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Lake Havasu City council reviews five‑year CIP, staff reports healthy one‑time reserves
Summary
City staff told council the city is in a strong position for one‑time capital projects and outlined the five‑year Capital Improvement Plan, assumptions for FY25‑26 and schedule for budget adoption. Council asked for additional detail on several projects and kept the $2.5 million pool allocation under review.
Lake Havasu City staff presented a five‑year capital improvement plan on April 10 and told the City Council the city has accumulated one‑time funds that allow continued investment in roads, water and public safety facilities while maintaining conservative operating assumptions.
City Manager Jess Knudson said staff and the budget committee spent months reviewing department requests and identified “one‑time projects” funded from reserves and dedicated revenue. “We are very, very fiscal fiscally conservative,” Knudson said, adding the city has set aside dollars “each and every year” for CIP work.
The budget office, led by Administrative Services Director Jill Olson, reviewed the schedule and key assumptions for FY25‑26: staff will return May 15 with the operating budget, a tentative budget and CIP adoption is scheduled for June 10, final adoption on June 24 and property‑tax adoption on July 8. Olson said staff projects the general‑fund budget stabilization reserve will be “just under $33,000,000” on June 30 and noted vacancy savings and delayed grant spending are contributing to better‑than‑budgeted results this year.
City finance staff told council that revenue projections include no property‑tax rate increase — the proposal assumes the primary property‑tax rate stays flat at 0.6718 per $100 of assessed valuation — and that projected revenues reflect recent trends, economic forecasts and known legislative activity. Olson also described a planned inclusion in FY25‑26 estimates of the estimated cost to implement results of a recent classification and compensation study, placed at roughly $1.9–$2.0 million.
On the expenditure side, Olson described how carryforwards work and why project timing is affecting estimated available resources in the water/wastewater funds. She called out key ongoing drivers: pension‑rate changes for state retirement systems, an average 5% increase in health insurance and an $800,000 vacancy‑savings assumption in the general fund.
Council discussion focused on items that staff flagged as likely to change, including project schedules and carryforwards identified in the CIP book. Knudson asked council for direction on several priorities (roads, Fire Station 7 and park projects) and asked members to identify any items they wanted to re‑prioritized before staff finalizes the budget documents for public hearings.
What’s next: staff will return with the operating‑budget workshop on May 15 and bring the tentative budget to council June 10. Council asked staff to keep the $2.5 million outdoor pool allocation in the FY25‑26 CIP while the council and community continue stakeholder conversations before any design contract is awarded.
