Financial Context Memo for Capital Improvement Program Discussion

City Manager’s Office
10000 North El Mirage Rd., El Mirage 85335
623-972-8116; TDD 623-933-3258
www.elmirageaz.gov
MEMORANDUM
TO: 
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM:
J. CRYSTAL DYCHES, CITY MANAGER
DATE: 
FEBRUARY 9, 2026
SUBJECT:
FINANCIAL CONTEXT FOR CAPITAL IMPROVEMENT PROGRAM (CIP)
DISCUSSION
PURPOSE
This memorandum provides a summary of the City of El Mirage’s audited financial and operational
results from fiscal year 2019 through fiscal year 2025. It highlights key financial outcomes,
explains fiscal policies adopted by the City Council, and shows how those policies supported
service delivery and capital investment over time.
The memorandum is included as background information for the City Council’s Capital
Improvement Program (CIP) Worksession to help establish a shared understanding of the City’s
overall financial condition and long-term financial trends. It is not intended to recommend or
advocate for specific projects, funding decisions, or spending levels, and no Council action is
requested.
The information presented is based on audited Annual Comprehensive Financial Report (ACFR)
data and is intended to serve as a long-term record of the City’s financial stewardship.
EXECUTIVE SUMMARY: FISCAL YEARS 2019–2025
The following highlights summarize the City’s audited financial outcomes over seven fiscal years
and provide context for upcoming capital planning discussions. The City of El Mirage strengthened
its financial position while lowering the property tax burden, expanding services, and reinvesting in
infrastructure without issuing new (net) long-term debt. Outcomes include:
•
The direct property tax rate declined from $3.96 to $2.79 per $100 of assessed valuation,
reflecting six consecutive rate reductions.
•
Net position (the City’s long-term assets minus liabilities) increased from $135,892,786 in
FY2019 to $249,719,720 in FY2025, an increase of $113,826,934. Net position reflects long
-term assets like roads and buildings, not money available for day-to-day spending.

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•
General Fund total fund balance increased from $33,516,918 in FY2019 to $94,397,828 in
FY2025, an increase of $60,880,910.
•
Debt per capita declined from $1,244 in FY2019 to $704 in FY2025, a reduction of $540 per
resident.
•
General obligation bonds outstanding declined from $23,780,971 in FY2019 to $15,531,699
in FY2025, a reduction of $8,249,272.
•
Capital investment totaled $47,263,000 from FY2019 through FY2025, primarily funded on
a pay-as-you-go basis.
OVERVIEW
From FY2019 through FY2025, the City of El Mirage strengthened its financial position while
continuing to deliver core municipal services, expand service levels, and reinvest in public
infrastructure. These outcomes were achieved through structurally balanced budgets and the
consistent application of Council-adopted financial policies.
These results reflect sustained policy discipline over multiple budget cycles rather than short-
term actions, one-time revenues, or temporary economic conditions.
Over this period, the City improved long-term financial capacity, increased liquidity, reduced
outstanding debt, and preserved affordability for residents while accommodating growth and
rising service demands. This approach allowed the City to address deferred infrastructure needs
and improve operational resilience without compromising fiscal stability.
The trends summarized in the following sections are based on audited Annual Comprehensive
Financial Report (ACFR) data and illustrate how individual financial metrics work together to
support long-term service delivery and policy flexibility.
SUMMARY OF FINANCIAL OUTCOMES (FY2019–FY2025)*
Financial Indicator
FY2019
FY2025
Change
Net Position
$135,892,786
$249,719,720
↑ $113,826,934
General Fund Total Fund Balance
$33,516,918
$94,397,828
↑ $60,880,910
Debt Per Capita
$1,244
$704
↓ $540

