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Home My WebLink AboutAGENDApacket__04-08-25_0143_690 NOTICE OF MEETING WORK SESSION - BUDGET WORKSHOP FOUNTAIN HILLS TOWN COUNCIL Mayor Gerry M. Friedel Vice Mayor Hannah Toth Councilmember Gayle Earle Councilmember Brenda Kaliviankis Councilmember Rick Watts Councilmember Peggy McMahon Councilmember Allen Skillicorn TIME:3:00 P.M. – WORK SESSION - BUDGET WORKSHOP WHEN:TUESDAY, APRIL 8, 2025 WHERE:FOUNTAIN HILLS COUNCIL CHAMBERS 16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ Councilmembers of the Town of Fountain Hills will attend either in person or by telephone conference call; a quorum of the Town’s various Commission, Committee or Board members may be in attendance at the Council meeting. Notice is hereby given that pursuant to A.R.S. §1-602.A.9, subject to certain specified statutory exceptions, parents have a right to consent before the State or any of its political subdivisions make a video or audio recording of a minor child. Meetings of the Town Council are audio and/or video recorded and, as a result, proceedings in which children are present may be subject to such recording. Parents, in order to exercise their rights may either file written consent with the Town Clerk to such recording, or take personal action to ensure that their child or children are not present when a recording may be made. If a child is present at the time a recording is made, the Town will assume that the rights afforded parents pursuant to A.R.S. §1-602.A.9 have been waived. AGENDA 1.CALL TO ORDER – Mayor Gerry M. Friedel 2.ROLL CALL – Mayor Gerry M. Friedel 3.REGULAR AGENDA A.PRESENTATION: Fiscal Year 2025-2026 Proposed Budget. 4.ADJOURNMENT Dated this 3 day of April, 2025. ______________________________ Bevelyn Bender, Town Clerk The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816-5100 (voice) or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in the meeting or to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council with this agenda are available for review in the Clerk's Office. Town Council Work Session of April 8, 2025 2 of 2 ITEM 3. A. TOWN OF FOUNTAIN HILLS STAFF REPORT Meeting Date: 04/08/2025 Meeting Type: Town Council Work Session - Budget Workshop Agenda Type: Regular Agenda Submitting Department: Administration Prepared by: Angela Padgett-Espiritu, Town Clerk Staff Contact Information: Request to Town Council Work Session - Budget Workshop (Agenda Language): PRESENTATION: Fiscal Year 2025-2026 Proposed Budget. Staff Summary (Background): On April 08, 2025, a budget workshop will be held for the Town Council. At the workshop, staff will present an update on the town's estimated fiscal year-end fund balances and the proposed FY 2025-26 budget. In addition to the materials attached to this report, an online electronic version of the FY26 Proposed Budget is available at: https://town-fountain-hills-az-cleardoc.cleargov.com/8866/250131/d The workshop will be televised live on Channel 11, the town's website, and on the town's YouTube Channel. Attachments Presentation - 2026 Proposed Budget Form Review Form Started By: Angela Padgett-Espiritu Started On: 04/03/2025 11:33 AM Final Approval Date: 04/03/2025 FY26 Proposed Budget Workshop Paul Soldinger, Chief Financial Officer April 8, 2025 FY26 Proposed Budget Considerations Overall Budget Considerations •FY26 Proposed Budget book is available on the Town’s website •Budget authority is not the same as fund balance or contract authority •Subject to Financial Policies •Fund Balance = Cash in the bank •Budget Authority = Permission to use cash •Subject to Procurement Policies •Contract Authority = Terms and Conditions agreed to by the Town and Vendor after procurement criteria met (IFB, RFP, Cooperative Purchasing, etc.) Overall Budget Considerations •FY26 Proposed Budget expenditures