger Zenov.

Second is Noah Markham. Third is David Win Stanley. All right. Thank you. And I'll call you up when we're done with that. Um item one is the is the consent agenda. Mr. Christopher, will you please read our consent agenda? Good evening, mayor and council members. These are the items on the consent agenda. All items listed with an asterisk will be considered as a group by the city council and will be enacted with one motion.

There will be no separate discussion unless a council member or a citizen request in which event the item will be removed from the consent agenda and considered as a separate item. Item two, approval of minutes of previous meetings is written. Item 3 A, act on liquor license application for Blue Dragon Smoke and Vape, 430 North Dobson Road. Item 3 B, act on liquor license application for Harbor Seafood and Cinjun House, 2711 South Alma School Road.

Item 3 C, act on liquor license application for the Sacred Pint, 214 West Main Street. Item 3 D, act on liquor license application for Alter by Pinnacle Brewing, 10 West Main Street. Item 3 E, act on liquor license application for Buddha's Brew Coffee Cafe, 710 East Main Street. Item 3F, act on liquor license application for Oshima Sushi, 1902 East Baseline Road.

Item 4 A, approving use of a cooperative contract for the purchase of one E1 cyclone chassis 95 ft rear mount platform for the Mesa Fire and Medical Department. This is funded by the apparatus public safety bond funds. Item 4 B, approving three-year term contract with two-year renewal options for large format commercial printing for the business services department.

Item 5A, introduction of ordinance amending Mesa City Code section 1-19-3 to authorize the city attorney to purchase insurance coverages for the city with funds from the property and public liability trust fund. Item 6 A has been removed from the consent agenda. Item 6B, approving resolution to enter into a development agreement related to Park North, which is on property located east of the northeast corner of Power Road and Guadalupe Road.

This is requiring landscaping and construction of pathways in an adjacent public park and notice to residents of possible noise and light intrusion from the park. Mayor and council members, these are the items on the consent agenda. Thank you, Mr. Christopher. I'll entertain a motion to approve the consent agenda. Mayor, um, yes. Question. Since 6A has been pulled, do we want to take 6B off and then vote on 6A and 6B at the same time? All right. So, can we pull 6B?

U, we certainly can at your request. We'll vote on those two together. Thank you. Okay. So, we'll approve the consent agenda without 6A and 6B. Thank you for the motion, Vice Mayor. Second by Miss Goforth. Please cast your vote. I Thank you, Mr. Redia. Unanimous. Thank you. With that, we'll circle back to item 6A off the consent. This is zoning case 24-00708 known as Park North of 5 acres located 270 ft east of northeast corner of South Power at East Guadalupe. We have five speakers on that.

I'll call you up uh Mr. Anthony Kelly and then following him Stacy Shepard. Mr. Kelly, you can come up and you have three minutes. Thank you. Mayor and Council, thank thank you for letting me speak. An Anthony Kelly Ridge ridge View. Many of you know me from the the opposition from Ascend at Longbo High Point of a couple years ago. Um, I'm not opposed per se to Park North. Um, I I I like what they got. I wish I had it. I wish we had we had it. Okay.

Um my question to you is how it how how it all came about, how it how it came um how how it applies to the G general plan itself. I've got I've got a a copy here. And um when we tried to use the G general plan against ascend at Long Longbo High Point, we hit wall after wall after wall. It was that that was from planning and zoning, from attorneys, from uh uh David Luna, and we we even had an audience with Chris Brady, too. And each time we could we we could not break through through that wall.

So given the fact that this that park north has morphed into a very nice uh town town home u I would I would like like to know from you each each one one at the end end of this when you u talk talk about why which which which way you're voting on it. Um, I would like to know how they seem to cruise right through it all, cruise through these walls that we hit.

Um, you know, when we uh when we did ask qu questions about the uh percentages in in the in the plan back then, um, we were uh we we were told it didn't matter at the at the time. In fact, an an exact quote um from from from the planner was um when I when I asked them how how do they arrive at the percentages? They they seem to pick and choose part parcels to get the se 7030 split, you know, uh res residential to uh retail. And the uh the planner says said to me because they can.

