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Prescott Valley reports roughly $6.4 million year-to-date surplus; staff to return May 22 with tentative budget and CIP financing plan
Summary
Finance staff told the Town Council May 1 that major funds are performing strongly through March 31, leaving an approximate $6.4 million surplus; staff will return May 22 with a tentative budget and a five-year capital improvement financing plan. Councilors discussed major projects including Glassford Hill Road and Lakeshore drainage.
Miss Morris, a finance staff member, told the Town Council on May 1 that the town’s major funds were “performing very strongly” and that, year to date through March 31, the town had a surplus of about $6,400,000.
The surplus comes as recurring revenues across the general fund, water, wastewater and stormwater exceeded ongoing expenses, Miss Morris said. She told council the water utility had about $9,000,000 in revenue and roughly $6,000,000 in expenses year to date, leaving a roughly $3,000,000 surplus before one-time operating and capital costs; wastewater showed about $5,300,000 in revenue and $3,400,000 in expenses; stormwater reported roughly $653,000 in revenue and $285,000 in expenses. Miss Morris also said the town averages about $500,000 in interest income per month from investments primarily held in the Local Government Investment Pool.
Why this matters: staff said the town is structurally balanced and that the reported surplus and fund balances give Prescott Valley flexibility to fund the capital improvement program (CIP) and maintain long-term financial stability. Staff also showed a falling debt profile as certain loans and bonds near payoff, which could free capacity for future street projects.
Staff outlined the draft five‑year CIP and the funding options the town is weighing: pay‑as‑you‑go using savings, one‑time construction sales tax receipts, project‑specific grants, development impact fees where legally permitted, debt instruments, and public‑private partnerships. Director Reuter described the vetting process for CIP requests and said the town’s second-level raw requests totaled about $80,000,000 for the five‑year horizon, with some projects moved later in the schedule to smooth costs.
Director Reuter highlighted two projects slated to start in fiscal year 2026: Glassford Hill Road and Lakeshore drainage improvements. Reuter said Glassford Hill Road “did start this fiscal year” and staff are redesigning to minimize right‑of‑way impacts; the project is expected to go to bid in late summer or early fall and to last about 12 months. The Lakeshore drainage work began as a maintenance item; Reuter said design is expected to finish early in the next fiscal year and that the town has obtained partial funding from the Yavapai Flood Control District for the immediate repairs.
Staff said they will return to council on May 22 with a tentative budget, a one‑year CIP for approval and a financing plan showing how proposed projects would be funded and where gaps remain. Final budget adoption is scheduled for June.
The presentation to council also reviewed the town’s fund balance history and debt obligations; staff noted they expect to maintain a structurally balanced budget for fiscal 2026 and highlighted that the town’s strong bond rating (Fitch: AA+; S&P: AA) supports financing options if council chooses debt for major projects.
No formal council votes were taken on May 1; staff sought council input and direction. Council members praised staff for the presentation and confirmed they would use the May 22 meeting to consider the tentative budget and CIP financing plan.
Ending: Staff will bring a tentative budget and a proposed five‑year CIP financing plan to the council on May 22. If council directs changes then, staff said they will incorporate them into the final budget proposals presented in June.
