EXHIBIT B CFD BUDGET & 5-YEAR REPORT FY 27.DOCX

Exhibit B
Page 1
RIO SALADO COMMUNITY FACILITIES DISTRICT
BUDGET AND 5-YEAR REPORT
The tentative budget presented to the Community Facilities District Board of Directors is 
comprised of two components: Capital expenses associated with the construction of the Tempe 
Town Lake and an operating budget. In 1997, the City Council and the Community Facilities 
District Board established a budget for construction of the Town Lake at $44,849,700.12 and 
estimated the first five full years of operating and maintenance expenses to be between $3,001,877 
and $3,422,133 per year.
Following the completion of the Town Lake and the audit of construction costs, the Capital project 
has been finalized at $44,849,700.12. As mandated by the Rio Salado Finance Plan, capital cost 
recovery takes place following construction and the issuance of a Certificate/Letter of Completion. 
To minimize the potential for vacant land banking, the capital assessment charged to each parcel 
within the Community Facilities District is increased by an amount equal to the rate borne by the 
bonds used to finance the lake construction (3.64%). This is also true for parcels that had existing 
structures at the time the CFD was created but do not pay the assessment unless a change in zoning 
or to the structure occurs. 
The tentative Budget for the fiscal year 2026/2027 (Exhibit F of Resolution No. CFD R2026.01) 
consists of costs associated with administration, operating the dams and recovery wells, water 
management and replacement, utilities, park and lake maintenance and security, insurance, water 
quality monitoring and treatment, and a sinking fund for future capital replacement. The tentative 
Budget for fiscal year 2026/2027 is $5,660,791, including $4,215,400 assessable to property 
owners and a maximum of $1,445,391 of carry forward capital infrastructure appropriation. 
The Rio Salado Enhanced Services Commission recommended this budget on April 21, 2026.
The table on the next page is a breakdown of the expense categories illustrating the past four years, 
the current year (2025/2026) as projected through June 30, 2025, and the tentative 2026/2027 
budget:

Exhibit B
Page 2
 
ACTUALS
CURRE
NT
PROPOSED
CFD Expense Category
2021/2022
2022/20
23
2023/20
24
2024/202
5
2025/202
6
2026/2027
Administration/Project Mgt
$449,520 
$459,49
2 
$486,36
0 
$535,164 
$550,500 
$605,520 
Lake Operations
$268,061 
$223,94
6 
$326,16
8 
$452,211
$360,000 
$555,000 
Water Quality Management
$210,151 
$185,19
8 
$212,33
7 
$212,918
$285,000 
$285,750 
Security
$441,794 
$477,88
6 
$713,43
2 
$845,092
$905,400 
$927,500 
Lake Surface, Shoreline 
 
 
 
 
 
 
          Cleanup, & 
Landscaping
$477,620 
$652,57
5 
$610,79
2 
$691,329
$668,500 
$734,000 
Electricity
$117,702 
$126,22
1 
$130,32
6 
$139,836
$175,000 
$160,000 
Replacement Water
$156,026 
$377,66
8 
$67,781 
$307,988
$254,400 
$282,800 
Equipment
$26,908 
$51,256 
$84,700 
$84,200 
$88,370 
$88,370 
Audit
$586 
$366 
$567 
$600 
$630 
$690 
Liability Insurance Premium
$50,825 
$60,644 
$68,419 
$75,258
$82,800 
$92,870 
Capital Replacement
$670,255 
$717,80
0 
$762,35
0 
$790,000 
$850,000 
$913,400 
Capital Replacement Reserve
$2,620,08
3 
$2,621,2
38 
$2,738,1
39 
$3,009,3
60 
$2,980,8
45 
$1,445,391
   Less: CFD Fund Balance 
adjust
($200,000)
($200,00
0)
($300)
($300,00
0)
($300,00
0)
($300,000)
   Less: Projected Revenues
($212,520)
($140,49
7)
($109,04
4)
($110,00
0)
($130,60
0)
($130,500)
Security Contingency
$0 
$0 
($250,00
0)
$0 
$0 
$0 
TOTAL CFD BUDGET
$5,077,01
1 
$5,613,7
93 
$5,842,0
28 
$6,766,5
95 
$6,770,8
45 
$5,660,791 
Administration/Project Management: The budget for the administration of the Community 
Facilities District consumes 15.0% of the non-administrative costs, or $605,520. The budgeted 
amount reflects the cost of staff, materials and advertising.
Lake Operations: Lake operations include monitoring and maintaining the dams, the wells, the 
water level, and the river channel. Lake operations expenses are performed and administered by 
one and a half (1.5) City of Tempe employees. The budget has increased compared to last years’ 
budget to $550,000 due to matching previous years’ and actual projected expenses. This budget is 
based on a review of time and material expenses estimates, hydraulic oil testing, and heavy debris 
removal to be used on an as needed basis. If some of these expenses become significant due to a 
flow event in the Salt River, then contingency funding from fund balance will be used. Other 
expenses include the required reports for Arizona Department of Water Resources – Dam Safety, 
and improvements to Emergency Warning System equipment.