And then she she said we don't go by that anyway. Those are exact quotes. Now if you don't go by the plan, what do you go go by? I guess that is my qu question and how it applies to Park North. Thank you, Mr. Kelly. uh Stacy Shepard and then followed by Stacy is Carrie Davis. Hi, my name is Stacy Shepard.

I live in the Superstition Springs um neighborhood and um we have been working for never uh now about I'm not sure several years from the start of the apartments for Park North to now the town homes. We have been I've been one of them that has worked with the um the law firm and Rob is who I know. But um we've worked very hard at making concessions going back and forth and the plan that is being set forth. We are many of us in the neighborhood have worked long and hard to get this approved.

We are for it. We um you know we've we've done our due diligence of being at all the planning meetings. We know exactly what's going on. I don't know what was happening with the other gentleman in front of me. Um and but our neighborhood I I speak for several in the neighborhood that we are for this and we would appreciate your approval tonight. Thank you, Miss Shepard. Um Mr. Davis, as you come forward, I'm going to give the applicant a chance to respond, too. Okay. Okay.

You wanted to speak now or No, go ahead. Okay. At the end. So, uh, honorable mayor and city council, I would like to put forward my support for this project. I believe it's for 78 units and the uh single family residence issue I think is something that the city council is taking uh seriously and I appreciate your efforts and hopefully then you will approve this project. So thank you very much. Thank you Mr. Davis. Uh Miss Cheryl Kirby uh followed by David Win Stanley.

I didn't know I signed up for this, but I guess I did. Well, it says Cheryl Kirby right here. So, I didn't find that. That's not my handwriting, but anyway, that's fine. Um, I also live in the sup superstition springs area. And as Stacy said, we have fought this and we absolutely 10,000% did not want the apartments, but we've worked with the uh different people responsible for the newest development of the town homes and that's definitely 100% much better than it started out a long time ago.

So yes, u and like Stacy, I live in Superstition Springs and I know there's a lot of people that approve of this development. Thank you. Thank you, Miss Kirby. Mr. Win Stanley, mayor and mayor and councel Dave Winstanley from district 6. Most of you are aware of who I am by now. Uh I would like to speak in favor of this. It is a good idea and one of the reasons I wanted to speak in favor of is this is a good choice compared to what was proposed previously.

Um so we wanted to compliment the council on doing that. I also wanted to give a quick uh comment to the gentleman. Uh I'm on the design review board. I remember this and we gave feedback and asked the developer to make some changes and he did and so that's good due process. I'm in favor of it. I hope you'll vote in favor of it. Thank you. Uh, I gave an option u to the developer or the applicant if you'd like to speak, give an overview of Park North. Hello, Mr. Ray.

Uh, mayor, council, good evening. Brennan Ray, 2325 East Camelback here on behalf of the developer. I'm happy to go through a full presentation if the council would like. Um, what I can say is we are grateful for those that came and spoke in support. Uh it has been a very long and arduous process. Um one of which I was not involved when the apartments were presented before you.

Um but since I've come on board working with Rob Stefen and the neighbors that spoke in support, it's been a wonderful collaboration and and process to get to something that we can stand and say we have the support of the community as we appear before you. With respect to the other gentleman's comments who had a concern about the general plan, I certainly cannot speak. I do not know of the other case with which he referred to or um the details and particulars of that.

I know as we looked at this case and worked closely with staff. First and foremost, we are not required to file a general plan amendment. This site is designated on the general plan as neighborhood place type which does allow commercial uses and multifamily residential as a primary use. And so there was no need for a general plan amendment. Our narrative is detailed in three pages of how we believe we are satisfying the current general plan.

Additionally, we know the city has the balanced housing plan as well and we satisfy a lot of that criteria in there as well. So, I can go into more detail should you wish, mayor, council, but we would request your approval consistent with the other recommendations for approval. Thank you, Mr. Ray. Council, do you want a presentation or No, you have enough information. I think you're off the hook, Mr. Ray. Thank you. Thank you.

