Meeting phoenix-pdf-2025-03-18 complete
2025-03-18 · Policy Session
Items: 4
Policy Session
Item text
Fiscal Year 2025-30 Preliminary Five-Year Capital Improvement Program
This report transmits the Preliminary Five-Year Capital Improvement Program (CIP) for
information and discussion. The City Charter requires the City Manager to submit the
Preliminary CIP prior to adoption of the final budget.
The CIP represents investments in the long-term health of the community through job
creation and economic development, responsible infrastructure maintenance,
sustainability, an assured water supply, and accelerated pavement maintenance
activities. The five-year program totals $11.5 billion, with a $2.8 billion program for
2024-25. The full report is available on the Budget and Research website at
phoenix.gov/budget.
THIS ITEM IS FOR INFORMATION AND DISCUSSION.
Summary
The five-year Preliminary CIP presented totals $11.5 billion. The first year of the
program, totaling $2.8 billion, will ultimately be updated for carryover and resource
availability and presented to the City Council for appropriation. The remainder of the
CIP is presented for responsible planning purposes and is dependent upon resource
availability.
Sources of five-year Preliminary CIP funding include $179.7 million in General Funds,
$2,279.5 million in Special Revenue Funds, $2,832.8 million in Enterprise Funds,
$386.8 million in General Obligation Bond Funds, $3,251.3 million in Other Bond
Funds, and $2,588.2 million in Other Capital Funds.
The Preliminary CIP reflects the $500 million voter approved 2023 General Obligation
Bond Program, less expenditures projected through the current 2024-25 fiscal year.
Projects and funding distribution are consistent with the General Obligation Bond
Executive Committee recommendations presented to, and adopted by, the City
Council in December 2022. $250 million in General Obligation bonds have been sold,
and the remaining $250 million is anticipated to be sold in approximately the summer
of 2026. Schedule 7 of the Preliminary CIP document provides the initial allocation of
funds by project and fiscal year. As the program progresses and costs are finalized,
this schedule will continue to reflect any proposed timing changes, and funding
reallocations in comparison to the original approved program.
The proposed program's $179.7 in General Funds and $98.5 million in General Fund-
backed excise tax bonds reflect a commitment to infrastructure and technology
investment. Substantial investments funded directly though General Funds include:
• $94.6 million in Facilities Management and Libraries for facility major maintenance
• $48.9 million in Information Technology for network, infrastructure and applications
• $24.7 million in Street Transportation and Drainage for flood hazard mitigation, cool
pavement, and Roadway Safety Action Program projects
• $6.1 million in Municipal Court for Case Management System replacement
• $2.3 million in Human Services for the Office of Homeless Solutions facility at I-17
and Northern Avenue
• $1.5 million in Economic Development to support development of the Center for
Advanced Molecular and Immunological Therapies (CAMI)
• $1.0 million in Sustainability for energy and water efficiency projects
Notable projects to be funded with excise tax bond proceeds include:
• $27.0 million in public safety radio replacements
• $21.0 million in fire apparatus
• $20.0 million for facility major maintenance
• $15.0 million to replace the Citywide security access control system
• $5.0 million for the Fire Computer Aided Dispatch System replacement and Records
Management System
The nearly 1,000 projects within the Preliminary CIP are detailed on the Budget and
Research website at phoenix.gov/budget. A summary of sources, uses, and project
selection methods by program is provided below.
Arts and Cultural Facilities
The Arts and Cultural Facilities program totals $32.1 million and is funded by General
Obligation Bond funds.
Projects are typically prioritized based on community input obtained during the
development of periodic General Obligation Bond programs.
The program provides funding for construction, renovation and expansion of arts and
cultural facilities operated primarily by non-profit partner entities.
Aviation
The Aviation program totals $2,590.5 million and is funded by Aviation, Aviation Bond,
Capital Grant, Customer Facility Charge, and Passenger Facility Charge funds.
The Aviation program includes improvements at Phoenix Sky Harbor International,
Phoenix Deer Valley and Phoenix Goodyear Airports.
Various divisions of the Aviation Department are responsible to identify and request
new CIP projects as they are needed for airport expansion and replacement of existing
infrastructure. They work with stakeholders to determine the impact of a project and,
where necessary, to develop a business case which includes a scope, schedule, and
budget, including a return-on-investment analysis, for the project. As part of the
business case, a points-based score is developed for the project. Scoring is based on
the project’s return-on-investment, cost reduction or net present value; efficiency or
productivity improvements; impact on the airport’s sustainability goals; regulatory
mandates; safety and security risk mitigation; and level of service or community
relations needs. The business case is then presented to Aviation’s executive team for
approval or revision. If approval is received, the project awaits available funding and
incorporation into the Aviation CIP.
Major projects include:
• Construction of new Terminal 3 North 2 apron
• Construction of new Crossfield Taxiway U
• Strengthening and reconstruction of Taxiway A (A3-A4)
• Reconstruction of Terminal 3 N1 outer apron
• Construction of Terminal 3 North 2 Concourse and processor improvements
• Repair and replacement of Terminal 3 Parking Garage expansion joints and bearing
pads
• Replacement of Rental Car Center fire alarm system and vertical transportation
modernization
• Repair of Terminal 4 Parking Garage joint seals and expansion joints
• Reconstruction and strengthening of Deer Valley Airport Runway 7R/25L
Economic Development
The $72.8 million Economic Development program is funded by General, Downtown
Community Reinvestment, Other Restricted, Sports Facilities and 2023 General
Obligation Bond funds.
The Community and Economic Development Department identifies new CIP projects
by various methods which include: alignment with strategic planning objectives;
collaboration with business, government and educational partners; and engagement
with community groups and business associations. The City commits funds and
expertise to partner with private and public entities. These partnerships help to expand
the City’s economy through the creation of new infrastructure and civic improvements,
that trigger regional revitalization, enhance public tax revenues, facilitate the growth of
the knowledge workforce, and promote higher education opportunities. Other benefits
include achieving affordable and workforce housing objectives, and support of historic
preservation and adaptive reuse projects.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Major projects include:
• Downtown Redevelopment Area project facilitation and assistance
• Rio Reimagined land acquisition
• Arizona State University (ASU) Health Technology Center development assistance
• ASU Thunderbird School of Global Management development assistance
• Historic Preservation and Conservation facilitation and assistance
• Arizona Biomedical Corridor project facilitation and assistance
Environmental Programs
The $3.3 million Environmental Programs CIP is funded by Other Restricted and 2023
General Obligation Bond funds. The program facilitates eligible citywide general
stormwater compliance and Brownfields redevelopment projects.
Stormwater capital improvement projects are implemented to advance the City’s efforts
to comply with stormwater management requirements and regulations. Any City
department may propose a potential stormwater project, provided that the project
meets the criteria outlined in the Stormwater Capital Improvement Project Fund
Eligibility and Funding Protocol. The proposed projects are reviewed by the
Stormwater Working Group and then the requesting department presents for approval
to the Stormwater Executive Committee based on criteria established in the funding
protocol, including: risk of regulatory non-compliance, ability for the project to achieve
sustained compliance, degradation to the City’s Municipal Separate Storm Sewer
System, need for remediation, and other associated risks.
Redevelopment of brownfields property results in the elimination of environmental
exposures and reuse that can eliminate blight, increase community benefits, jobs, and
often serves as a catalyst for revitalization of the area. City brownfields project funding
will assist City departments with predevelopment costs associated with
environmentally contaminated properties, such as environmental assessments,
asbestos/lead-based paint surveys and abatement, and remediation. Project selection
is based on several factors including location, benefit to community and job creation.
Additionally, brownfields funding for the Rio Reimagined Land Acquisition program
may include environmental assessments and cleanup to prepare economically
attractive sites along the Rio Salado.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Facilities Management
The Facilities Management program totals $154.7 million and is funded by General,
2023 General Obligation Bond, Other Bond, and Capital Grant funds.
The Facilities Management program includes various major maintenance projects for
City facilities and fuel infrastructure. Additional citywide efforts to be implemented by
Facilities Management primarily include: security access control, Glenrosa Fleet
Building and service center upgrades, energy efficient retrofits, fire and life safety
systems, HVAC systems, roofs, parking lots, fuel/oil tanks, generators, and electrical
systems.
Most Facilities Management capital projects are requested and prioritized under the
annual General Fund Facilities Project Prioritization Process. New project requests
originate from facility lifecycle replacement plans, facility assessments, engineering
studies, testing results, citizen requests, regulatory compliance, and identification of
asset deterioration by City facilities staff. Projects are reviewed by a committee of
subject matter experts from various departments and are evaluated and prioritized on
the basis of human safety, service continuity, damage avoidance, aesthetic deficiency
mitigation, regulatory considerations, and potential for increasing efficiency.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Finance
The Finance program totals $10.3 million and is funded by Other Restricted funds.
The Finance program consists of an enhancement to the City’s financial system
infrastructure including licensing, cloud hosting, database upgrades, disaster recovery
and business continuity support.
Fire Protection
The $105.9 million Fire Protection program is funded by Other Restricted, 2023
General Obligation Bond, Other Bond, Capital Grant, and Development Impact Fee
funds.
The Phoenix Fire Department plans for CIP projects through a prioritized strategic
forecasting process. The most significant projects for the department are construction
of future fire stations that have been forecasted through the creation of a 20-year fire
station implementation plan. The forecast plan was developed through analysis of a
variety of factors such as: existing fire stations’ location and capacity, key performance
indicators, and planned growth. Additionally, other identified new CIP project needs are
presented to the Fire Department executive staff in the form of business cases, that
are then evaluated based on the potential positive impact on service delivery to the
Phoenix community.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Major projects include:
• Implementation of a new Computer Aided Dispatch System and Records
Management System
• Acquisition of fire apparatus
• Construction of new Fire Station 51 located near 51st Avenue and the SR 303
• Construction of new Fire Station 74 located at 19th Avenue and Chandler Boulevard
• Replacement of Fire Station 7
• Replacement of Fire Station 13
• Replacement of Fire Station 15
Historic Preservation and Planning
The Historic Preservation and Planning program totals $9.9 million and is funded by
Development Services and 2023 General Obligation Bond funds.
The program includes the SHAPE PHX project, Historic Preservation Program, and an
Innovation in Affordable Housing program.
SHAPE PHX targets the Planning and Development Department’s primary land
management applications for replacement. This multi-year project envisions replacing
KIVA, PlanWeb and other supporting applications with a modern Planning, Zoning,
Plan Review and Permitting application that supports community planning,
development, and regulation.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Housing
The Housing program totals $141.2 million and is funded by General, Operating Grant,
Other Restricted, 2023 General Obligation Bond, and Capital Grant funds.
The program provides funding for the creation and preservation of public and
affordable housing units for low-income families, individuals, seniors, and special
populations throughout the city. Grant-funded projects are planned based on the
availability of these funds.
2023 General Obligation Bond projects will fund the preservation of City-owned
affordable housing units and creation of affordable units in the Edison-Eastlake
community. Grant funds include the U.S. Department of Housing and Urban
Development’s (HUD) Choice Neighborhoods development projects, HUD HOME
Investment Partnership Program multifamily loan and redevelopment, HUD HOME
American Rescue Plan to serve qualifying populations, and the conversion or
modernization of existing public housing units through the HUD Capital Fund Program.
Housing Department capital improvement projects are identified based on City
management’s priority list and the Mayor and Council’s Affordable Housing Initiative, in
coordination with planned redevelopment programs, feedback from the Public Housing
Resident Advisory Board, the Affordable Housing Development Community, and other
stakeholders. The department’s program and fiscal staff actively participate in
prioritizing funding availability and addressing community housing needs and
contractual terms of co-developers.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Human Services
The Human Services program totals $13.4 million and is funded by General, Other
Restricted, and General Obligation Bond funds.
The Human Services program includes acquisition, design, and
renovation/construction of shelters and senior centers.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Major projects include:
• Cesar Chavez Senior Center
• Renovation of the McDowell Senior Center
• Office of Homeless Solutions facility at I-17 and Northern Avenue
Information Technology
The $113.4 million Information Technology program is funded by General, Arizona
Highway User Revenue, Development Services, Other Restricted, Transportation
2050, Aviation, Convention Center, Wastewater, Water, Other Bond, and Solid Waste
Bond funds.
Information Technology CIP projects typically go through a review process and are
managed by IT project managers. The review process provides City leadership
visibility into information technology (IT) spending across the organization and helps
ensure technology purchases are in alignment with current and future technology
needs. Projects are evaluated and approved by various Information Technology
Services divisions for security, application, and infrastructure considerations.
Major projects include:
• Implementation of an enterprise time and labor system
• Replacement of public safety radios that are at end-of-life
• Data network infrastructure modernization
Libraries
The Libraries program totals $36.4 million and is funded by General, Development
Impact Fee, and 2023 General Obligation Bond funds.
Improvement and renovation projects are requested and prioritized under the annual
General Fund Facilities Project Prioritization Process. New project requests originate
from facility lifecycle replacement plans, facility assessments, engineering studies,
testing results, citizen requests, regulatory compliance, and identification of asset
deterioration by City facilities staff. Projects are reviewed by a committee of subject
matter experts from various departments and are evaluated and prioritized on the
basis of human safety, service continuity, damage avoidance, aesthetic deficiency
mitigation, regulatory considerations and potential for increasing efficiency.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Major projects include:
• Expansion of the Yucca Branch Library
• Construction of a new Estrella Civic Space Library at 99th Avenue and Lower
Buckeye Road
• Construction of a new Desert View Civic Space Library at Deer Valley Drive and
Tatum Boulevard
Municipal Court
The Municipal Court program totals $6.1 million and is funded by General funds.
The program includes the Court Case Management System replacement project which
targets the Phoenix Municipal Court’s primary business application. This multi-year
project envisions replacing the existing 24-year-old system which is no longer
sustainable with a modern application. The new application will increase efficiency,
expand self-service options for the public, enhance the Court’s ability to offer remote
contact and participation, reduce existing technical debt, and enable the Court’s ability
to move to real-time paperless processing.
Neighborhood Services
The Neighborhood Services program totals $2.2 million and is funded by Operating
Grant funds.
The Neighborhood Services program seeks to stabilize neighborhoods and improve
infrastructure by acquiring properties for revitalization. By partnering with City
departments, projects such as landscaping, sidewalks, lighting and other infrastructure
improvements provide enhancements to City neighborhoods.
The Neighborhood Services Department considers new CIP projects through the
efforts of their Neighborhood Enhancement and Infrastructure Team, which works
closely with program staff, to identify potential CIP projects. Projects may also be
proposed by the City Council or City management and evaluated based on availability
of funding, eligibility of project area and scope which meets a HUD National Objective.
Additionally, qualitative feedback is collected through community workshops,
stakeholder consultations, and public requests, for projects such as: facility
renovations, improvements to community centers, playgrounds, and other
enhancements to community public infrastructure. Large projects, like acquisition of
strategic or blighted properties, may be identified through other City programs and
initiatives to expand the impact and/or better address the needs of the community such
as providing affordable housing or creating Safe Routes to Schools.
Non-Departmental Capital
The Non-Departmental Capital program totals $640.4 million and is funded by
Convention Center Bond, Other Bond, Solid Waste Bond, Wastewater Bond, Water
Bond, Capital Grant, Customer Facility Charge, Federal, State and Other Participation,
and Passenger Facility Charge funds.
The Non-Departmental Capital program consists of existing and anticipated future
capital debt service, including payments of principal, interest, issuance costs and
related expenditures such as trustee fees for bonds issued. The capital debt program
reflects debt service for capital projects funded in other capital improvement programs.
The Non-Departmental Capital program additionally includes a contingency budget for
future capital grant awards, a set-aside to support operating costs on future capital
projects, and reserves to provide local matching funds for potential federal capital
grants.
Parks, Recreation and Mountain Preserves
The Parks, Recreation and Mountain Preserves program totals $336.6 million and is
funded by Parks and Preserves Initiative, Golf, 2023 General Obligation Bond, and
Development Impact Fee funds.
The program includes land acquisition; improvement and rehabilitation of city parks,
trails, sports fields, and pools; installation and replacement of security and sports field
lighting; parking lot improvements; construction of Americans with Disabilities Act
(ADA) accessible amenities; and other citywide park infrastructure improvements.
Projects in the Parks and Recreation Department’s CIP are prioritized within the five-
year planning window based primarily on park needs and priority criteria. This process
includes a three-tiered rating system that takes into account the life span of amenities.
The rating identifies amenities that are new, at half-life or ready for replacement.
Ratings are updated annually. Further, when a need is identified at a park facility, a
holistic look is used to evaluate if other needs can also be addressed at the same time.
This approach results in cost effectiveness, efficiencies and reduces redundancy of
services to the same site and minimizes impact to the community. Also, a
consideration for new park projects and preserve land acquisitions is population
growth, creating the need for parks expansion.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Major projects with various funding sources include development, improvements
and/or repairs to Encanto Park Lake, Estrella Civic Space, North Mountain Park,
Paradise Valley Park, Telephone Pioneer Park, Sun Ray Park, Maryvale Park Regional
Pool and Two Splash Pad Sites.
Phoenix Convention Center
The Phoenix Convention Center program totals $46.0 million and is funded by Sports
Facilities, Convention Center and Other Bond funds.
In addition to the Convention Center, this program includes projects and improvements
for the Herberger Theater Center and Orpheum Theatre, Symphony Hall, and the
Heritage and Convention Center parking garages. General Fund-supported excise tax
bonds are programmed for renovations of the 100 West Washington building.
The Phoenix Convention Center has a multi-discipline CIP committee comprised of
members of the department including management, facility and capital project
managers, fiscal, as well as subject matter experts. The committee meets monthly to
identify and discuss potential CIP projects. CIP projects are initially submitted, and
subsequently modified, through a project request form. The projects are then reviewed
and ranked by staff for inclusion to a perpetual 10-year CIP forecast that is constantly
evaluated and updated. Project considerations include life safety, revenue generation,
facility enhancement, and business and customer impact.
Major projects include:
• Symphony Hall theatrical venue improvements
• Herberger Theater Center theatrical improvements
• 100 West Washington renovations
• Roof repairs for the South Building
• Replacement of the Digital Audio Distribution System at South Building
• North and West Buildings heating, ventilation, and air conditioning (HVAC) and fire
alarm system replacement
• North and West Buildings security systems replacement
• Orpheum Theatre improvements
• Pit lift replacements at the Herberger Theater, Orpheum Theatre, and Symphony Hall
Police Protection
The $44.2 million Police Protection program is funded by Capital Reserve and 2023
General Obligation Bond funds.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Major projects include:
• Replacement of the Cactus Park Precinct
• Renovation of the Police Property Management Warehouse
• Renovation of the Maryvale Police Precinct
• Replacement of aerial fleet assets
Public Art Program
The Public Art Program totals $21.0 million and is funded by Percent-for-Art funds.
Established in 1986, the Public Art Program allocates one percent of eligible CIP
funding for the acquisition of temporary and permanent artwork for public buildings,
infrastructure, and spaces. The program maintains more than 200 permanent artworks
and manages and exhibits the City's 1,200 portable works in multiple public buildings.
The program works closely with all capital departments, City Council offices and the
Phoenix Arts and Culture Commission to determine and approve projects to be
included in the annual Public Art Plan. Public art projects included in the Plan are
prioritized based on opportunities to integrate artwork into individual CIP projects and
their potential impact on the neighborhood and the broader arts community.
Public Transit
The Public Transit program totals $1,175.8 million and is funded by Operating Grant,
Other Restricted, Regional Transit, and Transportation 2050 funds.
Public Transit staff and management identify project needs by utilizing several
planning documents - the Transportation 2050 Plan, the fleet replacement plan, the
Maricopa Association of Governments Transportation Improvement Program, and the
Transit Life Cycle Program element of the Regional Transportation Plan. Additionally,
public assets are considered for potential refurbishment, upgrade, or replacement.
Staff from each division submit project requests to Public Transit management for
review, prioritization, and funding consideration.
Major projects include:
• Purchase of new and replacement buses, Dial-A-Ride vehicles and commuter vans
• Bus Rapid Transit program development
• Design and construction of the Capitol Light Rail extension
• Construction of bus stop improvements, lighting and shade structures
• Design and construction of the I-10 West Light Rail extension
Regional Wireless Cooperative
The Regional Wireless Cooperative (RWC) program totals $41.0 million and is funded
through the contributions of RWC Member agencies.
The RWC capital program’s objective is to develop and assist Member agencies with
projects necessary to procure, install and upgrade major components of the radio
system(s) over which the RWC has responsibility. For example, major system
expansions to enhance capabilities, functions, or redundancy, or to incorporate
technologies or functions required through legal mandates or vendor-driven changes.
The RWC identifies capital improvement projects via a governance and policy process.
Projects and inventory are tracked, prioritized, and scheduled by the RWC Network
Manager, the City of Phoenix Information Technology Services Department, which
presents the projects’ explanations and expected budgetary needs to RWC
Administration. The costs are then distributed based on the number of radios in use by
each Member, or by special assessments, and are then presented by the RWC
Executive Director to the RWC Board of Directors for action. Specific RWC Working
Groups may also be asked to consider and draft large-scale CIP projects as needed.
Solid Waste Disposal
The $141.6 million Solid Waste Disposal program is funded by Solid Waste, Solid
Waste Bond, Capital Grant, and Solid Waste Remediation funds.
The Solid Waste Disposal program includes various projects at the City’s landfills and
transfer stations.
