Carefree board orders public hearing on FY2026–27 water budgets after staff corrects grant error

The Town of Carefree board of directors voted May 5 to order a public hearing on the proposed fiscal year 2026–27 budgets for the Carefree Arizona Utilities Community Facilities District (UCFD) and the Carefree Water Company after staff presented the budgets and corrected a grant accounting error.

Nick, the staff presenter, told the board that staff had discovered an accounting mistake in the packet: EPA grant funds were double‑counted in the UCFD beginning balance. He said the correction reduces the projected ending balance to $432,350 from the $1,052,003.50 shown in the packet but does not put the UCFD into a negative position and the district can still complete planned capital projects.

The board then considered Resolution 2026‑01, which approves the proposed FY 2026–27 UCFD budget and the proposed FY 2026–27 Carefree Water Company budget, rates, fees and charges and orders the public hearing. Committee member (mover) made the motion to adopt and the Chair seconded. The board voice‑voted “Aye,” and the motion passed as recorded in the meeting transcript.

Why it matters: the UCFD holds debt and capital project authority for water infrastructure and the Carefree Water Company provides the operating revenues that fund debt service and capital work. The correction to grant accounting reduces the UCFD’s projected year‑end balance and will inform public comment and any revisions the board considers before final adoption, scheduled for June 2.

Key details from the staff presentation

- Debt and projects: Staff cited a 2021 bond series and a WIFA loan as ongoing UCFD obligations and said the Peaceful Place Booster Station project was completed while the Silver Saddle pipeline project is waiting on EPA contract approval.

- UCFD funds and correction: Carefree Water Company payments were listed as the primary revenue source (roughly $1,400,000). Staff said an $800,000 grant balance and a town capital advance of about $1,100,000 previously appeared in the packet; after correcting the double‑counting of EPA funds the available ending funds fall to $432,350.

- Public hearing: The board opened the public hearing called by the resolution, received one public comment and then closed the hearing. Final adoption of the budgets is expected at the June 2 meeting after any changes resulting from tonight’s presentation and the public hearing.

One public comment and staff response

Sarah Emerson asked whether the UCFD’s budget included a line item for conservation education. Nick said the last page of the budget lists water conservation costs and that staff budgeted $2,500 for literature and community events (the same amount as the prior fiscal year); he said staff plans to expand public awareness efforts, citing recent Earth Day outreach. The Chair said the town will step up conservation outreach given drought conditions and possible Central Arizona Project (CAP) cuts.

What happens next

By voting to order the public hearing, the board set the budget process in motion: public comment will be considered and the board intends to vote on final adoption at its June 2 meeting. Staff also plans to launch a rate study this fall that will incorporate CAP rate and supply changes when those are clarified.

Quotes

“Mister chairman, fellow board members, it’s a pleasure being here to present the budget for our next fiscal year,” Nick said when introducing the packet and the staff correction.

“We inadvertently double counted those EPA funds,” Nick said, explaining the adjustment and apologizing for the discrepancy in the agenda packet.

Audit note: the transcript records the vote as a unanimous passing voice vote but does not list individual roll‑call vote tallies in the record.

Ending

The board adjourned after closing the public hearing. Staff will take public comments from the hearing into account and return with a final budget and any adjustments at the June 2 meeting.