Sedona city staff have released the city’s proposed budget for fiscal year 2023-24, and the city council discussed the budget on Wednesday and Thursday, June 14 and 15, beginning at 8 a.m. at city hall.

Members of the public were limited to two minutes per person for public comment rather than three and the public comment period as a whole was limited to 30 minutes.

The budget memo states that FY 24 expenditures will come to $84.7 million against projected revenues of $67 million, although the sum of the individual department budgets and sums allocated to capital improvement projects is $91.6 million — $57 million in departmental expenditures and $34.6 million in capital improvement projects. The Sedona Red Rock News reached out to city staff to clarify this difference but did not receive a response by press time.

City communications manager Lauren Browne later claimed that the discrepancy in the sums was due to the inclusion of internal charges such as indirect cost allocations and reserve contributions in each of the departmental budgets, which would result in duplication of costs and the addition of non-expenditure items when the departmental budgets are totaled.

Tentative budget adoption is scheduled for July 11 and final adoption for Aug. 8.

Incoming

City revenues for FY 24 are estimated to be $66,956,000.

Predicted sales tax revenues are $30.38 million, down 17% from 2023’s budget expectation of $36.57 million, while predicted bed tax revenues are $8.03 million, down 22% from 2023’s budget.

The city’s 2022 sales and bed tax collections were $28.16 million and $8.94 million respectively, and total tax collections were $38.51 million.

The city also estimates it will receive $9.08 million in miscellaneous ongoing revenues, $6.27 million in wastewater fees and $5.83 million in state shared revenues. Miscellaneous one-time revenues are expected to total $6.58 million.

City staff plan to transfer $25,188,000 from accumulated fund balances in order to bridge the gap between revenues and expenditures. The majority of this amount, $13.77 million, will come from the capital improvements fund, with $4.28 million being transferred from the wastewater fund, $3.5 million from the development impact fee fund and $3.38 million from the transportation sales tax fund.

Wastewater

Wastewater operations spending is budgeted at $5,621,280. With planned spending of $5,616,885 for sewage plant-related capital improvements, total FY 24 spending on the city sewer system will be $11,238,165.

Parks and Recreation

The proposed FY 24 operating budget for parks and recreation is $1,380,030. Parks and recreation capital project spending is budgeted at $3,826,530, for a total of $5,206,560. In addition to $2,271,210 for the Ranger Station Park buildout and improvements and $1.5 million for new pickelball courts, the parks capital budget includes $55,320 for dog park improvements.

Police

Sedona’s police department is to receive its largest budget in the city’s history at $9,497,800, plus another $215,800 in capital project spending on new radios for a total of $9,713,600.

According to the draft budget, the Sedona Police Department is expecting to make 595 arrests in FY 24.

Transit

The city’s transit operations budget for FY 24 will be $2,964,510, plus another $1,781,370 in capital improvements for a total of $4,745,880. Almost all of the capital project spending will be divided between $800,000 for beginning construction on a transit maintenance and operations center [estimated to eventually cost $22 million] and $856,370 for bus acquisition.

Staff will be requesting that council approve a decision package to allocate $64,500 to install TVs in the five Sedona shuttle buses.

Municipal Court

The city court budget for the coming year will be $998,960, plus $78,700 for capital spending on court relocation and remodeling, totaling $1,077,660.

In FY 22, the court handled a total of 275 criminal charges. Year-to-date revenues for FY 23 as of the time the budget was prepared were $155,805.

Sustainability

The sustainability department will receive $902,950 for its operations budget and $451,800 for capital improvements for a total of $1,354,750. Sustainability capital spending will consist of:

• $181,800 to retrofit streetlights with LED bulbs
• $150,000 for a decarbonization road-mapping plan
• $120,000 to install solar lights at Posse Grounds Park

The department’s tasking for the upcoming year includes expanding electric vehicle charging infrastructure and increasing the number of electric vehicles in the city fleet, providing projects for home energy retrofits, creating community composting and developing on-site renewable energy projects, but the draft budget does not include any funding tied to these projects.

Council will have the opportunity to approve a $15,000 decision package to create a city community garden.

Public Works

Public works will receive an operating budget of $9,080,370 in addition to $20,199,320 for Sedona in Motion projects, $935,800 for storm drainage projects and $650,000 for street improvements, totaling $30,865,490. Two thirds of its operating funding will be directed to maintenance services.

Capital projects being funded through public works will include:

• $12,923,600 for completing the Forest Road extension. In March, city staff’s estimate of the total project cost was $9.1 million.
• $3,517,020 for the SR 179 underpass
• $1.53 million for shared use paths
• $1,399,590 for Uptown northbound improvements
• $1,024,560 for the Uptown Parking Garage

Community Development

The community development department will receive $2,410,500, the majority of which will be allocated to planning.

The city expects the number of single-family home building permits granted by the department to fall to 60, down from 71 actually granted in FY 22, the number of single-family remodeling permits to fall from 177 to 130 and the number of commercial remodeling permits to fall from 96 to 55.

Housing

The draft budget calls for an allocation of $950,470 to the city’s current efforts to increase affordable housing.

Council will also have the opportunity to vote on a decision package that would allot up to $2 million to purchasing deed restrictions on existing homes. The city would pay between $60,000 and $150,000 for each restriction, which would prevent the property from being rented for less than 30 days at a time and last for a period of 99 years; the restrictions would survive any change in ownership and could only be eliminated with the city’s agreement.

Miscellany

Other budgeted items include:

• $14,454,920 under the catch-all category of general services, including $7,479,460 for capital and debt service payments and $1,674,290 for service provider contracts, including the Sedona Public Library, Sedona Historical Society and Sedona Community Center.
• $3,118,380 for information technology, including $2,518,380 for operations and capital spending of $600,000 for software replacement.
• $2,218,040 for financial services.
• $1,974,400 for the City Manager’s Office, including $1,742,400 for operations and capital spending of $232,000 for art in the roundabouts.
• $951,030 for the City Attorney’s Office.
• $542,920 for human resources.
• $465,560 for tourism initiatives, with the tourism initiatives office replacing the former Economic Development Department.
• $451,220 for the City Clerk’s Office.
• $339,080 is budgeted for the cost of City Council operations.

New Positions

The city is proposing to add three new employees:

• A police officer at a cost of $133,460
• A full-time IT helpdesk staffer at a cost of $120,710
• A permanent court clerk at a cost of $78,510

The city also plans to maintain the current temporary court clerk at a cost of $49,040 and to convert the court security officer position from part-time to fulltime at a cost of $50,250 due to a claimed “increase in sovereign citizens and First Amendment auditors.”