New Solid Waste Disposal CIP projects are evaluated and prioritized using an annual
project evaluation process. Staff submit a business case to provide information about
the new program or project request. The evaluation report describes the project scope
and identifies the essential needs criteria for the successful operation of the utility. The
Public Works Director and Assistant Directors review the requests and evaluate and
prioritize the projects in the following areas: customer service, system benefits and
efficiency, project benefits and impact, system reliability, operational flexibility, system
security, system replacement and rehabilitation, regulatory compliance, and system
growth. In addition to staff reviews, a Citizens Solid Waste Rate Advisory Committee
performs an advisory role in reviewing the Solid Waste Utility Financial Plan and
advising on the operating and capital program expenses and projects.
Major projects include:
• Maintenance and monitoring of open and closed landfill gas systems
• SR 85 Landfill cell development, including excavation, lining, critical systems, and
capping of completed cells
• Major maintenance, repair, and equipment replacement to support transfer station
and Material Recovery Facility operations
• Vehicle replacement
Street Transportation and Drainage
The Street Transportation and Drainage program totals $1,046.1 million and is funded
by General, Arizona Highway User Revenue, Capital Construction, Transportation
2050, Wastewater, 2023 General Obligation Bond, Capital Reserve, Development
Impact Fee, and partner agency contribution funds.
The program includes ongoing major maintenance of streets and bridges, new and
expanded streets, mobility improvements, pedestrian traffic safety improvements
including the Roadway Safety Action Plan, technology enhancements and storm water
improvements, and prioritizes an accelerated citywide pavement maintenance
program.
The Street Transportation Department maintains an ongoing annual project
identification and prioritization process. The process begins with the collection of “Call
for Projects” forms submitted by staff. These forms require various quantitative data on
the projects such as: relative traffic volume, speeds, collision history, existing pre-
design efforts or studies, and ADA requirements. The requests are gathered and
evaluated. Immediate funding needs for existing funded projects and programs, and
local funding matches required to leverage outside funding, are prioritized.
Prioritization of new project and program proposals considers immediate life safety
needs; the existence of completed pre-design studies with economical, feasible and
publicly supported recommendations; and equity in project distribution. Project
prioritization outcomes are presented to department management for review.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Programs, Residential Overlay, and Vision Zero Program Implementation.
Major projects planned include improvements to the following locations:
• Indian School Road: 39th Avenue to 91st Avenue
• Rio Salado River Bicycle/Pedestrian Bridge at 3rd Street
• Southern Avenue: 51st Avenue to 37th Drive
• Lower Buckeye Road: 27th Avenue to 19th Avenue
• 43rd Avenue: Dove Valley Road to Carefree Highway
Sustainability
The $1.0 million Sustainability program is funded by General funds.
The Sustainability program provides funding for various citywide energy and water
efficiency projects that reduce energy and water usage, while also decreasing ongoing
operational costs. Cost savings realized from implementation of these projects may be
used to replenish this fund for additional future projects.
Wastewater
The Wastewater program totals $1,746.0 million and is funded by Wastewater,
Wastewater Bond, Capital Grant, Development Impact Fee and Other Cities’ Share in
Joint Venture funds.
The Wastewater program includes infrastructure, safety, maintenance, technology and
efficiency enhancements for the 91st Avenue and 23rd Avenue wastewater treatment
plants, Cave Creek Water Reclamation Plant, North Gateway Advanced Water
Reclamation Plant, multi-city and Phoenix sewer line systems, lift stations, support
facilities and other related initiatives.
The need for a new water or wastewater CIP project is identified by various means
such as: an identifiable operational issue, the result of a study, a condition
assessment, age of equipment or infrastructure, new technology, growth, increased
number of pipe breaks, developer requests, City Council requests, and neighborhood
requests. Once it has been determined a project has merit, staff submit a project
request form, and the proposed project is included in the department’s annual Project
Charter Process. The department’s deputy directors of water and wastewater
engineering then determine optimal timing, the approach for lowest cost, and
coordinate with the affected operational division. All current and new CIP projects are
presented to department executive staff and prioritized based on factors including risk
of failure, criticality, timing and funding availability. Staff recommendations are
reviewed by the Water and Wastewater Rates and Advisory Citizens’ Committee, and
then by the City Council’s Transportation, Infrastructure and Planning Subcommittee.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Water
The Water program totals $2,986.6 million and is funded by Water, Wastewater, Water
Bond, Solid Waste Bond, Development Impact Fee and Other Cities’ Share in Joint
Venture funds.
The Water program includes a new North Gateway Advanced Water Purification Plant,
infrastructure improvements, technology and efficiency enhancements for water
treatment plants, water storage facilities, wells, pressure reducing valve stations,
booster pump stations, water and transmission mains and other water related
initiatives. Investments in power redundancy and water resiliency programs ensure
stable water delivery for customers.
The need for a new water or wastewater CIP project is identified by various means
such as: an identifiable operational issue, the result of a study, a condition
assessment, age of equipment or infrastructure, new technology, growth, increased
number of pipe breaks, developer requests, City Council requests, and neighborhood
requests. Once it has been determined a project has merit, staff submit a project
request form, and the proposed project is included in the department’s annual Project
Charter Process. The department’s deputy directors of water and wastewater
engineering then determine optimal timing, the approach for lowest cost, and
coordinate with the affected operational division. All current and new CIP projects are
presented to department executive staff and prioritized based on factors including risk
of failure, criticality, timing and funding availability. Staff recommendations are
reviewed by the Water and Wastewater Rates and Advisory Citizens’ Committee, and
then by the City Council’s Transportation, Infrastructure and Planning Subcommittee.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Responsible Department
This item is submitted by City Manager Jeffrey Barton and the Budget and Research
Department.
Report
This report transmits the Preliminary Five-Year Capital Improvement Program (CIP) for
information and discussion. The City Charter requires the City Manager to submit the
Preliminary CIP prior to adoption of the final budget.
The CIP represents investments in the long-term health of the community through job
creation and economic development, responsible infrastructure maintenance,
sustainability, an assured water supply, and accelerated pavement maintenance
activities. The five-year program totals $11.5 billion, with a $2.8 billion program for
2024-25. The full report is available on the Budget and Research website at
phoenix.gov/budget.
THIS ITEM IS FOR INFORMATION AND DISCUSSION.
Summary
The five-year Preliminary CIP presented totals $11.5 billion. The first year of the
program, totaling $2.8 billion, will ultimately be updated for carryover and resource
availability and presented to the City Council for appropriation. The remainder of the
CIP is presented for responsible planning purposes and is dependent upon resource
availability.
Sources of five-year Preliminary CIP funding include $179.7 million in General Funds,
$2,279.5 million in Special Revenue Funds, $2,832.8 million in Enterprise Funds,
$386.8 million in General Obligation Bond Funds, $3,251.3 million in Other Bond
Funds, and $2,588.2 million in Other Capital Funds.
The Preliminary CIP reflects the $500 million voter approved 2023 General Obligation
Bond Program, less expenditures projected through the current 2024-25 fiscal year.
Projects and funding distribution are consistent with the General Obligation Bond
Executive Committee recommendations presented to, and adopted by, the City
Council in December 2022. $250 million in General Obligation bonds have been sold,
and the remaining $250 million is anticipated to be sold in approximately the summer
of 2026. Schedule 7 of the Preliminary CIP document provides the initial allocation of
funds by project and fiscal year. As the program progresses and costs are finalized,
this schedule will continue to reflect any proposed timing changes, and funding
reallocations in comparison to the original approved program.
The proposed program's $179.7 in General Funds and $98.5 million in General Fund-
backed excise tax bonds reflect a commitment to infrastructure and technology
investment. Substantial investments funded directly though General Funds include:
• $94.6 million in Facilities Management and Libraries for facility major maintenance
• $48.9 million in Information Technology for network, infrastructure and applications
• $24.7 million in Street Transportation and Drainage for flood hazard mitigation, cool
pavement, and Roadway Safety Action Program projects
• $6.1 million in Municipal Court for Case Management System replacement
• $2.3 million in Human Services for the Office of Homeless Solutions facility at I-17
and Northern Avenue
• $1.5 million in Economic Development to support development of the Center for
Advanced Molecular and Immunological Therapies (CAMI)
• $1.0 million in Sustainability for energy and water efficiency projects
Notable projects to be funded with excise tax bond proceeds include:
• $27.0 million in public safety radio replacements
• $21.0 million in fire apparatus
• $20.0 million for facility major maintenance
• $15.0 million to replace the Citywide security access control system
• $5.0 million for the Fire Computer Aided Dispatch System replacement and Records
Management System
The nearly 1,000 projects within the Preliminary CIP are detailed on the Budget and
Research website at phoenix.gov/budget. A summary of sources, uses, and project
selection methods by program is provided below.
Arts and Cultural Facilities
The Arts and Cultural Facilities program totals $32.1 million and is funded by General
Obligation Bond funds.
Projects are typically prioritized based on community input obtained during the
development of periodic General Obligation Bond programs.
The program provides funding for construction, renovation and expansion of arts and
cultural facilities operated primarily by non-profit partner entities.
Aviation
The Aviation program totals $2,590.5 million and is funded by Aviation, Aviation Bond,
Capital Grant, Customer Facility Charge, and Passenger Facility Charge funds.
The Aviation program includes improvements at Phoenix Sky Harbor International,
Phoenix Deer Valley and Phoenix Goodyear Airports.
Various divisions of the Aviation Department are responsible to identify and request
new CIP projects as they are needed for airport expansion and replacement of existing
infrastructure. They work with stakeholders to determine the impact of a project and,
where necessary, to develop a business case which includes a scope, schedule, and
budget, including a return-on-investment analysis, for the project. As part of the
business case, a points-based score is developed for the project. Scoring is based on
the project’s return-on-investment, cost reduction or net present value; efficiency or
productivity improvements; impact on the airport’s sustainability goals; regulatory
mandates; safety and security risk mitigation; and level of service or community
relations needs. The business case is then presented to Aviation’s executive team for
approval or revision. If approval is received, the project awaits available funding and
incorporation into the Aviation CIP.
Major projects include:
• Construction of new Terminal 3 North 2 apron
• Construction of new Crossfield Taxiway U
• Strengthening and reconstruction of Taxiway A (A3-A4)
• Reconstruction of Terminal 3 N1 outer apron
• Construction of Terminal 3 North 2 Concourse and processor improvements
• Repair and replacement of Terminal 3 Parking Garage expansion joints and bearing
pads
• Replacement of Rental Car Center fire alarm system and vertical transportation
modernization
• Repair of Terminal 4 Parking Garage joint seals and expansion joints
• Reconstruction and strengthening of Deer Valley Airport Runway 7R/25L
Economic Development
The $72.8 million Economic Development program is funded by General, Downtown
Community Reinvestment, Other Restricted, Sports Facilities and 2023 General
Obligation Bond funds.
The Community and Economic Development Department identifies new CIP projects
by various methods which include: alignment with strategic planning objectives;
collaboration with business, government and educational partners; and engagement
with community groups and business associations. The City commits funds and
expertise to partner with private and public entities. These partnerships help to expand
the City’s economy through the creation of new infrastructure and civic improvements,
that trigger regional revitalization, enhance public tax revenues, facilitate the growth of
the knowledge workforce, and promote higher education opportunities. Other benefits
include achieving affordable and workforce housing objectives, and support of historic
preservation and adaptive reuse projects.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Major projects include:
• Downtown Redevelopment Area project facilitation and assistance
• Rio Reimagined land acquisition
• Arizona State University (ASU) Health Technology Center development assistance
• ASU Thunderbird School of Global Management development assistance
• Historic Preservation and Conservation facilitation and assistance
• Arizona Biomedical Corridor project facilitation and assistance
Environmental Programs
The $3.3 million Environmental Programs CIP is funded by Other Restricted and 2023
General Obligation Bond funds. The program facilitates eligible citywide general
stormwater compliance and Brownfields redevelopment projects.
Stormwater capital improvement projects are implemented to advance the City’s efforts
to comply with stormwater management requirements and regulations. Any City
department may propose a potential stormwater project, provided that the project
meets the criteria outlined in the Stormwater Capital Improvement Project Fund
Eligibility and Funding Protocol. The proposed projects are reviewed by the
Stormwater Working Group and then the requesting department presents for approval
to the Stormwater Executive Committee based on criteria established in the funding
protocol, including: risk of regulatory non-compliance, ability for the project to achieve
sustained compliance, degradation to the City’s Municipal Separate Storm Sewer
System, need for remediation, and other associated risks.
Redevelopment of brownfields property results in the elimination of environmental
exposures and reuse that can eliminate blight, increase community benefits, jobs, and
often serves as a catalyst for revitalization of the area. City brownfields project funding
will assist City departments with predevelopment costs associated with
environmentally contaminated properties, such as environmental assessments,
asbestos/lead-based paint surveys and abatement, and remediation. Project selection
is based on several factors including location, benefit to community and job creation.
Additionally, brownfields funding for the Rio Reimagined Land Acquisition program
may include environmental assessments and cleanup to prepare economically
attractive sites along the Rio Salado.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Facilities Management
The Facilities Management program totals $154.7 million and is funded by General,
2023 General Obligation Bond, Other Bond, and Capital Grant funds.
The Facilities Management program includes various major maintenance projects for
City facilities and fuel infrastructure. Additional citywide efforts to be implemented by
Facilities Management primarily include: security access control, Glenrosa Fleet
Building and service center upgrades, energy efficient retrofits, fire and life safety
systems, HVAC systems, roofs, parking lots, fuel/oil tanks, generators, and electrical
systems.
Most Facilities Management capital projects are requested and prioritized under the
annual General Fund Facilities Project Prioritization Process. New project requests
originate from facility lifecycle replacement plans, facility assessments, engineering
studies, testing results, citizen requests, regulatory compliance, and identification of
asset deterioration by City facilities staff. Projects are reviewed by a committee of
subject matter experts from various departments and are evaluated and prioritized on
the basis of human safety, service continuity, damage avoidance, aesthetic deficiency
mitigation, regulatory considerations, and potential for increasing efficiency.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Finance
The Finance program totals $10.3 million and is funded by Other Restricted funds.
The Finance program consists of an enhancement to the City’s financial system
infrastructure including licensing, cloud hosting, database upgrades, disaster recovery
and business continuity support.
Fire Protection
The $105.9 million Fire Protection program is funded by Other Restricted, 2023
General Obligation Bond, Other Bond, Capital Grant, and Development Impact Fee
funds.
The Phoenix Fire Department plans for CIP projects through a prioritized strategic
forecasting process. The most significant projects for the department are construction
of future fire stations that have been forecasted through the creation of a 20-year fire
station implementation plan. The forecast plan was developed through analysis of a
variety of factors such as: existing fire stations’ location and capacity, key performance
indicators, and planned growth. Additionally, other identified new CIP project needs are
presented to the Fire Department executive staff in the form of business cases, that
are then evaluated based on the potential positive impact on service delivery to the
Phoenix community.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Major projects include:
• Implementation of a new Computer Aided Dispatch System and Records
Management System
• Acquisition of fire apparatus
• Construction of new Fire Station 51 located near 51st Avenue and the SR 303
• Construction of new Fire Station 74 located at 19th Avenue and Chandler Boulevard
• Replacement of Fire Station 7
• Replacement of Fire Station 13
• Replacement of Fire Station 15
Historic Preservation and Planning
The Historic Preservation and Planning program totals $9.9 million and is funded by
Development Services and 2023 General Obligation Bond funds.
The program includes the SHAPE PHX project, Historic Preservation Program, and an
Innovation in Affordable Housing program.
SHAPE PHX targets the Planning and Development Department’s primary land
management applications for replacement. This multi-year project envisions replacing
KIVA, PlanWeb and other supporting applications with a modern Planning, Zoning,
Plan Review and Permitting application that supports community planning,
development, and regulation.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Housing
The Housing program totals $141.2 million and is funded by General, Operating Grant,
Other Restricted, 2023 General Obligation Bond, and Capital Grant funds.
The program provides funding for the creation and preservation of public and
affordable housing units for low-income families, individuals, seniors, and special
populations throughout the city. Grant-funded projects are planned based on the
availability of these funds.
2023 General Obligation Bond projects will fund the preservation of City-owned
affordable housing units and creation of affordable units in the Edison-Eastlake
community. Grant funds include the U.S. Department of Housing and Urban
Development’s (HUD) Choice Neighborhoods development projects, HUD HOME
Investment Partnership Program multifamily loan and redevelopment, HUD HOME
American Rescue Plan to serve qualifying populations, and the conversion or
modernization of existing public housing units through the HUD Capital Fund Program.
Housing Department capital improvement projects are identified based on City
management’s priority list and the Mayor and Council’s Affordable Housing Initiative, in
coordination with planned redevelopment programs, feedback from the Public Housing
Resident Advisory Board, the Affordable Housing Development Community, and other
stakeholders. The department’s program and fiscal staff actively participate in
prioritizing funding availability and addressing community housing needs and
contractual terms of co-developers.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Human Services
The Human Services program totals $13.4 million and is funded by General, Other
Restricted, and General Obligation Bond funds.
The Human Services program includes acquisition, design, and
renovation/construction of shelters and senior centers.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Major projects include:
• Cesar Chavez Senior Center
• Renovation of the McDowell Senior Center
• Office of Homeless Solutions facility at I-17 and Northern Avenue
Information Technology
The $113.4 million Information Technology program is funded by General, Arizona
Highway User Revenue, Development Services, Other Restricted, Transportation
2050, Aviation, Convention Center, Wastewater, Water, Other Bond, and Solid Waste
Bond funds.
Information Technology CIP projects typically go through a review process and are
managed by IT project managers. The review process provides City leadership
visibility into information technology (IT) spending across the organization and helps
ensure technology purchases are in alignment with current and future technology
needs. Projects are evaluated and approved by various Information Technology
Services divisions for security, application, and infrastructure considerations.
Major projects include:
• Implementation of an enterprise time and labor system
• Replacement of public safety radios that are at end-of-life
• Data network infrastructure modernization
Libraries
The Libraries program totals $36.4 million and is funded by General, Development
Impact Fee, and 2023 General Obligation Bond funds.
Improvement and renovation projects are requested and prioritized under the annual
General Fund Facilities Project Prioritization Process. New project requests originate
from facility lifecycle replacement plans, facility assessments, engineering studies,
testing results, citizen requests, regulatory compliance, and identification of asset
deterioration by City facilities staff. Projects are reviewed by a committee of subject
matter experts from various departments and are evaluated and prioritized on the
basis of human safety, service continuity, damage avoidance, aesthetic deficiency
mitigation, regulatory considerations and potential for increasing efficiency.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Major projects include:
• Expansion of the Yucca Branch Library
• Construction of a new Estrella Civic Space Library at 99th Avenue and Lower
Buckeye Road
• Construction of a new Desert View Civic Space Library at Deer Valley Drive and
Tatum Boulevard
Municipal Court
The Municipal Court program totals $6.1 million and is funded by General funds.
The program includes the Court Case Management System replacement project which
targets the Phoenix Municipal Court’s primary business application. This multi-year
project envisions replacing the existing 24-year-old system which is no longer
sustainable with a modern application. The new application will increase efficiency,
expand self-service options for the public, enhance the Court’s ability to offer remote
contact and participation, reduce existing technical debt, and enable the Court’s ability
to move to real-time paperless processing.
Neighborhood Services
The Neighborhood Services program totals $2.2 million and is funded by Operating
Grant funds.
The Neighborhood Services program seeks to stabilize neighborhoods and improve
infrastructure by acquiring properties for revitalization. By partnering with City
departments, projects such as landscaping, sidewalks, lighting and other infrastructure
improvements provide enhancements to City neighborhoods.
The Neighborhood Services Department considers new CIP projects through the
efforts of their Neighborhood Enhancement and Infrastructure Team, which works
closely with program staff, to identify potential CIP projects. Projects may also be
proposed by the City Council or City management and evaluated based on availability
of funding, eligibility of project area and scope which meets a HUD National Objective.
Additionally, qualitative feedback is collected through community workshops,
stakeholder consultations, and public requests, for projects such as: facility
renovations, improvements to community centers, playgrounds, and other
enhancements to community public infrastructure. Large projects, like acquisition of
strategic or blighted properties, may be identified through other City programs and
initiatives to expand the impact and/or better address the needs of the community such
as providing affordable housing or creating Safe Routes to Schools.
Non-Departmental Capital
The Non-Departmental Capital program totals $640.4 million and is funded by
Convention Center Bond, Other Bond, Solid Waste Bond, Wastewater Bond, Water
Bond, Capital Grant, Customer Facility Charge, Federal, State and Other Participation,
and Passenger Facility Charge funds.
The Non-Departmental Capital program consists of existing and anticipated future
capital debt service, including payments of principal, interest, issuance costs and
related expenditures such as trustee fees for bonds issued. The capital debt program
reflects debt service for capital projects funded in other capital improvement programs.
The Non-Departmental Capital program additionally includes a contingency budget for
future capital grant awards, a set-aside to support operating costs on future capital
projects, and reserves to provide local matching funds for potential federal capital
grants.
Parks, Recreation and Mountain Preserves
The Parks, Recreation and Mountain Preserves program totals $336.6 million and is
funded by Parks and Preserves Initiative, Golf, 2023 General Obligation Bond, and
Development Impact Fee funds.
The program includes land acquisition; improvement and rehabilitation of city parks,
trails, sports fields, and pools; installation and replacement of security and sports field
lighting; parking lot improvements; construction of Americans with Disabilities Act
(ADA) accessible amenities; and other citywide park infrastructure improvements.
