The annual budget proposal presented to the Town Council on April 13 includes $22,714,000 for the General Fund operations, and another $5,924,000 for capital projects.
The General Fund proposal reflects a 17.9-percent increase over the budget for the 2020/2021 Fiscal year.
Revenue sources for the General Fund are consistent year to year and include local sales tax, intergovernmental (state shared), permits and licenses, fines and fees and other sources.
Local sales tax is by far the largest revenue source, with a projection of $14,262,000 for the upcoming year, an expected 34 percent increase over the current year.
The state shared revenues will account for $6,645,000, with is a reduction of about 3 percent from this past year. Another $1,271,000 in permits and licenses is unchanged from the current year. The amount collected from fines and fees is budgeted at $421,000, and the “other” category accounts for $115,000.
Capital improvement proposals have been detailed previously in The Times from earlier discussions. The $5.9 million proposal will be funded through an estimated $4.7 million in revenue. The difference in budgeting is not unusual with capital projects. Projects are often put into the budget that are not executed during the fiscal year. The money must be in the budget or the town could not proceed with a proposed project at all.
Capital projects at all phases come back to the council for approval before work is executed, providing for fund management.
There will be an estimated (conservative) $2,269,000 in the capital fund balance going into the new year. Another $500,000 will come from excess General Fund revenues for the current year. The construction sales tax is projected to provide an additional $1,117,000 (conservative estimate).
Additional capital funding will come from grants ($314,000), development fees ($345,000) and the downtown fund ($210,000).
By department, the General Fund expenses are budgeted at $75,000 for the Town Council. It was noted specifically that total compensation for all council members is just $36,000. The remaining expenses cover operations including a portion of staff salary.
Administration has a proposed budget of $2,467,000.
The General Government allocation is $4,748,000, which includes a $4.1 million line for contingencies.
The Municipal Court has a budget of $393,000, which is a 2.2 percent reduction. The court is self-funded.
The Public Works budget is $1,252,000.
Development Services will have a $1,083,000 budget.
Community Services budget will be $3,222,000.
Public Safety, which incudes the contracts with the Maricopa County Sheriff’s Office and Rural/Metro for fire and emergency medical services, will total $9,474,000. That includes $5,154,000 for the MCSO contract and $4,320,000 for fire and emergency medical.
The town received $2.9 million from the CARES pandemic relief funds allocated by the state from the federal government.
That funding was allocated for public safety with $1.28 million to Rural/Metro (four monthly invoices) and $1.6 million to MCSO (3.9 monthly invoices).
Additional funds went to local business grants ($300,00), sanitizing services and supplies ($100,000).
This money offset $2.5 million already budgeted in the 20/21 General Fund. The savings is being allocated to the street fund for pavement management ($2 million) and $500,000 went to the Facilities Reserve Fund.
The recent pandemic relief package, the American Rescue Package, totals $1.9 trillion of which local municipalities in Arizona are expected to receive $1.2 billion. Fountain Hills anticipates receiving $3 million for fiscal year 22 and another $3 million for fiscal year 23.
Staff is proposing that the funds continue to go toward public safety. This provides transparency during auditing and allows the council to provide direction on the General Fund savings. It is recommended that the General Fund savings be used for one-time expenditures and not ongoing expenses.
Potential uses for the savings include pandemic related community assistance, pandemic related town expenses (testing/vaccination sites, sanitizing supplies and services). Also set aside in a possible separate fund for major infrastructure projects (lake liner, street reconstruction or facilities reserve).
When the Town Council meets on Tuesday, May 4, it will hold a public hearing and consider the tentative budget proposal for the fiscal year that begins on July 1, 2021. Following a review period, a budget hearing and consideration of the final budget for the coming year will take place on Tuesday, June 1.