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CITY OF TEMPE Meeting Date: 5/14/2026 REQUEST FOR COUNCIL ACTION Agenda Item: 2A ACTION: Hold a public hearing to adopt a resolution adopting the fiscal year 2026/27 Tentative Budget and setting public hearings for June 4, 2026, for the following: 1) adopting the fiscal years 2026/27 through 2030/31 Capital Improvements Program, 2) holding a Truth in Taxation Hearing, 3) approving the fiscal year 2026/27 property tax levy, and 4) adopting the fiscal year 2026/27 Final Budget. Also, setting a second public hearing for the final adoption of the property tax levy rate at a meeting scheduled for June 25, 2026. (Resolution No. R2026.53) FISCAL IMPACT: The fiscal year (FY) 2026/27 operating budget totals $867,963,553, and the FY 2026/27 capital budget totals $687,540,763 for a total financial program of $1,555,504,316. RECOMMENDATION: Adopt Resolution No. R2026.53. BACKGROUND INFORMATION: The FY 2026/27 operating budget totals $867,963,553 which represents a 1.8% or $15.1 million increase from the current fiscal year (FY 2025/26) adopted budget. The operating budget includes employee compensation increases, approved operating budget supplementals, inflationary increases (e.g., fuel and electricity) and contingency appropriation. The total FY 2026/27 operating budget decreased by approximately $1.9 million from the preliminary estimate provided at the April 23, 2026, Work Study Session due to technical changes related to indirect costs and refinement of personnel estimates. The FY 2026/27 capital budget totals $687,540,763 which represents a 17.9% or $149.6 million decrease from the current fiscal year (FY 2025/26) adopted budget. The capital budget total includes both new appropriation for continuation of existing projects or new projects and re-appropriation requests for projects that are delayed or unable to be completed by the end of the current fiscal year. The total FY 2026/27 capital budget did not change from the preliminary estimate provided at the April 23, 2026, Work Study Session. The FY 2026/27 public outreach plan provided residents with information about the City’s budget and allowed them to provide input and feedback during the budget development process. The budget planning and outreach process included the following: Online Tempe Forum Regional Unity Walk Virtual and in-person forums Mayor’s Youth Advisory Commission Meeting Website and various media – Tempe Today, press releases, social media, postcard mailings The capital budget planning process included Work Study Session public meetings on February 26 and March 23, 2026. In addition, the City’s recommended operating and capital budgets for FY 2026/27 were presented at the April 23, 2026, Work Study Session. The FY 2026/27 tentative budget adoption process will establish the maximum expenditure limit (spending authority) for next year’s budget. As required by state statute, the tentative budget is presented in schedules A through G (Attachment A) and includes both the operating budget and the first 2 year (FY 2026/27) of the 5-year Capital Improvements Program (CIP). In addition, the tentative budget will be published in a newspaper of local circulation once a week for two consecutive weeks prior to the public hearing for final budget adoption. ATTACHMENTS: 1. RESOLUTION.DOCX 2. ATTACHMENT A.PDF STAFF CONTACT(S): Robert Baer, Municipal Budget Director, (480) 350-8697 Department Director: Lisette Camacho, Deputy City Manager - Chief Financial Officer Legal review by: Dave Park, Sr Assistant City Attorney Prepared by: Benicia Benson, Administrative Analyst