Projects in the Parks and Recreation Department’s CIP are prioritized within the five-
year planning window based primarily on park needs and priority criteria. This process
includes a three-tiered rating system that takes into account the life span of amenities.
The rating identifies amenities that are new, at half-life or ready for replacement.
Ratings are updated annually. Further, when a need is identified at a park facility, a
holistic look is used to evaluate if other needs can also be addressed at the same time.
This approach results in cost effectiveness, efficiencies and reduces redundancy of
services to the same site and minimizes impact to the community. Also, a
consideration for new park projects and preserve land acquisitions is population
growth, creating the need for parks expansion.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Major projects with various funding sources include development, improvements
and/or repairs to Encanto Park Lake, Estrella Civic Space, North Mountain Park,
Paradise Valley Park, Telephone Pioneer Park, Sun Ray Park, Maryvale Park Regional
Pool and Two Splash Pad Sites.
Phoenix Convention Center
The Phoenix Convention Center program totals $46.0 million and is funded by Sports
Facilities, Convention Center and Other Bond funds.
In addition to the Convention Center, this program includes projects and improvements
for the Herberger Theater Center and Orpheum Theatre, Symphony Hall, and the
Heritage and Convention Center parking garages. General Fund-supported excise tax
bonds are programmed for renovations of the 100 West Washington building.
The Phoenix Convention Center has a multi-discipline CIP committee comprised of
members of the department including management, facility and capital project
managers, fiscal, as well as subject matter experts. The committee meets monthly to
identify and discuss potential CIP projects. CIP projects are initially submitted, and
subsequently modified, through a project request form. The projects are then reviewed
and ranked by staff for inclusion to a perpetual 10-year CIP forecast that is constantly
evaluated and updated. Project considerations include life safety, revenue generation,
facility enhancement, and business and customer impact.
Major projects include:
• Symphony Hall theatrical venue improvements
• Herberger Theater Center theatrical improvements
• 100 West Washington renovations
• Roof repairs for the South Building
• Replacement of the Digital Audio Distribution System at South Building
• North and West Buildings heating, ventilation, and air conditioning (HVAC) and fire
alarm system replacement
• North and West Buildings security systems replacement
• Orpheum Theatre improvements
• Pit lift replacements at the Herberger Theater, Orpheum Theatre, and Symphony Hall
Police Protection
The $44.2 million Police Protection program is funded by Capital Reserve and 2023
General Obligation Bond funds.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Major projects include:
• Replacement of the Cactus Park Precinct
• Renovation of the Police Property Management Warehouse
• Renovation of the Maryvale Police Precinct
• Replacement of aerial fleet assets
Public Art Program
The Public Art Program totals $21.0 million and is funded by Percent-for-Art funds.
Established in 1986, the Public Art Program allocates one percent of eligible CIP
funding for the acquisition of temporary and permanent artwork for public buildings,
infrastructure, and spaces. The program maintains more than 200 permanent artworks
and manages and exhibits the City's 1,200 portable works in multiple public buildings.
The program works closely with all capital departments, City Council offices and the
Phoenix Arts and Culture Commission to determine and approve projects to be
included in the annual Public Art Plan. Public art projects included in the Plan are
prioritized based on opportunities to integrate artwork into individual CIP projects and
their potential impact on the neighborhood and the broader arts community.
Public Transit
The Public Transit program totals $1,175.8 million and is funded by Operating Grant,
Other Restricted, Regional Transit, and Transportation 2050 funds.
Public Transit staff and management identify project needs by utilizing several
planning documents - the Transportation 2050 Plan, the fleet replacement plan, the
Maricopa Association of Governments Transportation Improvement Program, and the
Transit Life Cycle Program element of the Regional Transportation Plan. Additionally,
public assets are considered for potential refurbishment, upgrade, or replacement.
Staff from each division submit project requests to Public Transit management for
review, prioritization, and funding consideration.
Major projects include:
• Purchase of new and replacement buses, Dial-A-Ride vehicles and commuter vans
• Bus Rapid Transit program development
• Design and construction of the Capitol Light Rail extension
• Construction of bus stop improvements, lighting and shade structures
• Design and construction of the I-10 West Light Rail extension
Regional Wireless Cooperative
The Regional Wireless Cooperative (RWC) program totals $41.0 million and is funded
through the contributions of RWC Member agencies.
The RWC capital program’s objective is to develop and assist Member agencies with
projects necessary to procure, install and upgrade major components of the radio
system(s) over which the RWC has responsibility. For example, major system
expansions to enhance capabilities, functions, or redundancy, or to incorporate
technologies or functions required through legal mandates or vendor-driven changes.
The RWC identifies capital improvement projects via a governance and policy process.
Projects and inventory are tracked, prioritized, and scheduled by the RWC Network
Manager, the City of Phoenix Information Technology Services Department, which
presents the projects’ explanations and expected budgetary needs to RWC
Administration. The costs are then distributed based on the number of radios in use by
each Member, or by special assessments, and are then presented by the RWC
Executive Director to the RWC Board of Directors for action. Specific RWC Working
Groups may also be asked to consider and draft large-scale CIP projects as needed.
Solid Waste Disposal
The $141.6 million Solid Waste Disposal program is funded by Solid Waste, Solid
Waste Bond, Capital Grant, and Solid Waste Remediation funds.
The Solid Waste Disposal program includes various projects at the City’s landfills and
transfer stations.
New Solid Waste Disposal CIP projects are evaluated and prioritized using an annual
project evaluation process. Staff submit a business case to provide information about
the new program or project request. The evaluation report describes the project scope
and identifies the essential needs criteria for the successful operation of the utility. The
Public Works Director and Assistant Directors review the requests and evaluate and
prioritize the projects in the following areas: customer service, system benefits and
efficiency, project benefits and impact, system reliability, operational flexibility, system
security, system replacement and rehabilitation, regulatory compliance, and system
growth. In addition to staff reviews, a Citizens Solid Waste Rate Advisory Committee
performs an advisory role in reviewing the Solid Waste Utility Financial Plan and
advising on the operating and capital program expenses and projects.
Major projects include:
• Maintenance and monitoring of open and closed landfill gas systems
• SR 85 Landfill cell development, including excavation, lining, critical systems, and
capping of completed cells
• Major maintenance, repair, and equipment replacement to support transfer station
and Material Recovery Facility operations
• Vehicle replacement
Street Transportation and Drainage
The Street Transportation and Drainage program totals $1,046.1 million and is funded
by General, Arizona Highway User Revenue, Capital Construction, Transportation
2050, Wastewater, 2023 General Obligation Bond, Capital Reserve, Development
Impact Fee, and partner agency contribution funds.
The program includes ongoing major maintenance of streets and bridges, new and
expanded streets, mobility improvements, pedestrian traffic safety improvements
including the Roadway Safety Action Plan, technology enhancements and storm water
improvements, and prioritizes an accelerated citywide pavement maintenance
program.
The Street Transportation Department maintains an ongoing annual project
identification and prioritization process. The process begins with the collection of “Call
for Projects” forms submitted by staff. These forms require various quantitative data on
the projects such as: relative traffic volume, speeds, collision history, existing pre-
design efforts or studies, and ADA requirements. The requests are gathered and
evaluated. Immediate funding needs for existing funded projects and programs, and
local funding matches required to leverage outside funding, are prioritized.
Prioritization of new project and program proposals considers immediate life safety
needs; the existence of completed pre-design studies with economical, feasible and
publicly supported recommendations; and equity in project distribution. Project
prioritization outcomes are presented to department management for review.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Projects funded by the 2023 General Obligation Bond Program were reviewed and
prioritized by a citizens’ General Obligation Bond Committee prior to approval by the
Programs, Residential Overlay, and Vision Zero Program Implementation.
Major projects planned include improvements to the following locations:
• Indian School Road: 39th Avenue to 91st Avenue
• Rio Salado River Bicycle/Pedestrian Bridge at 3rd Street
• Southern Avenue: 51st Avenue to 37th Drive
• Lower Buckeye Road: 27th Avenue to 19th Avenue
• 43rd Avenue: Dove Valley Road to Carefree Highway
Sustainability
The $1.0 million Sustainability program is funded by General funds.
The Sustainability program provides funding for various citywide energy and water
efficiency projects that reduce energy and water usage, while also decreasing ongoing
operational costs. Cost savings realized from implementation of these projects may be
used to replenish this fund for additional future projects.
Wastewater
The Wastewater program totals $1,746.0 million and is funded by Wastewater,
Wastewater Bond, Capital Grant, Development Impact Fee and Other Cities’ Share in
Joint Venture funds.
The Wastewater program includes infrastructure, safety, maintenance, technology and
efficiency enhancements for the 91st Avenue and 23rd Avenue wastewater treatment
plants, Cave Creek Water Reclamation Plant, North Gateway Advanced Water
Reclamation Plant, multi-city and Phoenix sewer line systems, lift stations, support
facilities and other related initiatives.
The need for a new water or wastewater CIP project is identified by various means
such as: an identifiable operational issue, the result of a study, a condition
assessment, age of equipment or infrastructure, new technology, growth, increased
number of pipe breaks, developer requests, City Council requests, and neighborhood
requests. Once it has been determined a project has merit, staff submit a project
request form, and the proposed project is included in the department’s annual Project
Charter Process. The department’s deputy directors of water and wastewater
engineering then determine optimal timing, the approach for lowest cost, and
coordinate with the affected operational division. All current and new CIP projects are
presented to department executive staff and prioritized based on factors including risk
of failure, criticality, timing and funding availability. Staff recommendations are
reviewed by the Water and Wastewater Rates and Advisory Citizens’ Committee, and
then by the City Council’s Transportation, Infrastructure and Planning Subcommittee.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Water
The Water program totals $2,986.6 million and is funded by Water, Wastewater, Water
Bond, Solid Waste Bond, Development Impact Fee and Other Cities’ Share in Joint
Venture funds.
The Water program includes a new North Gateway Advanced Water Purification Plant,
infrastructure improvements, technology and efficiency enhancements for water
treatment plants, water storage facilities, wells, pressure reducing valve stations,
booster pump stations, water and transmission mains and other water related
initiatives. Investments in power redundancy and water resiliency programs ensure
stable water delivery for customers.
The need for a new water or wastewater CIP project is identified by various means
such as: an identifiable operational issue, the result of a study, a condition
assessment, age of equipment or infrastructure, new technology, growth, increased
number of pipe breaks, developer requests, City Council requests, and neighborhood
requests. Once it has been determined a project has merit, staff submit a project
request form, and the proposed project is included in the department’s annual Project
Charter Process. The department’s deputy directors of water and wastewater
engineering then determine optimal timing, the approach for lowest cost, and
coordinate with the affected operational division. All current and new CIP projects are
presented to department executive staff and prioritized based on factors including risk
of failure, criticality, timing and funding availability. Staff recommendations are
reviewed by the Water and Wastewater Rates and Advisory Citizens’ Committee, and
then by the City Council’s Transportation, Infrastructure and Planning Subcommittee.
Development Impact Fee-funded projects are identified in accordance with state
statutes, ensuring capital funding for service levels in planning areas is consistent with
service levels in developed areas of the City. Identified projects are incorporated in the
City’s Infrastructure Financing Plan, which is reviewed by a citizens’ committee prior to
public hearings and ultimate adoption by the City Council.
Responsible Department
This item is submitted by City Manager Jeffrey Barton and the Budget and Research
Department.
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Fiscal Year 2025-26 Proposed City Manager's Trial Budget
This report transmits a balanced proposed Fiscal Year (FY) 2025-26 City Manager's
Trial Budget for community review and comment.
THIS ITEM IS FOR INFORMATION AND DISCUSSION.
The Trial Budget is an important step in the City's budget development process. It
provides the Mayor, City Council and community an opportunity to review a proposed,
balanced budget months in advance of final budget adoption in June. This report
includes the proposed FY 2025-26 General Fund (GF) Trial Budget and strategies to
ensure the budget remains balanced.
The City of Phoenix is committed to engaging residents in the budget process and this
year there are many opportunities for residents to provide feedback outside of
regularly scheduled City Council meetings. Between April 1 and April 16, the FY 2025-
26 proposed Trial Budget will be presented to Phoenix residents for input at 12
community budget hearings. A complete list of hearing dates and times is included in
Attachment D and is available on our website at https://www.phoenix.gov/budget. All
resident feedback received will be provided to the City Council so it may be used in
budget decision making. As a result of public input, changes could be made to the Trial
Budget when a proposed City Manager's Budget is presented to City Council on May
6.
Summary
As presented at the February 25, 2025 Policy meeting, the GF budget outlook reflects
structural deficits over the next three fiscal years requiring strategic decisions to
balance the budget. The preliminary GF Status for FY 2025-26 reflected a baseline
deficit of $(36) million and the forecast reflected projected shortfalls in FY 2026-27 of
$(83) million and in FY 2027-28 of $(6) million primarily due to the State's actions to
eliminate residential rental sales tax via Senate Bill (SB) 1131 and to lower the
individual income tax rate to the flat tax of 2.5 percent (SB 1828). These actions by the
State limit local control and will reduce ongoing City revenues going forward. Staff
completed the annual 7+5 technical expenditure and revenue review process and
adjustments have been made to the FY 2025-26 GF Status of approximately $(3)
million primarily to reflect adjustments to property tax and emergency transportation
revenue estimates. The revised FY 2025-26 GF Status reflects a projected deficit of
$(39) million.
This report includes a proposed balanced GF Trial Budget with the strategies
presented to the City Council on February 25, 2025, to resolve the projected FY 2025-
26 deficit, and includes necessary resources going forward to offset the State's action
to reduce City revenues, and provide future capacity for necessary additions to the
budget. The proposed GF Trial Budget assumes City Council approval of the proposed
strategies included in this report.
Additionally, the proposed FY 2025-26 Trial Budget includes proposed GF and Non-GF
supplementals (Attachment A) for the Fire Department to reduce emergency
response times, for the Office of Homeless Solutions to continue efforts helping the
unsheltered population and to address impacts of homelessness on neighborhoods,
and to add resources to the Water Services Department to reopen the Cave Creek
Water Reclamation Plant.
The proposed FY 2025-26 Trial Budget also includes administrative position additions
and conversions of temporary full-time equivalent (FTE) positions to ongoing positions.
Funding for these positions has been identified and accounted for in department
operating budgets. Details on each position can be found in Attachment A. Also
included are proposed GF reductions totaling $24 million with limited impacts to
service delivery (Attachment B), a status update of the budget supplementals added
in FY 2023-24 (Attachment C), the schedule of upcoming community budget hearings
to engage residents and gather feedback (Attachment D), the annual GF Revenue
Estimates Report (Attachment E), and a list of State legislation introduced and active
in the current legislative session that if passed would further limit local control and
would have negative impacts to the City's budget (Attachment F).
FY 2025-26 GF Budget Status
As mentioned above, the revised GF Budget Status for FY 2025-26 is a deficit of $(39)
million, reflecting projected total resources of $2.040 billion less projected total
expenditures of $2.079 billion, further detailed below.
GF Resources
The revised FY 2025-26 GF Status reflects a projected deficit of $(39) million and
includes the beginning fund balance, net transfers and revenues projected at $2.040
billion or (4.8) percent lower than FY 2024-25 estimated resources. GF revenues for
FY 2025-26 make up the majority of resources and are projected to be flat at $1.819
billion or (0.0) percent growth after 7+5 technical revenue adjustments compared to
the FY 2024-25 revised revenue estimate. As detailed in the GF Status and Multi-Year
Forecast report presented to City Council on February 25, GF revenue is estimated to
decline in the current fiscal year by (4.5) percent, or $(86) million, compared to FY
2023-24. The significant decline in revenue is primarily due to the State's actions to
diminish the tax base by lowering individual income tax rates discussed below; and
elimination of residential rental sales taxes effective January 2025 (SB 1131). The
revised estimated five month impact from the loss of residential rental sales tax to the
GF for FY 2024-25 is approximately $(19.3) million and the ongoing annual impact in
FY 2025-26 is $(47.4) million. SB 1131 also impacts non-GFs including Public Safety,
Parks and Preserves and Transportation 2050. The revised estimated five-month loss
to all funds in FY 2024-25 is $(37.0) million and the ongoing annual impact in FY 2025-
26 is $(90.7) million. The impact through the multi-year forecast period to FY 2027-28
for all City funds is an estimated revenue loss of $(321) million.
Additionally, SB 1828 reduced individual income tax rates from a progressive four tax
bracket system to the current "flat tax" of 2.5 percent in 2022. Cities and towns in
Arizona receive state shared income tax revenues based on collections from two years
prior and is based on relative population share. On June 9, 2023, the State's Joint
Legislative Budget Committee (JLBC) notified the legislative membership of a
significant decline in state GF revenue collections, which is primarily due to the
individual income tax rate reduction. Budget and Research staff rely on projections
from the JLBC to estimate this revenue stream for budget development. This action by
the State is expected to result in less ongoing state shared income tax revenue to the
GF compared to prior projections had the tax rate not been decreased. This negative
impact is demonstrated in the significant decline in FY 2024-25 and FY 2025-26 for
state-shared income tax revenue of $(84.7) million and $(22.7) million, respectively.
Revenue projections account for the reductions mentioned above to city sales tax and
state shared revenue.
The FY 2025-26 GF estimates for each major revenue category totaling $1.819 billion
are highlighted below:
· Local Sales Tax - $723 million;
· State Shared Revenue - $682 million;
· Primary Property Tax - $223 million;
· User Fees - $191 million.
GF Expenditures
FY 2025-26 GF expenditures to continue existing levels of service are projected to be
$2.079 billion, or $1.987 billion excluding contingency funds. This compares to the FY
2024-25 GF expenditure estimate of $1.946 billion, representing an increase of $41
million or 2.1 percent excluding contingency funds. The increase accounts primarily for
higher costs associated with inflation and increases in employee salaries and fringe
benefits, including higher pension costs discussed below, and accounts for the City
Council approved Classification and Compensation Study and negotiated labor
increases. These cost increases are partially offset by lower GF capital costs for pay-
as-you-go projects. The FY 2025-26 budget includes increasing the contingency fund
from $89 million to $92 million, to reflect 4.75 percent of operating expenditures.
Expenditure amounts may change over the coming weeks as staff continues to refine
final estimates prior to the presentation of the City Manager's Proposed Budget on
May 6.
Employee pension costs have consumed a growing share of the City's GF resources
over the past 10 years. GF pension costs in FY 2025-26 are estimated to be $464
million, and represent 23 percent of total GF operating costs. The GF Multi-Year
Forecast included estimated increases of $63 million, between FY 2024-25 and FY
2027-28. This increase is primarily caused by rising costs in public safety pension
costs. The City is committed and legally required to pay 100 percent of our actuarially
required contribution every year. Also, under the leadership of the City Council, a
pension funding policy has been adopted each year as required by state statute.
Additionally, pension reform for the City of Phoenix Employees' Retirement System
(COPERS) is helping to stabilize civilian pension costs. While reform efforts have been
successful for the Public Safety Personnel Retirement System (PSPRS), there
remains a significant unfunded sworn pension liability of approximately $3.8 billion, per
the PSPRS June 30, 2024, actuarial valuation.
Other Budget Considerations
The FY 2025-26 Preliminary GF Status and Multi-Year Forecast report available at
https://www.phoenix.gov/budgetsite/budget-books/2025-
30_General_Fund_Multi_Year_Forecast.pdf included several assumptions and risks to
projections, including economic risks and proposed State legislation that could further
significantly reduce City revenues. Significant economic uncertainty exists including
impacts from the new Trump administration policies on tariffs, tax law changes,
reductions to Federal agencies, potential elimination or reduction of Federal Grant
programs; and market volatility, Federal Reserve actions to reduce inflation,
geopolitical concerns and conflicts, housing affordability, and overall consumer
confidence.
Additionally, several introduced and active State legislative bills could further limit local
control and reduce City revenues if signed into law. For those bills that are still active
and with a fiscal note prepared by the JLBC, the estimated annual impact to City
revenue is $(69) million. Additionally, some bills could increase City expenditures
requiring additional resources and further straining the City's budget. Attachment F
provides information from Government Relations on bills in the current legislation
session that if passed could have negative impacts to the City.
Proposed Strategies to Balance the GF Budget
Several options are recommended for City Council consideration to resolve the
projected FY 2025-26 budget shortfall and provide necessary resources going forward
to balance the budget, protect existing programs and services, and provide future
capacity for necessary additions to the budget.
The proposed FY 2025-26 Trial Budget included in this report contains the below
strategies to balance, provides additions to the budget for the Fire Department and
Office of Homeless Solutions and recommends carryforward of resources (set-aside)
to help balance the FY 2026-27 budget and/or provide for future labor increases, or
other City Council and community priorities.
Proposed strategies include:
· Increase the Transaction Privilege Tax (TPT) and Use Tax rate 0.5 percent effective
July 1, 2025, from 2.3 percent to 2.8 percent, as posted on the City's website.
www.phoenix.gov/Documents/2025-PHX-Tax-Notice-Info.pdf.
· Reprioritize spending and reduce ongoing GF costs by $24 million (Attachment B).
· Use of excise tax bond proceeds to pay for public safety and other GF capital needs
totaling $150 million to reduce the up front cost burden to the GF (City Council
approval of an excise tax bond sale is scheduled for April 9).
· Set-aside $92 million in FY 2025-26 to be available to balance FY 2026-27.
