The Sedona City Council approved the city’s fiscal year 2025 tentative budget and expenditure limitation during its Tuesday, May 28 meeting.

At $106,155,786, it will become the largest budget in Sedona’s history, breaking the FY23 record of $105.7 million.

“On a scale of 1 to 10, if conservative is a zero, I’d say a 2,” budget and financial analyst Sterling West told the council when describing the proposed budget.

Expected Revenue

Staff projections expect sales tax revenues to increase to $28.45 million, compared to an estimate of $26.05 million for FY24, and bed taxes to increase to $9.26 million from an estimate of $8.03 million. State shared revenues are expected to decline by $672,000.

“FY24 is likely to come in much higher than this,” West said of the previous estimates, an assessment echoed by interim Finance Director Jean McGann.

Projected Spending

The city’s operating budget will increase by $5.8 million, or 11% compared to the previous fiscal year, while the amount allocated for capital improvement projects, $48.2 million, has decreased from last year. Ongoing costs for salaries and benefits are expected to increase from $18.95 million to $21.1 million, or 11%. Seven full-time staff positions have been added and six positions have been increased from part-time to full time, which will account for $965,000 of the salary increases.

Sedona in Motion capital projects, including the Uptown parking garage, currently priced at $26 million over the course of its construction, are expected to account for $11.87 million of the budget, while wastewater programs will receive an additional $3.16 million compared to FY24.

The Sustainability Department will receive an additional $102,000 for capital projects.

The police force will receive an extra $991,608.

Public transit costs are slated to increase by $450,000, and the sum allocated for producing a new master plan for the Sedona Cultural Park is $121,700.

The amount of loans the city is planning to grant to the builders of apartment complexes has also increased to $19.3 million from $18.9 million in the draft budget.

Total annual debt service charges following approval of a new issue of bonds to fund the Uptown garage will rise from $7.4 million to $8.2 million.

Council Comments

“I do struggle when I look at ongoing operational costs, ongoing personnel costs that are looking at 13% increase year over year,” Councilman Brian Fultz said. “That’s a big number and it’s outstripping revenue increases, or at least what we can expect.”

“I don’t think we need another snowplow in this town,” Fultz added; the new snowplow is budgeted at $44,800.. “Nobody goes anywhere when it snows … We shouldn’t lose this opportunity to do a little bit of belt-tightening.”

“I hear Councilman Fultz and I’m with him,” Vice Mayor Holli Ploog said. “We can’t afford any glitches. If the bed and sales tax starts to decline, where are we?”

“The more you take on, the more it’s going to cost you over time,” Councilwoman Jessica Williamson said. “There’s no way around it. Which is why the people who argue for small governments really have a point. If you don’t provide a service, it’s not going to cost you more over the years … Our priorities should reflect a vision … As long as we want more things our budget is going to go up … I have no trouble spending the money that we have … I am perfectly happy with this budget.”

“I share all of the concerns that have been said,” Councilman Pete Furman said.

“I think this is a fiscally sound budget,” Councilwoman Kathy Kinsella said. “I agree that I’m concerned … we always go on these little spending sprees … I’ve always been a voice up here for going a little more conservatively.” Kinsella added that she felt council and staff had already done a good job of reducing their priority lists.

“I’m going to vote in favor of it, but this will be the last time I’ll vote in favor of it unless we do this work,” Ploog said, referring to her desire to see council reduce its priorities further. “You can’t just keep funding huge projects forever.”

The council then voted unanimously to approve the tentative budget and expenditure limit.

City staff have currently scheduled final budget approval for Tuesday, June 25.