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Fountain Hills staff presents FY26 draft budget; contingency and expenditure‑limitation figures highlighted
Summary
Town finance staff walked council through a $50.37 million proposed FY26 budget, noting a $1.23 million general‑fund contingency, projected $26.05 million general‑fund revenue, and planned capital spending increases driven by street projects.
Town finance staff presented the town’s draft fiscal year 2026 budget during a work session, describing revenue projections, the town’s approach to the state expenditure limitation, and proposed capital and operating supplements.
Paul, the town’s finance director, said the draft budget book totals $50,370,000 across all funds, with an estimated general‑fund revenue total of $26,050,000 and department expenditures of about $24,820,000, leaving a general‑fund contingency of roughly $1,230,000. “The contingency is our wiggle room. That’s what we have if something goes wrong,” Paul said.
Staff explained that the town’s proposed total budget exceeds the state expenditure limitation figure and that projected exclusions — grants, HEERF revenues, investment income and other exclusions — are expected to reduce the amount subject to the limitation. Paul said the proposed budget assumes about $7.7 million of projections for FY26 exclusions and that the town carried forward approximately $10.6 million of one‑time exclusions from prior years.
The presentation highlighted a roughly 10% year‑over‑year increase in the overall proposed budget, primarily tied to higher capital spending — most notably Palomino reconstruction and other street projects. Staff said approximately $12.7 million is budgeted for capital projects in the capital projects fund (up from about $3.6 million the prior year), and noted the town is budgeting $5.4 million from the streets fund toward the Palomino reconstruction project.
Staff also described several ongoing program and personnel supplements included in the draft budget, including maintenance for washes ($450,000), downtown economic development initiatives, park upgrades and a proposal to add one full‑time street maintenance technician funded from the streets fund. Staff cautioned council that if projected revenues underperform, spending restrictions would start with contingency, then other budgetary constraints would be considered.
Ending: Staff said the tentative budget will be presented to council at the next regular meeting for formal action; final adoption is scheduled for a June public hearing. Council provided direction on several line items during the work session and asked staff to return with updated numbers for the tentative budget and later for final adoption.
