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Safford council reviews FY2026 preliminary budget; fire and vehicle-replacement costs drive big increases
Summary
Staff presented a conservative FY2026 preliminary budget that remains balanced under current revenue assumptions but highlights significant increases: a roughly 53% increase in the fire-related budget driven by vehicle replacement and facility assessments, large enterprise vehicle-replacement needs for sanitation and landfill, and airport revenue growth; the council discussed pay and staffing measures for water/wastewater and debated how to finance replacement costs and nonprofit landfill waivers.
City staff used the April 14 work session to walk council through the FY2026 preliminary budget, emphasizing a conservative revenue approach while flagging several large, multi-year cost pressures.
Legislative risk: Assistant city manager briefed council on pending state legislation affecting the "food tax" (HCR 2021), which staff estimated could have reduced local revenue by about $2.1 million annually for Safford. An amendment that would preserve current city food-tax treatment passed the House; as of the meeting the Senate Rules Committee was still considering the bill.
Major increases and drivers: The largest single departmental increase presented was in the fire budget (staff cited roughly a 53% increase), driven by aging vehicles that have reached or exceeded useful life, equipment replacement costs and an upcoming facility assessment to determine renovation versus new construction. Finance staff proposed phased replacement and a multi-year funding plan to spread costs rather than buying all equipment at once.
Enterprise pressures: Sanitation and landfill funds face vehicle-replacement demands (sanitation trucks modeled at a seven-year useful life), prompting a sanitation rate study; staff said existing fund balances will cover near-term needs but long-term sustainability will require user-fee adjustments. Landfill staff recommended using the council-directed donations process rather than unrestricted waivers for nonprofit use of the landfill, and council discussed increasing the council-directed donation appropriation to ease transitions for major nonprofit users.
Staffing and compensation: Water and wastewater divisions reported recruitment and retention challenges. Staff presented a market-based pay supplement option (an illustrative $4/hour adjustment was discussed) along with sign-on bonuses; council debated stepped approaches and alternative incentives to reduce turnover without creating unsustainable ongoing costs.
Budget posture and next steps: Under the conservative revenue assumption used in the draft, staff reported a balanced budget with limited one-time capital funded by ongoing revenue. Council asked staff to return with adjustments and more detailed proposals on vehicle replacement strategies, the utility rate-study outcomes, compensation alternatives, and options to fund a modest facility-maintenance increase in FY2026.
Why it matters: The preliminary budget frames capital and operating choices for next fiscal year. The items flagged (fleet replacement, fire facility assessment, utility rate adjustments) will influence user fees and capital plans and may affect taxpayers and ratepayers if council approves programmatic changes.
What’s next: Staff will return with refined proposals, cost options, and a tentative budget for council consideration in May and adoption steps through June (tentative budget and truth-in-taxation hearing schedule noted).
