Presentation and consideration of adoption of the FY2023 Tentative Budget in the amount of $650,431,700 for all funds.

The FY2023 Annual Budget provides for day-to-day operations, the first year of the five-year CIP, debt service, new ongoing and one-time supplemental budget additions, and carryovers from the FY2022 budget.

ADOPT RESOLUTION NO. 2022-2246 ADOPTING THE FISCAL YEAR 2022-2023 ESTIMATES OF REVENUES AND EXPENSES FOR THE CITY OF GOODYEAR, INCLUDING ESTIMATED PROPERTY TAX LEVY AND PROPERTY TAX RATES, AS THE TENTATIVE BUDGET FOR FISCAL YEAR BEGINNING JULY 1, 2022 AND ENDING JUNE 30, 2023; SETTING FORTH THE RECEIPTS AND THE AMOUNTS ESTIMATED AS COLLECTIBLE FOR THE PREVIOUS FISCAL YEAR; THE AMOUNT PROPOSED TO BE RAISED BY DIRECT PROPERTY TAXATION FOR THE VARIOUS PURPOSES; GIVING NOTICE OF THE TIME FOR HEARING TAXPAYERS; FOR ADOPTION OF BUDGET AND SETTING THE TAX LEVIES. (Ryan Bittle, Finance Manager, Doug Sandstrom, Finance Director)

This is the first official step in adopting the FY2023 budget. Adoption of the tentative budget sets the expenditure limitation amount for FY2023 and authorizes expenditure of funds in FY2023. No sales tax rate changes are included in this budget, primary property taxes are at the maximum levy consistent with financial policy, and the secondary property tax levy is set so that combined the total property tax rate remains under $1.74 per $100 of assessed valuation. Further, no other rate or fee changes are included in the budget. 

The FY2023 budget process began in the fall with departments submitting their initial list of new capital project requests as part of the CIP budget process that stretched through January. In November, departments began preparing base budget estimates and updating existing CIP project costs and timelines if needed and by December had also submitted supplemental budget addition requests. All of these estimates and requests are reviewed by Budget and Research and with the executive team. In the case of capital projects; Engineering Project Management, Information Technology, and Procurement were also involved in reviews.

In October, the Council provided insight into initial budget priorities in discussions held as part of a retreat. 

The first formal step in this budget process with the City Council, was the presentation of the five-year General Fund forecast during a work session held on February 7, 2022.

On March 28, 2022, City Council approved the only change to our financial policy which was to increase our portion of construction sales tax treated as ongoing revenue from $5.6 million to $6.1 million. This policy calls for annual review and the $6.1 million was based on the average of the lowest five-years in the prior ten of General Fund construction sales tax collections.

The City Manager presented a sustainable recommended budget on both April 18th 2022 and April 25th 2022 which focused on growth, continuing existing programs and services to a larger residential base, fair compensation for employees, meeting obligations, opening new capital facilities, and continuing the capital improvement program. The changes to that recommended budget are shown in the staff analysis section of this report.  To comply with state statute, the Council must adopt a tentative budget. Budget and Truth in Taxation publications will each appear twice in the newspaper per state requirements. The required public hearing for budget adoption, Truth In Taxation and Final Budget adoption will follow on June 6, 2022. The Property Tax Levy adoption will occur on June 27, 2022.

This budget was built from a framework of a continued strong local and national economies with city revenues that have fully recovered from the Coronavirus pandemic. Despite this strong historical trend, unique challenges such as labor shortages, supply chain disruptions, and inflation rates not seen in over 40 years have arisen post-pandemic and appear as if they will persist into the foreseeable future. The budget framework remains one of maintaining current programs and services, adding depth to support services, addressing the highest priorities expressed by City Council, compensating employees fairly, providing capacity to absorb revenue losses or cost increases, and continuing the capital improvement program given both the needs of the organization and the benefits that derive to the local economy from such projects. The FY2023 tentative budget complies with all financial policies including General Fund ongoing resources exceeding the ongoing uses.