Show Low updates FY2026 draft budget, trims projects to stay under state expenditure limit

City Manager Johnson reviewed changes to the fiscal year 2026 city manager’s recommended budget and told the City Council the presentation required no action at the meeting. Johnson said the new draft budget number is "a hundred and 34,536,984." The council is scheduled to consider tentative budget adoption on June 3 and final adoption on June 17; the council will adopt the secondary tax rate for the streetlight improvement district on July 15.

The changes Johnson reported include revenue and expenditure adjustments made after department meetings. He said operating revenues were revised upward by about $715,000, driven by increases to the sales-tax estimate, and that the new draft operating revenue figure is "83,000,000." He reported a reduction in fund balance largely because several projects did not carry into the next fiscal year.

Johnson described a series of expenditure adjustments and project carryovers. He said two capital projects were removed from the FY2026 carryover list — a repaving in the Golf and Country Club Subdivision and Eleventh Street improvements — which together reduced next year’s budget by roughly $967,000. He said planning work for runway 22/0 and Taxiway D at the airport was increased in the budget and will be paid by the city and reimbursed later. Johnson said one previously duplicated phone-system line item was cut in half and that insurance premiums increased after staff learned rebates would not apply, requiring an additional $350,000 in the budget.

To remain under the state expenditure limitation, Johnson said the event center budgeted at $16,000,000 was reduced by $1,700,000 to $14,300,000 in the draft. He summarized the net changes as the removal of about $967,000 in carryovers and additional modifications totaling about $2,200,000.

Johnson also reported that Waste Management requested a consumer-price-index adjustment under its contract, a 4.9% increase that would raise the first cart and the recycle cart by $1.02 and increase additional carts from $13.25 to $13.90.

Johnson closed by reminding the council that after tentative adoption the budget cannot be increased but may be reduced before final adoption on June 17. He said staff will continue to monitor revenues and economic activity and return with material changes at the tentative-adoption hearing.

Discussion only: the presentation drew brief council questions but no formal actions or votes were taken at the meeting.