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Direct Property Tax Rate (Per $100 Assessed
Value)
$3.96
$2.79
↓ $1.17
General Obligation Bonds Outstanding
$23,780,971
$15,531,699
↓ $8,249,272
*Figures are based on data from the audited Annual Comprehensive Financial Report (ACFR).
UNDERSTANDING THE FINANCIAL TRENDS
The City’s fiscal progress from FY2019 through FY2025 is best understood by examining multiple
financial indicators together rather than any single metric in isolation. Changes in financial
position, reserves, tax policy, debt levels, and revenue composition reflect sustained policy
direction and disciplined financial management applied over multiple budget cycles, not short-
term actions or one-time revenue events.
The financial trends discussed in this memorandum are organized around four core areas:
•
Financial position and reserves – long-term capacity and liquidity.
•
Affordability and tax policy – changes in the property tax rate and tax base.
•
Debt reduction and long-term capacity – liability management and future flexibility.
•
Revenue structure and sustainability – diversification, growth, and exposure to economic
cycles.
Each area is discussed separately below, with charts and tables used to illustrate multi-year
trends audited.
FINANCIAL POSITION AND RESERVES
Net Position
Net position represents the City’s total assets minus total liabilities, reported on a full accrual
basis. From FY2019 through FY2025, the City of El Mirage’s net position increased from
$135,892,786 to $249,719,720.  Net position is similar to a household’s total wealth, including the
value of a home and vehicles, not the balance in a checking account.
This change reflects the combined effect of:

Ongoing investment in capital assets.

Planned reduction of long-term liabilities.

Structurally balanced operations over multiple fiscal years.
Net position is not a measure of spendable cash. Instead, it is an indicator of long-term financial
strength and capacity to support services and infrastructure over time.
Chart 1:  Net Position Growth (FY2019-FY2025)

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This trend reflects sustained capital investment, disciplined liability management, and
structurally balanced operations over multiple budget cycles, rather than short-term valuation
changes or one-time revenues.  All charts reflect audited Annual Comprehensive Financial Report
(ACFR) data and are presented to illustrate multi-year trends rather than annual volatility.
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
$300,000,000
$250,000,000
$200,000,000
$150,000,000
$100,000,000
$50,000,000
$-
$135,892,800
$151,445,200
$168,789,600
$180,701,600
$197,753,000
$225,552,200
$249,719,700
Net Position Growth (FY2019–FY2025)
Net position increased by $113.8 million
General Fund Reserve Policy and Governmental Fund Balances
The City maintains a Council-adopted General Fund reserve policy that establishes a minimum
reserve target of approximately $13 million to support operational stability, liquidity, and risk
management. Amounts reported above this policy level reflect fund balance timing, conservative
revenue forecasting, and multi-year financial planning, rather than excess or uncommitted
reserves.
The General Fund total fund balance increased from $33,516,918 in FY2019 to $94,397,828 in
FY2025. Throughout this period, the City maintained reserves above the adopted policy threshold
while continuing to fund operations, deliver services, and plan for long-term needs. As of June 30,
2025:
• Unassigned General Fund balance totaled $94,307,453.
• Total combined governmental fund balances totaled approximately $111 million.

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The unassigned General Fund balance represented approximately 235 percent of annual General
Fund expenditures, reflecting cumulative results over multiple years of disciplined financial
management rather than an annual spending target. These balances are not intended for routine
operating use and function as financial stabilization resources, similar to a household emergency
fund, to support service continuity over time.
Reserve growth resulted from conservative revenue forecasting, controlled expenditure growth,
and the consistent application of Council-adopted financial policies across multiple budget
cycles. Strong reserve levels protect residents from service disruptions during economic
downturns, reduce reliance on long-term debt, and help avoid sudden tax or fee increases in
response to emergencies or revenue volatility.
Chart 2: General Fund Total Fund Balance (FY2019-FY2025)
This trend illustrates multi-year reserve accumulation resulting from conservative revenue
forecasting, controlled expenditure growth, and the consistent application of Council-adopted
financial policies.
$100,000,000
$90,000,000
$80,000,000
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
$0
FY2019
FY2025
$33,516,920.00
$94,397,820.00
General Fund Growth (FY2019–FY2025)
General Fund: Total Fund Balance
Reserve Policy $13M
Long-Term Liabilities
During the same period, the City reduced total outstanding governmental debt from $43,668,001
in FY2019 to $26,670,523 in FY2025, a reduction of $16,997,478. This reduction reflects

