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Mohave County officials present structurally balanced FY26 budget built on tax-rate swap and one-time designations
Summary
County Manager Andrew Alters and CFO Luke Mornien recommended a structurally balanced FY2026 budget (Option B) that relies on a property-tax levy rate swap, a library-district sweep and other one-time moves while preserving a $50 million target fund balance and proposing a policy to set aside surplus for future capital.
Mohave County Manager Andrew Alters and Chief Financial Officer Luke Mornien presented the Board of Supervisors with a recommended, structurally balanced fiscal year 2026 budget on April 16, 2025, centered on a proposed tax-rate swap, a sweep of part of the library district balance and a set of both recurring and one-time adjustments.
The recommended package, labeled Option B in staff materials, would raise the county’s primary property tax levy rate modestly by shifting levy authority from the county library and TV districts into the general fund while keeping overall property tax bills unchanged at fixed property values. Mornien said the swap — a 6-cent shift in combined levy rate — would generate roughly $1.6 million for the general fund; combined with increased assessed values and a higher assumed collection rate, staff estimate about $5.1 million in increased property tax revenue for FY26.
Mornien said staff designed Option B to be sustainable across a five-year projection and to deliver a structurally balanced outcome without using recurring revenue to pay for one-time initiatives. "Option B is our recommended option. It maintains a net positive change throughout the five-year projection," Mornien said.
Why it matters: County leaders said the plan protects core services while preserving flexibility for capital needs. Manager Alters told the board the county achieved a structurally balanced FY26 by a proactive budgeting approach, disciplined department requests and by holding many new initiatives until revenue and priorities are clear.
Key elements and tradeoffs - Library sweep and rate swap: Staff propose a one-time sweep of $1.25 million from the library district (authority cited to JLBC guidance) and a 6-cent levy swap (2¢ from TV district, 4¢ from library) that moves roughly $1.6 million into the general fund while leaving total property tax bills unchanged if property values are held constant. Mornien said five‑year projections show both districts retain healthy fund balances after the swap. - Collection-rate change: The budget increases the assumed property tax collection rate from 95% historically budgeted to 97% based on recent actuals; staff described this as conservative relative to recent performance. - One-time revenue/expense moves: Staff recommended short-term transfers and using fund balances in certain internal funds (risk fund, jail/building maintenance funds) to reduce FY26 general fund transfers. Those were presented as one‑year measures, not permanent reductions. - Contingency and reserves: The recommendation targets a $50 million general-fund balance composed of about 3.5 months of operating expenses plus a 10% contingency (rounded to $13 million on slides). Staff projected an end‑of‑FY26 surplus near $25.5 million under Option B, which they proposed designating for capital and infrastructure planning by policy.
Uncertainties and risks Staff highlighted several uncertainties that could change the FY26 outlook: state legislative budget actions (notably the Parents as Paid Caregivers program), potential federal grant cuts (including Medicaid impacts), and an ongoing review of state health program billing/refund practices that has produced material swings in county obligations. Mornien warned that removing any of the revenue or expense measures underpinning Option B could produce a structural deficit.
Next steps The board took public questions and directed staff to incorporate board feedback into the tentative budget scheduled for June 2 and the final adoption scheduled for June 16, 2025. Mornien asked for direction on a proposed fund-balance policy that would designate a portion of year-end surplus for capital and future needs; he offered options ranging from project-specific designations to a standing percentage transfer into a capital-improvement fund.
Ending note: Staff recommended Option B as the most sustainable path to preserve county services and begin planning for long-term capital needs without immediately increasing recurring expense obligations.