But we do have a presentation queued up if we wanted and and that's uh you can see that online as well, right? So if anybody wants to see the presentation, it's about 40 slide decks long. Uh with that um 6A and 6B, we will entertain. There's no uh taking that off the consent. Yes. Go ahead, Miss. Go forward. Could I address I just would like to address Anthony Kelly and um to say I although I was not here that that approval of Longbow um Ascend was prior to my election to council.

I understand your frustration. Um and I'm sorry that you and your residents didn't feel heard um at that time. I can't speak to the particulars and unfortunately I don't even think we have the same planning director. we don't who might be able to speak to it. But you know, you and I talk all the time about about these types of issues.

And so I I the one thing I can say is I hope that you feel differently now than you have in the last four years, but um I do understand your frustration about the process. Council, any comments, Mr. Adams? Well, thank you, Mayor. Uh just just a few. I uh became familiar with uh what we're now calling Park North a little over a year ago and um met with Rob Stefen um a time or two and was aware of some of the peculiarities and the difficulties with this particular parcel.

We have the the bridges and cross access and things like this. I think it's a it's it's a um it's a great thing that everyone has been able to come together and agree on something that will benefit the neighborhood. Um I would just like to recognize Rob. I think he was always looking for a way to make something happen there that would be good and um not um go contrary to what the neighbors were hoping for. So uh Rob, if you're out there, thank you. Um so I think it's good.

I I do have a quick comment about uh uh Mr. Kelly's comments. I have been around long enough to remember when the developer um invited me to go out and uh stand on that property which was vacant dirt to make a number of points and one of them was um that aircraft noise wasn't an issue and just almost like magic the B7 sentimental journey decided to take off and go over our heads at the time and again I was I I think I was just coming off of planning and zoning board.

I was not supportive of that project. Um but um I I can't really address all of the steps and machinations that were involved in that. But um I don't recall that it was a unanimously supported project, at least from my perspective of the planning and zoning board at that time. So, I don't know that that helps much, but I do remember it in its very early stages and would be happy to visit with you, Mr. Kelly, uh, offline and share what I can remember.

Um, I'm also very pleased to see that all seven members of the planning and zoning board were engaged in this project and we had a 70 vote. So, thank you. Thank you, Mr. Adams. Mr. Readia, you have any comments? No comments. Thank you. I'll just say share Mr. Kelly, I'm just letting you know this is one was not an easy process for the developer, the applicant to come through. So I think it was several years uh in the making. So it was not an overnight thing.

So with that said, council, I'll entertain a motion to approve items 6A and 6B together. Is there a motion to that effect? Thank you, Vice Mayor. I need a second. Thank you, Miss Taylor. Please cast your vote, Mr. Ready. I Thank you. Motion passes unanimously. With that, uh we're going to move over to item 7. A seven is adoption of the notice of intention to adjust utility rates. And I I want to leave uh read a comment here for context for people that are not familiar with this process.

State statute requires municipalities to provide notice before adopting rate increases. At the public hearing on December 8th, council could adopt the proposed rates and this notice of lower or lower rates. If council wanted to adop adopt a rate higher than what is in the notice, council would need to first adopt a new notice of intention for that rate.

In other words, this notice is the maximum potential rates that council could adopt at the December 8th meeting, but we are not adopting any rates tonight. So, with that, we have uh Brian here as our staff to provide an overview of the utility rate proposed increase. Brian, good evening, Mayor, Council. Brian Richel, management, and budget director. So, the brief presentation I have is uh was a full presentation was uh presented to council just over a week ago.

I dialed it down just a little bit just to kind of get the um make it a a brief one tonight. So, what I would like to do is start off with what the financial principles the city follows with when looking at the utility fund as a whole and then also the utility rates. We always strive for a balanced net sources and uses throughout the forecast. Also a 20% higher or higher reserve fund balance. We look at rate adjustments that are predictable and smooth throughout the forecast.

And then also equity between resident residential and non-residential rates which was a big topic last year and we've continued that. And then also keeping our utility uh rates affordable. So the utility rate adjustment the main focuses this year was equity continuing the equity between residential and non-residential also growth pays for growth uh conservation of discretionary water use and also smooth rate adjustments throughout the forecast.

