Sedona City Council adopts fiscal 2025–26 budget, unanimous vote

The Sedona City Council on June 24 unanimously adopted Resolution No. 2025-09 to approve the city’s budget for fiscal year 2025–26.

City Finance Director Barbara Whitehorn and Budget and Financial Analyst Sterling West presented the final budget, telling the council staff had held some revenue assumptions flat and reduced several expenditures. "We had the best April sales and bed tax that we've ever had," Whitehorn said, adding that staff remained cautiously optimistic about economic conditions and would be ready to pivot if needed.

Whitehorn said the council-directed changes produced a total decrease from the prior year of $2,900,000 (2.8%). She reported the operating budget increased by 5.8% while the capital budget decreased by 13% compared with fiscal 2025. Between the May 27 draft and the final presented on June 24, staff reduced planned spending by $706,000.

Councilors and staff discussed several line items during the presentation. Whitehorn said the city paid off enterprise leases in the current fiscal year at a total cost of $922,656, which included about $78,000 in sales tax; she said the payoff will reduce interest costs by an estimated $19,000 in fiscal 2026 and by about $34,500 in total interest savings. The budget also includes a $10,000 allocation for the Red Rock Trail Fund, and staff reported total reserves of $66,600, which they said meet the city's reserve requirements.

Councilors asked about an anticipated surplus for the current year. Whitehorn said there is an expectation of a surplus but cautioned it is not final until the city completes and audits its financials. A council member referenced a possible surplus figure of $7,300,000; Whitehorn said that amount was not yet certain and that most municipalities wait for audited financials before making final allocations.

Council discussion included when to schedule a formal council discussion about allocating any fiscal 2025 surplus. Whitehorn recommended waiting until the books are closed and the audit is complete (typically in December with audit presentation in January), so council would have a clearer figure before deciding whether to direct surplus funds to capital projects, debt reduction or other uses. Council members asked staff to place a surplus-allocation discussion on a future agenda after the audit is complete.

The meeting included a public comment by Tim Perry, a resident of Uptown Sedona, who criticized the budget as "awful" and voiced strong opposition to staff pay increases and certain capital projects. The council then moved to adopt the resolution; a councilor motioned to adopt Resolution No. 2025-09 and Councilor Kinsella seconded. The council voted unanimously to approve the budget.

The council adjourned the session and said staff would return with follow-up materials and the surplus-allocation discussion after the year-end close and audit.