Some important priorities and some necessary expenses were covered in a recent budget Chandler City Council study session.
In its first official budget session for fiscal year 2023-24, the council went over many important fiscal priorities and starting points and what will, or could, impact streams of revenue and expenses in the years ahead.
Matt Dunbar, a budget and policy officer for the city, led a presentation that included mention of many facts key to the budget process. For example, on average, the city derives about 57% of all its revenue from transaction privilege tax — an Arizona tax on a vendor for the privilege of doing business in the state.
One example of a funding priority will be the increased payroll expenses caused by raises and higher benefit costs, such as health insurance. The city’s 1,727 full-time employees total an increase of 8.3% since the start of fiscal year 2017, while the Chandler estimated population has gone up 11.2% during that same five-year stretch.
Dunbar pointed out that the city will likely need to fill many budgeted positions in order to catch up to the city’s population growth and need for services.
One example of a concern on the horizon was voiced by Vice Mayor Matt Orlando, who said he’s more concerned about new regulations and unfunded mandates than he has been since he first joined the council more than 30 years ago.
“I know I’ve probably sounded this alarm before, but this time, I really see how we’ve finally built up solid reserves, and the Legislature is coming after those,” Orlando said.
Council member Mark Stewart said the Legislature going after reserves is not entirely a surprise. Many cities didn’t have to dip significantly into reserves, or at all, despite the COVID-19 pandemic creating some once-per-century financial circumstances for governments and households.
Dunbar said even though Chandler is unlikely to annex much more land along its exterior boundaries, there will still be more growth — even in new housing construction.
“We see there are still plenty of building permits in the pipeline, despite the city being mostly built to its borders,” Dunbar said. “And with Intel undergoing major construction, there’s a drop-off point coming in construction-related revenue, but that isn’t going to impact fiscal 2024.”
There was also discussion about how to spend one-time money. The city’s overall balance sheets changed in complicated ways as state and mostly federal COVID-19 relief funds trickled down to Chandler.
Dawn Lang, deputy city manager and the city’s chief financial officer, said during the meeting that the city’s one-time dollars are generally spent in one of five ways, or used to attack smaller bits of all five priority areas.
One priority area discussed at length in the session was its Public Safety Personnel Retirement System planning, known widely in Arizona as PSPRS. While big changes aren’t expected in Chandler’s strategy or tactics this year in how that debt is paid down, Lang said, it’s important to track each year’s payments, partly to keep an eye on the city’s obligations as it relates to money available for other expenses.
Chandler’s PSPRS debt was $136.5 million as of June 30 of last year. Beginning with Fiscal 2023, where Chandler is six years into a 20-year payment plan, rates and unfunded liability are decreasing.
The city paid off $18 million of that debt in Fiscal 2022. That took Chandler’s $154 million debt down by almost 13%.
“The decision on whether to borrow or pay cash for various large projects is really a case-by-case, in-the-moment decision,” Lang said. “A lot depends on which interest rates can be locked in.”
The city imposes a general tax rate of 1.5%, a restaurant and bar tax of 1.8%, utility and telecommunications rate of 2.75% and transient lodging tax of 2.9%. These rates are in addition to state or other taxes that help determine how much customers pay on each transaction.
Kevin Lair, the city’s transportation manager, said the street maintenance budget is funded mainly through the city’s capital improvement fund, but does also get a small percentage from general funds as well.
There are almost 30,000 traffic signal lights in Chandler, spread across 238 signal-controlled intersections. There are almost 2,100 miles of city-maintained streets, with a priority list as part of Chandler’s capital improvement program.
We’d like to invite our readers to submit their civil comments, pro or con, on this issue. Email AZOpinions@iniusa.org.
Jason W. Brooks is a News editor for the Daily Independent and the Chandler Independent.
He covers the Chandler area for both yourvalley.net and the monthly print edition while writing for and assisting in the production of the Daily Independent.
Brooks is a well-traveled journalist who has documented life in small American communities in nearly all U.S. time zones.
Born in Washington, D.C. and raised there and in suburban Los Angeles, he has covered community news in California, New Mexico, Arkansas, Iowa, Nebraska and northern Arizona.
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