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scheduled amortization of existing obligations and the absence of new net long-term debt
issuances.
Between FY2019 and FY2025, the City also reduced its combined net pension and other
postemployment benefit (OPEB) liability from approximately $18.6 million to $15.0 million, making
long-term retirement obligations more secure and posing less financial risk to future budgets. This
improvement was driven primarily by a reduction in Public Safety Personnel Retirement System
(PSPRS) liabilities, partially offset by growth in Arizona State Retirement System (ASRS) liabilities
associated with workforce growth and actuarial factors.
The City’s long-term liability position, taken together with these results, demonstrates sustained
funding discipline and improved management of public safety retirement risk, as reported in the
audited Annual Comprehensive Financial Report (ACFR).
Audit Performance and Transparency
Throughout this period, the City maintained clean, independent audits and transparent financial
reporting practices. The City has received the Government Finance Officers’ Association
Certificate of Achievement for Excellence in Financial Reporting for 14 consecutive years, as well
as the Distinguished Budget Presentation Award for five straight years.
AFFORDABILITY AND TAX POLICY
Property Tax Rate Reductions
From FY2019 through FY2025, the City reduced the direct property tax rate from $3.96 to $2.79 per
$100 of assessed valuation, reflecting six consecutive year-over-year rate reductions.
These reductions occurred while the City maintained structurally balanced budgets, sustained
service delivery, and continued capital reinvestment, demonstrating that affordability
improvements were achieved alongside financial stability rather than at the expense of either.
Chart 3: Direct Property Tax Rate (per $100 Assessed Valuation) (FY2019–FY2025)
This chart reflects six consecutive year-over-year reductions in the direct property tax rate
achieved while maintaining balanced budgets, service delivery, and ongoing capital reinvestment.

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FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
$4.50
$4.00
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$-
$3.96
$3.74
$3.68
$3.39
$3.21
$2.98
$2.79
Property Tax Rate per $100 (Combined)
Tax Burden Distribution
Over the FY2019–FY2025 period, the composition of the City’s property tax base shifted as
assessed valuation increased across residential, commercial, and industrial property classes. As
non-residential valuation expanded, the residential share of total property tax collections declined
from approximately 64 percent to 59 percent.
This shift reflects changes in the underlying tax base rather than changes in the tax rate applied to
residential property. Growth in non-residential valuation supported revenue capacity while
allowing the City to reduce the direct property tax rate.
DEBT REDUCTION AND LONG-TERM CAPACITY
Debt per Capita
Between FY2019 and FY2025, outstanding debt per capita declined from $1,244 to $704, a
reduction of $540 per resident. This change reflects the scheduled retirement of existing
obligations and the management of liabilities over multiple fiscal years.

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Chart 4:  Outstanding Debt per Capita (FY2019-FY2025)
This trend reflects the planned amortization of existing obligations over time rather than
population growth or one-time debt restructuring actions.
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
$1,244
$910
$1,066
$949
$862
$805
$704
Debt Per Capita
Reduced by 43% from FY2019 to FY2025
Lower debt per capita reduces financial risk and improves future flexibility.
Outstanding Debt Levels
Over the same period, general obligation bonds outstanding declined from $23,780,971 in FY2019
to $15,531,699 in FY2025, a reduction of $8,249,272. Total outstanding governmental debt
declined over the period as existing obligations were retired in accordance with adopted
repayment schedules.
Legal Debt Margin and Borrowing Capacity
As a result of declining outstanding debt and growth in assessed valuation, the City retains a
substantial legal debt margin under state limits. This preserved capacity provides future flexibility,
if needed, but does not represent a current plan to issue new debt.

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REVENUE STRUCTURE AND SUSTAINABILITY
Revenue Mix Trends
Between FY2019 and FY2025, the City experienced growth and diversification in its major revenue
sources. Transaction Privilege Tax (TPT) collections increased from $8,538,740 in FY2019 to
$19,576,235 in FY2025, reflecting increased economic activity and expansion of the local tax
base. Because sales tax revenues fluctuate with the economy, the City maintains strong reserves
to protect services during downturns.
During the same period, property tax revenues remained relatively stable, reflecting the combined
effect of declining tax rates and increasing assessed valuation.
By FY2025, TPT revenues exceeded property tax revenues by a wider margin than in FY2019,
reflecting a shift in the composition of the City’s revenue structure rather than a reduction in
property tax capacity.
Chart 5: Major Tax Revenues: Property Tax and Transaction Privilege Tax (FY2019–FY2025)
This trend illustrates growth in economic activity and diversification of the City’s revenue
structure, with transaction privilege tax revenues increasing faster than property tax revenues over
the period.
2019
2020
2021
2022
2023
2024
2025
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
Tax Revenue FY2019 to FY2025
Property Tax Revenues (Govtl Funds)
TPT Collections (All Categories Total)