· Use of Non-GFs to reduce GF costs for major maintenance and citywide street
transportation and construction services.
The City of Phoenix TPT and Use Tax rate to support GF programs and services is
currently 1.2 percent (of the total 2.3 percent) and has not been increased since 1986
despite the significant growth in population, square miles, and city program and
services over this time period. Phoenix's TPT and Use Tax rate is also lower than six
other surrounding cities. The rate has been increased since 1986 with the most recent
increase in January 2016 to the current 2.3 percent, however past rate increases have
been for specific voter approved purposes including Public Safety, Parks and
Preserves and Transportation with none of the increase applied to the GF. The revised
estimated annual revenue to be generated by increasing the TPT and Use Tax rate
from 2.3 percent to 2.8 percent is approximately $117 million to the GF and $132
million to Non-GFs.
The City posted the required 60-Day Notice of Intent on January 15, 2025, for a
potential TPT and Use Tax rate increase in compliance with Arizona Revised Statute
§9-499.15. To allow the public an opportunity to provide feedback on the proposed rate
increase five community information sessions were held across the City between
January 27 and February 6. Staff also provided information on the City's Newsroom,
Budget and Research Department website, and on social media platforms.
Additionally, staff presented information to the City Council on February 25, 2025, on
the estimated impact of the proposed tax rate increase and the City Council report is
available on the phoenix.gov/budget website. On February 27, 2025, the City posted
the required 15-Day Statutory Notice of Intent to Increase the TPT and Use Tax rates
with City Council consideration scheduled for a vote immediately following
presentation of the proposed FY 2025-26 Trial Budget on March 18, 2025, at 2:30 p.m.
in the Phoenix City Council Chambers, 200 West Jefferson Street, Phoenix, AZ.
Information about the proposed TPT and Use Tax rate increase, and budgetary
considerations for the increase along with the applicable business classifications that
would be increased from 2.3 percent to 2.8 percent if approved by City Council, is
available at: https://www.phoenix.gov/budget.
Additionally, City Council approval of a $150 million excise tax bond sale will be
included on the April 9, 2025, Formal Council agenda for action. Use of excise tax
bond proceeds is commonly used to pay for large capital purchases that will last
multiple years; and will reduce the up front cost burden on the GF. Proceeds will be
used for Fire replacement apparatus ($40 million), replacement of a public safety
rescue helicopter ($8.5 million), replace public safety radios ($30 million), build two
new Fire Stations and purchase additional Fire apparatus to reduce response times
citywide ($50 million), provide resources for the Fire Department's cost share of the
new ShapePHX system ($9 million), and remaining resources will be used for other
major facility or information technology needs (12.5 million).
FY 2025-26 Proposed Trial Budget
The above proposed strategies are estimated to offset the revenue losses caused by
State actions, protect existing programs and services, and provide additional
resources for critical additions to the budget detailed below. The FY 2025-26 proposed
GF Trial Budget as presented, including the proposed strategies referenced in this
report, result in a potential one-time surplus of $17 million; reflecting projected total
resources of $2.172 billion less projected total expenditures of $2.155 billion.
To ensure the budget remains balanced in the future, and considering economic
uncertainty and legislative risks discussed in this report and previously with the City
Council, the City Manager recommends the $17 million one-time surplus be set aside
and carried forward to be available next fiscal year to help balance the FY 2026-27
budget if needed (Attachment A).
Details on the proposed FY 2025-26 supplementals is provided below and also
included in Attachment A.
Phoenix Fire Department (PFD)
The PFD provides lifesaving services to all Phoenix residents and visitors and includes
emergency medical and transportation services, all-hazards incident management,
property protection through fire suppression, and community risk reduction efforts. The
recent fire catastrophe in Los Angeles, CA serves as a reminder the importance of
adequately resourcing the PFD to ensure sufficient levels of staffing, equipment and
facilities are ready to respond to emergencies. A critical measurement of the PFD
effectiveness in operations is emergency response time and is measured from the time
of dispatch of an emergency apparatus to when the unit arrives on scene. The
National Fire Protection Association (NFPA) establishes the standard fire departments
utilize to measure performance. Currently, the PFD’s response times exceed the NFPA
established standards. While the department continuously evaluates innovative ways
to improve response times, additional resources are needed to increase the number of
fire stations and facilities, personnel, and equipment to keep pace with the significant
growth in geographic area and population the department must serve. Supplemental
needs for the Fire Department (Attachment A) include conversion of 32 grant funded
sworn positions to the GF estimated at $3 million in FY 2025-26 and $5 million
ongoing, add 24 sworn personnel to staff the new General Obligation Bond funded Fire
Station 15 at 45th Avenue and Camelback Road estimated at $2 million in FY 2025-26
and $4 million ongoing, and provide a dedicated $25 million in GF resources going
forward to add 134 sworn and 19 civilian personnel to reduce emergency response
times.
Once fully implemented, the estimated impact of additional sworn personnel will be an
improvement in localized and citywide fire response times based on 2024 incident data
at the 90th percentile. Fire critical emergency medical services (CEMS) response
times are projected to improve from 8 minutes and 30 seconds to 4 minutes and 25
seconds in the localized communities where the units will primarily serve. Fire
ambulance response times are projected to improve from 10 minutes and 42 seconds
to 4 minutes and 44 seconds in the localized communities. Based on the estimated
citywide impacts of the budget additions, Fire CEMS response times are projected to
improve from 7 minutes and 23 seconds to 7 minutes and 14 seconds. Based on the
estimated citywide impacts of the budget additions, Fire ambulance response times
are projected to improve from 9 minutes and 38 seconds to 9 minutes and 29 seconds.
These response times could vary based on any future adjustments to unit placement
and the hours of service to meet the community's needs. The additional sworn
personnel will staff new apparatus to be placed in service around the City, and new
Fire stations including Station 71 located at 60th Street and Mayo Boulevard, and
Station 93 at Metrocenter (location site to be determined). The additional apparatus
and fire stations will be funded by excise tax bond proceeds (City Council approval
scheduled for April 9).
Office of Homeless Solutions (OHS)
The OHS has made tremendous progress in addressing homelessness over the last
two years. Investments in the infrastructure of the region’s homeless services system
have been monumental. As we move out of pandemic-era funding, OHS has unfunded
needs necessary to continue its momentum and ensure the transformational projects
and services implemented in the last two years can continue. Also important to note on
November 5, 2024, voters passed Proposition 312 Property Tax; Refund; Nuisance
Enforcement that allows property owners beginning in Tax Year 2025 to apply to the
Arizona Department of Revenue for a property tax refund if the owner documents
expenses caused by a city, town, or county that either (1) declines to enforce existing
laws prohibiting illegal camping, obstructing public thoroughfares, loitering,
panhandling, public urination or defecation, public consumption of alcoholic beverages
or use of illegal substances, or (2) maintains a public nuisance. The City is unable to
project the potential costs associated with Proposition 312 but will have to identify a
funding source. The passage of this proposition furthers the need for the City of
Phoenix to address and provide ongoing resources for homelessness.
GF resources will be needed in 2025-26 for homelessness with revised estimates at
$4.5 million due to the expiration of American Rescue Plan Act (ARPA) funding.
Funding is necessary for a portion of OHS operational costs, operational costs at an
affordable housing site for very low-income older adults, operational costs at three
emergency shelters (Rio Fresco, North Mountain Healing Center, and the temporary
Washington Shelter) and heat relief efforts. The need in 2026-27 and going forward is
estimated at $26.0 million and will fund a portion of OHS operational costs, the
temporary Safe Outdoor Space, operational support for five emergency shelters (Rio
Fresco, North Mountain Healing Center, the temporary Washington Shelter, Central
Arizona Shelter Services, and the Phoenix Navigation Center), some operational costs
at the Key Campus and heat relief efforts. Staff will continue to seek additional external
funding for these programs, and evaluate other City funding sources, which if received
would offset the need for a portion of the ongoing General Fund request.
More information on GF proposed reductions totaling $24 million is included in
Attachment B. The proposed reductions do not include any filled City positions, but
elimination of 18.2 vacant positions; and represent lowering costs for non-personal
related line items included various contractuals, commodities and minor capital outlay.
These reductions will not have a significant impact on service delivery. Finally, more
detail on GF revenue estimates is provided in Attachment E and assumes the
proposed TPT and Use Tax rate increase.
The proposed FY 2025-26 Trial Budget also includes a Non-GF supplemental budget
addition for the Water Services Department to add $5.6 million for 28.0 FTE and 20
vehicles to reopen the Cave Creek Water Reclamation Plant. This addition would allow
the City to expand capacity for wastewater treatment and water purification, maintain
environmental and safety standards, and uphold technological process control and
security standards (Attachment A).
Next Steps
In order to engage the community in the budget development process, staff will be
holding 12 community budget hearings between April 1 and April 16. Attachment D
includes the schedule of budget hearings. Residents are also welcome to contact the
Budget and Research Department directly to provide input or ask questions about the
budget. More information on the budget and how to submit feedback directly to the
City, is available at https://www.phoenix.gov/budget.
The remaining key dates in this year's budget process are as follows:
Date Event
May 6, 2025 City Manager's 2025-26 Proposed Budget
May 20, 2025 City Council Budget Decision
June 4, 2025 2025-26 Tentative Budget Ordinance Adoption
June 18, 2025 2025-26 Funding Plan and Final Budget Ordinance Adoption
July 2, 2025 2025-26 Property Tax Levy Ordinance Adoption
Responsible Department
This item is submitted by City Manager Jeffrey Barton and the Budget and Research
Department.
ATTACHMENT A
2025-26
PROPOSED ADDITIONS
GENERAL AND NON-GENERAL FUNDS
View the Inventory of Programs published online for program details.
2025-26
Department/Program Total
GENERAL FUND
Set-Aside
1. General Fund set-aside of projected one-time surplus to be carried over and $17,000,000
available for potential labor increases, other community and Council priorities or
to balance the 2026-27 budget if needed due to economic declines or further
reductions to City revenues.
Total Set-Aside $17,000,000
Communications Office
1. Communication Outreach to Diverse Communities and Niche Media $0
Convert a temporary Management Assistant I position to ongoing status. This 1.0
position provides Spanish-language interpretation services at high-profile City
meetings and events and provides Spanish-language media outreach support.
Converting this position to ongoing status will provide the City's Spanish-speaking
community with high-quality, seamless interpretation services and support.
Total Communications Office $0
1.0
Environmental Programs
1. Food Systems $0
Convert a temporary Project Management Assistant and a temporary 2.0
Administrative Assistant I to ongoing status. These positions are needed to
administer ongoing food systems programs previously funded by American
Rescue Plan Act grants.
Total Environmental Programs $0
2.0
Finance
1. Banking and Cashiering $0
Convert a temporary Accountant III position to ongoing status in the Treasury 1.0
Banking & Cashiering Division paid for by the Water Services Department (WSD).
The position responsibilities include security administration of payment platforms,
ensuring proper integration with financial and customer billing systems used by
WSD.
Total Finance $0
1.0
2025-26
Department/Program Total
Fire
1. Fire Emergency Medical Services and Hazardous Incident Response $2,579,000
Add funding for 32 sworn firefighter positions previously funded by the SAFER 2021 0.0
grant. This funding will allow the department to maintain service delivery and reduce
the impact to daily constant staffing. Funding for the SAFER 2021 grant is estimated
to be fully expended in December 2025 and the full-year ongoing cost is$4,984,000.
2. Fire Emergency Medical Services and Hazardous Incident Response $2,039,000
Add funding for 24 sworn positions (4 Fire Captains, 4 Fire Engineers, and 16 24.0
Firefighters) to provide dedicated staffing for new Fire Station 15, located at 45th
Avenue and Camelback Road. Funding for the station is from the 2023 GO Bond
Program. Staff costs are anticipated to begin January 2026. The full year ongoing
cost is $4,187,000.
3. Various - Note: Items 3 & 4 include ongoing resources totaling $25 million dedicated $22,836,000
to the Fire Department to improve emergency response times. 134.0
Add funding for 134 new sworn positions (29 Fire Captains, 4 Fire Battalion Chiefs,
77 Firefighters, and 24 Fire Engineers) with the goal of reducing emergency
response times. Once fully implemented, the estimated impact will be an
improvement in localized and citywide fire response times based on 2024 incident
data at the 90th percentile. Fire critical emergency medical services (CEMS)
response times are projected to improve from 8 minutes and 30 seconds to 4
minutes and 25 seconds in the localized communities where the units will primarily
serve. Fire ambulance response times are projected to improve from 10 minutes
and 42 seconds to 4 minutes and 44 seconds in the localized communities. Based
on the estimated citywide impacts of this budget addition, Fire CEMS response
times are projected to improve from 7 minutes and 23 seconds to 7 minutes and 14
seconds. Based on the estimated citywide impacts of this budget addition, Fire
ambulance response times are projected to improve from 9 minutes and 38 seconds
to 9 minutes and 29 seconds. These response times could vary based on any future
adjustments to unit placement and the hours of service to meet the community's
needs. The additional sworn personnel will staff new apparatus to be placed in
service, and new Fire stations including Station 71 located at 60th St. and Mayo
Blvd., and Station 93 at Metrocenter. The additional apparatus and fire stations will
be funded by excise tax bond proceeds.
4. Various $2,164,000
Add funding for 19 new civilian positions to support increased sworn Firefighter 19.0
staffing, facilities and calls for service. Included are one Fire Administrator, one
Supplies Clerk II*U2, one Building Maintenance Worker*U2, one Fire Equipment
Service Worker, three Human Resources Aides, three Administrative Aides, one
Administrative Assistant I, one Accountant I, two User Technology Specialists, one
Info Tech Analyst/Programmer II, one Special Projects Administrator, one Fire
Communications Shift Supervisor, one Fire Emergency Dispatcher, and one
Paramedic Training Coordinator. These positions will ensure the availability of
resources for logistical, information technology, and human resources assistance.
Total Fire $29,618,000
177.0
2025-26
Department/Program Total
Human Resources
1. Labor Relations $0
Convert a temporary full-time Deputy Human Resources Director position to 1.0
ongoing status. This position coordinates and supports citywide labor
negotiations, helping to facilitate effective relationships with labor groups and
efficient negotiation processes.
Total Human Resources $0
1.0
Human Services
1. Homeless Emergency Services $500,000
Add funding to create an operating reserve for the City-owned low-income senior 0.0
housing project being constructed along the Black Canyon Freeway. In 2023, the
Office of Homeless Solutions purchased a hotel located at 8130 N. Black Canyon
Boulevard with the aim of converting the hotel into permanent housing and
supportive services for seniors exiting homelessness. The project will generate
ongoing revenue through the collection of rents; however, the project requires
reserve funds to support operations during initial lease up and until revenue is
able to support the cost of operations and supportive services.
2. Homeless Emergency Services $3,926,000
Add funding for Office of Homeless Solutions (OHS) shelter operations needed 0.0
due to expiring American Rescue Plan Act (ARPA) funds. OHS recognizes the
need for diverse types of shelters throughout Phoenix to meet the individual
needs of people experiencing homelessness. This funding will be utilized to
support shelter operations throughout the city as needs are identified. For fiscal
year 2025-26, several shelters that were previously supported by expiring ARPA
funding will receive support, including: Rio Fresco, which provides 117 units of
shelter that can accommodate couples, pets, and individuals with substance use
disorder; North Mountain Healing Center, which provides congregate shelter for
up to 100 individuals and is limited to people experiencing homelessness within
1.5 miles of the site; and the Washington Shelter, which is a converted City-
owned office building that provides a 200-bed congregate shelter and wraparound
services, operated and provided by nonprofit partners. The anticipated ongoing
GF need to support OHS shelter operations and provide heat relief efforts upon
full expiration of ARPA funds is estimated at $26 million in FY 2026-27.
3. Homeless Emergency Services $150,000
Add funding to support Office of Homeless Solutions (OHS) operations due to the 0.0
expansion of department services and staffing. OHS has grown from nine to 34
full-time employees, resulting in increased operational expenses. These funds will
cover employee supplies and equipment, as well as third-party financial audit
costs related to the contracts the department oversees. Currently, OHS is
managing 26 American Rescue Plan Act contracts, which require audit services
to ensure compliance with federal regulations.
Total Human Services $4,576,000
0.0
2025-26
Department/Program Total
Law
1. Civil Division $0
Convert two temporary Assistant City Attorney IV positions to ongoing status. 2.0
These positions will be dedicated to matters related to GO Bond projects and the
Information Technology Services department.
Total Law $0
2.0
Neighborhood Services
1. Blight Reduction Program $0
Convert a temporary Special Projects Administrator position to ongoing status. 1.0
This position was created to oversee implementation of the Community Safety
Plans approved by Council in 2022 and to facilitate coordination of services
between departments. The Community Safety Plans leverage technology and
community-based resources to improve the safety and quality of life along the
19th and 27th Avenue and Hatcher and Bell Road corridors.
Total Neighborhood Services $0
1.0
Office of Arts and Culture
1. Administration $0
Convert a temporary part-time Administrative Assistant I position to ongoing 0.6
status. This position is the first contact point for customer service and supports
Arts and Culture programs by scheduling meetings, creating reports and
presentations, and responding to constituent inquiries, as well as supporting the
public arts, grants, and cultural facilities teams.
Total Office of Arts and Culture $0
0.6
Parks and Recreation
1. Administration $0
Convert a temporary Assistant Parks and Recreation Director position to ongoing 1.0
status. This position is responsible for management of several large department
divisions that provide programming to the community. Additionally, this position is
responsible for management of capital projects throughout the park system.
Total Parks and Recreation $0
1.0
2025-26
Department/Program Total
Police
1. Administration $0
Convert a temporary Senior Public Information Officer to ongoing status. This 1.0
position is responsible for strategic communications planning related to the
Department of Justice (DOJ) report, including collaboration with outside legal
counsel. The position also serves as the technical advisor and support for public-
facing communication and associated efforts, including support of Police and
other City executive staff in public interviews and communications.
Total Police $0
1.0
TOTAL PROPOSED GENERAL FUND ADDITIONS $51,194,000
187.6
PROPOSED SUPPLEMENTALS
NON-GENERAL FUND
Finance
1. Water and Wastewater Financial Planning $0
Convert a temporary Accountant III position to ongoing status in the Finance 1.0
Utilities Division paid for by the Water Services Department (WSD). The position
responsibilities include reviewing transactions and reports in the customer billing
system used by WSD.
Total Finance $0
1.0
Housing
1. Community Partnerships $0
Convert a temporary Project Manager position to ongoing status. This position 1.0
provides project management and coordination for the implementation of various
affordable housing development projects. It also ensures the City meets stringent
federal compliance requirements for grants awarded through the U.S. Department
of Housing and Urban Development (HUD) HOME Investment Partnerships
Program American Rescue Plan (HOME-ARP).
2. Housing Supportive Services $0
Convert two temporary Caseworker II positions to ongoing status. These positions 2.0
support the Family Self Sufficiency Program, which coordinates public and private
resources to help Housing Choice Voucher program participants, public housing
tenants, and tenants in the Section 8 Project-Based Rental Assistance program
achieve financial independence.
Total Housing $0
3.0
2025-26
Department/Program Total
Human Services
1. Head Start Birth to Five $0
Convert multiple temporary Family Resource Centers positions to ongoing status, 8.0
including one Caseworker III, three Caseworker Aide, and four Caseworker I
positions. These positions are funded by the First Things First grant, which the
department has received since 2017. The positions work in the department's
Education Division, providing early childhood support.
Total Human Services $0
8.0
Law
1. Civil Division $0
Convert a temporary Assistant City Attorney IV position to ongoing status. This 1.0
position will be dedicated to matters related to the employee pension fund.
Total Law $0
1.0
Police
1. Various $0
Convert three temporary grant positions to ongoing status, including a Police 3.0
Research Analyst supported by the Urban Area Security Initiative grant program,
and a Criminal Intelligence Analyst and Contracts Specialist I supported by the
Internet Crimes Against Children grant program. These positions oversee grant
management and administrative responsibilities, including coordinating task force
activities, scheduling task processing, collecting data, and submitting reports for
grant performance measures.
Total Police $0
3.0
Public Transit
1. Customer Service Centers $0
Convert two Supplies Clerk II positions from temporary to ongoing status. These 2.0
positions support expanded cash handling operations for public transit regional
partners.
2. Light Rail $0
Convert one Administrative Assistant II from temporary to ongoing status. This 1.0
position in the Light Rail Transit Division is responsible for assuring operational
policies and Light Rail facilities are meeting contractual terms.
Total Public Transit $0
3.0
2025-26
Department/Program Total
Retirement
1. Retirement Member Services $0
Add funding for a Retirement Assistant position to handle increasing workload and 1.0
continuing complexity of retirement program law. With 34% of active employees
reaching retirement eligibility in the next five years, this position will support
general City retirement by handling counseling appointments and retirement
estimates and processing retirement documents. The cost of this position will be
paid by the City of Phoenix Employees' Retirement System trust.
2. City of Phoenix Employees' Retirement System (COPERS) Investment $0
Management 1.0
Add funding for an Investment Manager position to provide guidance and
oversight of pension investments. This position will strengthen the COPERS
investment program, continuing to build a strong investment portfolio that will
meet funding requirements for long-term retirement plan protection. The cost of
this position will be paid by the COPERS trust.
