Budget Workshop #1 FY 2022-23 Presentation

Council Conference Room
Thursday, February 10, 2022 | 4:30 p.m.
FY 2022-23 
Budget Workshop #1

• Financial Considerations 
• FY 2022-23 Budget
• FY 2022-23 Preliminary Budget
• General Fund Forecast Inflows and Outflows
• Public Safety Personnel Retirement System 
(PSPRS) 
• Capital Improvement Plan (CIP)
• Property Tax Discussion
• Key Budget Dates
• Closing remarks
Agenda

Financial Considerations

FY 2022-23 Budget Theme
Staying Connected
Our Brand
A safe, diverse, equitable and inclusive community that 
connects people, chooses innovation and inspires excellence

Strategic Framework Guides 
Our Decision Making
•Being the Most Connected City
•Being a Leader in Trust and Transparency
•Maintaining Fiscal Sustainability
•Attracting a Range of Private Sector Businesses
•Fostering a Contemporary Culture that 
Embraces Unity
•Being Safe and Beautiful
Strategic Policy Goals
Focus Areas
•Economic Vitality
•Innovation and Technology
•Mobility
•Neighborhoods
•Quality of Life

FY 2022-23
Financial Considerations
Economy has mostly recovered 
from COVID-19 impacts, however 
hyper-inflation is reducing gains
Growth of sustainable (ongoing) 
revenue is being reset following 2 
years of artificially reduced 
projections
Development revenues continue 
contributing one-time to General 
Fund, at a higher rate
Potential State legislative and/or 
Federal actions may threaten or 
enhance City revenues, and federal 
grants are driving projected 
expenditures up (ARPA, ERA, etc.)

• Chandler maintained AAA Bond Ratings from 
Moody’s, Fitch, and S&P rating agencies
•
Continue adherence to all fiscal policies
•
Continue pay-down of pension obligations
•
Re-affirmed October – November 2021
• Chandler is structurally balanced
•
Ongoing revenues support ongoing expenditures
•
One-time revenues support one-time expenditures
• Chandler maintains strong reserves
•
15% General Fund contingency reserve
•
Budget Stabilization Reserve at a minimum of $10M
• Chandler manages expenditures to meet service 
demands
•
Maximize grant opportunities
•
Weigh positions vs. contracting
•
Ensure service continuity through various staffing solutions 
•
Bond election passing also drives spending totals/projections
Sound Budgeting Practices  
Support Financially 
Sustainable Goals

Strong Fiscal Foundations
Move Us Forward
• Operating Management*
• Capital Management*
• Reserves 
•*(Updated May 28, 2020)
Financial Policies
(*Revised and adopted by 
Council January 14, 2016)
• Debt Management*
• Long-Range Financial Planning*
• Grant Management*
• Investment*
• Accounting, Auditing, & 
Financial Reporting*
• Pension Funding 
•
(Updated annually, last     
April 19, 2021)

General Fund 
Inflows and Outflows

Annual General Fund 
Revenues and Expenditures
Annual Inflows
Annual Outflows 
85% Local taxes and licenses and 
State shared revenues
6% Charges for services (i.e., parks, 
rec., building, planning, library)
3% Misc. Receipts (i.e., Interest Inc., 
fines, leases, surplus sales)
6% Property tax and Indirect costs
77% Personnel (Wages/Benefits)
16% Ongoing Base Budget             
(i.e., Ops./maint., supplies, utilities)
5% One-time decision package needs 
(i.e., consultants, pilot programs)
2% Transfers to replacement funds
If Revenues exceed Expenditures, General Fund Balance increases

Ongoing & One-Time Local Sales Tax Revenues
56% of General Fund
Budget set artificially 
low during COVID
Ongoing levels reset 
for FY 2022-23
One-time sales tax 
revenues fluctuate 
due to economic 
volatility

State Shared Revenues (in Millions)
COVID impacted 
Urban Revenue with 
continued increases 
anticipated in other 
categories 
29% of General Fund