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Property tax revenues remained relatively stable over the period, reflecting a deliberate
affordability policy rather than a decline in capacity.
Economic Sensitivity and Risk Management
As the City’s revenue structure has diversified, a greater share of ongoing revenues is derived from
economically sensitive sources, particularly transaction privilege taxes. While this diversification
supports revenue growth, it also introduces greater exposure to economic cycles and external
market conditions.
To manage this risk, the City has maintained strong General Fund reserves, preserved property tax
levy authority, and applied conservative revenue forecasting practices. These fiscal guardrails are
intended to provide stability during economic downturns and to absorb revenue volatility without
immediate service reductions or reactive policy changes.
This approach reflects a deliberate balance between leveraging economic growth and maintaining
long-term fiscal resilience.
CAPITAL INVESTMENT AND COMMUNITY IMPACT
Capital Investment Strategy
These investments represent visible improvements residents can see, use, and rely on every day.
From FY2019 through FY2025, the City delivered approximately $47.3 million in capital
improvements, reflecting cumulative annual capital activity across adopted capital programs and
audited financial results. This figure demonstrates cumulative capital outlays over the period and
is distinct from the total value of capital assets reported on the City’s Statement of Net Position.
These investments were primarily funded on a pay-as-you-go basis and aligned with Council-
adopted priorities focused on infrastructure preservation, service reliability, and public access.
Capital planning emphasized sequencing projects to match available resources, minimize long-
term financial risk, and integrate capital delivery with ongoing operational capacity.  The following
examples are illustrative and not exhaustive.
Community Facilities and Services
Capital investments and related operational improvements supported expanded and improved
community services, including:

Adaptive reuse of a former fire station into a public library facility exceeding 7,000 square
feet.

Senior Center renovations and expanded programming capacity.

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
Construction of a new Public Works facility to improve operational efficiency and service
response.

Relocation of the Utility Customer Service Center to improve public access and customer
service.

Development of Veterans and Police Honor spaces.
These investments prioritized maximizing the use of existing assets and facilities while improving
service access and functionality.
Infrastructure Systems Preservation
Capital investments prioritized preservation and long-term reliability of core infrastructure
systems, including:

Preservation or improvement of more than 150 lane miles of roadway.

Dysart Road widening and regional connectivity improvements.

Replacement of more than 4,000 linear feet of water and wastewater infrastructure.

Drainage, traffic signal, and intelligent transportation system improvements.

Confirmation of a 100-year Assured Water Supply, supporting long-term growth and
reliability.
Operations, Fleet, and Technology
Operational capacity was strengthened through targeted capital and technology investments,
including:

Fleet and equipment replacement across Police, Fire, Parks, Water, and Public Works.

Technology upgrades supporting cybersecurity, disaster recovery, fiber connectivity, and
online services.

Expanded public access through live-streamed Council meetings, digital budgeting tools,
and online permitting.
MEASURABLE COMMUNITY OUTCOMES
Fiscal discipline supported measurable operational and community outcomes, including:

Fire emergency response times averaged approximately 4 minutes and 30 seconds.

Annual response to approximately 12,000 police calls and 4,500 fire incidents.

An estimated 2,300 jobs were created, with additional development in the pipeline.

Facilitation of an estimated 1.2 million square feet of industrial and commercial
development since 2020.

Expanded access to parks, recreation, library, senior, and community services.

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CHALLENGES AND FISCAL GUARDRAILS
The City’s financial position is strong, but it is not automatic. Sustaining progress will require
continued fiscal discipline as the community grows and service expectations evolve.
Looking ahead, growth will require periodic evaluation of service levels, capital timing, and
funding strategies, including the appropriate balance between pay-as-you-go financing and
selective long-term borrowing as infrastructure ages and operational demands increase.
Considerations include:

Greater exposure to economic cycles due to increased reliance on transaction privilege tax
revenues.

Continued growth driving demand for services and infrastructure.

Affordability pressures are associated with rising property values, despite declining tax
rates.

Potential volatility in state-shared revenues resulting from economic conditions or
legislative changes.
Fiscal guardrails currently in place include:

Adopted reserve policies supporting long-term stability.

Preserved property tax levy authority.

Reduced outstanding debt and retained borrowing capacity.

Multi-year financial planning and capital improvement programming.
CONCLUSION
These outcomes reflect sustained fiscal discipline and the consistent application of Council-
adopted policies across seven consecutive budget cycles. As a result, the City is positioned to
plan for the future from a place of financial capacity rather than constraint. This allows future
Councils to focus on community priorities rather than crisis-driven financial decisions.
Source: City of El Mirage Annual Comprehensive Financial Reports (FY2019–FY2025). Figures
reflect audited results.