3. Retirement Member Services $0
Add funding for a Curriculum and Training Coordinator position to review, assess, 1.0
and develop training and communication strategies to improve retirement
readiness information. This position will enhance efforts to communicate to all
members the importance and value of retirement benefits in a more transparent,
easy to understand, and accessible way. The cost of this position will be paid by
the COPERS trust.
Total Retirement $0
3.0
Street Transportation
1. Administration $0
Convert a temporary Special Projects Administrator position to ongoing status. 1.0
This position supports the Street Transportation Director's Office, providing
strategic oversight, project management, and coordination of departmental
initiatives, and serves as a critical liaison with internal stakeholders, government
agencies, and community partners.
2. Administration $0
Convert a temporary Accountant II position to ongoing status. This position 1.0
supports, invoices, and reconciles various revenue sources in the Street
Transportation Department, assisting with the oversight and generation of
invoices related to revenues collected from a variety of sources, including
damage claims, revocable permits, and fees for new programs.
2025-26
Department/Program Total
3. Administration $0
Convert a temporary Accountant II position to ongoing status. This position 1.0
supports and manages various grants and federal aid-funded projects, many of
which require quarterly reporting and other mandatory documentation of activities.
Duties handled by this position are expected to increase with the recent passage
of the Proposition 479 transportation initiative, which provides regional
transportation funds over the next 20 years.
4. Transportation Planning $0
Convert a temporary Management Assistant II position to ongoing status. This 1.0
position plays a crucial role in supporting the department's local, state, and
federal competitive grant applications and submissions. Grant opportunities have
increased in recent years, resulting in increases in grant planning efforts, Council
action requests, interdepartmental collaboration, and grant agreement
coordination.
Total Street Transportation $0
4.0
Water Services
1. Wastewater Treatment $5,578,000
Add funding for twenty-eight new positions, plus related vehicles, equipment, 28.0
contractual services, and commodities needed to re-open and expand the City's
Cave Creek Water Reclamation Plant. This addition would allow the City to
expand capacity for wastewater treatment and water purification, maintain
environmental and safety standards, and uphold technological process control
and security standards.
2. Administration $0
Convert two temporary full-time positions to ongoing status, including an 1.0
Administrative Assistant I and an Accountant I. The Administrative Assistant I
provides critical services to ensure compliance with Occupational Safety and
Health Administration (OSHA) requirements and Department of Transportation
Commercial Drivers License federal regulations. The position also helps
coordinate department-wide Safety Standard Operating Procedures and
Environmental Compliance Procedures (ECP). The Accountant I assists with City
incentive programs for residents to install low-flow toilets, smart irrigation
controllers, and to replace turf with xeriscape landscaping. The position also
provides budget development support and produces regular position and financial
reporting for management.
Total Water Services $5,578,000
29.0
TOTAL PROPOSED NON-GENERAL FUND ADDITIONS $5,578,000
55.0
ATTACHMENT B
2025-26
PROPOSED REDUCTIONS
GENERAL FUND
View the Inventory of Programs published online for program details.
2025-26
Department/Program Total
Budget and Research
1. Centralized Budget and Position Control $(158,000)
Eliminate one vacant Budget and Research Analyst position which conducts (1.0)
detailed forecasting, position control, and revenue estimates. Responsibilities of
this position have been assigned to other department analysts.
Total Budget and Research $(158,000)
(1.0)
City Auditor
1. Audits $(73,000)
Reduce funding for the use of outside consultants to conduct specialized audits 0.0
resulting in one to two fewer specialized audits annually.
Total City Auditor $(73,000)
0.0
City Clerk
1. Official Records / Records Management / Various $(201,000)
Eliminate funding not used by the department for the acquisition and 0.0
implementation of a new Records Management System and reduce funding for
computer hardware maintenance, office equipment replacement and official
records and elections shredding services.
Total City Clerk $(201,000)
0.0
City Manager's Office
1. Administration of Policies and Objectives Set by Mayor and Council; Oversight of $(99,000)
Departments
Eliminate one vacant Management Fellow position. The City Manager’s Office (1.0)
would have three management fellow positions remaining to rotate through
various departments and assist with Council meetings and special projects.
2025-26
Department/Program Total
2. Administration of Policies and Objectives Set by Mayor and Council; Oversight of $(35,000)
Departments
Allocate partial costs for one Support Services Aide position to the Public Works 0.0
Solid Waste Division, allowing the PHX311 Information Center to continue to
timely respond to a high volume of resident inquiries and requests.
3. Administration of Policies and Objectives Set by Mayor and Council; Oversight of $(31,000)
Departments
Reduce the Office of Innovation discretionary budget designated for expanding 0.0
the office and various programs.
4. Administration of Policies and Objectives Set by Mayor and Council; Oversight of $(175,000)
Departments
Reduce Office of Accountability and Transparency (OAT) special contractual 0.0
services funding for future OAT expansion.
Total City Manager's Office $(340,000)
(1.0)
Communications Office
1. Communication Outreach $(122,000)
Reduce contractual funding for marketing and citizen outreach. This reduction 0.0
would result in less available resources to conduct marketing efforts such as
promoting City employment opportunities.
Total Communications Office $(122,000)
0.0
Community and Economic Development
1. Business Development $(182,000)
Eliminate one vacant Protocol Program Administrator position. Eliminating this (1.0)
position will require the department to forego adjustments to staff responsibilities
in the Business Development Program aimed at improving project staff and
department efficiency and effectiveness.
2. Business Retention and Expansion $(228,000)
Eliminate one vacant Deputy Economic Development Director position. The (1.0)
reduction requires the department to shift retention and expansion efforts to
another middle manager position.
3. Business Development $(22,000)
Reallocate an Aviation Marketing Supervisor position to an Economic 0.0
Development Specialist resulting in savings for the cost of the position. Due to
challenges filling this position, the department moved position responsibilities to
an Economic Development Program Manager.
2025-26
Department/Program Total
4. Various $(72,000)
Reduce funding for professional services, including Council-requested market- 0.0
area studies, due-diligence research for site acquisitions/dispositions, unplanned
special-event services and economic policy research. This reduction slightly
impacts the department's ability to respond to unforeseen needs.
Total Community and Economic Development $(504,000)
(2.0)
Equal Opportunity Department
1. Small and Disadvantaged Business Enterprise (S/DBE) Programs $(46,000)
Increase Small and Disadvantaged Business Enterprise Program allocations to 0.0
the Aviation and Street Transportation Departments, generating savings to the
General Fund. These allocations are based on additional work Equal Opportunity
Department staff will provide to support the economic growth of local businesses
through administration of the Small Business Enterprise (SBE), Disadvantaged
Business Enterprise (DBE), and Airport Concessions Disadvantaged (ACDBE)
Business Enterprise programs.
Total Equal Opportunity Department $(46,000)
0.0
Finance
1. Financial Accounting and Reporting $(164,000)
Increase a flat rate assessment from the General Fund to the Sports Facility Fund 0.0
for financial reporting and oversight. Due to the Class and Comp Study, the
assessment increased by 20%. Additionally, due to organizational structure
changes, the assessment adds 20% of an Assistant Director and Fiscal Manager
position costs to the assessment.
2. Banking and Cashiering $(22,000)
Reduce banking services not needed due to higher than anticipated credits from 0.0
favorable Federal Reserve interest rates.
3. Debt and Investment Management $(226,000)
Eliminate one vacant Deputy Finance Director, in the Treasury and Debt (1.0)
Management Division, that has management and financial oversight over all City
banking activities; all City investment activities; and all City debt issuances,
monitoring, accounting, and reporting. Eliminating the position will require other
Deputy Finance Directors to oversee the area of Treasury and Debt Management.
4. Sales Tax Licensing and Accounting $(154,000)
Eliminate one vacant Senior Tax Auditor in the Tax Compliance and Education (1.0)
Audit Team. The position requires specialized knowledge of complex tax
regulations. Responsibilities would be assigned to other staff on the team
increasing respective workloads.
2025-26
Department/Program Total
5. Goods & General Services Procurement and Contract Management $(107,000)
Eliminate one vacant Buyer position in the Central Procurement Division. The (1.0)
position is tasked with researching procurement matters, assisting with the
administration of contracts, and handling small dollar purchases and informal
procurements. Responsibilities would be assigned to other staff in the division
increasing respective workloads.
6. Banking and Cashiering $(77,000)
Eliminate one vacant Account Clerk III in the Treasury and Debt Management (1.0)
division. The position serves as a Cashier in the 305 Finance Payment Center.
The position provides payment acceptance services to City residents and
businesses by accepting payments for City departments in-person, over-the-
phone, and by mail, in addition to providing Spanish language translation services
for customers. Responsibilities would be assigned to other staff in the division
increasing respective workloads.
7. Acquisition, Relocation and Title $(112,000)
Eliminate one vacant Property Specialist, in the Real Estate Division, tasked with (1.0)
leasing City properties for all departments. The position negotiates lease terms,
monitors compliance, and facilitates amendments and renewals. Responsibilities
would be assigned to other staff in the division increasing respective workloads.
8. Financial Accounting and Reporting $(109,000)
Eliminate one vacant Accountant II, in the Financial Accounting and Reporting (1.0)
Division, tasked with processing fixed assets and encumbrances citywide.
Responsibilities would be assigned to other staff in the division increasing
respective workloads.
$(119,000)
9. Risk Management (1.0)
Eliminate one vacant Accountant II in the Revenue & Risk Management division.
The division processes property/liability claims filed against the City, purchases
commercial insurance, and provides risk related consulting services to
departments. Responsibilities would be assigned to other staff in the division
increasing respective workloads.
Total Finance $(1,090,000)
(7.0)
2025-26
Department/Program Total
Fire
1. Various $(5,000,000)
Reduce funding for various non-personal services items including contractual 0.0
services, commodities, and capital outlay items. This reduction includes less
resources for emergency repairs, minor capital projects, technology equipment
replacements, and employee training and travel. While these reductions impact
the department by reducing budgeted resources, the impact is minimal and will
not impact fire service delivery.
Total Fire $(5,000,000)
0.0
Government Relations
1. Federal, State, Regional and Tribal Programs $(88,000)
Reduce funding for business travel and a lobbying firm contract that provides 0.0
supplemental support for federal legislative matters.
Total Government Relations $(88,000)
0.0
Human Resources
1. Safety & Workers Compensation $(147,000)
Generate savings to the General Fund by allocating the cost of a Program 0.0
Manager position in the Human Resources Safety Division to the Workers'
Compensation Trust fund. By charging this position to the trust, a portion of its
costs will be assessed to non-General Fund funding sources.
2. Benefits & Wellness $(200,000)
Reduce planned funding for an emergency back-up care program. This program 0.0
was planned to be added beginning in July 2025 to provide full-time employees
with up to five days of childcare assistance if their normal childcare was
unavailable.
3. Organizational & Learning Development $(30,000)
Reduce funding for the implementation of components of the City's Learning 0.0
Management System, PHXYou. This reduction would delay the migration of
Police, Fire, and other departments away from their internal learning systems to
PHXYou.
4. Labor Relations $(30,000)
Reduce funding for labor negotiation training. City code requires staff to 0.0
participate in labor negotiations with labor groups on a routine basis. This
reduction would decrease the amount of training able to be provided to City staff
on labor law and negotiations processes.
2025-26
Department/Program Total
5. Talent Acquisition & Management $(32,000)
Eliminate a vacant part-time Senior Human Resources Clerk position. (0.7)
Responsibilities would be assigned to other staff increasing respective workloads.
6. Talent Acquisition & Management $(50,000)
Reduce funding for advertising services for applicant recruitment. This would 0.0
reduce resources used for paid search engine optimization, banner ads, paid
social media ads, outdoor billboards, and other advertising functionality to attract
job applicants.
7. Classification and Compensation $(188,000)
Eliminate one vacant Human Resources Supervisor position. This position (1.0)
oversees a team of employees responsible for reviewing position classifications,
pay step placements, special merit recommendations, and classification and
compensation studies. Responsibilities would be assigned to other staff
increasing respective workloads.
Total Human Resources $(677,000)
(1.7)
Human Services
1. Strategic Initiatives $(76,000)
Eliminate a vacant Secretary III position from the Strategic Initiatives Division. (1.0)
This position provides administrative support within the division. Responsibilities
would be assigned to other staff increasing respective workloads.
Total Human Services $(76,000)
(1.0)
Information Technology Services
1. Various $(5,000,000)
Reduce funding for various non-personal service items including primarily staff 0.0
augmentation working to support technology modernization efforts, server and
storage environment, SharePoint migration, technical writing, service delivery,
projects for small departments, and other initiatives, telecommunications network
power supply and fiber management, and technology software and licensing for
management of mobile performance and implementing enhancements and/or
automation of software integration.
Total Information Technology Services $(5,000,000)
0.0
2025-26
Department/Program Total
Law
1 Various $(242,000)
Eliminate one vacant Legal Secretary*Lead and two Court/Legal Clerk II (3.0)
positions. The Legal Secretary*Lead position provides secretarial support for
three attorneys within the Community Prosecution and Appeals bureaus. The
Court/Legal Clerk II positions ensure files are complete, motions are filed, and
work requested by a Prosecutor or Legal Assistant is completed timely.
Responsibilities would be assigned to other staff increasing respective workloads.
Total Law $(242,000)
(3.0)
Library
1 Various $(249,000)
Reduce non-personal services funding for library materials and information 0.0
technology needs. This reduction would result in fewer new materials being
purchased, more wear and tear on current physical collections, and gradual
degradation of the audio visual capabilities of library public meeting room spaces.
Total Library $(249,000)
0.0
Municipal Court
1 Criminal and Civil Case Adjudication $(106,000)
Eliminate one vacant part-time pro tem City Judge position. This position makes (0.5)
judicial decisions in a criminal courtroom. This elimination would result in more
cases being moved to existing courtrooms and be scheduled further into the
future.
2. Interpreter Services - Management Services Division $(7,000)
Reduce funding for interpreter and translation services, which is used for services 0.0
for non-English speaking court participants.
3. Administration $(86,000)
Reduce funds for information technology training for staff and communications 0.0
equipment in courtrooms. This reduction will impact the team's ability to assist its
technical staff in keeping their skills current with the evolving technical toolsets
they must employ as part of their daily activities.
Total Municipal Court $(199,000)
(0.5)
2025-26
Department/Program Total
Neighborhood Services
1. Targeted Neighborhood Revitalization Programs $(741,000)
Replace funding in the General Fund for the Gated Alley Program with 0.0
Neighborhood Block Watch Program (NBWP) funds. In December 2024, the City
Council approved the use of $3 million in available NBWP funds for the program.
It is anticipated NBWP funds will be available going forward to continue the Gated
Alley Program as planned. Future use of additional funds will be brought to the
2. Targeted Neighborhood Revitalization Programs $(74,000)
Reduce funding for landscape maintenance. This service is scheduled monthly for 0.0
multiple city-owned properties located throughout Phoenix and ensures they
remain blight free and in compliance with City Code. With this reduction,
landscape maintenance will be completed 7 times per year, rather than 12 times
per year and is not expected to have a material impact.
3. Blight Reduction Program $(150,000)
Reduce funding for the Private Property Cleanup Program. The costs of the 0.0
program are less than originally estimated and the reduction is not expected to
result in adverse impacts to residents or service levels.
Total Neighborhood Services $(965,000)
0.0
Office of Arts and Culture
1. Public Art Program and Cultural Facilities Development and Property $(175,000)
Management Services
Reduce funding for maintenance of the City’s Municipal Arts Collection and for 0.0
facility maintenance for the Children's Museum of Phoenix, Phoenix Art Museum
and Phoenix Theatre.
Total Office of Arts and Culture $(175,000)
0.0
Parks and Recreation
1. Various $(2,000,000)
Reduce various non-personal services items primarily including park maintenance 0.0
and capital equipment replacement funding. This funding supports general park
and facility maintenance needs and also funds the replacement of aging or broken
equipment. While these reductions impact the department by reducing budgeted
resources it is not expected to impact park service delivery.
Total Parks and Recreation $(2,000,000)
0.0
2025-26
Department/Program Total
Phoenix Convention Center
1. General Fund Garages $(208,000)
Reduce funding for re-stripping of parking stalls at the 305, Adams Street, and 0.0
2nd Avenue Garages.
Total Phoenix Convention Center $(208,000)
0.0
Police
1. Various $(6,000,000)
Reduce various non-personal services items primarily including approximately 0.0
$1.5 million in funding no longer needed due to the planned rollout of the new
Records Management System (RMS) beginning in June 2025. It also includes
reductions to training, technology, various police equipment, maintenance, and
supplies. While these reductions impact the department by reducing budgeted
resources, the impact is minimal and will not impact police service delivery.
Total Police $(6,000,000)
0.0
Public Works
1. Facilities Management and Maintenance $(500,000)
Eliminate non-critical minor maintenance projects for city facilities including 0.0
asphalt reconstruction, carpet replacement and flooring repair, illuminated strip
replacement, landscaping regrading and gravel replacement.
Total Public Works $(500,000)
0.0
Street Transportation
1. On-Street Parking Program $(87,000)
Eliminate one vacant Parking Meter Repair Supervisor position. This position has (1.0)
been vacant for an extended period of time due to hiring challenges, and its
elimination would have limited impact on current daily operations.
Total Street Transportation $(87,000)
(1.0)
TOTAL PROPOSED GENERAL FUND REDUCTIONS $(24,000,000)
(18.2)
ATTACHMENT C
2023-24
SUPPLEMENTALS UPDATE
GENERAL FUND
2023-24
Department/Program Total
Fire
1. Fire Emergency Medical Services and Hazardous Incident Response $2,021,000
Add funding for twenty-four sworn positions (four Fire Captains, four Fire 24.0
Engineers, and sixteen Firefighters) to provide dedicated staffing for the new Fire
Station 74, located at 19th Avenue and Chandler Boulevard. The Fire Department
intends to hire personnel to staff this fire station beginning January 2024. The full-
year ongoing cost will be $3,796,000.
Status Update: All 24 firefighter positions are filled and trained, allowing the
placement of Engine 74 and Rescue 74 into service at temporary locations
until the opening of Fire Station 74. This has improved overall service
delivery to the growing community in west Ahwatukee.
2. Fire Emergency Medical Services and Hazardous Incident Response $1,355,000
Add funding for seven new sworn positions (Firefighters) and one new vehicle 7.0
(ambulance) to provide dedicated staffing and apparatus for one new Rescue
unit. These positions and equipment will significantly improve service delivery
citywide. The full-year ongoing cost, excluding initial vehicle purchases, will be
$1,049,000.
Status Update: All seven firefighter positions are filled and trained, allowing
for a new rescue company to go into service, which will have an impact on
reducing response times and will help improve overall service delivery to
the community.
3. Administration $71,000
Add funding for a new Human Resources Aide position to support the processing 1.0
of payroll and leave transactions for the Fire Department. This addition will reduce
the number of transactions per employee to reduce human errors in the payroll
process and ensure that employees are paid correctly. The full year ongoing cost,
excluding initial equipment purchases, will be $69,000.
Status Update: The position is filled and supports the Fire Department's
payroll section in processing payroll and leave transactions.
Total Fire $3,447,000
32.0
2023-24
Department/Program Total
Human Services
1. Client Services $500,000
Add funding to compensate for the loss of Low Income Home Energy Assistance 0.0
Program (LIHEAP) funding from the Arizona Department of Economic Security
(DES). Administrative changes in the DES funding process have resulted in a loss
of revenue to the City's program. The anticipated reduction will negatively impact
the City's ability to adequately staff the LIHEAP program, resulting in reduced
levels of service to residents qualifying for home energy assistance. This addition
helps ensure continued service.
Status Update: This funding was designed to replace anticipated lost
funding from DES. Unexpectedly, DES provided temporary funds for
navigation support, in place of LIHEAP administrative support. The
additional DES funds supported the program for the first part of FY 2023-24.
In March 2024, the department began to spend the supplemental funding,
which continues to support LIHEAP activities.
2. Victim Advocacy Services $450,000
Add funding to offset expiring Victims of Crime Act (VOCA) grant funding. These 0.0
funds will enhance the department's ability to provide domestic violence and
sexual assault referrals, reducing caseloads, preventing case backlogs, and
maintaining adequate response times.
Status Update: This funding was designed to replace anticipated lost
funding from the Office for Victims of Crime (OVC), based on its
communication of a 50% reduction of funding levels for FY 2023-24.
However, the State of Arizona used American Rescue Plan Act (ARPA)
funds to make up for the shortfall. As a result, no supplemental funds have
been spent to date. For FY 2024-25, OVC is again communicating a potential
50% reduction in funding, which would result in the need to utilize the
funding approved in this supplemental.
3. Homeless Outreach Services $600,000
Add funding to expand the department's Behavioral Health Engagement Teams 0.0
(BET) contract. BET teams provide outreach to specific and targeted areas of the
city that are experiencing high instances of substance abuse and behavioral
health issues, which may contribute to people experiencing homelessness.
Status Update: The BET contract is in place and has more than 100
engagements with people experiencing homelessness. While positive exits
are challenging with these encounters, the team has been able to achieve 42
positive exits, including shelter, detox, and permanent housing. To date,
more than 2,000 services have been delivered. Services include case
management, obtaining identification or securing forms, transportation, and
benefits assistance. The additional resources for this contract support
positive outcomes and increased community engagement for people with
mental health needs and substance use disorder.
2023-24
Department/Program Total
4. Homeless Community Engagement $600,000
Add funding to expand the department's PHX CARES Outreach Teams contract. 0.0
The expansion will dedicate teams to hot spots throughout the city where there
are high concentrations of encampments. The teams will provide outreach from 5
a.m. to 11 p.m., seven days per week, with the goal of reducing people
experiencing homelessness.
