2023-24 CM Trial Budget Message.pdf

To: 
Mayor and City Council 
Date: 
March 16, 2023 
From: 
Jeffrey J. Barton 
City Manager 
Subject: 
CITY MANAGER’S TRIAL BUDGET MESSAGE 
Attached is the FY 2023-24 Trial Budget proposal for City Council and community 
consideration. The Trial Budget reflects broad Council and community priorities. It is an 
early look at possible allocations of resources for next fiscal year and serves as the 
beginning point for discussion, leading to a more refined proposal in May. As a result of 
the strong Phoenix economy, strategic actions taken by City Council and City 
management, along with the commitments of City employees to provide services and 
control spending, the Trial Budget reflects a $134 million General Fund (GF) surplus. 
The goal of the Trial Budget is to identify programs that build the Phoenix of tomorrow. In 
putting together this proposal, we attempt to address many issues that have been raised 
by councilmembers and the community over the last few years, without over-committing 
current and projected resources. While we find ourselves in a very favorable financial 
position, we must also recognize that the surplus contains both one-time and ongoing 
resources, and each must be carefully programmed to avoid creating structural budgetary 
challenges in the future. 
With that said, I first want to recognize the diligence and effort of City employees who 
stood on the front lines to provide vital services to our residents throughout the pandemic 
over the last three years. The City is experiencing significant vacancies across all 
departments due to a combination of the competitive labor market and below-market 
salaries for many job classifications. As a result, approximately 85 percent of the GF 
surplus in the FY 2023-24 Trial Budget is allocated to employee compensation as we 
negotiate contracts with our labor unions and associations. Competitive compensation 
allows us to continue to attract, retain and reward talented people who provide vital 
services to our residents each and every day.  
The attached Trial Budget also includes $14 million in service additions that will continue 
moving the City forward in several key priorities that have been discussed over the last few 
years. The proposed additions provide needed resources in the following areas: 
•
Continuity of Services for Vulnerable Populations - $7.4 million
•
Enhanced Public Safety Responsiveness and Criminal Justice - $3.8 million
•
Healthy Neighborhoods and Community Enrichment - $2.8 million

This year, the Trial Budget also includes $1 million that is being reserved to potentially 
address issues and challenges that are identified during Community Budget Hearings. 
Like many cities across the country, Phoenix is currently facing a significant increase in 
the number of people experiencing homelessness. As a result, the Trial Budget proposes 
that the largest programmatic investment in service additions be allocated towards 
ensuring continued service for our most vulnerable populations.  
 
In addition to the investments in the Trial Budget, City Council has also approved funding 
or directed staff to implement other projects to address this issue, including the following: 
 
• Approximately $140 million allocated for current and future shelter, rapid 
rehousing, navigation services, case management, mental and behavioral health, 
and weather respite. 
• 800 new shelter/transitional beds expected to be added by 2024. 
• 125 new affordable housing units expected to be added by 2024. 
• $63 million in planned funding for Housing, Human Services and Homeless 
Services projects in the upcoming bond program expected to go to voters in 
November 2023. 
 
The attached report from the Budget and Research Department provides additional details 
on proposed additions and detailed information about GF revenues. The FY 2023-24 Trial 
Budget is offered for feedback and will be publicly discussed between April 3 and April 15 
at the Community Budget Hearings. Residents can also view the document at 
phoenix.gov/budget and provide direct feedback at budget.research@phoenix.gov. A 
Proposed Budget will then be presented for Council consideration on May 2, 2023.