Here is what I wanted to present was this was the forecast that was presented to council at the budget adoption. And with this what I I have two highlighted boxes uh the net negative net sources and uses for 2526 through 2728. What I wanted to show there is that we had some negative net sources and uses. We had a lot of uh expenditures coming through. Um and throughout our forecast, our reserve ending fund balance uh dips around 13%.

We would like to keep that a little bit higher, but as you see at the end of the year, at the end of the forecast, it's about 20.8%. Which is right in line to what we were looking for, but the what concerned us was that middle portion right there of the negative net sources and uses and wanting to to grow out of that.

And also uh the bottom portion of the se of the the slide that are that is unchanged forecast from what was presented to council and during the rate adoption process last November and December. So what we do is we take what we want to do for budget and we we keep the um rate adjustments that were presented to see how the forecast comes out throughout the process. We now have uh throughout the summer we up up update our forecast.

And so when we updated our forecast we as you see I highlighted the same fiscal years the net s the net sources and uses as you see 2526 went from a negative 18 uh negative fund balance to now a positive 737. That is significant uh and I'll get to that in a little bit. But as you see the the fund balance negative fund balance starts growing out a little bit sooner. Um at 2728 fiscal year we were at 13% on the previous slide we are now 16.5%.

And the bottom still has the same rate adjustments actually sorry the same rate adjustments for the first couple of years but then we adjusted them um throughout. So the few things that I wanted to point out was for fiscal year 2526 what helped this forecast is we had uh in June May and June uh we had the refunding of some of the utility revenue bonds and that helped out significantly with let's get here $2.3 million throughout the forecast.

So we had close to $12 million of refunding savings of So what we did was we always every year um the city treasurer and the CFO Mike Tenkin Mike Kennington looks to see are we able to refinance some of our debt after 10 years and see what the eligible debt is. Can we lower our interest rate? And that's that was big because we were able to lower our interest rate. We don't extend the years that that debt is um for.

So for instance, if it's a 25year debt after 10 years, we look can we lower the interest rate for that next 15 years. And so we don't extend it out. We just keep that same maturity and we were able to save the the um forecast uh $12 million throughout. So $2.3 million.

Also one of the significant um things that happened in 2526 is the water revenue was uh estimated to be negative but now the net sources is positive that is due to a very warm winter and also a very hot um record-breaking March springtime. So there was a lot of consumption and that equated to about $6.9 million higher in revenue due to that consumption.

On the flip side, and this is why we look at the utility uh fund as a whole, on a flip side, because of that warm winter, gas, a lot of the gas, natural gas was not used because it wasn't as cold. So, people weren't using their gas furnaces, also barbecues, things like that.

So um so that's why we look at as a whole but with those savings um we also uh saw even though we had a lot more consumption we saw savings in our expenses for electricity but also in some of the chemical cost we're seeing even though there is some inflation we're seeing some of those costs come down from the high um costs that were in previous years. So staff is always looking uh and keeping in mind of our expenses to see if we can get it any lower than we can. um throughout the year.

So those are the main points I want to make here to where this is why the um the forecast is much better. Also, one significant thing in the previous and this one is due to the capacity fee with council adopting the capacity fee last year that took a significant burden of one of the our um focuses was growth paying for growth.

It took a significant burden of some of our projects, growth projects, for instance, the signal but uh expansion, signal but water uh treatment plant expansion off of this forecast and and recording it separately and having those capacity fees pay for that growth. So that was a heavy burden off of these rate payers and that's why we see our net sources and uses uh increasing uh throughout the forecast and now we're at with 31 32 fiscal year at 24%.

So with that impact what I want to show here is just just on the water itself. So um with the prior forecast recommended so when we came to council last year prior forecast was about a 4.2% uh impact on the typical customer and typical customer is around 6,000 gallons. The first three gallons is part of the service charge. The next three is um in the tiers. So what we recommended was staff recommended a a shift in between. So we recommended a uh a 4% for the service charge.

