Scottsdale budget commission probes capital‑project overruns, proposes tighter predesign and contingency steps

Scottsdale — The Budget Review Commission on March 27 examined a staff list of 31 capital projects for which the city is seeking budget increases and heard a subcommittee report identifying common causes of cost growth, from unforeseen site conditions to pandemic‑era delays.

The commission’s subcommittee, led by Commissioner Mark Stevens and Vice Chair Dan Swigert, told the panel it reviewed roughly 30 contracts covering fiscal 2024 and year‑to‑date 2025 and found change orders, outdated project scopes and delays among the most frequent drivers of increases. Commissioner Stevens summarized the challenge: “If you only do what you always did, you only get what you always got.”

Why this matters: staff presented that the total of proposed increases going to City Council for approval was about $284,000,000, with roughly $163,000,000 expected to be spent next year. The commission and staff framed those requests against a proposed next‑year capital program of about $1,000,006,000 and a multi‑year capital outlook measured in the billions.

The subcommittee’s review found several recurring causes of budget increases: unanticipated underground utilities or drainage and right‑of‑way complications; extended delays and inflation related to the COVID‑era supply and labor market; scope changes that happen after construction begins; and differing procurement approaches that carry different levels of risk if projects are not fully defined before bidding.

As practical steps, the subcommittee recommended more robust pre‑design and feasibility work for higher‑risk projects, earlier and deeper engagement between user departments and design/project teams, and larger contingency allowances on projects with known risk factors. Commissioner Dan Swigert told the commission staff were cooperative in the review and “they were very, very helpful,” and offered specific process suggestions drawn from other local governments, including contractor incentives and penalties tied to schedule performance.

City Manager Caitlin said project prioritization and community input are layered into the capital process and noted staff continuously receive community feedback and coordinate with utility providers on long‑lead projects. “We have staff members identifying needs every day, quite frankly,” she told commissioners, describing how the city filters hundreds of candidate projects into a fundable capital list.

Commissioners discussed examples the subcommittee examined. Members pointed to the advanced water purification/recycling effort as a project that has grown significantly in scope and cost because of permit and regulatory developments; the subcommittee described a recently cited increase on that item in the tens of millions (staff described an approximate $50,000,000 change during the meeting). Commissioners also cited the Jomax Road sewer improvement as a multi‑year project whose cost rose as estimates were updated over more than a decade of planning.

The subcommittee also prepared a condensed presentation sheet intended for City Council that highlights (a) what the council previously approved, (b) what staff already has approved, (c) proposed new change requests, and (d) the portion of cost expected to be spent next year. Commissioners said the one‑page view should help council focus questions on what has changed rather than reviewing the entire capital list.

The commission did not take formal policy votes on the subcommittee recommendations at the March 27 meeting. Instead members discussed next steps: staff will present the formal proposed fiscal year 2025‑26 budget document to the commission the week after the meeting and the commission plans to finalize recommendations in an April 11 work session ahead of a joint study session with City Council on April 22.

Votes at the meeting: the commission unanimously approved the minutes of its March 19, 2025 meeting and later unanimously approved a motion to adjourn. (The minutes‑approval motion was offered by Commissioner Ransko and received a second; the meeting record shows the vote passed unanimously. The meeting closed on a unanimous motion to adjourn moved by Commissioner Newman and seconded by Vice Chair Dan Swigert.)

The commission emphasized that many of the cost‑increase reasons shown in the subcommittee’s review are not unique to Scottsdale and that the city manages a large project portfolio. Commissioners said the goal is to add value through process recommendations—better scoping, clearer coordination, targeted contingencies and improved reporting to council—while recognizing some increases are driven by technical requirements or long lead times that are hard to compress.

Next steps: the proposed 2025‑26 budget binder will be posted to the city’s public materials and discussed in commission presentations scheduled for April 7 and April 10. The commission will use an April 11 session to finalize recommendations to council for the April 22 joint meeting.