Mesa council approves tentative FY2026–27 budget after public hearing on pensions, utility transfers

Mesa — The Mesa City Council approved Item 1B, the tentative fiscal year 2026–27 budget and proposed property tax levy, following a June 1 public hearing in which residents urged the council to be more transparent about staffing costs, pension liabilities and the practice of transferring utility fund revenues to the general fund.

Residents delivered a series of public comments during the hearing that focused on three themes: public safety pension underfunding, apparent department reshuffling that masks spending, and large transfers from the utility fund. Tony McElprang said Mesa’s public safety pension plans are “only about 50% funded,” and cited an unfunded liability of $691,000,000. “That is more than the entire general fund budget,” McElprang said, and he pressed the council for a plan and a timetable to raise funding levels above 60%.

Dennis Miller questioned whether reported cuts were real. He pointed to a $14,500,000 decrease in the police department budget offset, he said, by a newly created ‘Mesa Public Safety Support’ department budgeted at $23,800,000, calling the net result a reshuffling rather than a cut. “When you add those two together, public safety actually went up by $9,300,000,” Miller said.

Other speakers flagged the scale of employee costs and the city’s reliance on utility transfers to mask general‑fund pressures. A resident citing city figures said total pay and benefits across funds are about $763,000,000 for roughly 4,817 full‑time positions, and several speakers asked for a department‑by‑department staffing and compensation breakdown.

City Manager Butler responded that Mesa has used reserves deliberately to avoid sudden service cuts and noted the budget process builds conservative, fully loaded estimates and contingencies as required under state law. Butler defended the city’s financial position and cited audit and rating‑agency validation: “We have some of the most robust reserves in the city’s history,” he said, adding that Fitch and S&P have given Mesa high marks.

Brian Richel, director of the Office of Management and Budget, told the council that although some budget lines are conservatively estimated, audited actuals in recent years have often exceeded the conservative budgets. “Our revenues have come in higher than what we have expended,” Richel said, summarizing a multi‑year chart that he said shows positive actual net sources and uses in four of the last five fiscal years.

Councilmembers asked staff to clarify audited figures, the role of one‑time transfers and how reserve draws are planned and used. Several councilmembers said they support the direction of the budget while acknowledging concerns raised by speakers. Councilmember Adams described the budget as “a step in the right direction,” and Councilmember Taylor thanked staff for extensive briefings and said she would vote after seeking more detail.

With comments concluded, Mayor Freeman called for a motion to approve Item 1B. The council voted; the motion passed (the transcript did not include a roll‑call tally). After the vote the council moved to adjourn; the meeting ended with the council’s adjournment.

What’s next: The tentative budget approval completes the public‑hearing step; the budget process continues with the July 1 start of the new fiscal year and further opportunities for council oversight, departmental reconciliation and public follow‑up on the items residents asked staff to provide.