Tempe residents who rely on the city's water, wastewater, and transportation networks are looking at $1.85 billion in capital spending over the next five years under a plan the City Council will consider Thursday night.

The five-year Capital Improvements Program totals $1,848,183,483 for fiscal years 2027 through 2031. The current fiscal year 2026/27 appropriation within that plan is $687,540,763 — roughly $230 million in new spending plus $457 million in re-appropriated funds from prior years.

Water and wastewater projects make up the largest share. The water program alone accounts for $521.2 million over five years. Wastewater adds another $326.7 million. Together, the two utility programs represent 46 percent of the total capital plan.

Transportation is the second-largest category at $265.5 million over five years, with $92.9 million budgeted for FY27. That covers both right-of-way work and traffic signals/street lighting.

General government facilities — buildings, technology, and equipment — total $289.9 million. Park improvements are budgeted at $111 million over the five-year period, with $65.1 million in FY27 alone.

Public safety capital spending includes $82.1 million for police protection and $88 million for fire protection over five years. Transit funding totals $119.2 million, including $52.9 million in the upcoming year. Storm drain improvements are set at $19.1 million.

Arts and culture projects account for $12.3 million over five years, with $6.5 million in FY27.

Property tax increase proposed

The council will also hold a Truth in Taxation hearing required under state law when a city proposes a primary property tax levy that exceeds the prior year's, excluding revenue from new construction. Arizona Revised Statutes §42-17107 requires a public hearing and a roll call vote before a city can adopt such a levy.

The proposed property tax rate is $2.5626 per $100 of assessed valuation. City staff estimate the rate would generate $68,892,357 — $23,794,713 from the primary levy at a rate of $0.8851 per $100, and $45,097,644 from the secondary levy at $1.6775 per $100.

A separate property tax ordinance is scheduled for two public hearings: the first tonight and a second and final hearing on June 25.

The council is also expected to adopt a final FY26/27 budget resolution containing estimated expenditures for the fiscal year beginning July 1.

What comes next

The capital plan, if approved, establishes the FY27 capital budget as an appropriation. The out-year figures for FY28 through FY31 are planning estimates and will be updated annually as part of each budget cycle.

The meeting begins at 6 p.m. Thursday at Tempe City Hall, 31 E. Fifth St., with an executive session scheduled beforehand for discussion of development agreements and city-owned property dispositions.