Carefree forecasts at least $700,000 general-fund surplus, eyes $12.5 million in operating spending

At a Carefree Town Council budget workshop, town staff projected roughly $8.5 million in recurring revenue for the next fiscal year and outlined a program-based spending plan that totals about $12.5 million before grants and contingencies.

Town staff member Mister Neece told the council the forecast uses a five-year average for municipal sales tax to smooth volatility and avoid relying on a single-year peak. “So our minimum could be 2 or 3 times this number, but I'm projecting conservative wise, a $700,000 surplus within our general fund,” Mister Neece said.

Why it matters: the town's conservative revenue assumptions and large capital reserves are the basis for planned investments in aging infrastructure and public safety while keeping the statutory expenditure limit in view. Town staff said the forecast excludes speculative grants and investment interest.

Key revenue and budget figures presented - Total recurring revenue (excluding speculative grants and investment income): about $8,500,000. That total is driven mainly by municipal sales tax, state shared revenue and cost-recovery fees. - Municipal sales tax: forecasted at 63% of the three main revenue sources or about $5,320,000 (staff used a five-year average rather than last year's peak of $6.42 million). - State shared revenue (intergovernmental): forecasted at about $1,750,000. - Cost-recovery fees (permits, inspections, utility right-of-way fees, court service fees): forecast about $1,400,000; proposed fee adjustments will go to public hearing at the May council meeting and would take effect 30 days after adoption. - General-fund operating forecast (without grants): roughly $7,800,000, producing a minimum projected surplus of $700,000 under conservative assumptions.

Staff emphasized conservative forecasting to insulate the town from closures of large retail producers or state legislative changes affecting local receipts. Mister Neece described the five-year average approach as “insulat[ing] ourselves from the volatility of sales tax.” Councilmembers asked whether the five-year approach accounts for inflation and whether growth reflected more transactions or price increases; staff replied it was likely a mix of both.

Capital reserves, grants and statutory limits Town staff displayed a capital projects “fuel tank” showing roughly $16 million in reserves. Planned capital projects plus grants and contingencies bring the town's working expenditure limit to about $14.5 million for the draft budget. Staff noted the statutory expenditure limit is approximately $13.2 million but explained that exclusions (grants, Highway User Revenue Fund (HURF), and certain other sources) reduce the amount counted toward that limit; after accounting for exclusions the town was about $1,180,000 under the statutory ceiling in the presentation.

Next steps Staff said the program-based draft budget that pairs this workshop's numbers with the narrative from the first workshop will be presented at the next budget workshop and then through the public hearing process in May. Fee changes will be presented at public hearing, and any consultant contracts or major procurement will return to council for approval.