TITLE
The Mayor and City Council shall discuss and take action on adopting a tentative budget for fiscal year 2026-2027 (FY26-27, or FY27) and the 10-Year Capital Improvement Plan. Discussion and Action.
AGENDA ITEM DESCRIPTION
In compliance with Title 42 of the Arizona Revised Statutes (A.R.S.), the tentative budget for FY26-27 is presented for City Council consideration. The tentative operating and capital budgets, based on City Council strategic priorities and staff input, total $335,257,661. The tentative operating budget totals $154,062,064 and the tentative Capital Improvement Projects (CIP) budget totals $181,195,596.
Final budget adoption is scheduled for June 16, 2026, at a City Council Meeting.
Operating Budget
The proposed operating budget totals $154,062,064. The totals, by fund, are as follows:
|
General Fund |
$ 86,052,345 |
|
Special Revenue Funds |
|
|
Highway User Revenue Fund |
$ 5,792,021 |
|
1/2 Cent County Road Tax Fund |
$ 2,110,000 |
|
Grants Operating Fund |
$ 52,940,468 |
|
Debt Service Fund |
$ 7,167,230 |
|
Total Operating Expenditures |
$ 154,062,064 |
A preliminary version of this Operating Budget was made available to the public on April 16, 2026, and was shared with City Council to allow for input and public feedback at a Budget Work Session on April 23rd, 2026.
The FY27 City Manager's Proposed Budget includes new personnel and operating investments across multiple funds, representing an increase of $8.9 million.
The General Fund accounts for the majority of the new requests, totaling $6.5 million, primarily driven by public safety staffing, ambulance upfitting, the Parks Master Plan, facility related operating increases and personnel-related operating costs. Significant investments include the addition of firefighters and police officers, as well as operational support staff and personnel reclassifications for Development Services, Fire, Police, Public Works, IT and Parks & Recreation.
The Highway User Revenue Fund reflects an increase of $863,205, supporting street related maintenance and personnel reclassifications within Public Works.
The Grants Fund includes $1.5 million in additional budget capacity, primarily related to anticipated public safety grant opportunities.
Additionally, the proposed budget includes compensation adjustments, including negotiated step increases for sworn personnel, a 4% increase for non-sworn personnel, and insurance premium increases.
Capital Budget
The 10-Year Capital Improvement Plan (Plan) serves as the basis for developing the FY26-27 Capital Improvement Projects (CIP) budget. Based on the Plan, the FY26-27 tentative CIP budget totals $181,195,596 and is as follows:
|
Capital Project Funds |
|
|
General Government CIP Fund |
$ 64,458,814 |
|
Grants CIP Fund |
$ 46,219,259 |
|
Fire Impact Fee Fund |
$ 2,267,996 |
|
Parks Impact Fee Fund |
$ 1,668,149 |
|
Police Impact Fee Fund |
|
|
Transportation Impact Fee Fund |
$ 12,763,076 |
|
Special Revenue Funds |
|
|
Commuting Corridors Sales Tax Fund |
$ 7,500,000 |
|
Highway User Revenue Fund |
$ 11,113,335 |
|
1/2 Cent County Road Tax Fund |
$ 13,052,100 |
|
Asset Replacement Fund |
$ 6,934,682 |
|
Land Acquisition Enhancement Fund |
$ 6,870,765 |
|
Revenue Bond |
$ 8,347,420 |
|
Total Capital Project Funds |
$ 181,195,596 |
A preliminary version of this Capital Improvement Plan was shared with City Council to allow for input and public feedback at a Budget Work Session on February 19th, 2026. This preliminary version was then made available to the public following that work session, and any updates and changes to this preliminary Plan were shared with City Council at the Budget Work Session on April 23, 2026.
Key highlights of the Capital Improvement Program (CIP) include the widening of SR238 west of John Wayne Parkway, new road construction on Farrell Road, Seven Ranch Road and Gunsmoke Road, improvements to Roosevelt Avenue, the Green Road UPRR bridge design, a new box culvert on Murphy Road, intersection improvements at Honeycutt and White & Parker, new traffic signals at key locations, and chip seal work on Murphy and Farrell Roads.
City Parks projects include design work on Lake View Park Phase II, the completion of the Recreation Gym/Fieldhouse, and a multi-use path along Maricopa-Casa Grande Highway.
Public Safety investments focus on planning efforts for two new fire stations, upgrading existing stations, and purchasing equipment for first responders.
Economic Development efforts include regional drainage design and updates to the zoning code and General Plan.
The FY27 City Manager’s Proposed Budget presents a balanced budget that has been vetted by department directors and city leaders. This Budget considers all expected revenues and necessary fund balances to manage the appropriate levels of service, and ensures that both our short term and long term financial planning are fully aligned with the City’s strategic priorities as established by City Council.
PRESENTER
This item will be presented by Matt Kozlowski, Deputy City Manager & Chief Financial Officer.
STAFF RECOMMENDATION
Staff recommends that the Mayor and City Council adopt the tentative budget for fiscal year 2026-2027 (FY26-27) and the 10-Year Capital Improvement Plan.