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Mesa OMB warns reserves could fall below policy in 2028–29 after revenue losses and public‑safety pay adjustments
Summary
City budget staff told the council on March 6 that the loss of the residential rental sales tax, state tax changes and rising personnel and operating costs — including an estimated $23 million benchmark adjustment for public‑safety pay — create pressure on general fund and utility reserves and will shape the upcoming budget calendar.
Mesa budget officials on March 6 presented a multi‑year forecast showing revenue headwinds and rising expenses that, if unaddressed, could push the city’s general fund reserves below council policy by fiscal 2028–29.
Brian Richel, director of the Office of Management and Budget, told the council the forecast reflects three principal revenue pressures: the loss of the residential rental sales tax (staff said that source supplied just over $18 million annually to the general fund), enactment of the state “flat tax,” and sluggish sales tax growth. Richel said staff used an apples‑to‑apples homeowner comparison across Valley cities to frame cost and rate decisions.
Public‑safety compensation and benchmarking
Scott Butler, assistant city manager, told council that a benchmarking analysis completed for sworn police and fire positions showed Mesa lags peer cities and that bringing sworn pay to market carries a material, ongoing cost. “The impact for both the adjustments to police and fire sworn personnel … is about $23,000,000,” Butler said; that figure excludes additional step‑pay costs that will be added for eligible employees in the coming…
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