City Council Memorandum Management Services Memo No.24-087
Date:
May 23, 2024
To:
Mayor and Council
Thru:
Joshua H. Wright, City Manager Dawn Lang, Deputy City Manager - CFO
From:
Matthew Dunbar, Budget and Policy Director
Subject:
Tentative Budget Adoption
Proposed Motion:
Move City Council pass and adopt Resolution No. 5800, adopting the FY 2024-25 Tentative Budget and 2025-2034 Tentative CIP and giving notice of the dates and times for hearing taxpayers for final adoption of the budget and for setting the tax levies and tax rates.
Background:
Resolution No. 5800 will adopt the FY 2024-25 Tentative Budget and the State Auditor General Schedules (budget forms), as prescribed by Arizona Revised Statutes 42-17101 and 42-17102. The Tentative Budget sets the total expenditure amount for the fiscal year.
As required, the budget forms will be published in the Arizona Republic newspaper, as will a notice that the City Council will meet on June 13, 2024, at 6:00 p.m., for the purpose of a public hearing and for final adoption of the FY 2024-25 Budget, and will further meet for the purpose of setting the tax levies on June 27, 2024, at 6:00 p.m.
Discussion:
In summary, the FY 2024-25 Budget totals $1,629,072,684 and includes funding for departmental operating budgets of $527,082,614 (32.4% of total budget), funding for bond debt service of $81,117,324 (5%); budget for equipment, technology, and vehicle replacements of $10,756,580 (0.7%); and contingencies and reserves in the amount of $133,605,116 (8.2%) in various funds. The capital budget totals $876,511,050 (53.8%) and includes $238,934,596 in new appropriation, capital carryforward of $637,126,454, and contingency and reserve funding of $450,000. The total budget represents a 1.6% decrease from FY 2023-24.
Included in the projected operating revenues of $684,264,968 is revenue from a property tax levy of $44,723,790 based on a reduced rate of $1.0826 per $100 assessed property valuation, the majority of which ($0.87) funds the debt service on General Obligation bonds that fund capital projects. The proposed budget includes a reduction in the primary property tax rate for the ninth consecutive year and no anticipated increases in transaction privilege tax rates.
The Proposed Budget, as provided at the all-day Budget Briefing on April 26, 2024, is currently online. Since that day, three minor corrections have been incorporated, which included shifting $30,000 from ongoing to one-time of a Neighborhood Resources Department's budget request; an increase to the Diversity, Equity and Inclusion Division's special events' appropriation of $35,000 to match the sponsorship revenue already in the budget and, conversely, a reduction of contingency; and a reversal of a Council Contingency entry that reinstated the original total by $21,000. The resulting Proposed (Tentative) Budget and Resolution, budget forms, and 2025-2034 Tentative CIP are also available for public review and inspection on the City's official website (http://www.chandleraz.gov/budget) or by calling the Budget Division at 480-782-2254.
As in past years, Section 4 of the Resolution includes certain delegations to the City Manager or designee to transfer funds for specific administrative purposes such as year-end encumbrances, capital project carryforward, and the allocation of personnel budgets to departments following final approval of memorandums of understanding (MOUs) and general employee merit and market adjustments. There are no changes to the delegations.
Financial Implications:
The Tentative Budget adoption sets the total FY 2024-25 budget (expenditure limitation), which once approved cannot increase. The purpose of the budget is to set the legal spending authority for the new fiscal year after public input and feedback.