Preliminary FY 2022-23 Revenue Takeaways
•
Recognizing significant development 
impacts to tax base
•
Revenue budget set artificially low 
during COVID as precaution 
•
Resetting ongoing to capture actual 
sustainable revenues
•
Some revenue growth is a result of 
increased inflation

FY 2021-22
FY 2022-23
Ongoing
One-time
General Fund Requests 
$11.1M
*Prior Year $6M
Total Fund Requests $16.3M
General Fund Requests $12.6M
Total Fund Requests $13.7M
Requests just to maintain service levels are higher this 
year due to inflation
81%
84%
Expenditures
“Outflows”
Prioritize Ongoing Demands
(Maintain > Enhance > New)
$16.4M       $11.6M 
$2M
All Funds

Focus on 
Chandler’s 
Workforce
1,702.75 FTE
Class and 
Comp
Recruitment
Health Care 
Costs
Professional 
Development
Succession 
Planning
Wellness
Work 
Flexibility -
Balance
Mental 
Health
Workers Comp 
& Safety
Contract 
vs. 
Employee
Mentoring
Position counts 
have decreased 
while 
population has 
increased
Contract 
labor used 
to sustain 
services

Citywide Inflationary Impacts
•
Water utilities in parks and on street medians
•
Water/Wastewater chemicals
•
Equipment and vehicles
•
Emergency dispatch fees
•
Contracts such as animal control, detention/jail rates, street maintenance
•
Technology contract services and software licensing
•
Health Care and Risk Self Insurance costs 
•
Temporary employee costs
•
Capital construction and related professional services
•
General operational costs

Priorities for One-Time Dollars
Continue 
Reduction of 
Pension Debt
Replenish 
Reserves
Operations  
& 
Maintenance
Maintain 
Existing 
Capital
New
Capital

Public Safety Personnel 
Retirement System Update

PSPRS Unfunded Liability 
Pay-Down Benefits
• GOOD NEWS – Finally!
• Started with 20-year amortization, and now have 15 years remaining
• Continuing additional payments has reduced liability and rates for FY 2022-23

PSPRS Actuarial Report
Results 6/30/21
Unfunded Liability decreased $17.2M 
from Prior Year’s total of $171M
Employer Fire and Police contribution 
rate reductions resulted in savings of 
$660K over prior year
Normal portion 
of contribution 
30%
Unfunded liability 
portion of 
contribution 
70%
Police
$102.8M
Fire
$  51.1M
Total
$153.9M

PSPRS  Net Unfunded Liability Balances Update
June 2020
June 2021
Difference
% Change
Chandler
$171M
$154M
-$17M
-11.04%
Gilbert
$42M
$27M
-$15M
-55.56%
Glendale
$290M
$284M
-$6M
-2.11%
Mesa
$691M
$696M
$5M
0.72%
Peoria
$109M
$104M
-$5M
-4.81%
Phoenix
$3.38B
$3.39B
$11M
0.34%
Scottsdale
$216M
$211M
-$5M
-2.37%
Tempe
$343M
$338M
-$5M
-1.48%

PSPRS Employee/Employer Rates Comparison
Fire
43.50%
22.90%
49.20%
52.90%
35.60%
61.00%
17.70%
76.20%
41.67%
21.20%
53.70%
56.17%
36.86%
63.29%
21.35%
83.35%
39.68%
21.70%
55.77%
58.05%
34.50%
63.38%
23.41%
83.87%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Chandler
Gilbert
Glendale
Mesa
Peoria
Phoenix
Scottsdale
Tempe
Employer- FY 20-21
Employee- FY 20-21
Employer- FY 21-22
Employee- FY 21-22
Employer- FY 22-23
Employee- FY 22-23