Previous year was 4 and a half%. We wanted to reduce that. However, we had to increase our drought service charge. Um, so when things came, it was about equal for the resident. However, coming with the audit and finance committee, they requested that we uh lower the uh recommended lowering the service charge from 4% to 3 and a.5%. And that is why it is down uh to just a 3.8% impact on the typical customer. that service charge is charged to every customer across the board.

So that going from 4% to three and a half percent helped all of the water customers even commercial uh and landscape and also multi-unit. So that reduced that as you see as you go through uh the chart u the reduced percentage impacts for each typical customer. So, what I wanted to show here was the affordability of the Mesa Utilities. The top line that's dashed, the 4 and a.5%, this is what the EPA considers a high burden to a water um user. And this is water and wastewater combined.

So, if you're at 4.5% of your uh income is going towards water and wastewater, that is considered a high burden. So the bottom the bottom line the solid dark line that is a typical customer of water and wastewater of a medium household income. Just to show how affordable Mesa water and wastewater is compared to what EPA says is a high water burden. The next one is the light blue that goes from about 2.73% to about 2.9. That is for minimum wage households.

So if you're at a minimum wage, the wa the water and wastewater impact is still much lower than the what EPA considers as a high water burden. So I wanted to just show this how that even with some of our uh rate adjustments, uh the city of Mesa is still considered a very affordable water and wastewater utility. So bringing it all together, residential rate adjustments.

So, your typical customer who has the water, wastewater, and solid waste, the impact for that customer will be just uh just less than $6. So, $5.92. And then down below is what a typical average uh customer bill would be for electric and natural gas. So, they're looking at just around just over $6 uh of an impact if you have those um utilities. So, but for most of the city, it's water, wastewater, and solid waste. It'd be just less than $6 a month um of impact.

So, even with with all those adjustments, I wanted to show you here is the typical homeowner average uh cost comparison where the city of Mesa with the proposed would be, we would still be the third most affordable uh in this comparison u just just above uh Scottsdale and Chandler, but well below um all the rest of them.

And so even with these slight rate adjustments that staff is recommending, we would still be very affordable within the comparison for and this includes water, wastewater, solid waste, it also includes sales tax. So it takes a typical home and what they spend on property tax, sales tax, and their utilities, water, wastewater, and um solid waste. And we're still affordable.

So the next steps is this wanted to remind council uh is this is just for adopting fis one fiscal year in those other in the spreadsheet of the forecast those are just a planning purposes to see how that forecast would be. So the adoption for the notice of intent is just 42627. So, if I go back up to here, it would just be uh what's recommended adjustments for fiscal year 2627 of those adjustments in the light green and the tan. The rest in the gray is just for planning purposes.

As you're well aware that we we come on an annual basis, we review um this forecast on a quarterly basis. So, we make adjustments and want to be able to come back to council to be able to make those slight adjustments year-over-year rather than waiting a couple of years and then coming back and having uh to come back to council and make some significant changes.

So the next step would be the introduction of uh the utility rate ordinances for council on December 1 and then council would take action on adopting these rates uh on December 8th and the rates would go into effect on February 1st. I'm here for any questions. Thank you, Brian. Council, any questions? All right, we'll wait till December 8th then. So, I'll entertain a motion to approve the notice of intent intention. We have two speakers that were Oh, I'm sorry. We do. Uh, thank you, Miss Holly.

Um, David Winstanley, please come up. And followed Mr. Win Stanley is Chelsea Mortonson. Good evening, Mr. Mayor, council members, and staff. My name is David Winstanley. I think you know me, but I am also a member of the board of directors of Encore East Mark HOA. We are the ugly step step grandparents of East Mark, south of Ray.

I'll explain that comment another time because I want to address two issues regarding water use and utility rate increases, specifically the um excess search charge and the general fund transfer. Um, and I understand fully that the current item is just an announcement of the maximum that can be charged. But if I wait until the actual meeting on utility rates, we can't have a fruitful discussion because it's an up or down vote.

