Budget season is under way in the city of Scottsdale as local leaders continue to decipher strategies for bringing municipal costs within local revenue levels.
Municipal chieftains on Tuesday, Feb. 21 presented to Scottsdale City Council their proposed rate and fee schedules for the upcoming fiscal year, which will define the major operations of services enjoyed by local residents and business owners.
Fiscal year 2017-18 begins Saturday, July 1 in the city of Scottsdale.
The Scottsdale General Fund, which provides for day-to-day operations of the city, is $278.3 million for fiscal year 2016-17 with 47 percent of those funds derived from local sales taxes whereas property tax levies, state-shared revenues and charges for services account for the majority of local funds.
Scottsdale Budget Director Judy Doyle, at a Jan. 31 work session discussion, said the city does not have enough anticipated revenue to sustain the needs and priorities of the municipality.
A looming liability of unpaid public safety pensions and infrastructure maintenance costs appear to be an emerging budgetary issue.
Recovery of costs
Scottsdale Public Works Director Dan Worth spoke for both his department and on behalf of Scottsdale Aviation Director Gary Mascaro.
The Scottsdale Airport will not be making any adjustments to its fee structure; however, jet fuel costs continue to rise.
“We need to recover the direct and in-direct costs of services through rates and fees that provide for that program,” Mr. Worth said of solid waste services. “We need to recover those costs that are sustainable for a multi-year financial plan. We are not proposing any rate increases this year.”
According to Mr. Worth, the Scottsdale Solid Waste Division provides waste and recycling services to 1,400 commercial clients
“The recycling business is the one where we aren’t charging for the service. The thought was we would get bigger. We are down … fiscal year to down 5 percent the last full month we are down 15 percent.”
Mr. Worth said the solid waste division anticipated a rate increase this upcoming fiscal year but has opted to postpone that request pending approval of the department’s strategic plan and a better understanding of cost history with the usage of new rates identified last fiscal year.
Scottsdale City Council last year approved an increase to solid waste rates — the first in seven years, records show.
While Scottsdale Airport will not be pursuing any rate increases next fiscal year, the entity is expecting to issue $27 million in general obligation bond debt for terminal expansion.
The redevelopment project at Scottsdale Airport is expected to demolish current buildings in late spring, with an estimated grand opening in summer 2018, officials there say.
The cost of water
Scottsdale Water Resources Director Brian Biesemeyer outlined three rate increases expected to hit local households and businesses who use municipal water and sewer services within city limits.
“The reasons why are our (Central Arizona Project) water rates and their increase,” he said at the Feb. 21 public hearing. “There is some discussion on drought. We have been in a 15-year drought and one wet year does not take us out of the drought.”
Mr. Biesemeyer says residents can expect a 2.9 percent increase in water costs while sewer fees will see an uptick of 2.6 percent.
Mr. Biesemeyer says the proposed increases will equate to $3,564,000 in additional revenue for both water and sewer costs. The Scottsdale Water Department budget has been proposed at $16.9 million in fiscal year 2017-18.
“This is the largest increase we are proposing in eight years,” he told Scottsdale City Council. “We are always cautious of our fees and we want them to be as low as possible. Over the last five years we have not asked for increases, but costs are rising.”
Mr. Biesemeyer explained to city council the dire level of Lake Meade, which provides water to California, Nevada and Arizona.
“There is still a drought and it is still a concern of ours,” he said. “We have a substantial investment in this as about 75 percent of our water comes through the Central Arizona Project.”
Mr. Biesemeyer points out the cost of water will likely continue to rise in Arizona pointing out an interstate effort through the state of Arizona coined the “Drought Contingency Plan,” which help keep water flowing at reasonable costs if drought levels persist.
“The DCP and DCP-plus are being proposed by the state if Arizona, working with the other lower basin states, Arizona and Nevada, as a measure that would alleviate some of the cuts the CAP would have to take if the drought were to increase,” he said pointing out Arizona and Nevada are third in line for water generated through Lake Mead collections.
A rundown of the rest
Scottsdale Community Services Department Executive Director Bill Murphy outlined fee increases for community services, the planning division, public safety and tourism development departments.
Mr. Murphy said fee increases for community services, the planning department and tourism related efforts combined will equate to an additional $65,323 in revenue for the municipality.
In addition, Mr. Murphy pointed out adjusted fees to local sports complexes along with a new court advocacy program could bring in an estimated $232,000 in General Fund revenue.
“The annual review is to determine our direct and indirect costs of service,” he said.
“We are suggesting some of fees at the sports complex. Human Services has been working with the court system for dealing with those who are going through the court system for driving under the influence. The amount we expect to make is $232,000.”
Mr. Murphy outlined a proposal where the city would hire two full-time social workers to administer 420 outreach programs that typically come at a cost of $100 for each.
“The anticipated cost to the city for the full-time staff would be $172,000,” he said. “This is under consideration with the city manager for it to move forward.”
Scottsdale Fire Chief Tom Shannon outline changes to fire safety inspections, which would be a $159 fee for the evaluation of one to nine structures. The new fee would be $477 for 10 or more structures.
There is no anticipated impact to the General Fund due to this measure, Chief Shannon pointed out.
Scottsdale Development Services Director Randy Grant introduced a 3 percent increase to the issuance of permits for new wireless communication facilities within city limits.
The anticipated General Fund revenue impact would be a $38,285 boost.
Scottsdale Tourism Director Karen Churchard outline a series of nominal changes to Marshal Way Bridge fees, downtown alley closure fees and on-street parking space closure fees.
Ms. Churchard anticipated the changes in fees would equate to an additional $300 to the General Fund.
Scottsdale City Council is expected to host budget talks through June.
North Valley News Editor Terrance Thornton can be contacted at 623-445-2774 or at email@example.com