Town of Fountain Hills Finance Director David Pock hosted a public meeting on Feb. 6 to outline the steps in developing the Town’s budget plan for the upcoming fiscal year. This was the initial public outreach related to the budget this year.

Residents who attended heard Pock outline the process using numbers from the previous fiscal year completed June 30, 2022, as an example. He discussed Town fiscal policies and how revenues are anticipated against expected expenditures.

The Town relies on three primary sources of revenue with about five lesser contributors to income. The Town’s local sales tax (Transaction Privilege Tax -TPT) is the largest. The intergovernmental revenue, primarily that which comes from the state, is next. Together those two revenue sources accounted for more than 90% of the Town’s revenue for Fiscal Year 22.

Licenses and permits accounted for about 6% with the remainder collected from leases and rents, charges for services, fines and forfeitures and other miscellaneous items. Investment earnings fell into the negative category this past fiscal year, according to Pock.

The Town spent more than 83% of its operating budget in three categories, public safety (police and fire) 35%, general government 26% and culture and recreation 21%.

Public works accounts for 8% of the budget and development services 7.5%. Capital outlay was just shy of 10% of the budgeted expenses.

Pock reported that the Town received $4.2 million from the American Rescue Plan Act (pandemic recovery) which was used for public safety services. The Town is slated to receive a like amount ($4.2 million) for the current fiscal year. This funding allowed for the Town to set aside nearly $10 million in revenue which is primarily allocated to the Streets Fund.

The Town has struggled with adequate funding for street maintenance and restoration for a number of years. For the past year or so a volunteer panel of citizens made up of professionals in engineering, finance, marketing and government has been studying the street finance issue. The panel has provided the council with a couple of progress reports over the past year, but is expected to have an initial report ready by late this month that can be presented to the council in March.

This report is expected to outline maintenance priorities and finance options for improving the streets. It should allow the Town to move forward with a plan for street improvements focusing on residential streets.

The Town’s expenditures for FY 22 provided numbers similar to the revenue, with expenses coming in at $4.5 million less than the adopted budget.

Pock explained how the surplus is allocated to various fund balances outlined in Town fiscal policies covering reserves such as the “rainy day” fund, investments and capital improvement fund.

At its annual retreat scheduled for Tuesday, Feb. 28, the Town Council will discuss policies and financial priorities for the upcoming fiscal year that will begin on July 1, 2023, which staff will work to present in the budget proposal.

The remaining schedule for budget discussions includes the retreat on Tuesday, Feb. 28 (the public is welcome to attend although input is limited).

On Tuesday, March 14, is the Town Council special session to review proposed capital improvement projects for the coming fiscal year.

On Tuesday, April 11, the Town Council will hold a special session to review the proposed budget.

On Tuesday, May 2, the council will consider the proposed tentative budget plan. This includes budgets for special districts the council oversees. The council may make changes to the tentative budget plan but only to reduce the proposed total. The approved tentative budget cannot be increased.

The final budget plan is to be considered at the Tuesday, June 6, council meeting during a special session.

All of these meetings are open to the public.

Pock said that while nothing was currently scheduled it is possible additional public discussion meetings such as the Feb. 6 session will be held.