Encort HOA occupies about 65% of the square mile bounded by Ray Chrisman Williamsfield and signal but roads. We have 49 acres of landscape common area of which 16 are grass. The plan for this was approved by the city of Mesa in 2014. I don't think any of you even Scott was here at that time. Doesn't matter. Uh that's 12 years ago. So the city accepted the idea that Encore Eastark was going to have a lot of grass. That was part of the plan. It's there. We agreed to it.

In 2000 in 2026, we estimate that our total landscape water bill will be about $45,000. That's $418 a year or $35 a month per household. Our typical ratio of summer to winter water average, and that's the definition, the criteria for the excess charge between June and September is over 700%. That's because we turn off the water in December through through February when the winter water average rate is calculated. Remember your junior high school math?

When you divide something by zero or a very small number, the result is a very big number. The criteria for excess water searchcharge is 100% and 150%. In my community, we're talking about 6 or 700% because we're dividing by zero. So, what you're really saying is that the proposed increases in excess search charge for water is don't use grass if you're not going to water it in the winter. This doesn't make sense, especially since it was approved.

Or should we plant winter rye grass, which we don't currently do, so our water average, winter water average is high enough to have a ratio nearer 100%. It it's a unintended consequence in my in my mind. We are actively pursuing zeroscaping and other options, all four that the city manager has put available for HOAs to lower our water use, but it will be impossible to bring it down enough to avoid this sir charge.

So first I would like you to ask you to postpone the change in excess search charge so that we can have a more rational discussion of exactly what you want and how we can all accomplish it. I understand there is some great discussion in defining ornamental versus functional grass. Let's have that discussion. Second subject. May we please have a more detailed discussion of calculating the general fund transfer instead of just using a constant 30%.

Do you really need an 11 million increase to your utility customers, US citizens, for public safety? I do not doubt that it would be put to good use. I do not wish to take anything away from fire and police, but I would like to hear from you guys. Why do we need an 11 million increase for this year? With that, I will thank you very much. I gave you an extra minute. Thank you, Mr. Win Stanley. Miss Mortonson. Chelsea, are you here? I have a Chelsea Mortonson. Not here. Okay. All right. Thank you.

Anything else, Miss Mosley? No, mayor. That that were the only two. All right. This time, I'll entertain a motion to approve the notice of intention. Can I have a motion, please? Thank you, Miss Duff. I'd like a second. Thank you, Vice Mayor. Please cast your vote. Mr. Ready? I. Okay. The motion passes unanimously to move forward. Okay. Item eight is items from citizen present. We allow up to three speakers three minutes. Our first person is Jaor Zenov followed by Noah Markham.

Jagor, you have three minutes. Uh, good evening, Mayor and Council. My name is Ziggor Zenov. I officially reside in Chandler, though I was born here and I've been taking college classes here in Mesa. Um, as part of that education, I studied the urban heat island effect. And normally that relates to asphalt radiating heat during the night. But the urban heat island effect gets so much worse when you build a data center that radiates hundreds of megawws of uh waste heat directly into our air.

That would be another example of I guess the good people of Eastmart getting the short end of the stick. The reason that I mention this is because um there's actually research coming out of for example Arizona State University that shows that in the area surrounding a data center like the NT10 Phoenix data center that I oppose um there would be an increase of 3 to 5 degrees Fahrenheit. So a nasty 111 degree day could turn into an unbearable 115 degree day if we were to build this campus.

But the other issue actually relates to what we just discussed which is utility rates. You see, whenever these hypers scale data centers come into a community, they will always try to um skirt around the rules to take on a minimum burden.

Now, I understand Mesa tried to pass an ordinance to increase environmental reviews on data centers, but the NT10 is actually getting grandfathered in, which means that even though we're SRP is doing its best to spread the load, it is likely that rate payers will pay significantly large amounts of money both in their um essentially uh to offset all of the power grid upgrades that need that the data center needs.

Um if present trends continue, uh you could draw the trend line increasing 15 to 40% by 2030. But as someone who has worked in the data center industry, I am here to tell you that present trends will not continue. Most of the data center debt is becoming increasingly distressed. And in fact, one data center project in New Mexico had to declare force majour, totally unrelated to a natural disaster.

