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Surprise council adopts updated financial policies; members ask for fall retreat on construction sales tax use
Summary
Council approved annual updates to the Comprehensive Financial Management Policies (Resolution 2026-50) and to budget amendment procedures (Resolution 2026-45). Council members discussed construction sales tax revenue trends and requested a fall retreat to evaluate using that volatile revenue for operations or capital needs.
The Surprise City Council on May 19 approved annual updates to financial-management policies and minor revisions to budget-amendment procedures, and held an extended discussion about how the city uses construction sales tax revenue.
Finance staff presented the Comprehensive Financial Management Policies and said updates include enhanced capital project oversight language and a change removing a phased contingency reserve for the solid-waste utility. Council approved Resolution 2026-50 (annual update) after a brief discussion.
The council also approved Resolution 2026-45, updating budget amendment policies and procedures to better reflect current practice. Both resolutions were moved, seconded and passed by voice vote.
Council members then discussed the city's construction sales tax (a TPT component collected at 3.7%, with 2.2% earmarked for general capital and 1.5% for the Transportation Improvement Fund). Members noted construction receipts can be boom-or-bust and asked staff to convene a fall workshop or retreat to align capital and operating priorities and to consider whether construction sales tax should temporarily support operations in the event of shortfalls.
Finance staff said forecasts show a flattening trend into FY27–28 based on permits currently in the pipeline and that staff plans to return to council in a retreat or special meeting format to discuss capital projects and operations.
