Surprise council receives FY26 budget kickoff; staff outlines process, state deadlines
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Summary
At a Jan. 21 work session, city staff introduced the FY2026 budget process, emphasized that the budget implements council strategic goals, reviewed timeline and state requirements under Arizona Revised Statutes Title 42, and said initial capital and operating outlooks will be refined in coming meetings.
City of Surprise staff on Jan. 21 kicked off the fiscal year 2026 budget process, outlining the city's budgeting approach, state filing deadlines and the link between council strategic priorities and departmental budget requests.
"The city budget is allocating limited resources to the programs and services," said Sandy, a staff budget presenter, emphasizing that the budget functions as both a financial and an operating plan and should reflect council policy priorities. Staff urged council to confirm strategic priorities at an upcoming retreat so departments can align budget packages and staffing requests.
Staff described the flow of the budget: council sets strategic priorities, the city manager recommends allocations, departments translate priorities into operating and capital requests, and staff uses a five-year outlook for both operating needs (for example, phased hiring for new fire stations) and capital planning. Staff said the city maintains a five-year capital plan and that many capital priorities were previously prioritized as part of a bond list.
State requirements and timeline: a finance staff member reviewed statutory filing and publication requirements under the Arizona Revised Statutes, Title 42. Staff said the tentative budget is due by the third Monday in July under state rules (the city typically presents earlier), the final budget must be posted at least 14 days before the property tax levy, and the tax-levy schedule and truth-in-taxation notices must be published with required formats and timing. "We have state requirements that we have to follow, with the Arizona Revised Statute Title 42," the presenter said. Staff reminded the council the prescribed newspaper notice format and schedule cannot be changed by the city.
Funding and constraints: staff noted the city is growing, which increases both revenues and service demand; new development raises the levy as valuation increases even if the tax rate remains unchanged. The presentation stated initial capital investments for other projects (not the budget overall) have relied on a mix of sources; staff said they had not identified an expected revenue loss for FY26 and that no recommendation to raise taxes or fees had been made at that time.
Next steps and council direction: Staff asked council for early direction about the desired property-tax-rate approach (maintain, reduce, or other) because that choice affects the truth-in-taxation process and public notices. Council members expressed interest in exploring how much a property-tax cut would affect levy growth and asked staff to return with additional materials; Vice Mayor Heaney and others recommended continued regional coordination on items that intersect state-controlled roadways.
No formal votes were taken during the budget kickoff presentation. Staff said they will return with more detailed departmental budget proposals and recommended that the council consider strategic priorities in the coming weeks.