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Mesa council hears budget update showing narrower gaps, one-time costs and public-safety drivers
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Summary
The Mesa City Council received an update on the proposed FY 2026–27 budget and five‑year capital plan that narrows projected gaps due to higher sales tax and one‑time carryovers, but that also reflects ongoing public‑safety labor costs tied to a new MOU and transit funding shifts.
Brian Mitchell, director of the Office of Management and Budget, told the City Council at its April 30 study session that higher-than-anticipated sales-tax receipts and reconciled project carryovers helped improve the city’s projected net sources and uses for the coming years but that public-safety labor costs and ongoing transit expenditures remain a major driver of future deficits. "We went from the projected for 25‑26 to 31.1," Mitchell said during the presentation, summarizing changes between the earlier forecast and the proposed budget.
The update, which staff described as the final step before the council’s tentative budget consideration on May 18 and final adoption June 1, repeatedly distinguished one‑time investments from ongoing expenses. Mitchell highlighted roughly $16.2 million in planned one‑time items for FY 2026–27 — including police radio replacements, a financial reporting system upgrade and parking‑garage structural repairs — and said removing those one‑time items narrows structural shortfalls. "If you took those one‑time expenses out, our ongoing revenues and expenditures would be much closer than what it appears," he said.
Why it matters: the presentation framed the budget as an "expenditure authorization" for the next fiscal year and a five‑year plan that guides priorities while leaving room for annual adjustments. Councilmembers pressed for more detailed backup on the large one‑time items and asked staff to produce clearer materials the public can use to understand the tradeoffs behind reserve use and any program reductions.
Concerns and debate: several councilmembers urged targeted, or “surgical,” reductions rather than across‑the‑board cuts. Councilmember Go Forth and Councilmember Taylor both said residents want stability in city services even as the council seeks fiscal balance. Councilmember Adams, who said he had been a vocal critic of low participation at past planning and zoning hearings, welcomed evidence of stronger participation and noted the value of more data in explaining budget choices to constituents.
On revenues, staff said the unanticipated gains have been mostly sales tax — retail, contracting and utilities — and that the city uses conservative forecasting. Mitchell told the council the city was forecasting sales tax to be about 5–7% above budget this year, driven in part by retail and contracting activity, while cautioning that revenue assumptions should remain conservative.
Public safety and staffing: the proposed budget includes recurring investments in recruitment and retention — three police academies budgeted for about 110 recruits and two fire academies — and step‑pay increases for both sworn and non‑MOU employees. The council acknowledged vacancies in police staffing and supported continued work to keep pay competitive while balancing fiscal constraints.
Next steps: staff will provide requested breakout slides detailing the largest one‑time items and a simple list of projects programmed for FY 2026–27. The tentative budget will be presented May 18, followed by public hearings and final adoption June 1.
Sources: Presentation and Q&A at the Mesa City Council study session; Office of Management and Budget.