are $50,371,002 •FY26 Expenditure Limitation is $36,581,877 •Some exclusions are allowed (i.e., grants, HURF, investment earnings) •FY26 projected exclusions of about $7.7 million •Town has saved (carried forward) $10.6M of one-time exclusions by the end of last fiscal year 2024 •$6.2M of HURF •$3.6M of investment earnings •$0.8M of other exclusions •If revenues are less than projected, expenditures must also be reduced to maintain fund balance (cash) Expenditure Limitation for FY 2026 FY26 Expenditure Limit $36,581,877 FY26 Proposed Budget $50,371,002 Less Grants (4,260,050) Less HURF (1,890,627) Less Investment Income (967,130) Less Other Exclusions (625,176) Less Using Prior Years’ Carryforward (6,046,143) FY 26 Expenditures Subject to Limit $36,581,876 $1 FY26 - $7.7M exclusions $1 under the FY26 expenditure limitation Revenue Considerations •Staff conservative revenue projections use a 95% confidence level •Recent flattening local sales tax revenues required reducing preliminary local sales tax revenue forecasts by about $250,000 in the General Fund (now at $26.05M) •State Shared Revenue estimates were received from the AZ League in March, which increased Town’s preliminary revenue projections (see next slide) Revenue Considerations – State Shared General Fund •State Shared Income Taxes •Prelim: $4.60M •Current: $4.70M •State Shared Sales Taxes •Prelim: $3.72M •Current: $3.64M Streets Fund •HURF •Prelim: $1.85M •Current: $1.89M •Vehicle License Taxes •Prelim: $1.25M •Current: $1.28M Expenditure Considerations •Contingency •Included in General Government (General Fund) •Provides budget authority for unforeseen expenditures only if projected revenues are received •$1.23M contingency included in FY2026 Proposed Budget (before any staff pay adjustment reduces this amount) •Recommended budget supplements are included in proposed budget figures Expenditure Considerations – General Fund Revenues: $26.05M Department Expenditures: $24.82M $1.23M General Fund Contingency (before staff pay adjustments) FY26 Proposed Budget – All Funds Total Projected Revenues= $38.13 million Total Budgeted Expenditures = $50.37 million Recommended Supplements Ongoing Supplements (General Fund) Environmental Program Supplements = $727,320 Wash maintenance increase from February Council retreat = $175,000 Number Request Title Department Revenue Source FY26 Requests Manager Recommendation General Fund: BA-100-03 Maintenance Increase to Base Budget - Facilities LeasedFac Maint General Fund $1,874 $1,874 BA-100-04 Maintenance Increase to Base Budget - Fac OperationsFac Maint General Fund 13,925 13,925 BA-100-05 Ballroom Movable Wall Maintenance Fac Maint General Fund 20,000 20,000 BA-100-06 Windows 11 Upgrade Inf Tech General Fund 15,000 15,000 BA-100-07 New Amenities Operations and Maintenance Parks General Fund 37,368 15,000 BA-100-08 Pocket Parks Operations and Maintenance Parks General Fund 43,200 20,000 BA-100-10 Additional Cell Phone for park Attendant Shifts Recreation General Fund 740 740 BA-100-11-ENV Annual MS4 Permit Fees Public Works General Fund 10,000 10,000 BA-100-12-ENV Wash, Dam and Drainage Sliver Maintenance Public Works General Fund 450,000 450,000 BA-100-13-ENV DAM INSPECTION AND MAINT Public Works General Fund 13,400 13,400 BA-100-15-ENV MS4 Professional Services Public Works General Fund 103,000 103,000 BA-100-17-ENV Annual Electronics Recycling Event Public Works General Fund 2,500 2,500 BA-100-18-ENV Annual Household Hazardous Waste Event Public Works General Fund 2,500 2,500 BA-100-19-ENV Environmental Remediation for Oil Spills Public Works General Fund 10,000 10,000 BA-100-20-ENV Street Sweeping Contract Public Works General Fund 135,920 135,920 Total General Fund:$859,427 $813,859 May be removed, if new wall is installed Ongoing Supplements (Other funds) Number Request Title Department