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Douglas presents FY2026–27 budget with tight available reserves and targeted investments
Summary
City staff presented a balanced and conservative FY2026–27 budget that preserves policy reserves while proposing targeted investments in infrastructure, compensation, and strategic projects; available unrestricted fund balance after reserves was reported at $386,556 ahead of tentative adoption on June 10.
City Manager Ana Urquijo formally presented the City of Douglas proposed fiscal year 2026–27 operating and capital budget at the June 2 special joint meeting of the Mayor and Council and Finance Committee.
City Treasurer Alejandro Martinez opened the financial briefing by reporting a general government cash balance of $18,391,781 as of May and walking members through restricted balances. Staff identified $15,855,910 in restricted cash for items that include capital project carryovers ($2,514,281), a PSPRS reserve for pension liabilities, a police trainee savings account, grant matches totaling $1,035,741, and policy reserves that include a 45‑day operating reserve, an emergency capital reserve, and a debt service reserve. After accounting for those restrictions and the city manager’s $1.5 million minimum fund balance floor, staff calculated an available fund balance of $386,556.
Urquijo described the budget approach as a continuation of a multi‑year plan emphasizing sustainability and strategic alignment and thanked department directors and the budget team for their work. Martinez said revenue trends through March showed local sales tax running roughly 3–4% above budgeted projections and that updated state‑shared revenue numbers received just before the meeting increased general fund forecasts by about $70,000.
The budget packages a modest 2% increase in overall general fund expenditures driven by inflationary pressures, a proposed 3% cost‑of‑living adjustment for most employees ($306,000 GF cost), and targeted, one‑time or limited investments such as a $16,400 transit driver classification adjustment and supplemental entry‑level increases for first responders funded from an unexpected $71,872 in additional state revenue. Staff characterized the overall budget as balanced and conservative in its revenue assumptions, with contingency for capital projects and one‑time initiatives tied to the Vision 2032 strategic plan.
Council members and finance committee members asked staff for clarifications on how restricted funds would be used for specific capital projects and pressing operational needs. Martinez reiterated that certain large reimbursable grants—most notably the ADOT‑managed RAISE award—are project‑managed and are not reflected in the city’s current cash position. He reminded members that tentative adoption on June 10 will set the spending cap; adjustments within that cap are allowed before final adoption on July 8.
The meeting continued with detailed discussions of personnel proposals, capital carryovers and prioritization, and enterprise fund condition reports. No final budget adoption occurred at the June 2 meeting; the tentative adoption hearing is scheduled for June 10.
