No two budgets are identical, but only minor alterations from fiscal year 2017 are present in the $336.5 million 2018 Surprise City Manager’s Recommended Budget presented in Tuesday’s City Council Work Session.
The proposal does not include a tax increase of any kind after the council extensively debated property, food and sales taxes a year ago.
Seven of 13 new full time positions proposed in this budget are covered either by grant funding, required by changes, an extension of hours for a former part time job or offset by other budget reductions.
The only new jobs attributable to the city’s initiative — six in total — are tied to the addition of a third city ambulance service, this one at at Fire Station 303 at Greenway Road and Cotton Lane. It should go into operation this fall and has been planned for two years.
“This has been a particularly tight budget, for me as city manager the tightest budget that I’ve presented to you,” City Manager Bob Wingenroth said during Tuesday’s meeting.
Finance director Lindsey Duncan said unlike recent years where the focus was on expanding city services, the financial picture dictated that Surprise largely stand pat.
For the decade-long veteran of the city finance department, this budget is somewhere in between the robust plans of recent years and the austerity budgets caused by financial mismanagement of City Hall in the early 2000s
“This is a lean year, but it’s a better position than we were during the downturn because we’re not actually making reductions. We can maintain services. We just don’t have a lot of additional capacity for additional resources or improvements,” Ms. Duncan said.
That leaves a general fund operating budget of $126.7 million, fueled by general fund sources of $106.3 million and $20.4 million of the city’s projected fun balance to begin fiscal year 2018 on July 1.
The remaining $18.3 million of the fund balance stays in reserve, in accordance with City Council policy.
Changes to the public safety retirement system and more Surprise public safety employees retiring will cost an additional $3 million of the budget.
Smaller hits will come from library operations, software licensing and maintenance and dispatching fees.
Ms. Duncan said too many months of fiscal year 2017 revenue are unaccounted for to budget anything but conservatively in that regard. She said the public safety retirement fund changes set the tone early in the process, and the operating budget got tighter as they went.
“We had a structural surplus for a number of years. Once we programmed all that surplus we want back to a balanced budget and you just don’t have a lot of opportunity for expansion,” Ms. Duncan said.
Two public safety grants (SAFER Grant and COPS Hiring Program) will partially fund a five-member Fire-Medical Peak Time Response Unit and two police officers, focused on community policing, through 2019. Technically the peak time response unit began training in fiscal year 2017, so those five positions are not included among the 13 new jobs.
The five new jobs outside public safety are scattered about. A new lead records technician is mandated by changes to federal crime reporting standards.
A youth coordinator administrative assistant position received extra hours through reclassifications in the city manager’s office, Workers in water and sewer utilities, one for each, would be added through the reduction of the operating budget.
Though listed, a construction inspector job is not new. Rather, it is the reclassification of an existing full time position.
“It is a tight budget, but utilitarian,” Mayor Sharon Wolcott said.
The recommended $49.8 million Capital Improvement Plan is notable in that it does not address three projects tied to developer impact fees that must be spent by Jan. 1, 2020. Those projects, as discussed in March, 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.
“We’re constricted by the non-growth component, which relies on us having general fund dollars in order to move forward with those. That’s where it gets tricky to program. We need to identify cash for the non-growth piece. That’s where some of them have been placed in bond questions in the past,” Ms. Duncan said.
She said the city’s revenue streams have been above projections for the early stages of fiscal year 2017, and there is a slight chance contingency funding could fill the gaps in these projects, but it is not forecast as of now.
The recommended budget has $59.7 million in contingency funding, with $22.6 million set aside for enterprise funds and $22.2 million for capital improvements.
Among the contingency funding is $274,100 if the city proposes a special bond election for this fall.
Surprise may have to be creative in other ways in the coming year. Mr. Wingenroth said he wants to set up revenue discussions in October and November, as trends show state shared revenues flattening and possibly dipping in the coming years.
“While this budget is balanced for this year, when we look out over the next three to five years, we see some financial challenges,” he said.