The Town Council held its annual review of the proposed budget for the next fiscal year last week and on Thursday, May 4, will consider a vote on the tentative plan of $33,333,495.

The new budget year begins on July 1, and the Council will vote on the final version at its Thursday, June 1, session. During the month between the approval of the tentative budget proposal and final adoption, the council can cut items from the budget, but may not increase the total.

An outline of the spending plan follows, with expected revenues addressed later in this story.

General Fund

There is $18,435,834 budgeted for the General Fund, the money used for everyday operations of the town and its departments.

The remaining $16,897,661 is divided into separate funds including capital projects, debt service and special revenue funds and excise tax revenue.

In the General Fund the largest amount is set aside for public safety services, specifically providing for law enforcement and fire protection and emergency medical. The two operations divide $7,732,459 almost evenly. The largest share of each goes to service contracts with the Maricopa County Sheriff’s Office (law enforcement) and Rural/Metro Corp. (fire and emergency medical).

There are smaller ancillary amounts in these totals separate from the contracts, such as animal control on the law enforcement side and equipment and facilities on the fire side.

Town administration accounts for $3,719,323 in the General Fund. This includes operations in Town Hall such as the Mayor and Council, town manager, town clerk, economic development, information technology, finance and the court.

The budget for Community Services is $2,352,113. This department operates recreation services, tourism, operations and maintenance for parks and the Community Center operations including Senior Services.

General Government is a new category this year, according to Town Manager Grady Miller. This category has a budget of $1,369,057 which encompasses services that are spread over all various departments such as legal services, insurance, etc. It also holds contingency funds for unforeseen needs.

The Development Services budget is proposed at $1,890,482. This includes building services such as plan review, building safety, planning and zoning and code enforcement.

Public Works has a proposed budget of $837,495 from the General Fund. This operation includes engineering, streets, open space management and facilities.

Capital Fund

Getting away from the General Fund, the capital improvement budget for the upcoming year totals $8,019,125. The two most significant projects include the construction for relocation of Fire Station #2 at roughly $3 million, and the construction of the Preserve trailhead at Adero Canyon, approximately $2 million.

A variety of other projects paid for by the capital fund include design studies for Fountain Hills Boulevard improvements, cooling equipment upgrades for Civic Center facilities, parks and recreation projects and the vehicle replacement fund.

Other funds

Special Revenue Funds have a budget of $5,971,634, which is primarily the Highway User Revenue Fund (HURF). This is money used for major street maintenance and improvements as well as other street department related operations.

The town has $2,906,902 budgeted for debt service. This includes payment on general obligation bonds for the Saguaro Boulevard improvements, as well as the Library/Museum building and Preserve land, revenue bonds for the Community Center and the Community Facilities District for the Eagle Mountain subdivision.

There is $534,905 budgeted from the special excise tax, which is used to fund downtown improvement projects, economic development and tourism activities.

Revenue

The town receives approximately 88 percent of the money for its General Fund from local sales tax and revenues the state divides between all municipalities (state shared revenues). The amount distributed to each community is based on formula using population growth.

Local sales tax is expected to account for $10 million for the coming year. Another $2.2 million will come from property taxes and $360,000 in franchise taxes.

While sales tax revenues are trending upward, it is not a rapid rise for Fountain Hills.

The state shared revenues will account for $9.5 million. This includes a portion of state sales tax, HURF monies and income taxes.

The town will collect about $1.8 million from licenses and permits. Most of this is construction related.

Another $730,000 comes from fines, service charges and leasing and rental fees.

Paying for capital projects can be a complex arrangement of revenues from varying sources.

The town has an established Capital Improvement Fund that is funded through a portion of construction sales tax revenues, as well as transfers from surplus funds at the end of each year.

Very often projects such as street construction and park improvements are grant eligible to pay a portion of costs.

Work planned for this coming year – Fire Station #2, is largely from the CIP fund with a small amount of development fees collected for police and fire services.

Development fees are collected with building permits for new homes to offset costs of new infrastructure related to growth. The use of this money is strictly defined by law.

The funding for the Adero Canyon Trailhead is almost all development fee money collected for open space projects during the late 90s and early 2000s.

More recent changes to state law mean that open space development fees can no longer be collected, and the town has only until 2020 to use the money it has collected. These funds may not be transferred to any other use.

Debt service revenue all comes from secondary property taxes collected from residents. General obligation bonds are voter approved and revenue bonds are paid with an excise tax dedicated from sales tax revenue.

The entire 468-page budget document is available for review on the town website, fh.az.gov. There is also a six-page Budget in Brief summary for review.

Final budget approval on Thursday, June 1, will be held as a special meeting and will include a public hearing for comment.