Flagstaff staff present FY25–26 budget requests totaling $94.7M; manager recommends targeted employee investments and infrastructure spending

City budget staff presented an overview of FY25–26 requests and the city manager's recommended allocations during a council budget briefing, saying divisions submitted roughly $94.7 million in new requests across all funds and divisions.

"This year, we had total request across all funds and divisions totaling $94,700,000 in new requests," City staff member Brandy Suda told the council. Brandy said the total includes operating capital and operating grants and that requests have increased compared with prior years as the city has broadened what flows through the priority-based budgeting process.

Key numbers presented by staff included a general fund request total of $43.2 million, with roughly $5.0 million in ongoing personnel requests and $1.2 million in one-time personnel requests. Brandy said the manager's recommended employee investments in the general fund total $5.7 million, including $2.8 million for merits and pay-for-performance increases and $3.5 million in market adjustments (the latter described as a general-fund impact figure and separate from citywide figures shown earlier).

Infrastructure and capital needs also featured in the recommendations. Staff proposed $11.5 million in general-fund one-time infrastructure investments, about $955,000 in fleet replacements and roughly $2.9 million for facility repair and replacement, including a major allocation to Jay Lively facilities. The recommended budget also includes design funds "just over $2,000,000 for new police and fire facilities," Brandy said, and a software modernization program budgeted at $5.5 million over three to five years for systems including public-safety dispatch and a potential enterprise resource planning (ERP) replacement.

Staff described how available resources were identified: ongoing and one-time availability was increased from prior estimates by evaluating expenditure execution rates, savings from vacant positions and updated revenue projections. Brandy summarized total available resources for FY25–26 as $6.1 million ongoing and $26.5 million one-time in the general fund, and said allocations use infrastructure reserves set aside in prior years, including $9.0 million for stormwater and a $2.5 million infrastructure reserve.

Priority-based budgeting alignment: Heidi, who led the PBB overview, said the process scores programs against council-established priorities. She said the city recommended funding for a higher share of requests in programs scored as most or more aligned with community priorities. "So this year, we are recommending, in the city manager's budget, almost $49,000,000 of recommended requests," Heidi said, and she noted that a large portion of the requested funding is grant-based or multiyear and may be budgeted across fiscal years.

Other allocations cited in the presentation included one-time transfers to other funds: $500,000 to the housing fund, $648,000 to the water resource infrastructure protection fund for wildfire crew facility design, and $4.8 million to a flagged project (phrasing in the transcript is unclear). Staff also mentioned airport support of about $781,000 and a $570,000 sustainability allocation related to climate neutrality work. Brandy said the proposed allocations assume no increase to the primary property tax levy as presented.

No formal votes were taken during the presentation; the session served as information and to identify areas for further council consideration and refinement.

What to watch: staff said final decisions on the recommended items and any changes to tax levies will be addressed in upcoming budget workshops and hearings.