That means if a data center falls through, right, a developer just builds the shell to get paid, but that no customers materialize because AI gets commoditized, then everyone gets saddled with the cost substantially more than what we are projecting. And I would like to see those projections in our future utility bill costs unless you believe the AI bubble is 100% not going to happen. But the other thing that needs to be remembered is the will of the citizenry. Right?

There's a lot of people who are not able to speak today because there is more than three of them and they instead decided to, you know, talk to the media and protest outside. They fundamentally oppose this construction of the data center campus. And whether we you take state numbers or national numbers, this is an 8020 issue. like a show of hands would probably show that the vast majority of people do not want a data center in Mesa.

So, you know, um also I would want to look to the double standard of it all, right? We are very very careful. We try to build apartments, but when we take an issue that is arguably more consequential especially to the people of Eastmark, um we seem to, you know, ban signs. We seem to um you know, scrub footage from the internet of people protesting the data center. So, let's recap, right? This is a project that will literally cook a part of the city.

It is going to cook affordability and it's going to cook some people's re-election chances. Please do the right thing with NT10 and oppose it. Thank you, Mr. Markham. Followed by David Winstanley. Um, aloha mayor and to the rest of the uh city council. As a Democrat, some people may disagree with me in the Democratic party, but that's the beauty of America. So, you know how I feel about supporting the disability community.

I ask for one request that each kind of meeting you have before you start streaming live, I ask for a virtual sign language interpreter during the live feed online during our meetings in Mesa and also a sign language interpreter when we post the videos on YouTube to rewatch on YouTube somewhere in the corner of the videos. There's gonna be a lot of push back on this data center that is from Tokyo and I don't see what's wrong with this data center. It's in a good area. It's close to the airport.

Hopefully, they can work together and advance technology with each other. And the Japanese are very smart people, especially the Japanese Americans to and water will not be the issue with this data center. I keep on hearing this but the fact is that the most water that is used 72% in Arizona is irrigated agriculture. The water is being used the most there. Also um I would like to talk about this part because it's very concerning to me.

Um and we may we may need some kind of policy for anti-zionists because they have been very threatening. And I don't think that's okay. We can have disagreements, but it should never get this far. So, please, please, um, we do need this to be stopped. Mahalo and thank you for your time this evening. Thank you, Noah. Mr. Win Stanley. your third time. Thank you for your advocacy. Who is this guy? I never met him. Mayor and council, thank you for letting me speak.

I am not competing with Noah for time at the table. Um, I just wanted to talk briefly about automatic license plate readers. Uh, I have spoken in favor of stoplight cameras and I have observed a substantial change in traffic along Ray Road by East Mark High School as a result of those cameras. So I am generally in favor of them. But when I speak to others, especially conservatives and nowadays even some of the progressives, we need some assurance about the private the safety of our privacy.

I've I have reviewed the online information, but I don't see some things that I see from others. We had this same conversation with Jerry Sheridan, the sheriff uh of Maricopa County, and he told the first thing he told us was misuse is a firing principle. What are the consequences for someone who misuses that information? Secondly, who does it apply to? It's not just sworn. There are other people who have access to it. And in particular, I'm concerned about third-party contractors. Why?

David Snowden was a third party contractor. I am a third-party contractor. We need access to do things. And are we if I was to be the IT specialist, would would I be subject to the same things? And I understand the data is is removed every 30 days, does that include backups? There just isn't quite enough depth on the website for me to bring assurances to people that I want to convince to use these devices um which I think are very valuable for law enforcement.

And with that, I'll say thank you very much. Thank you, Mr. Win Stanley. We'll look into your request, Miss Mosley. That's all that I have for speakers. Yes, sir. And I think that's all we have. Motion to adjurnn. I'll entertain a motion to adjurnn. So move. Thank you, Vice Mayor. Thank you, Miss Go forth. Please cast your vote. I I Mr. Ready. He said I I Okay. Thank you. We're journed. Have a good evening.