The Town Council has approved a tentative budget plan for the 2022/2023 fiscal year of $46.1 million. This increased from the $40.5 million proposal discussed at a budget session in April after a $4.4 million contingency line was added.

The fiscal plan includes a $23,266,912 General Fund budget and $7,588,400 in capital improvement requests, and roughly $4 million for the Street Fund. The additional contingency 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.

Normal postings for public review are available with the tentative budget approval. This year the posting includes a ClearGov budgeting platform that presents the document on the Town website, fountainhillaz.gov. Town Manager Grady Miller said this new platform provides for greater transparency and easier navigation.

The council will consider the final budget plan on Tuesday, June 7. At that time the council may reduce the total approved with the tentative budget, but it may not increase it. By law the Town must have a balanced budget. The new fiscal year begins on July 1.

Finance Director David Pock told the council the TPT (sales tax) revenue picture for the current fiscal year through March looks positive for end-of-year projections. He said through the first three quarters, $12.8 million had been collected compared to the $12.1 that had been budgeted. He said the wholesale/retail, restaurant/bars and services categories are all well ahead of projected revenue for the year. Local sales tax accounts for 61% of the revenue for the General Fund budget.

Four Peaks lease

The Town is currently negotiating with the Fountain Hills Unified School District for a potential lease arrangement for the Four Peaks Elementary School building. For budget purposes, $75,000 for the lease has been included in the budget planning. Economic Development Director Amanda Jacobs told the council earlier the proposed lease is for three years for the Town to work in partnership with Business Advisors on a business incubator project. The total over the three years would be $225,000.

Councilwoman Sharron Grzybowski said she is concerned about the town being involved in leasing this facility. She said she has seen reports indicating the building is unusable.

“I’m concerned that we will be stuck with a lemon,” Grzybowski said.

Miller said staff shares the concerns about the facility. He said the School District would be responsible for most necessary improvements. The cost to the Town may be about $50,000 he said. Miller also noted that any reports the building is unusable refers to bringing it back in line with standards for educational facilities.

“This will all be considered before bringing this back to the council,” Miller said. “If we decide not to go forward the money would be put back into the budget.”

Miller said he would provide all the engineering and standards reporting to the council for review.

Breakdown

Staff had made requests for personnel totaling $455,669. Miller reduced that to $222,340 by removing two recreation requests and an additional building inspector.

The capital budget proposal totals $7,713,200 combined between Public Works and Community Services. A couple of items in the proposed Capital Plan generated some discussion. A proposal to fund design work for a roundabout for the Saguaro Boulevard and Avenue of the Fountains intersection ($150,000), as well as design for pedestrian access and lake overlook amenities at the same intersection ($131,000) was somewhat controversial in the council discussion.

Another proposed capital project that split the council is a staff proposal to install an 80-foot diameter shade structure in Centennial Circle between the Community Center and Library/Museum.

Community Services Director Rachael Goodwin is asking for $275,000 in the budget for the project. She said it would work as an extension of the Community Center for events and activities. She estimates it could generate about $8,000 annually in revenue.

Miller said rather than remove those items from the budget staff would present additional detail on these projects for council consideration before preparing RFP bidding.

All capital projects are subject to council approval for contracts as they are processed. This is another situation where money is budgeted in anticipation of possible expenditure. Capital projects are often deferred or removed from fiscal year planning.

Funding plan

The General Fund makes up the operating budget for Town departments. That funding in the proposed budget breaks down like this:

*Mayor and Council - $76,619.

*Administration - $9,019,182.

*Administrative services - $323,269.

*General Government - $5,224,907.

*Court - $536,599.

*Public Works - $13,353,610 (includes capital).

*Development Services - $1,359,678.

*Community Services - $6,658,021 (includes capital).

*Fire - $4,457,834.

*Law enforcement (MCSO contract) - $5,456,036.

The detailed proposed budget plan is posted to the Town website at this time for public review, fountainhillsaz.gov/budget.