The Town Council approved its annual budget for the 2022/2023 fiscal year at a meeting and hearing on June 7. There was some discussion related to the direction of capital improvement funding, but ultimately there were no last-minute changes to the plan before it was approved on a 7-0 vote. The budget is in place for the new fiscal year beginning on July 1.

The budget totals $46.1 million. It includes a $23,266,912 General Fund budget and $7,588,400 in capital improvement requests, and roughly $4 million for the Street Fund. There is $4.4 million in contingency that was added in anticipation of possible infrastructure grants. There may be some local match to such grants, and the money cannot be spent unless it is in the budget.

The General Fund budget plan, excluding the contingency reflects an increase of 3.6% over the Town’s 2021/22 FY budget.

Finance Director David Pock reported the Town’s revenue picture heading into the end of the year is looking positive. The Transaction Privilege Tax (TPT), or sales tax, collections through April totaled $14.6 million, which is $1 million over budget. He said the preliminary number for TPT collection in May is $1.5 million.

The exact numbers will not be known until an audit after the fiscal year ends, but Pock is anticipating a surplus. Pock said surplus money after the fiscal year is divided into reserves set by policy and the Capital Improvement Fund.

Vice Mayor Gerry Friedel expressed his concerns about the Capital Improvement Plan, which totals $7,688,400 divided between Public Works ($5 million) and Community Services ($2.6 million) projects.

Capital plan

“There are projects in the CIP that will never be built and need to be pulled,” Friedel said. He said the Town should be focused on necessary work such as street maintenance rather than what he referred to as “nice to have.”

Projects that Friedel and other fiscal conservatives find particularly egregious are pedestrian access and Fountain Lake overlook on Saguaro Boulevard at Avenue of the Fountains ($131,800) and a roundabout at the same intersection ($260,000). Both of these capital line items for the coming year are for engineering only, no construction is included.

There is also a proposal for a pavilion shade structure for the Centennial Circle in the Civic Center at a cost of $275,000, that some on the council feel is unnecessary. Community Services Director Rachael Goodwin has promised to seek out all possible funding options for this amenity.

Councilman Alan Magazine, himself a fiscal hawk on the council, said that while he agrees with the frugality, he does not believe the savings from these projects would have much impact on the money available for street improvements.

“I hate to be the fly in the ointment on this,” Magazine said.

The approved budget does include $6.1 million in the Streets Fund, $2.1 million of which would be a transfer from the General Fund.

There is currently a citizens committee working on a plan for a long-term pavement management solution. It is expected that group will recommend all of $8 million the Town received over two years from the American Rescue Plan Act be used toward bringing streets up to a higher standard of condition in town. Based on the amount of work to be done, it is unclear how far even that much will go to reach community goals.

It is also possible the Town would ask visitors to consider a street bond package in an election next year.

“Don’t you want to hear what the committee will propose,” Mayor Ginny Dickey asked Friedel. “The money is in the budget for planning purposes, it won’t be spent automatically.”

Friedel acknowledged he has a great deal of respect for those serving on the committee and is interested in what they propose.

“I’m not adverse to wait for the committee. They have expertise I don’t have,” Friedel said. “I think our financial situation is going to be worse than we are anticipating.”

Councilman Mike Scharnow noted that trying to fund street improvements has been a challenge the council has faced for years. He recalled a $30 million bond proposal that was rejected by voters, as well as a primary property tax, before the lighter bond request to do just Saguaro Boulevard and partially fund new pavement on Shea Boulevard was approved.

“I think (the Town) has done as much as it can,” Scharnow said. “Citizens don’t want to cut services to a bare minimum. Quality of life is not just about streets, I disagree with cherry picking smaller things.”

Councilman David Spelich said a little here and a little there can really add up.

“These are nice to have, but anytime we can save money we should do it,” Spelich said.

“Keeping things in the budget does not mean the money will be spent,” Magazine reiterated. He followed up to The Times with an email following the meeting, after seeing comments on the council vote.

“Apparently some folks believe that if you say something incorrect often enough, some people will believe you,” Magazine said. “The claim is that the Town Council has spent approximately $400,000 to study a roundabout.

“Not a single dollar has been authorized or spent on a roundabout study.”

Town Manager Grady Miller said there was a consensus of the council at the budget workshop saying staff would bring all proposals back to the council for its approval before moving forward, and as always, the council would have the final say on approving a contract for services.

“Infrastructure grants need to be design ready,” Miller said. He noted that if a project is not done, unused budgeted funds would be swept back into appropriate fund balances.

Friedel said he could go along with that approach.

Another issue that came to discussion was salary and wage increases for Town employees.

Resident Crystal Cavanagh spoke in call to the public (not the budget hearing) about a 4% salary increase for staff.

“Are you trying to pit employees against the townspeople,” Cavanagh asked. “Quit spending our money like drunken sailors (no offense to sailors).”

Cavanagh was offended by the salary hike for Miller after council approved a new contract for him earlier in the year with a wage hike. There was no response to Cavanagh at call to the public, as it is not permitted by open meeting laws. The budget was approved without discussion of the salary increases.

At the close of the regular session Spelich brought up the 4% increases again and was somewhat taken aback to learn those were authorized with the budget approval earlier in the meeting.

When Spelich said he did not want to let the issue rest, Miller stated that he was officially, on the record rejecting his 4% increase.

“The council was quite generous with my compensation with the new contract,” Miller said.