By Richard Smith
The Surprise City Council will have its first discussion of the City Manager’s Recommended Budget for fiscal year 2018 during its Tuesday work session.
It is the second item on the agenda for that meeting, which begins at 4 p.m. The council is schedule to approve the tentative budget, which will set the spending ceiling, at its May 2 meeting.
During four work sessions in February and March, the city’s finance staff went over some general aspects of the budget. Unlike last year with public safety jobs, no area of concentration for new hires was specified.
Two topics, however, stood out during those discussions.
Surprise had a $53 million capital improvements budget in fiscal year 2017. While the 2018 amount was not released until Tuesday, budget director Jared Askelson said it should be in the same ballpark.
City departments presented a $192 million list of projects that will be priorities in the next decade. Some of those will have to finish sooner, though, due to the timing of impact fee funding.
Portions of three projects are tied to impact fee funding that runs out Jan. 1, 2020. They are:
- Road improvements on 163rd Avenue from Grand Avenue to Jomax Road, $2.4 of the $2.5 million in impact fees for the $11.3 million project.
- A third library in the city (at an unspecified location), $4.6 million of a $10 million project.
- A new public works yard — a project in the failed 2016 bond — has $7.2 million in impact fees for the $11.8 million project.“I think that’s an important thing that we need to consider this year. Next year is pushing it. I’d hate to lose that,” Vice Mayor Todd Tande said during the March 21 work session.
In February, Finance Director Lindsey Duncan said a confluence of four factors with the public safety retirement system will cause an additional cost that is the greatest pressure on the fiscal year 2018 budget. She said filling these gaps will cost an additional $3 million.
“We see this year a higher contribution required for our public safety retirements than we saw in past years. The first piece of that was the proposition approved by voters last spring that changed the way the public safety retirement plan works,” Ms. Duncan said during the Feb. 7 meeting.
“Another component is the returns we are getting from the monies that were invested in that fund. It anticipated in the plan a 7.5 percent return. In reality they’re seeing a .7 percent return. Which requires us to make greater contributions to fill that gap.”
Also, the demographics of the Surprise public safety force have changed. A number of retirements in recent years leaves the city with more to support.
Finally, a court ruling on prior reforms to the public safety retirement system, finding some aspects unconstitutional, will cause about $1 million of the expense.