Carefree staff present FY2027 budget framework built on conservative sales‑tax forecasts and pay‑as‑you‑go capital

Town Administrator Kristen opened the first FY2027 budget workshop on April 21, laying out a proposed operating budget of $8.9 million and a proposed capital program of $5.2 million. She told the council the session was intended to seek direction rather than finalize numbers and described a compressed adoption schedule that includes a second workshop on April 28, a tentative budget on May 5 and adoption on June 3.

Kristen said the budget is grounded in the council’s strategic plan and the town’s stated core values. She emphasized that Carefree must follow state rules requiring a legally balanced, fund‑based budget and explained that fund restrictions mean ‘‘not all dollars are interchangeable.’’ Using a five‑year average to smooth municipal sales‑tax volatility, staff currently project municipal sales tax for FY27 of about $6 million, with sales tax representing roughly 65% of the town’s operating revenue mix. State shared revenue was presented at about 20% and cost‑recovery fees at about 15%.

Kristen flagged several revenue risks: national economic cycles affecting retail and tourism, the end of one‑time property sale receipts that boosted FY25, and legislative uncertainty that could change state shared revenue or HERF distributions. She said staff will not ‘‘adjust base’’ until legislation is final; if a bill passes staff will reflect the change in a subsequent year’s figures.

On expenses, the presentation described FY26 salary and benefit totals and a FY27 staffing profile of 17 budgeted full‑time equivalents (16 on staff at present). She noted total compensation will be presented in the budget book and reiterated that public safety remains the town’s largest cost. Public‑safety contracts (law enforcement via the Maricopa County Sheriff’s Office and fire/EMS via Rural Metro) are budgeted at about $3 million, roughly 40% of the operating budget, and staff warned council to plan for a significant contract increase when the next fire contract begins in July 2027.

Kristen said the town will continue a ‘‘pay‑as‑you‑go’’ capital policy to avoid debt, pointing to available reserves that she said give Carefree three to four months of operating liquidity. She asked the council for guidance on several priorities in the proposed capital program, including town‑center improvements, pavement management, and a culvert rehabilitation project (Whitewash at Leisure Lane) that includes county grant funding on an 80/20 split.

Kristen told the council the budget book would be released as a draft for review immediately following the workshop and that staff would present final numbers and a public hearing schedule at the next meeting.