Revenue Source FY26 Requests Manager Recommendation Economic Development Funds: BA-300-01 Event Programming (Second Thursdays/Concerts)Econ Dev Downtown Fund $20,000 $20,000 BA-300-04 Downtown Facade Improvement Program Econ Dev Downtown Fund 50,000 50,000 BA-300-06 Banner Replacements and Repairs Econ Dev Downtown Fund 5,000 5,000 BA-310-01 Downtown Digital Marketing Econ Dev Econ Dev Fund 36,000 36,000 Total Economic Development Funds:$111,000 $111,000 Court Enhancement Fund: BA-420-01 Court Security - Part Time - Contracted Municipal Court Court Enh Fund $25,000 $25,000 Total Court Enhancement Fund:$25,000 $25,000 Cottonwoods Fund: BA-550-01 Cottonwood Maintenance District - 15% Increase Public Works Cottonwoods Fund $1,040 $1,040 Total Court Enhancement Fund:$1,040 $1,040 Total All Funds:$996,467 $950,899 Personnel Supplements *Fire Department supplement request would create revised command structure to strengthen automatic aid application. Future plans include about another $110k in FY27 for a total of about $330k Number Request Title Department Revenue Source FY26 Requests Manager Recommendation General Fund: BAP-100-01 Additional Part Time Park Attendant Community Services General Fund $24,361 $24,361 BAP-100-02 Cap to Battalion Chiefs/Fire Captain & Engineer PromotionsFire - Command StructureGeneral Fund 222,411 222,411 BAP-100-03 Converting Training Captain to Assistant Chief position Fire General Fund 1 1 BAP-100-05 Part Time Seasonal Operations Staff Community Services General Fund 10,742 10,742 BAP-100-06 Building Permit Technician II Development Services General Fund 7,914 7,914 Total General Fund:$265,429 $265,429 Streets Fund: BAP-200-01 Street Maintenance Technician I Public Works Streets Fund $90,427 $90,427 Total Streets Fund:$90,427 $90,427 Total All Funds:$355,856 $355,856 * Non-Personnel One-Time Supplements Number Request Title Department Revenue Source FY26 Requests Manager Recommendation General Fund: 100-02 Program and amenities expansion Comm Ctr Operations General Fund $15,000 $10,000 100-10 Park Amenity Painting (All Parks)Parks General Fund 15,000 10,000 100-11 Soccer Field Renovations Parks General Fund 30,000 25,000 100-13 Hazard Tree and Stump Removal and Replacement Parks General Fund 25,000 15,000 Total General Fund:$85,000 $60,000 Vehicle Replacement Fund: 810-01 Type 6 Brush Truck Replacement Fire Vehicle Repl Fund $390,000 $390,000 810-02 PW Vehicle Replacement – STPAVE (F-250)Public Works Vehicle Repl Fund 64,100 64,100 Total Vehicle Replacement Fund:$454,100 $454,100 Total All Funds:$539,100 $514,100 Staff Pay Adjustment Data 1% = $107,887 in FY26 payroll costs •$98,006 in General Fund •$7,164 in Streets Fund •$2,717 in Economic Dev Fund General Fund General Fund $26.05M $14-15M* *Estimated Fund Balance to begin FY26: •Rainy Day Fund: $5.01M •Required Unassigned Fund Balance: $5.01M About $4-5 million estimated GF excess reserves, which policy requires to be transferred into Capital Projects Fund General Fund Revenues General Fund Expenditures General Fund Expenditures *In FY2023, the Town paid for much of its Fire Department and other public safety expenditures out of its Special Revenue Fund using federal grant revenues. Therefore, FY2023 expenditure amounts shown here in the General Fund do not include those expenditures. Departments Link* * MCSO Contract Reduction Reduction of General Fund Contingency Environmental Program Supplements Command Structure Supplements Streets Fund Streets Fund *Estimated Fund Balance to begin FY26 Streets Fund Revenues Streets Fund Expenditures $5.0 million per year for streets pavement management Includes new Streets technician staff member supplement Capital Projects Fund – Capital Improvement Plan Capital Projects Fund $12.01M budgeted for Capital Improvement Plan +$0.7M Contingency for unforeseen costs -------------------------------------------------------------------- $12.71M total Capital Projects Fund budget *Estimated Fund Balance to begin FY26 Green Light Projects in Community Services Capital Projects FY26 Centennial Pavillion Shade Lighting $ 50,000 Avenue of the Fountains Park Improvements (Multi Year – Year 2 of 3)200,000 Desert Vista Pump Enclosure (Multi-Year – Year 1 of 2)50,000 Desert Vista / Dog Park Renovation 50,000 Fountain Park Splash Pad Shade Electrical and Lighting 50,000 Fountain Park Ramadas (Multi-Year – Year 1 of 2)320,000 Fountain Park Panorama Hillside Erosion Control 75,000 Four Peaks Electrical Building (Multi-Year – Year 1 of 2)50,000 Golden Eagle Playground Equipment Carryover (Multi-Year – Year 2 of 2)50,000 Total FY26 Community Services CIP $895,000 Alternative Funded Projects FY26 Pleasantville Park (Development Fees)(Multi-Year – Year 2 of 2)$700,000 Total FY26 Community Services CIP – Alternative Funded Projects $700,000 Green Light Projects in Public Works Total Green Light Projects = $11.41 million Capital Projects FY 26 Pedestrian Marked Crosswalks (Multi-Year – Ongoing)150,000 Town Wide Guardrail Replacement (Multi-Year – Ongoing)50,000 Town Hall Campus Buildings - Roof Design 125,000 Sidewalk Infill & Design (Multi-Year – Ongoing)325,000 Town Wide Storm Water Infrastructure Rehabilitation (Multi-Year – Ongoing)150,000 Dam Sediment Removal and Improvements (Multi-Year – Ongoing)100,000 Downtown Streetscape Improvement Program (Multi-Year – Year 1 of 5)515,000 Total FY26 Public Works CIP $1,415,000 Alternative Funded Projects FY26 Palomino Boulevard Reconstruction (Streets Fund)$5,400,000 Shea Blvd Widening – Palisades to FHBLVD (Development Fees) (Prop 400)3,000,000 Total FY26 Public Works CIP – Alternative Funded Projects $8,400,000 Option #3 from CIP Work Session – Design for Verde River and Parkview in FY26 Yellow Light Projects Capital Projects – Public Works FY 26 Community Center Renovations (Multi-Year – Ongoing)300,000 Total FY26 Yellow Light Projects – Public Works $300,000 Alternative Funded Projects – Public Works FY26 Golden Eagle Impoundment Area Improvements (Multi-Year – Year 2 of 2)300,000 Total FY26 Yellow Light Projects – Public Works Alternative Funded Projects $300,000 Total Yellow Light Projects = $600k Wayfinding Signs - Carryover •FY25 CIP Plan includes budget authority for Wayfinding Signs project; project may not be completed by June 30, 2025 •Staff is requesting to carryover $50k budget in the FY26 CIP Facilities Reserve Fund Facilities Reserve Fund *Estimated Fund Balance to begin FY26, including: •$5.4M saved for Lake Liner •$1.8M for other repairs FY26 Proposed Increase from $550k to $1M based on Capital Reserve Study recommendations from 2016 and current needs Special Revenue Fund Special Revenue Fund FY26 Proposed Increase of $500k to accommodate any grants (other than planned capital projects) the Town receives Economic Development Funds Economic Development Funds* *Includes estimated FY26 beginning fund balances: •Economic Development Fund ($850k) •Downtown Strategy Fund ($700k) •Tourism Fund ($250k) Moved Economic Development Specialist from Tourism Fund to Econ Dev Fund Also includes $111k of Downtown and Econ Dev supplements discussed earlier All Nonmajor Funds All Nonmajor Funds* $25,000 Court Security ongoing supplement $454k for 2 vehicle replacements + $25k contingency *11 nonmajor funds estimated FY26 beginning fund balances What’s Next? •Staff adjusts budget based on Council direction •Tentative Budget Adoption – 5/6/2025 Regular Meeting (Public Hearing) •Tentative Budget sets the maximum amount the Town may budget for FY2026 •Final Council direction for final budget •Final Budget Adoption – 6/3/2025 Regular Meeting (Public Hearing) •Council considers adoption of final budget for FY2026 Town operations Council questions?