Second of two Public Hearings on Proposed Local Alternative Expenditure Limitation - Home Rule Option Election.  (Roula Encinas, Acting Finance Director)

1.  Staff Presentation
2.  Open the Public Hearing
3.  Call to the Public
4.  Close the Public Hearing

Background

On June 3, 1980, the State of Arizona imposed an expenditure limitation on cities and towns. Before 1980, cities and towns were free to determine at the local level how to use their revenue. The Arizona Constitution, Article IX, Section 20(1) sets out a maximum spending limit based upon a formula incorporating expenditures in Fiscal Year (F.Y.) 1979-1980, adjusted for increases in population and inflation.

The Arizona Constitution also provides several alternatives to the spending limitation. Under the Arizona Constitution, Article IX, Section 20(9), one of those alternatives is the alternative expenditure limitation referred to as the “Home Rule Option,” which allows the city to establish its own expenditure budget based upon anticipated revenues and expenditures. The alternative expenditure limitation, the “Home Rule Option,” frees the local community from any ties to the State-imposed limitation and permits the Mayor and Council, along with the local electors of the community, to decide programs, service levels, and methods of financing capital improvements. The decision to implement the Home Rule option must be adopted by resolution with a two-thirds Council majority vote and then approved by a majority of the voters of the city.

This Public Hearing is the second and the last of two (2) Public Hearings required by Arizona Revised Statutes (“A.R.S.”), Section 41-563.01. The first public hearing was on July 3, 2024. Only after the two public hearings may the City Council consider adopting a resolution to place the Home Rule Option on the November 5, 2024, General Election ballot. If the City Council adopts the Home Rule Option by resolution, it will then place it on the General Election ballot. If approved by the voters, the Home Rule Option’s alternative budget would begin with the Fiscal Year starting July 1, 2025, through June 30, 2026, and be effective for four (4) fiscal years.

The City Council cannot take action until the completion of this second public hearing on July 10, 2024. As required by A.R.S. § 41-563.01, Public notice of the two Public Hearings to discuss the alternative expenditure limitation, the Home Rule option, was published in the Yuma Sun newspaper on June 17 and June 20, 2024. In addition, it was published in the Bajo El Sol newspaper on June 21 and June 28, 2024. The notices were also posted on the city’s website and the four (4) places for posting notices under City Council’s Resolution No. 2289 (City Hall, the Main Police Station, the Municipal Court, and Fire Station 2).

Financial Detailed Analysis
The attachments provide a detailed financial analysis. Under A.R.S. § 41-563.03, these details for the proposed alternative expenditure limitation must be submitted to the Arizona Auditor General sixty (60) days before the election and before printing the pamphlet for the ballot. The Auditor General may request additional information necessary to clarify or correct the analysis. The Auditor General then returns the reviewed analysis to the city. No revision may be made to the documents after the Auditor General’s review.