Status Update: This contract has served more than 500 individuals with
mental health needs, substance use disorders, and chronic health
conditions. A total of 202 individuals were exited to shelter, two were exited
to transitional housing programs, 10 were exited to live with family or
friends, and 68 exited to substance use treatment or detox. 255 individuals
engaged through this contract are identified as chronically homeless. The
additional funding for this contract supports positive outcomes and
increased engagement with high need populations.
5. Homeless Emergency Services $5,200,000
Add funding needed to continue emergency services for shelter operations 0.0
throughout the city serving individuals experiencing unsheltered homelessness.
The City is developing a new shelter that will house up to 280 individuals per night
at 3000 S. 22nd Ave, which will be operated by a nonprofit shelter and wrap
around service provider. Additionally, the City and Maricopa County are co-
funding Community Bridges Inc.’s (CBI) acquisition of a hotel to be converted into
an emergency shelter called Rio Fresco Healing Center. Although the acquisition
is not finalized, the rooms at the hotel are currently being rented by CBI, serving
140 individuals per night at that location. Together the two shelters supported with
this funding will serve up to 420 individuals per night and approximately 1,260
individuals per year. While operational funding for both locations is being sought
through additional federal, state, county, and private sources, this funding will
facilitate operations through June 2024.
Status Update: The original project planned for this funding was not viable,
so funds were used for a temporary shelter while a new site for a City
shelter was identified. A contract with A New Leaf was executed on October
1, 2023 for emergency shelter services via temporary lodging. This
temporary lodging site provides 100 non-congregate beds and accepted its
first residents on October 18, 2023. The funding will continue to support
City shelter efforts in the future.
6. Head Start Birth to Five $250,000
Add funding to support the Phoenix Day Early Childhood Education Center 0.0
(PDECEC). This one-time allocation will allow the PDECEC to retain and expand
teaching staff and training to increase enrollment to a sustainable level. Impacts
from COVID resulted in a $1 million deficit in funding. A New Leaf has developed
a plan to increase enrollment and is on track to reach sustainability by 2024.
Status Update: This one-time funding allowed PDECEC to continue to
increase student enrollment and hire teachers to meet their 2024 financial
sustainability goals. The funding specifically supported three lead teachers,
an enrollment coordinator, and a compliance manager.
2023-24
Department/Program Total
Total Human Services $7,600,000
0.0
Law
1. Criminal Division - Victim Services Unit $344,000
Fund five Federal Victim of Crime Act Assistance (VOCA) Fund grant positions 5.0
with General Funds. Grantees were informed funding will be reduced by 50-60%
beginning fiscal year 2023-24. These positions provide services to victims and
assistance to comply with mandated victims' rights. The full-year ongoing cost will
be $447,000.
Status Update: Four of the five positions are filled. Services have been able
to remain at existing levels.
2. Civil Division $0
Add four Management Assistant II and two Assistant City Attorney IV positions. 10.0
Convert from temporary to ongoing status a Chief Assistant City Attorney, an
Assistant Chief Counsel, a Management Assistant II, and a Special Projects
Administrator. These positions are needed to facilitate and coordinate immediate
and ongoing needs related to the Department of Justice investigation of the
Phoenix Police Department. The cost of these positions will be offset with salary
savings within the Police Department budget.
Status Update: One Assistant City Attorney IV position assigned to the
Phoenix Police Academy, recently became vacant and a recruitment is
underway. The second Assistant City Attorney IV positions is assigned to
the Police Department Professional Standards Bureau and is filled. The
Chief Assistant City Attorney and Assistant Chief Counsel are filled. The
Chief Assistant City Attorney is the citywide project manager for the
Department of Justice Investigation and receives support from the Assistant
Chief Counsel. The five Management Assistant II and one Special Projects
Administrator positions were transferred to the Police Department and are
no longer in the Law Department.
Total Law $344,000
15.0
Neighborhood Services
1. Targeted Neighborhood Revitalization Programs $352,000
Increase funding for the Gated Alley Program. In 2022-23, 45 gated alley 0.0
segments are scheduled to be initiated, which will expend all current program
funding. By increasing program funding, an additional 32 gated alley segments
already approved will be able to be initiated. The ongoing funding will provide for
approximately 77 gated alley segments per fiscal year.
2023-24
Department/Program Total
Status Update: This funding helped contribute to GAP gating 156 alley
segments in FY2023-24 through a combination of General Funds,
Neighborhood Block Watch Program (NBWP) funds, and other funding
sources. In November 2024, Council approved the allocation of $3 million in
NBWP funds to help meet current GAP demands. Since the start of FY 2024-
25, GAP has received 195 requests. This year’s General Fund budget
allocation will allow 80 alley segments to be gated. Of the 115 remaining
requests, 58 have been fully vetted, are ready for permitting, and will use
NBWP funds to complete the work.
Total Neighborhood Services $352,000
0.0
Office of Arts and Culture
1. Public Art Program $0
Add a Project Manager position to help manage and coordinate the City's 1.0
nationally-recognized public art program. This position will coordinate the
implementation and completion of Capital Improvement Program (CIP) percent-for-
art public art projects, as well as providing technical and program support for
other public art projects. The cost of this position will be offset by charging Capital
Improvement Projects.
Status Update: The Public Art Program completed hiring of the Project
Manager position to help manage and coordinate the City’s nationally-
recognized public art program. The position is now coordinating,
implementing, and completing Capital Improvement Program (CIP) percent-
for-art public art projects.
2. Community Investment and Engagement Program $250,000
Increase funding for the Community Arts Grants Program from $125,000 to 0.0
$250,000 to enhance efforts towards greater equity of funds to arts organizations,
including providing support to renters at City cultural venues to help offset
performance and production costs. The increase will provide ongoing annual
funding from Community Arts Grants of $1.45 million.
Status Update: The additional $250,000 Community Arts Grant funding has
enhanced efforts toward more significant equity of funds to arts
organizations. This includes providing support to renters at City cultural
venues to help offset performance and production costs. 126 applications
were received for the FY 2024-25 Community Arts Grant Program, a nine
percent increase from FY 2023-24.
Total Office of Arts and Culture $250,000
1.0
2023-24
Department/Program Total
Parks and Recreation
1. Park Rangers-Community and Neighborhood Parks $1,537,000
Add funding for one Park Manager, two Park Ranger III, and 12 Park Ranger II 15.0
positions to create an overnight shift of two Urban Park Ranger Teams. By
creating these two teams, Park Ranger coverage will be available 24 hours per
day, seven days per week throughout the 186 parks within the City's 500 plus
square miles. The full-year ongoing cost, excluding initial vehicle purchase costs,
will be $1,344,000.
Status Update: These positions were filled in July 2023. Since that time, the
positions have been critical to the ongoing education and enforcement of
the Parks and Recreation Department's Code of Conduct. The Park Rangers
are currently performing regular patrols of urban parks overnight, where
they educate park users on code of conduct rules. Additionally, the Park
Rangers assist with large cleanup efforts throughout City parks. These
positions have also increased the ability to respond to issues related to
people in closed parks overnight.
2. Specialized Maintenance-Skilled Trades $394,000
Add funding for an additional Forestry crew consisting of one Parks Foreman, two 5.0
Urban Forestry Technician, and two Equipment Operator II positions. The
Forestry section provides citywide tree planting, tree maintenance activity,
technical support, and 24/7 emergency response. Additional staff are needed for
irrigation system installation, maintenance and operation of controllers, tree
planting, staking, and pruning. These activities will support the Tree and Shade
Master Plan, an important component of the City's Climate Action Plan. The full-
year ongoing cost, excluding initial vehicle purchases, will be $353,999.
Status Update: All positions have been filled except for one Urban Forestry
Technician position, which is currently in the hiring process. These
positions have enhanced tree planting, maintenance, and emergency
response efforts across the City.
3. General Recreation $101,000
Add funding for a Volunteer Coordinator position. This position would serve as a 1.0
single point of contact to brand and promote a Parks volunteer program
supporting urban flatland parks citywide. The department receives a large number
of volunteer requests from the public. This position would receive those requests,
plan, develop, and implement volunteers, and conduct fundraising and/or
community service programs.
Status Update: In an effort to better align the job duties with the needs of
the department, this position was reallocated to an Administrative Assistant
II and was filled in January 2025. The development of the volunteer program
is ongoing and is the primary responsibility of the position.
4. General Recreation $250,000
Add funding for up to three cricket fields and explore development of partnership 0.0
opportunities to expand more sites in the future.
2023-24
Department/Program Total
Status Update: Funding enabled the development and installation of two
cricket pitch sites: Turtle Rock Basin, located near 12th Street and Bell
Road, and Grovers Basin, located near 20th Street and Grovers Avenue.
Both sites have been constructed and are open to the public. During the fall
2024 allocation season, the cricket pitches were reserved for a total of 526
hours. For the 2025 spring season, 119 adult teams and 13 youth teams
have been allocated 2,240 and 220 hours, respectively.
5. Parks Maintenance $125,000
Add funding for additional maintenance and repair items at Sueño Park and other 0.0
Parks sites.
Status Update: Parks and Recreation staff worked with the community to
identify improvements to the park, including new benches, picnic tables,
and grills throughout the park, a new bleacher by the basketball court,
backstop replacement, and chilled drinking fountains. All improvements
have been made and are being enjoyed by the community.
Total Parks and Recreation $2,407,000
21.0
Police
1. Various $0
Add funding for 20 Civilian Investigator positions and related equipment to support 20.0
the department's ongoing civilianization efforts. These positions perform select
investigative functions and enhance investigative capacity, provide staffing
flexibility, and allow the department to use sworn staff where they are most
needed. The full-year ongoing cost will be $1,917,000; however, the cost for FY
2023-24 will be absorbed utilizing savings from vacant sworn positions.
Status Update: These positions are assigned to a variety of bureaus, with 18
of the 20 positions currently filled. Their work supports the Homicide
Squad, Drug Enforcement Bureau, Property Crimes Bureau, Employment
Services Unit, as well as Real Time Operation Centers. Essential tasks
include data collection, communicating with residents, liaising with other
government agencies, and relieving sworn staff of duties that would keep
them from needed public safety work.
2. Various $0
Add funding for three Police Research Analyst positions and three Criminal 6.0
Intelligence Analyst positions and related equipment to the Investigations and
Patrol Divisions and the Compliance and Oversight Bureau as part of the
department's ongoing civilianization efforts. These positions will provide key
analytics and research work to support a variety of department efforts, including
work with the Office of Accountability and Transparency and the Professional
Standards Bureau addressing community concerns. The full-year ongoing cost
will be $575,000; however, the cost for FY 2023-24 will be absorbed utilizing
savings from vacant sworn positions.
2023-24
Department/Program Total
Status Update: All positions are currently filled. The Organizational Integrity
Bureau is assigned two Police Research Analysts, and the Department of
Justice (DOJ) Investigative Detail is assigned one Police Research Analyst.
These positions support DOJ activities, work with the Organizational
Integrity Unit, support early intervention efforts, provide assistance on
analytics and dashboards, and handle community complaints. The Strategic
Information Bureau currently has two Criminal Intelligence Analyst
positions, and the Compliance and Oversight Bureau has one Criminal
Intelligence Analyst. Two of the positions are assigned to the Compstat
program, which provides crime trend information to leadership. One
position conducts data queries, develops reports, responds to public
records requests, and provides research and data analysis to assist with
ongoing investigations and solving crimes.
3. Training Bureau - Training, ALEA & AZPOST $0
Add funding for four Civilian Curriculum and Training Coordinator positions 4.0
working as Law Enforcement Training Specialists in the Training Bureau. These
positions are needed to enhance training capacity, benefitting both new recruits
and existing sworn staff. The full-year ongoing cost will be $384,000; however, the
cost for FY 2023-24 will be absorbed utilizing savings from vacant sworn
positions.
Status Update: The Training Bureau has utilized these positions to alleviate
workload normally handled by sworn staff. All four positions are currently
filled. The coordinators conduct daily physical conditioning with recruits,
teach health and wellness classes, and assist with the PHXYou learning
management system. Additionally, they create and prepare lesson plans for
the Phoenix Police Academy, proctor exams, document grade reports,
conduct orientations and information training, and manage the Academy’s
data dashboard. These positions have allowed Field Training Officers to
spend more time training recruits.
4. Laboratory Bureau - Crime Scene Response/Crime Suppression $0
Add funding for five Crime Scene Specialist II positions, vehicles, and related 5.0
equipment in the Laboratory Services Bureau. These positions play a pivotal role
in the investigative process and processing of crime scenes. Due to increased
work volume, additional positions are needed to keep pace with national
standards and best practices. The full-year ongoing cost will be $381,000;
however, the cost for FY 2023-24 will be absorbed utilizing savings from vacant
sworn positions.
Status Update: All five positions are filled and are in various stages of
training, with all positions available to respond to crimes scenes. Two staff
have completed training and are responding to violent crime scenes. These
positions have increased the number of investigated scenes, resulting in
improved support overall for criminal investigations.
2023-24
Department/Program Total
5. Various $0
Add funding for 10 Police Assistant positions, vehicles, and related equipment to 10.0
the Patrol Division and Logistical Resources Bureau. The Police Department
recently partnered with Arizona State University in a collaborative assessment of
calls for service, resulting in the identification of four call types that could best be
performed by Police Assistants. Among other tasks, these positions will ensure
the integrity of chain of custody and preservation of property. The full-year
ongoing cost will be $680,000; however, the cost for FY 2023-24 will be absorbed
utilizing savings from vacant sworn positions.
Status Update: These positions are assigned to various bureaus. Nine
positions are filled, and one is vacant. The positions assigned to precincts
relieve sworn patrol staff by responding to non-emergency calls not
requiring a sworn officer. Positions in the Property Management Bureau
purge items from the Records Management System in accordance with
policy, serve as the Abandoned Vehicle Coordinator, and assist with drug
disposals. Additionally, they are the subject matter experts for Evidence on
Q, the Property Management Bureau’s new evidence management program.
These positions have allowed sworn officers to spend more time
responding to emergency calls for service.
Total Police $0
45.0
Street Transportation
1. Street Cleaning $150,000
Add funding to allow Street Transportation Maintenance to clean, cut, and remove 0.0
debris in up to three additional washes annually, and to enhance the clean-up of
medians. This would reduce the turnaround time each wash is maintained,
shortening the time frame between each cleaning. Additional cleanings will help
reduce calls for service and citizen complaints.
Status Update: Street Transportation Maintenance has utilized the
additional funding of $150,000 to service three additional washes. In
addition to the immediate benefits of maintaining a wash, the increased
frequency of service reduces future service times and effort required to
maintain the wash. This increased service level contributes directly to
increased citizen satisfaction and reliability of the wash during storm
events.
2. Street Cleaning $100,000
Add funding for a street sweeper for bike lanes. The sweeper will improve the 0.0
safety and cleanliness of protected bike lanes on city streets. Bike lane sweepers
can remove debris and other hazards from the lanes, making them safer for
cyclists to use. Regularly cleaning the lanes can help promote cycling as a viable
mode of transportation, contributing to a reduction in traffic congestion and air
pollution.
2023-24
Department/Program Total
Status Update: Street Transportation Maintenance is working with Fleet
Services to complete the procurement and deployment of the bike lane
sweeper machine. The sweeper will improve the safety and cleanliness of
protected bike lanes on City streets by servicing these areas that traditional
street sweepers cannot access.
Total Street Transportation $250,000
0.0
TOTAL GENERAL FUND $14,650,000
114.0
SUPPLEMENTALS UPDATE
NON-GENERAL FUND
Aviation
1. Terminal Safety, Security & Communication Center $167,000
Add two Airport Access Agent positions to provide security badging services to an 2.0
active badge population of 19,000. These additional positions will reduce wait
times and increase the number of available appointments. They will also assist in
meeting regulatory requirements of security functions such as background
checks, security training, and badging services. The full-year ongoing cost,
excluding one-time equipment purchases, will be $122,000.
Status Update: All positions were filled in November 2023, reducing wait
times, increasing available appointments for badging customers, and
allowing for additional walk-in customers.
2. Terminal Safety, Security & Communication Center $750,000
Increase the Airport Police Bureau fleet by adding 10 new vehicles. Due to the 0.0
growth in passenger traffic, geographic footprint and the Sky Train expansion, the
Police Bureau is gaining 12 additional officer positions. This increase to the fleet
will help support daily operations.
Status Update: All 10 vehicles were procured December 2023 and delivered
in the first quarter of 2024-25. The vehicles are currently in make-ready
status awaiting to be upfitted, therefore not currently in operations.
Total Aviation $917,000
2.0
2023-24
Department/Program Total
Planning and Development
1. Administration $335,000
Add funding for a Planning and Development Team Leader position, Plan Review 3.0
Coordinator position, and a Senior Business Systems Analyst position to support
the SHAPE PHX technology replacement project and ensure continuity of IT
support services. The project will replace numerous highly-customized legacy
systems with a new application that supports planning, zoning, historic
preservation, and plan review and permitting. The Team Leader position will
supervise Business Leads, oversee involvement of subject matter experts, and
ensure turnaround times and customer service levels are maintained. The Plan
Review Coordinator position will support the largest project release which
includes civil and commercial plan review and permitting and serve as the liaison
between the team and the vendor. The Senior Business Systems Analyst position
will respond to customer requests from residents, the development community,
and staff. The full-year ongoing cost, excluding initial computer and office supply
purchases, will be $324,000.
Status Update: The Planning and Development Team Leader position is
filled. The Plan Review Coordinator (Business Lead) position is vacant due
to an unsuccessful recruitment process. Recruitment will be revisited. The
Senior Business Systems Analyst position was filled at the end of FY 2022-
23. The position is dedicated to overseeing internal and external customer
communications regarding SHAPE PHX Portal Accounts and Permit
Application questions. It also oversees Glance, a resource/tool for staff to
assist external customers with questions regarding Planning and
Development Services Portal processes. The position oversees intranet and
internet pages for needed updates. The positions support the SHAPE PHX
Project and work to ensure continuity of IT support services in the
department. SHAPE PHX is a transformative technology project that
replaces numerous highly customized legacy systems with a consolidated,
secure, transparent, and modern land-based application that supports
Planning, Zoning, Historic Preservation, Plan Review and Permitting.
2. Administration $83,000
Add funding for a Chief Engineering Technician position for the Electronic Plan 1.0
Review administrative team. This position will facilitate plan review submittals and
processing. This will allow staff to manage turnaround times and support the
demand of high-profile projects without adversely impacting other teams. The full-
year ongoing cost, excluding initial computer and office supply purchases, will be
$79,000.
Status Update: The position was filled on November 13, 2023. The main
functions of the Self-Cert Electronic Plan Review Team are administrative
processing of highly confidential projects, coordination and plan review of
Self-Certification submittals and to maintain a report for ARS 9-835 (SB
Report) to make sure all plan reviews are being conducted in the SB
Timeframe in order to not refund the customers. This position adds support
to these key functions and allows for more in-depth research for the ARS 9-
835 report.
2023-24
Department/Program Total
3. Administration $71,000
Add funding for a Human Resources Aide position to reduce turnaround times for 1.0
HR transactions and processing. The full-year ongoing cost, excluding initial
computer and office supply purchases, will be $67,000.
Status Update: This position is filled. The current workload for
Leave/Transactions/Payroll functions was previously distributed between
two HR Aide positions which proved to be a workload burden, creating
longer time frames for HR processes causing unnecessary delays. By
having a third HR Aide position, we are able to distribute the workload more
evenly, creating much more manageable workloads and efficiencies.
Total Planning and Development $489,000
5.0
Public Transit
1. Facility Construction and Maintenance $50,000
Increase funding for clean-up, removal of debris, and overall maintenance of bus 0.0
stops. This funding will enable additional services through multiple existing
contracts to include bus stop cleaning, bus stop repairs, landscaping, and other
maintenance and improvements.
Status Update: Bus stops across the city are being cleaned more often.
Total Public Transit $50,000
0.0
Regional Wireless Cooperative
1. Regional Wireless Cooperative $51,000
Add a part-time Accountant I position to support the administrative and accounting 1.0
responsibility of the VHF (Conventional) Radio Network. This position will assist in
the following areas: accounts receivable, accounts payable, audit, budgeting,
projections, member inquiries, research, and special projects specifically related
to the VHF system. This position was approved by the RWC Board of Directors
on December 1, 2022.
Status Update: The part-time Account I position was filled in October 2023.
The creation of this position provides for more efficient accounting support
to all RWC members. After a one year review it was determined that a full-
time Accountant I was required to meet the demand for increased
accounting support for the VHF Network. In February 2025, the position was
converted to full-time; the department plans to begin recruitment for the full-
time position in the spring of 2025.