Exhibit B
Page 3
Water Quality Management: Aquatic Consulting provides water quality, vector control 
management services, and lake surface maintenance on the lake. The budget of $285,750 is $750 
above last year’s budget. Lake water treatments are done on an as needed basis. We continue to 
treat the lake area to address vector control.
Security: The security contract associated with the DTA provides a good amount of coverage at a 
savings. This coverage is augmented with three Park Rangers at the lake. A Police Sergeant 
continues to supervise and coordinate security needs around and on Tempe Town Lake; this cost 
is split with the Police Department between the CFD and Tempe. The budget does allow for costs 
to cover fuel and maintenance costs for two security vehicles and boat. An increase from the 
current budget to $927,500 is projected due to CPI, security personnel, and vehicle cost increases.
Lake Surface, Shoreline Cleanup, and Landscaping: The Community Services Department – 
Maintenance/Operations has submitted a “cost for service” proposal which includes park and 
landscape maintenance for the northern portion of Tempe Beach Park, the linear parks, marina, 
and bike path sweeping. Additional service improvements to the Tempe Beach Park area are 
included. These maintenance services are provided at an enhanced level in the lake area. The 
budget of $734,000 has been increased.
Electricity: The electricity budget remains the same as the current year’s budget of $160,000 based 
on an analysis of electricity used by the new hydraulic dams and the pumps in the 10 wells around 
the lake. The electricity budget covers power expenses for the 10 pump wells, the sump pump at 
the west dams, and the lights for the multi-use path on the north and south sides of the lake.
Replacement Water: The budgeted cost of replacement water increased by $28,400 from the 
current $254,400 after evaluating proposed rate increases, the projected use of contingency 
funding if there was a need to re-fill an emptied lake, and comparison to current water use 
requirements.
Equipment: The amount of the equipment replacement fund remains the same. The current year’s 
budget is $88,370 and reflects the variety of vehicles used in the CFD area. The five-year 
replacement fund to replace the remaining equipment is adjusted to recognize the effects of 
inflation. This represents the CPI for the Western region as published by the U.S. Department of 
Labor (www.bls.gov/cpi/), All Urban Consumers (CPI-U) category, from December 2024 to 
December 2025, or 2.9%. 
Audit/Liability Insurance: The annual liability insurance premium budget increased to $92,870 
based on the provider’s revised estimates to Tempe’s Risk Management. The hydraulic dam 
system helped the insurance premium be reduced from the previous rubber dam system. ADWR 
requires that the dams and infrastructure be insured. The audit expense estimate is $690 due to 
cost savings achieved by being part of the overall City audit.

Exhibit B
Page 4
Capital Replacement: A reserve for capital replacement is used to replace capital items located 
within the lake area, identified as lake edge-to-lake edge, dam-to-dam. Some buoy replacement 
and dock repairs are expected, and we anticipate the need to replace some docks. The budget for 
the capital replacement cost is increased by $913,400 due to a better understanding of the scope of 
items covered and anticipated maintenance costs associated with the hydraulic dams. The amount 
to re-appropriate from the estimated 2025/26 carry-forward balance is no more than $1,445,391.
Projected Revenues: The projected revenues (boat permits, concessions, boating classes, park 
permits) has remained the same from last year. The ability to purchase and print a permit remotely 
is a helpful factor, and the lifting of Covid restrictions may have a significant factor in the decline.
Debt Service: The City of Tempe has paid the debt service on the $40.5 million in bonds issued to 
cover the cost of constructing the lake. The capital CFD assessment on developed properties is 
ultimately repaying about 60% of that debt. 
The original bonds were based on a floating rate. For budgeting purposes a 5% flat rate was 
estimated. In 2003 the debt was fixed to an average 4% rate, and in 2012 the bonds were again 
refinanced at an average 3.64% rate. Bond repayment was completed in the 2022/23 fiscal year. 
The debt service budget and actual expenses are presented below.
CFD Debt 
Service
2019/2020
2020/2021
2021/2022
2022/2023
2023/2024
2024/2025
2025/2026
Budget
$3,044,25
0
$3,033,00
0
$2,906,88
7
$2,878,96
2
$0
$0
$0
Actual Debt 
Service Expense
$3,042,00
0
$3,033,00
0
$3,028,91
0
$2,878,96
2
$0
$0
$0
CFD Fund Balance: On January 26, 2017, a CFD fund balance policy was approved by the CFD 
Board. The policy is to assist with extraordinary expenses that are beyond normal operations, and 
to retain a fund balance between 15% and 25% of the current year’s budgeted expenses. The 
current budget of $4,250,400 indicates a fund balance of $1,053,850 at the 25% upper range. Since 
the CFD fund balance as of July 1, 2025 was $2,013,000 (currently projected $658,000). An action 
of this nature will continue until the 25% upper range has been achieved.
Summary: Overall, the CFD assessment budget proposed for fiscal year 2026/2027 is 
$425,400 more (10%) than the current year’s budget. Costs associated with security, 
maintenance, replacement water, electricity for lake and park operations are largely responsible 
for the difference between current expenses and the tentative CFD budget proposed for fiscal year 
2026/2027.