PSPRS Employee/Employer Rates Comparison
Police
49.10%
32%
53.70%
54.80%
45.20%
65.80%
55.80%
71%
49.12%
24.21%
58.95%
56.89%
47.23%
67.32%
59.02%
75.95%
47.61%
19.55%
63.67%
60.24%
48.44%
73.34%
63.27%
83.38%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Chandler
Gilbert
Glendale
Mesa
Peoria
Phoenix
Scottsdale
Tempe
Employer- FY 20-21
Employee- FY 20-21
Employer- FY 21-22
Employee- FY 21-22
Employer- FY 22-23
Employee- FY 22-23

PSPRS Contributions in 
FY 2021-22 One-Time Forecast
Recommend  
continuing planned 
commitment of 
additional annual 
one-time payments 
to reduce PSPRS 
pension liability
Anticipate update 
using increased one-
time funds available 
when setting FY 
2022-23 budget

Capital Improvement Plan 
(CIP)

Fiscal Foundations –
Staying Connected
Current 10-Year CIP Council Guidelines
• Minimize increase in property taxes
• Maintain, enhance, or re-imagine 
existing infrastructure
• Finish planned construction of 
streets, parks, fiber and utility 
systems
• Prior to adding capital, ensure 
related ongoing O&M can be 
supported
• Utilize master plans to guide long-
term capital investment

Continued Focus on 
Chandler’s Aging Infrastructure
Maintaining 
high quality 
of life for our 
275,987 
residents
65 square 
miles
2,090 miles
of streets
29,500
Street lights
230 
signalized
intersections
1,232 miles 
of potable 
water lines
945 miles 
of sanitary 
sewer
68 developed 
parks 
(1,289 acres)
48 lighted 
fields
51 
municipal 
buildings
781 fleet 
vehicles/
trucks
30 
operating 
wells

Capital Projects 
Under Review
in the 10-Year Plan
•
Various community/regional park improvements
•
Remaining arterial street projects, Alma School, 
Ocotillo Road and Chandler Heights Road projects
•
Existing street, park, facility and utility infrastructure 
maintenance 
•
Technology and fiber projects
•
Public Safety projects and maintenance or 
replacement of capitalized equipment
•
Fire Station 2 construction
•
Critical Airport needs, including Cooper Road 
collector
•
Utility infrastructure rehab/replacements
Leaving secondary tax rate flat at 
$0.87 with a 4% estimated increase 
in assessed value, generates $1.1M 
for debt service on bonds
A successful bond election was held to support all 
the projects in the current year CIP

Preliminary Property 
Tax Discussion
Assessed Values 
Not Yet Received

Property Tax Rate Comparison
FY 2021-22
(per $100 of Assessed Valuation)
0.9896
1.0081
1.1126
1.1319
1.4400
1.7257
2.1196
2.3668
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Dollars
* Do not have a primary property tax rate, only secondary rate

31
Impact of FY 2021-22 Tax Rate Reduction 
on Median Value Homeowner
Anticipate Assessed Values for FY 2022-23 by 2nd week in February

Breakdown of $1 of Typical Chandler Property Tax Bill
City of Chandler 
9.8 cents
Public Schools and 
Community College 
Districts 
67.5 cents
Maricopa County 
& Special Districts
22.7 cents
*Based on 2020 Tax Bill information. Exact split will vary depending on the 
school district and any other special taxing districts on the bill.

33
• Maintain Secondary Rate since bond election 
anticipated increase in assessed values
• Lower Primary Rate to offset appreciation in 
assessed values, leaving new property growth
• Primary Rate will be continuously evaluated until 
Tentative Budget adoption and can be revisited if 
revenue needs change
Property Tax Policy Recommendation

Key Budget Dates
Budget Event
Date
Council Budget Kickoff 
Completed
Citizen Budget Survey 
Completed
Council Workshop #1
Tonight
Budget Advancement of Strategic Framework Outreach Videos 
Early March
Council Workshop #2
03/24/2022
All Day Budget Briefing
04/29/2022
Council Meetings 
Amendment Discussion
05/12/2022
Tentative Adoption
05/26/2022
Public Hearing and Final Adoption 
06/09/2022
Adoption of Tax Levy
06/23/2022

Questions?