Total Regional Wireless Cooperative $51,000
1.0
TOTAL NON-GENERAL FUND $1,507,000
8.0
ATTACHMENT D
2025-26 Community Budget Hearings
Council
Date/Time District(s) Location Information
Tuesday, April 1, 2025 Communitywide Hybrid City Council Chambers
6:00 pm (virtual/in-person open to all 200 W. Jefferson Street
residents) www.phoenix.gov/budget/hearings
Wednesday, April 2, 2025 D4 Steele Indian School Park
6:00 pm Memorial Hall
300 E. Indian School Road
Thursday, April 3, 2025 Spanish Language South Mountain Community Center
6:00 pm (English interpretation available) Century Room
212 E. Alta Vista Road
Friday, April 4, 2025 D1 DoubleTree by Hilton Phoenix North
8:00 am Terrace Room
10220 N. Metro Pkwy E
Saturday, April 5, 2025 Communitywide City Council Chambers
10:30 am Bilingual Hybrid 200 W. Jefferson Street
(virtual/in-person open to all www.phoenix.gov/budget/hearings
residents)
Monday, April 7, 2025 D8 South Mountain Community Library
6:00 pm 7050 S. 24th Street
Tuesday, April 8, 2025 D5 Maryvale Community Center
6:00 pm Multipurpose
4420 N. 51st Avenue
Thursday, April 10, 2025 D3 Sunnyslope Community Center
8:30 am Multipurpose
802 E. Vogel Avenue
Thursday, April 10, 2025 D7 Desert West Community Center
6:00 pm Multipurpose
6501 W. Virginia Avenue
Monday, April 14, 2025 D6 Devonshire Senior Center
8:30 am Multipurpose
2802 E. Devonshire Avenue
Monday, April 14, 2025 D2/D3 Paradise Valley Community Center
6:00 pm Multipurpose
17402 N. 40th Street
Wednesday, April 16, 2025 Spanish Language Maryvale Community Center
6:00 pm (English interpretation available) Multipurpose
4420 N. 51st Avenue
ATTACHMENT E
BUDGET AND RESEARCH DEPARTMENT REPORT B.R.D. NUMBER
2025-05
SUBJECT DATE ISSUED
General Fund Revenue Estimates March 18, 2025
This report provides General Fund (GF) revenue estimates to explain recommended revenue
projections. The City is committed to providing a transparent and open budget process. Providing this
information enhances the review and understanding of how revenue projections are developed to
better facilitate discussions during the annual budget development process.
Careful examination of revenue estimates is required to ensure projections are as accurate as
possible to maintain fiscal stability and long-term budget management. Predicting future revenue
growth is challenging and requires consistent and diligent analysis based on sound forecasting
principles and methods. Revenues are monitored closely, and an updated revenue report is prepared
and distributed to the City Manager’s Office, the City Council, and the community for review monthly.
GF revenues are comprised of several categories, all of which are unique and require separate
analysis. The primary revenue categories include local taxes and related fees, primary property taxes,
state shared sales, income and vehicle license taxes, and user fees and non-tax revenues.
Included in this report is an explanation of how GF revenue is projected, the sources relied upon to
assist in developing estimates, economic assumptions and the methods used to analyze revenues.
Also included are historical revenue actuals and growth rates, the recommended revenue estimates
for 2024-25 and 2025-26, and an explanation of the influencing factors used by staff in analyzing
each major revenue category. Revenue estimates for Local Taxes assume City Council approval of a
proposed Transaction Privilege Tax and Use Tax rate increase from 2.3% to 2.8% effective July 1,
2025. The City Council is scheduled to vote on the proposed tax rate increase on March 18, 2025.
The table below summarizes the 2024-25 and 2025-26 estimated GF revenues and the primary
reason for the variance:
GF Revenue Category 2024-25 2025-26 Amount Percent Primary Reason for Difference
(millions) Estimate Estimate Change Change
Assume moderate growth and a
Local Taxes $718.4 $840.9 $122.5 17.1%
0.5% TPT rate increase.
Increase in assessed property
Primary Property Tax 215.4 222.7 7.3 3.4%
valuation.
State Shared Sales
252.5 262.7 10.2 4.0% Moderate growth is expected.
Tax
Based on collections received two
State Shared Income
351.0 328.3 (22.7) -6.5% years prior. Includes impact of
Tax
Senate Bill 1828.
State Shared Vehicle
88.0 90.9 2.9 3.3% Moderate growth is expected.
License Tax
User Fees & Non- Projected decline in interest
194.0 191.3 (2.7) -1.4%
Taxes earnings.
Total $1,819.3 $1,936.8 $117.5 6.5%
Revenue Projections & Trusted Sources
Projecting revenues involves complex analysis and continuous monitoring to identify variances and
recommend adjustments so that expenditures do not exceed available resources and a balanced
budget can be maintained. As part of the overall forecasting process, assumptions about the
direction and strength of the national, state, and local economy are considered along with indicators
such as population, job growth and personal income. Information on program and service activity
levels, rates, and fees that influence certain revenues are evaluated and proposed legislation is
monitored to determine potential impacts to revenue categories such as sales taxes, state shared
revenues, emergency transportation service revenues and property taxes.
For example, the State enacted Senate Bill (SB) 1131, which prohibits municipalities from taxing
residential rental property starting Jan. 1, 2025. The estimated five-month impact to the GF for
2024-25 is approximately $(19) million and the ongoing annual impact beginning in 2025-26 is over
$(47) million. Additionally, SB 1828 reduces individual income tax rates beginning in tax year 2022
to the current flat tax rate of 2.5%. The City receives state-shared income taxes based on actual
collections from two years prior. Compared to FY 2023-24 collections, state-shared income tax
revenue will decrease by $(85) million in FY 2024-25, followed by an additional reduction of $(23)
million in FY 2025-26. To address the revenue decline resulting from the State’s actions and to
support both existing and future costs to deliver programs and services to the community, the City
proposes increasing the Transaction Privilege Tax (TPT) and Use Tax rate from 2.3% to 2.8%,
effective July 1, 2025, as reflected in the revenue forecast. The City Council is scheduled to vote on
the proposed tax rate increase on March 18, 2025.
In addition, information from City departments on user fees and non-tax revenue is requested and
analyzed each year as part of the technical budget review process. Finally, trusted economic and
financial sources are relied on to provide certain revenue projections and insight into the overall
direction and strength of the economy and include experts from the State’s Finance Advisory
Committee (FAC), Joint Legislative Budget Committee (JLBC), Arizona State University, University
of Arizona (UofA) Economic and Business Research Center (EBRC), Arizona Department of
Revenue, National Blue Chip, Western Blue Chip, and the U.S. Bureau of Labor Statistics and
Bureau of Economic Analysis.
The City is also a member of the Forecasting Project through the EBRC at the UofA. This project is
a community-sponsored research program providing project members with economic forecasts for
Arizona and the Phoenix-Mesa metro area. Budget & Research (B&R) staff attend quarterly
meetings, participate in discussions with other local government and private enterprise members,
and receive quarterly economic reports. In the fall of 2014, Budget and Research consulted with the
UofA’s Eller College of Management, EBRC to enhance the City’s sales tax revenue forecasting
process. Dr. George Hammond, EBRC Director, and Dr. Alberta Charney, Senior Research
Economist, spent several months working with City staff to develop an enhanced econometric sales
tax forecasting model for all categories of city and state sales taxes. In the summer of 2017, staff
worked with EBRC to update the tax forecasting model. In March 2021, the EBRC revised the City’s
model again by including online sales tax. The EBRC leads the State of Arizona Forecasting
Project, which provides in-depth economic forecast analysis and databases on a subscription basis
to businesses, organizations, and government via membership. The additional consulting with Dr.
Hammond has provided the City with solid, independent economic and statistical expertise used to
develop a statistically valid forecasting model specifically for the City of Phoenix. The projected
growth rates in each category of sales tax for the 2025-26 estimate and the out years of the forecast
are based on projections developed with the enhanced econometric forecasting model.
Economic Assumptions
Several of the primary revenue categories are influenced by the economy and the sources
mentioned above provide valuable information about the expected growth of the economy. These
sources are used in developing projected revenue growth rates. B&R staff continuously monitor
economic variables and what these experts are predicting when developing revenue estimations.
The U.S. economy experienced the most robust recovery from the COVID-19 pandemic compared
to other major developed economies, demonstrating resilience and potential for continued growth.
Real Gross Domestic Product (GDP), a common economic measure, grew 2.8% in 2024, compared
with an increase of 2.9% in 2023. According to the U.S. Bureau of Economic Analysis (January
2025), the 2024 growth was attributed to increases in consumer spending, nonresidential fixed
investment, state and local government spending, and exports. However, the Blue Chip Economic
Indicators (BCEI) consensus projects that real GDP will grow at a slower pace, with an estimated
growth of 2.2% in 2025 and 2.0% in 2026. Uncertainties and market volatility are still expected to
persist throughout the year, driven by factors such as geopolitical conflicts, policy shifts under the
new administration, high consumer debt levels, low housing affordability, labor market challenges,
high interest rates, global supply chain disruptions, and inflationary pressures.
The U.S. economic growth established a platform for continued solid gains in Arizona in 2024.
Inflation is currently below the national rate, and job growth is occurring at a faster pace than in the
US (Arizona Governor’s Executive Budget, January 2025). As of December 2024, Arizona’s
Consumer Price Index (CPI-U) was 1.9%, which is lower than the U.S. City Average of 2.9%.
Furthermore, Arizona’s job growth reached 2.1% for the twelve months ending in December,
outpacing the national average of 1.6%. Additionally, the Phoenix MSA average hourly earnings
within the private sector have increased by 6.5%, exceeding the Phoenix MSA CPI-U of 2.2% in
2024. The Arizona economy experienced a solid year in 2024, but faced several challenges such as
slowing growth, housing affordability issues, and uncertainty regarding new government policies.
Arizona taxable retail sales growth (including remote sellers) has decelerated in recent months.
Year-to-date (YTD) statewide taxable retail plus remote sales tax increased by only 2.3% in
December 2024, a decline from 2.8% in December 2023 and 6.4% in December 2022. YTD sales
tax collections for Prime Contracting grew by only 2.8% in December 2024, compared to 17.3% in
December 2023 and 21.6% in December 2022. According to the JLBC, this is the lowest growth rate
for the comparable period since December 2021 when the construction industry in Arizona was
adversely affected by the pandemic (JLBC, January 2025). Furthermore, Arizona’s job growth has
been decelerating. As of December 2024, the year-over-year job growth rate for non-farm
employment has slowed to 1.7%, a decline from 2.4% in 2023 and 3.4% in 2022 (U.S. Bureau of
Labor Statistics, January 2025). Following the COVID-19 pandemic, Arizona has experienced a
surge in home and rent prices; housing affordability has remained a primary challenge for the state.
The number of building permits issued in Arizona has continued to drop. Statewide new housing
units for single-family and multi-family homes decreased by 38.8% in December 2024 compared to
December 2023 (EBRC Benchmark).
Revenue Forecasting Methods
Several forecasting methods and practices are used to estimate City revenues and vary depending
on the type of revenue being analyzed. Evaluating historical growth patterns and current actuals is
an important component to analysis and provide insight into the direction of the various revenue
categories and the growth needed to achieve estimated revenues. Information is also collected from
the economic sources mentioned earlier to ensure the current and subsequent year’s estimates are
reasonable and in-line with what these experts are predicting. The State FAC provides valuable
information from a panel of respected economists and financial professionals. Included in their
materials are projections of state sales tax and income tax collections. These projections are
considered when developing city sales tax, and state shared sales and income tax revenues for both
the current and subsequent fiscal years. Additionally, information is collected from City departments
during the annual technical review process to analyze the user fee and non-tax revenue category.
The department’s knowledge of the revenues generated by various City programs and services is
essential to developing accurate projections. Staff also considers one-time revenues, adjustments,
and contractual agreements impacting growth when developing estimates.
In conjunction with considering historical growth, current trends, and information from trusted
sources and departments, B&R staff uses several forecasting methods when preparing the
estimates. The most common methods of revenue estimation used are averages of actual revenue
experience by varying periods, annualization of year-to-date actuals, and most often a percentage of
prior year method. This last method involves analyzing the amount of revenue collected at a point in
time during prior fiscal years, for example, the 7-month actuals represented a certain percentage of
the total collections for the entire fiscal year and then applying it to current year-to-date actuals. This
method accounts for the seasonal nature of many City revenues and is often a more effective
method than using an average or annualizing approach. Additionally, the growth rate needed to
reach the budgeted or estimated revenue is considered. If the percentage growth needed for the
remaining months of the fiscal year is substantially higher or lower than the current growth rate,
adjustments are made to arrive at a new estimated revenue amount for the fiscal year.
Once the current fiscal year estimate is developed, assumed growth rates are then applied to this
amount to arrive at a projected revenue amount for the following fiscal year. These assumed growth
rates take into account historical and recent trends in revenue data, one-time revenue adjustments,
and information from City departments and our trusted sources to ensure projections are not overly
conservative or aggressive.
Finally, as part of the annual budget development process each year, revenue estimates are
presented to the City Manager’s Office, the City Council and the community as part of the GF Multi-
Year Forecast, the proposed Trial Budget and City Manager’s Budget recommended for
consideration and approval prior to final budget adoption in June.
General Fund Revenue
To assist in explaining the basis for how GF revenue is estimated for each of the major categories,
historical revenue growth and estimated revenues for the 2024-25 and 2025-26 fiscal years are
provided graphically, along with a description of the revenue category and the methodology used
to develop recommended revenue estimates beginning with total GF revenue.
Total General Fund Revenue
Actual & Estimated General Fund Revenue $ % Change 13%
$1,937
13% $1,905
2 0 0 .0 2 0
%
10% 8% $1,819
6% 4% $1,693
3%
1 8
0 0 .0
2% 3%
1 0
%
6%
1 6
0 0 .0
$1,496 0 %
$1,379
$ Millions
-5%
$1,259
1 4
0 0 .0
$1,173 $1,221
-1 0 %
$1,075 $1,106
1 2
0 0 .0
-2 0 %
1 0 0 .0
-3 0 %
8 0 .0
-4 0 %
6 0 .0
-5 0 %
4 0 .0
2 0 .0 -6 0 %
* Projections for 2024-25 and 2025-26 assume no fee increases, changes to state shared revenue formulas or legislative
changes that have recently been proposed or discussed during the current legislative session. The 2025-26 estimate includes
a potential TPT and Use Tax rate increase of 0.5%, effective on July 1, 2025, if approved by City Council on March 18, 2025.
As mentioned, GF revenue consists of local taxes and related fees, primary property taxes, state
shared sales, income and vehicle license taxes, user fees and non-tax revenues. Estimating
revenues for each category is conducted separately to predict the revenues for the current and
following fiscal year more accurately. Each category is unique with respect to the variables that
comprise the revenue and influence growth. Variables that impact revenue growth include
economic factors such as inflation, consumer sentiment, discretionary income, population,
unemployment, job growth and construction activity. Other influencing factors may include
legislative action, City Council policy directives, legal restrictions and mandates, state statutory
formulas, program enhancements or reductions, and changes in rates and fees. For these
reasons, evaluating each major category separately is preferred and generates more accurate
revenue projections.
Local Taxes and Related Fees, 43% of Total General Fund Revenue
Actual & Estimated Revenue $ % Change $841 30%
5% -2%
16% 7% 17%
800.0
20%
12% $730 $718
8% $697
2% 3% 2%
10%
$650
700.0
1%
0%
$559
$ Millions
600.0
-10%
$490 $501
$453
500.0
$437 $441
-20%
-30%
400.0
-40%
300.0
-50%
200.0 -60%
Local taxes and related fees consist of city sales taxes, privilege license fees and other excise
taxes. The majority of revenue is derived from city sales taxes, which is comprised of 15 general
categories collected based on a percentage of business income accruing in each category. The
table on the following page provides the local sales tax rates by category and the percentage
allocated to each fund. The table reflects a proposed 0.5% increase in the TPT and Use Tax rates,
raising them from 2.3% to 2.8%, effective July 1, 2025, pending City Council approval on March 18,
2025.
Privilege license fees are assessed to recover the costs associated with administering the local tax
system. Other excise taxes include the jail tax and the excise tax collected on water service
accounts, which provide resources to help offset jail costs paid to Maricopa County and other GF
services.
Projections provided by the UofA were used to develop city sales tax estimates. Staff analyzes
historical and recent trends in sales tax data by category, evaluates cumulative growth and uses an
econometric forecasting model constructed by the UofA to develop projections. Estimates provided
by the FAC and JLBC are also considered to ensure projections are reasonable and not overly
aggressive or conservative in nature. Sales tax can be volatile and typically correlates to the local
economy and consumer spending behavior. Increases in sales tax collections are expected when
the local economy expands due to underlying fundamentals such as increases in population,
discretionary income, business expansion, jobs, and real estate growth. The opposite holds true
during times of economic contraction or recession as evidenced in 2008-09 and 2009-10 during the
Great Recession, and most recently during the COVID-19 pandemic. The federal stimulus
assistance provided during the pandemic and more than expected revenue collections from retail
and contracting sales taxes offset the revenue loss in the hospitality and leisure sales tax
categories which prevented a severe decline in City revenues. Additionally, the recent surge in
inflation has positively impacted the City by drawing in greater tax revenue from higher-priced
taxable goods and a rise in wages. However, significant economic uncertainty and volatility in sales
tax revenue collections in the first seven months of FY 2024-25 require a cautious approach to
forecasting. Staff is closely monitoring revenue collections and may revise revenue estimates as
more information is available. Currently, the growth estimated in 2025-26 of 17.1% assumes a
potential 0.5% increase in the TPT and Use Tax rates, effective July 1, 2025, if approved by City
Council on March 18, 2025. The forecast also accounts for moderate growth and the negative
impact of the elimination of residential rental sales tax. The State recently enacted SB 1131, which
prohibits municipalities from taxing residential rental property starting Jan. 1, 2025. The estimated
five-month impact to the GF for 2024-25 is approximately $(19) million, and the ongoing annual
impact beginning in FY 2025-26 is over $(47) million.
Privilege license fees and other excise tax projections are developed using the existing fee
structures, assumptions about historical trends, averages, recent collection experience and use of
the percent of prior year method to account for seasonal influences in revenue activity. Privilege
license fees are projected to decline by 45.5% in 2025-26. Starting January 1, 2025, income from
residential rentals of 30 days or more is exempted from Transaction Privilege Tax, leading to a
significant decrease in these fees. The growth estimated in 2025-26 for other excise taxes assumes
conservative growth and continuation of current year-to-date experience.
Local Sales Tax Rates by Category
Public Public Parks
N’hood Safety Safety & Transp. Conv. Sports Capital
GF Protection Expansion Enhance. Pres. 2050*** Center Fac. Const. Total
Advertising – – – – – – 0.5% – – 0.5%
Contracting***** 0.9% 0.1% 0.2% – 0.1% 0.9% 0.6% – – 2.8%
Job Printing***** 0.9% 0.1% 0.2% – 0.1% 0.9% 0.6% – – 2.8%
Publishing***** 0.9% 0.1% 0.2% – 0.1% 0.9% 0.6% – – 2.8%
Transportation/Towing***** 0.9% 0.1% 0.2% – 0.1% 0.9% 0.6% – – 2.8%
Restaurants/Bars***** 0.9% 0.1% 0.2% – 0.1% 0.9% 0.6% – – 2.8%
Leases/Rentals/ 1.5% 0.1% 0.2% – 0.1% 0.9% – – – 2.8%
Personal Property*****
Short-Term Motor 1.5% 0.1% 0.2% – 0.1% 0.9% – 2.0% – 4.8%
Vehicle Rental*****
Commercial Rentals***** 1.6% 0.1% 0.2% – 0.1% 0.9% – – – 2.9%
Lodging Rentals 1.5% 0.1% 0.2% – 0.1% 0.9% 2.0% 1.0% – 5.8%
Under 30 Days*****
Lodging Rentals – – – – – – – – – –
30 Days and Over******
Retail (Level 1 – amounts 1.5% 0.1% 0.2% – 0.1% 0.9% – – – 2.8%
= < $13,886 for a single
item) **** & *****
Retail (Level 2 – amounts 1.2% 0.1% 0.2% – 0.1% 0.4% – – – 2.0%
> $13,886 for a single
item) ****
Public Public Parks
N’hood Safety Safety & Transp. Conv. Sports Capital
GF Protection Expansion Enhance. Pres. 2050*** Center Fac. Const. Total
Amusements***** 1.5% 0.1% 0.2% – 0.1% 0.9% – – – 2.8%
Utilities 2.7%* – – 2.0%** – – – – – 4.7%
Telecommunications 2.7% – – – – – – – 2.0% 4.7%
*The General Fund portion of the utilities category includes the 2.7 percent franchise fee paid by utilities with a franchise agreement.
**The Public Safety Enhancement designated 2.0 percent sales tax applies only to those utilities with a franchise agreement.
***The Transportation 2050 Fund (Proposition 104) was established by the voters effective January 1, 2016 and replaced the Transit
2000 Fund (Proposition 2000) to fund a comprehensive transportation plan with a 35-year sunset date. The Proposition increased
the transaction privilege (sales) tax rates by 0.3% for various business activities.
****Proposition 104 also established a two-tier tax rate structure applicable to retail sales of single items in excess of $10,000, to be
adjusted biennially for inflation. Effective January 1, 2018, the first $10,303 (Level 1) is subject to the 2.3% tax rate, while
transactions over $10,303 (Level 2) are subject to the 2.0% tax rate. The criteria for Level 1 and Level 2 were adjusted on January 1,
2024, and the current threshold is $13,886, which will be adjusted again on January 1, 2026.
*****The tax rates reflect a proposed 0.5% increase, from 2.3% to 2.8%, effective July 1, 2025, pending City Council approval on
March 18, 2025. The rounded tax rates for each fund are provided for demonstration purposes, with the specific percentages used in
the actual allocation.
