Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Revenue topic
No spam. Unsubscribe anytime.
Flagstaff finance staff outline tax and bond tools: voter measures, secondary capacity and primary levy options
Summary
Finance staff reviewed the city's revenue toolbox — transaction privilege (sales) taxes, secondary property‑tax capacity for GO bonds and primary levy growth options — and asked the council whether to post the 60‑day notice for a potential primary‑tax levy increase ahead of the April retreat.
At the Feb. 14 retreat, Flagstaff finance staff presented an overview of the city’s revenue toolbox, including transaction‑privilege (sales) tax options, the role of secondary property tax capacity for general obligation (G.O.) bonds and the rules that govern primary property‑tax levies.
Brandy Soodles, the city’s finance director, explained that G.O. bonds require voter approval and are typically repaid with a secondary property‑tax levy. She said the city’s current secondary levy policy is 0.8 per $100 of assessed value and that maintaining that rate constrains how much debt the city can carry without raising the levy. Brandy told council there is an estimated $72.5 million of G.O. capacity available under current assessed‑value projections if the council chooses to use it and pursue voter approval.
On primary property taxes, staff explained state statute limits annual levy growth in most years to a 2% increase in the levy amount, though the presentation said that for fiscal year 2025–26 the city had about 12% potential levy capacity (approximately $912,000) because the levy had not been increased for several years. Staff also noted statutory requirements for notices: a 60‑day pre‑notice for council consideration and a Truth in Taxation newspaper notice if council moves forward.
The presentation also reviewed transaction‑privilege (sales) tax categories and the Model City Tax Code that standardizes local sales‑tax administration in Arizona. Staff noted some local sales taxes are dedicated to specific purposes and can be sunsetted, and that voter approval would be required to add or increase dedicated sales taxes for specific uses such as transportation or housing.
Finance staff sought council direction on whether to post the required 60‑day notice related to a possible primary‑tax levy change so that council would retain the option to act before the April retreat. Several council members supported posting the notice to preserve options; staff said more detailed impact analyses and examples of tax and bond scenarios would be prepared for future retreats and meetings.