******SB 1131 prohibits municipalities from taxing residential rental property starting January 1, 2025.
Primary Property Tax, 11% of Total General Fund Revenue
Actual & Estimated Revenue $ % Change
4% 3%
6% 5% 3% $223
$215
230.0 20%
6% 7% $206
210.0
2% 3% 5% 5% $192 $201 10%
190.0
$182 0%
$170
$162
$155
170.0 -10%
$ Millions
150.0
$141 $146 -20%
130.0 -30%
110.0 -40%
90.0 -50%
70.0 -60%
50.0 -70%
Arizona property tax law provides two separate tax systems. A primary property tax is levied to pay
current operations and maintenance expenses. Therefore, primary property tax revenue is
budgeted and accounted for in the GF (and is illustrated in the above graph). A secondary property
tax levy is restricted to the payment of debt service on voter approved long-term general obligation
debt. Therefore, the secondary property tax revenue is budgeted and accounted for as a special
revenue fund. The primary property tax levy forecast reflected here is based on the net assessed
value stated in the annual “Levy Limit Worksheet” for the City of Phoenix, issued by the Maricopa
County Assessor, multiplied by the projected primary property tax rate. The primary property tax
revenue forecast assumes that 99% of the projected primary property tax levy is actually collected.
The annual amount of the primary property tax levy is limited by the Arizona Constitution to a two
percent increase over the prior year levy limit plus an estimated levy for previously unassessed
property (primarily new construction). Provisions in Chapter XVIII of the City Charter limit the City’s
primary property tax rate to $1.00 per $100 of assessed valuation with the exception of costs to
operate library services. The proposed 2025-26 primary property tax rate, not including the portion
of the rate allocated to cover the Library Department operating costs, is $1.00 per $100 of assessed
valuation. The proposed primary property tax rate for 2025-26 of $1.2658 is equal to the 2024-25
primary property tax rate and is lower than the rate allowable under the state constitutional 2% levy
limit of $1.2755, which limits the Primary Property Tax to an amount 2% greater than the prior-year
levy on previously taxed properties. Although the primary property tax rate remains constant, the
primary property tax revenue estimate increases for 2025-26 to $222.7M, which is $7.3M or 3.4%
more than the 2024-25 revenue estimate of $215.4M due to increased taxable net assessed
valuations (property values) and new construction.
State Shared Sales Tax, 14% of Total General Fund Revenue
Actual & Estimated Revenue $ % Change
14% 3% 1% 4%
5%
$263
2 0
%
8% $250 $253
4% 5% 6% 4% 17% $242 1 0
%
$230
2 5
0 .0
0 %
$201
$ Millions
-1 0 %
2 0 .0
$172
$165 -2 0 %
$156
$144
1 5
0 .0
$138 -3 0 %
-4 0 %
-5 0 %
1 0 .0
-6 0 %
5 .0 0 -7 0 %
State sales tax revenues received by the City are governed by Arizona State Statute §42-5029.
State sales tax revenues are split between a “distribution base”, of which Phoenix receives a share,
and a “combined non-shared” category, which is allocated entirely to the state. With the exception
of some tax categories, the distribution base consists of either 20, 32, 40, or 50 percent of
collections depending on the tax category. State statute §42-5029 stipulates of the monies
designated in the distribution base the Arizona Department of Revenue shall pay 25 percent to
incorporated cities on the basis of relative population percentages. The population share changes
annually based on Census Bureau Population Estimates. The 2025-26 City of Phoenix population
share is estimated at 27.71 percent and is based on the 2023 Census Bureau Population Estimate.
State sales tax is estimated similar to how city sales tax is forecasted. Staff analyzes historical and
recent trends in sales tax data by category and evaluates cumulative growth when developing
revised estimates. Projections provided by the UofA EBRC, using an econometric sales tax model,
were used to develop 2025-26 estimates; and information from the FAC and JLBC were considered
to ensure current fiscal year estimates are reasonable and in-line with what these experts are
projecting.
State Shared Income Tax, 17% of Total General Fund Revenue
Actual & Estimated Revenue $ % Change 41%
500.0
44% $436 450.0
400.0
$351
10% 12% $328
9%
350.0
5% $308
-1% -2% -11%
$ Millions
300.0
$240 -6%
250.0
$200 $197 $215 $213
$191 -19%
$174 200.0
150.0
100.0
50.0
0.0
State shared income tax revenue, also known as the Urban Revenue Sharing (URS) Fund, was
established by voter initiative in 1972 and is governed by Arizona Revised Statute §43-206. The
statute stipulates that 15 percent of the net proceeds of state individual and corporate income tax
collected two years preceding the current fiscal year be distributed to incorporated cities and towns.
Laws 2021, Chapter 412 (Tax Omnibus) increased the Urban Revenue Sharing distribution from
15% to 18% starting in 2023-24. Individual cities receive their portion based on the cities’ share of
the state population. The 2025-26 City of Phoenix population share is estimated at 27.68 percent
and is based on the 2023 Census Bureau Population Estimate. This rate will change annually
based on Census Bureau Population Estimates. As a result of the initiative, Arizona Revised
Statute §43-201 stipulates the area of income taxation is preempted by the state and a county, city,
town, or other political subdivision shall not levy income tax as long as the Urban Revenue Sharing
Fund is maintained as provided in state statute §43-206.
Since state shared income tax revenue is based on actual collections from two years preceding the
current fiscal year, the 2024-25 and 2025-26 projected revenue is known and is based on actual
collections received in 2022-23 and 2023-24, respectively. The negative growth of (19.4) % in FY
2024-25 and (6.5) % in FY 2025-26 are primarily due to significantly lower state shared income tax
collections caused by the State’s actions to lower the individual income tax rate to the current “flat
tax”. Senate Bill 1828 reduces individual income tax rates beginning in tax year 2022 to the current
flat tax rate of 2.5%.
State Shared Vehicle License Tax, 5% of Total General Fund Revenue
Actual & Estimated Revenue $ % Change 3%
5%
$91
13% 4% $88
90.0
-1% 2%
$80
20%
8% 8% $81 $84
5% $79
80.0
3% 0%
$70 $71
0%
70.0
$67
$62
$60
$ Millions
-20%
60.0
50.0
-40%
40.0
-60%
30.0
20.0 -80%
State shared vehicle license tax has been distributed to cities and towns since 1941. The tax is
levied per $100 of a vehicle’s assessed value. For the first 12 months of the vehicle’s life, the
assessed value is 60% of the manufacturer’s base retail price. For each subsequent year, the
assessed value is 16.25% less than the previous year. The rate per $100 of assessed value is
$2.80 for new vehicles and $2.89 for renewals. The Arizona Department of Transportation (ADOT)
collects and distributes the tax according to Arizona Revised Statute §28-5808. The distribution to
individual cities is based on their relative population within the county. The 2025-26 City of Phoenix
population share is estimated at 39.19 percent and is based on the 2023 Census Bureau Population
Estimate. This rate will change annually based on Census Bureau Population Estimates.
Vehicle License Tax (VLT) revenues are often correlated to the overall strength of the economy.
Similar to sales tax revenues, this revenue category tends to grow when the economy is expanding,
as illustrated in the graph above. Revenues are estimated by evaluating historical growth patterns,
year-to-date cumulative growth and applying the percent of prior year method to year-to-date
actuals, which accounts for the seasonality in collections. Staff also consider projections
provided by ADOT, which are published annually for this revenue source, and any available recent
economic information pertaining to projections on the local economy and vehicle sales when
formulating recommended current and subsequent year estimates. The projected growth rate for
2025-26 is expected to be 3.3%, assuming a moderate growth rate based on the ADOT forecast in
September 2024.
User Fees and Non-Tax Revenues, 10% of Total General Fund Revenue
22%
Actual & Estimated Revenue $ % Change
$200 $194 $191
24%
200 .0
16% 13%
30%
-4%
180 .0
0% -5% $164
-2% -11%
$142 $137
160 .0 10%
$131 $117 $132
$125 $122 -3% -1%
140 .0
-10%
$ Millions
120 .0
-30%
100 .0
80. 0 -50%
60. 0
-70%
40. 0
-90%
20. 0
0.0 -110%
User Fees and Non-Tax Revenues include collections from licenses and permits, fines and
forfeitures, cable television fees, user fees from several City departments designed to recover the
costs of providing specific City services including Parks and Recreation, Library, Planning, Police,
Fire, and Streets; other service charges including interest income, parking meter revenue, in lieu
property taxes, sales of surplus property, various rental income, parking garage revenues and
concessions; miscellaneous service charges in Finance, Housing, Human Services and
Neighborhood Services.
B&R staff relies on departments to provide essential information concerning activity levels, fee
increases or decreases and program changes which impact the variety of revenue sources in this
category. Technical revenue reviews are conducted twice each fiscal year as part of the annual
budget development process. Departments are asked to provide revenue estimates and reasons for
changes from prior year actuals. Staff conducts a line-item analysis of all revenues and uses
various methods including annualization and percentage of prior year, as well as consideration of
one-time and contractual revenues, program enhancements or reductions and other adjustments
when developing estimates.
The projected negative growth rate of (1.4)% in 2025-26 was attributed to a decline in interest
earnings, which offset the moderate growth of emergency transportation services. Some non-tax
revenues, such as cable communications and police personal service billings, are expected to
decrease in 2025-26 due to a decline in collection trends and one-time revenue collections in 2024-
25.
In addition to the technical reviews conducted twice each fiscal year, B&R staff monitors revenues
monthly to determine if adjustments to projections are needed. The proposed estimates are then
reviewed by B&R management and the City Manager, and finally incorporated into the GF proposed
revenue projections for consideration by the City Council and the community.
This report is for informational purposes only and is intended to provide the City Council and the
community with explanations on how GF revenues are analyzed and developed to better facilitate
discussions during the annual budget development process.
Yung Pham
Principal Budget and Research Analyst
ATTACHMENT F
Government Relations staff closely monitor State legislation each year and have
identified bills that if passed could further limit local control, reduce City revenues or
increase expenditures causing negative impacts to the budget.
Staff have identified top priority bills in the current session actively moving through the
State Legislature that could have an estimated annual revenue impact of $(69) million
according to JLBC fiscal notes:
• SB1318 income tax rate; reduction; surplus
o For each tax year beginning with 2026, the Department of Revenue is
required to reduce the individual income tax rate for the current tax year
by 50 percent of a "structural surplus" for the immediately following fiscal
year.
• SCR1014 surplus; income tax rate; reduction
o The 2026 general election ballot is to carry the question of whether to
amend state statute to require the Department of Revenue to reduce the
individual income tax rate for the current tax year by 50 percent of a
"structural surplus" for the immediately following fiscal year.
• SB1371 income tax; subtraction; retirement distribution
o For individuals 67 or older, subtracts distributions from pension and
retirement accounts and non-deductible contributions to individual
retirement accounts (IRA), excluding Roth IRAs, from the calculation of
Arizona gross income tax.
• HB2918 tax rates; reductions
o Reduces the rates for several tax categories including property tax and
individual income tax. For the individual income tax rate reduces the rate
from 2.5% to 2.47% beginning in Tax Year 2026.
Staff have identified the following bills that increase obligations on the City’s General
Fund:
• HB2689 cancer insurance; retirees; public safety
o Permits people on the Public Safety Cancer Insurance Program whose
eligibility is expiring to remain eligible for coverage paying 50% of the
premium and requiring the employer to pay the remaining amount of the
premium.
• SB1365 PSPRS; member contributions
o Effective January 1, 2026, caps the Tier 3 member contribution rate at 9.5
percent and requires Public Safety Personnel Retirement System
employers to pay the difference if the member's contribution rate must be
higher.
• SB1288 police vehicles; inspection; requirements
o Requires police patrol vehicles to be replaced 10 years after the
manufacture date or when the odometer reaches 115,000 miles.
Staff have identified the following bills that impact Mayor and Council’s ability to balance
the City’s budget:
• HB2221 law enforcement; defunding; prohibition
o Prohibits a city from reducing the annual operating budget for a law
enforcement agency.
• HB2943 municipal fire departments; defunding; prohibition
o Prohibits a city from reducing the annual operating budget for a fire
department.
• SB1013 municipalities; counties; fee increases; vote
o Prohibits the common council of a municipality or the board of supervisors
of a county from increasing an assessment, tax or fee without a two-thirds
vote of the governing body.
• SCR1008 municipalities; counties; vote; fee increases
o The 2026 general election ballot is to carry the question of whether to
amend state statute to Prohibit the common council of a municipality or
the board of supervisors of a county from increasing an assessment, tax
or fee without a two-thirds vote of the governing body.
Staff would also like to bring attention to the following two bills that pose significant
budgetary risks to the City if passed. While these bills are effectively “dead” they may
return in the form of amendments or in future legislative sessions. Per JLBC fiscal notes
the estimated annual impact to the City if signed into law is $(120) million.
• HB2421 corporate income tax rate; reduction
o Reduces the Corporate Income Tax rate from the current rate of 4.9% to
2.0%
• HCR2012 income tax; rate; reduction
o The 2026 general election ballot is to carry the question of whether to
amend state statute to reduce the Individual Income Tax rate from the
current rate of 2.5% to 2.0%, beginning in Tax Year 2027.
Report
This report transmits a balanced proposed Fiscal Year (FY) 2025-26 City Manager's
Trial Budget for community review and comment.
THIS ITEM IS FOR INFORMATION AND DISCUSSION.
The Trial Budget is an important step in the City's budget development process. It
provides the Mayor, City Council and community an opportunity to review a proposed,
balanced budget months in advance of final budget adoption in June. This report
includes the proposed FY 2025-26 General Fund (GF) Trial Budget and strategies to
ensure the budget remains balanced.
The City of Phoenix is committed to engaging residents in the budget process and this
year there are many opportunities for residents to provide feedback outside of
regularly scheduled City Council meetings. Between April 1 and April 16, the FY 2025-
26 proposed Trial Budget will be presented to Phoenix residents for input at 12
community budget hearings. A complete list of hearing dates and times is included in
Attachment D and is available on our website at https://www.phoenix.gov/budget. All
resident feedback received will be provided to the City Council so it may be used in
budget decision making. As a result of public input, changes could be made to the Trial
Budget when a proposed City Manager's Budget is presented to City Council on May
6.
Summary
As presented at the February 25, 2025 Policy meeting, the GF budget outlook reflects
structural deficits over the next three fiscal years requiring strategic decisions to
balance the budget. The preliminary GF Status for FY 2025-26 reflected a baseline
deficit of $(36) million and the forecast reflected projected shortfalls in FY 2026-27 of
$(83) million and in FY 2027-28 of $(6) million primarily due to the State's actions to
eliminate residential rental sales tax via Senate Bill (SB) 1131 and to lower the
individual income tax rate to the flat tax of 2.5 percent (SB 1828). These actions by the
State limit local control and will reduce ongoing City revenues going forward. Staff
completed the annual 7+5 technical expenditure and revenue review process and
adjustments have been made to the FY 2025-26 GF Status of approximately $(3)
million primarily to reflect adjustments to property tax and emergency transportation
revenue estimates. The revised FY 2025-26 GF Status reflects a projected deficit of
$(39) million.
This report includes a proposed balanced GF Trial Budget with the strategies
presented to the City Council on February 25, 2025, to resolve the projected FY 2025-
26 deficit, and includes necessary resources going forward to offset the State's action
to reduce City revenues, and provide future capacity for necessary additions to the
budget. The proposed GF Trial Budget assumes City Council approval of the proposed
strategies included in this report.
Additionally, the proposed FY 2025-26 Trial Budget includes proposed GF and Non-GF
supplementals (Attachment A) for the Fire Department to reduce emergency
response times, for the Office of Homeless Solutions to continue efforts helping the
unsheltered population and to address impacts of homelessness on neighborhoods,
and to add resources to the Water Services Department to reopen the Cave Creek
Water Reclamation Plant.
The proposed FY 2025-26 Trial Budget also includes administrative position additions
and conversions of temporary full-time equivalent (FTE) positions to ongoing positions.
Funding for these positions has been identified and accounted for in department
operating budgets. Details on each position can be found in Attachment A. Also
included are proposed GF reductions totaling $24 million with limited impacts to
service delivery (Attachment B), a status update of the budget supplementals added
in FY 2023-24 (Attachment C), the schedule of upcoming community budget hearings
to engage residents and gather feedback (Attachment D), the annual GF Revenue
Estimates Report (Attachment E), and a list of State legislation introduced and active
in the current legislative session that if passed would further limit local control and
would have negative impacts to the City's budget (Attachment F).
FY 2025-26 GF Budget Status
As mentioned above, the revised GF Budget Status for FY 2025-26 is a deficit of $(39)
million, reflecting projected total resources of $2.040 billion less projected total
expenditures of $2.079 billion, further detailed below.
GF Resources
The revised FY 2025-26 GF Status reflects a projected deficit of $(39) million and
includes the beginning fund balance, net transfers and revenues projected at $2.040
billion or (4.8) percent lower than FY 2024-25 estimated resources. GF revenues for
FY 2025-26 make up the majority of resources and are projected to be flat at $1.819
billion or (0.0) percent growth after 7+5 technical revenue adjustments compared to
the FY 2024-25 revised revenue estimate. As detailed in the GF Status and Multi-Year
Forecast report presented to City Council on February 25, GF revenue is estimated to
decline in the current fiscal year by (4.5) percent, or $(86) million, compared to FY
2023-24. The significant decline in revenue is primarily due to the State's actions to
diminish the tax base by lowering individual income tax rates discussed below; and
elimination of residential rental sales taxes effective January 2025 (SB 1131). The
revised estimated five month impact from the loss of residential rental sales tax to the
GF for FY 2024-25 is approximately $(19.3) million and the ongoing annual impact in
FY 2025-26 is $(47.4) million. SB 1131 also impacts non-GFs including Public Safety,
Parks and Preserves and Transportation 2050. The revised estimated five-month loss
to all funds in FY 2024-25 is $(37.0) million and the ongoing annual impact in FY 2025-
26 is $(90.7) million. The impact through the multi-year forecast period to FY 2027-28
for all City funds is an estimated revenue loss of $(321) million.
Additionally, SB 1828 reduced individual income tax rates from a progressive four tax
bracket system to the current "flat tax" of 2.5 percent in 2022. Cities and towns in
Arizona receive state shared income tax revenues based on collections from two years
prior and is based on relative population share. On June 9, 2023, the State's Joint
Legislative Budget Committee (JLBC) notified the legislative membership of a
significant decline in state GF revenue collections, which is primarily due to the
individual income tax rate reduction. Budget and Research staff rely on projections
from the JLBC to estimate this revenue stream for budget development. This action by
the State is expected to result in less ongoing state shared income tax revenue to the
GF compared to prior projections had the tax rate not been decreased. This negative
impact is demonstrated in the significant decline in FY 2024-25 and FY 2025-26 for
state-shared income tax revenue of $(84.7) million and $(22.7) million, respectively.
Revenue projections account for the reductions mentioned above to city sales tax and
state shared revenue.
The FY 2025-26 GF estimates for each major revenue category totaling $1.819 billion
are highlighted below:
· Local Sales Tax - $723 million;
· State Shared Revenue - $682 million;
· Primary Property Tax - $223 million;
· User Fees - $191 million.
GF Expenditures
FY 2025-26 GF expenditures to continue existing levels of service are projected to be
$2.079 billion, or $1.987 billion excluding contingency funds. This compares to the FY
2024-25 GF expenditure estimate of $1.946 billion, representing an increase of $41
million or 2.1 percent excluding contingency funds. The increase accounts primarily for
higher costs associated with inflation and increases in employee salaries and fringe
benefits, including higher pension costs discussed below, and accounts for the City
Council approved Classification and Compensation Study and negotiated labor
increases. These cost increases are partially offset by lower GF capital costs for pay-
as-you-go projects. The FY 2025-26 budget includes increasing the contingency fund
from $89 million to $92 million, to reflect 4.75 percent of operating expenditures.
Expenditure amounts may change over the coming weeks as staff continues to refine
final estimates prior to the presentation of the City Manager's Proposed Budget on
May 6.
Employee pension costs have consumed a growing share of the City's GF resources
over the past 10 years. GF pension costs in FY 2025-26 are estimated to be $464
million, and represent 23 percent of total GF operating costs. The GF Multi-Year
Forecast included estimated increases of $63 million, between FY 2024-25 and FY
2027-28. This increase is primarily caused by rising costs in public safety pension
costs. The City is committed and legally required to pay 100 percent of our actuarially
required contribution every year. Also, under the leadership of the City Council, a
pension funding policy has been adopted each year as required by state statute.
Additionally, pension reform for the City of Phoenix Employees' Retirement System
(COPERS) is helping to stabilize civilian pension costs. While reform efforts have been
successful for the Public Safety Personnel Retirement System (PSPRS), there
remains a significant unfunded sworn pension liability of approximately $3.8 billion, per
the PSPRS June 30, 2024, actuarial valuation.
Other Budget Considerations
The FY 2025-26 Preliminary GF Status and Multi-Year Forecast report available at
https://www.phoenix.gov/budgetsite/budget-books/2025-
30_General_Fund_Multi_Year_Forecast.pdf included several assumptions and risks to
projections, including economic risks and proposed State legislation that could further
significantly reduce City revenues. Significant economic uncertainty exists including
impacts from the new Trump administration policies on tariffs, tax law changes,
reductions to Federal agencies, potential elimination or reduction of Federal Grant
programs; and market volatility, Federal Reserve actions to reduce inflation,
geopolitical concerns and conflicts, housing affordability, and overall consumer
confidence.
Additionally, several introduced and active State legislative bills could further limit local
control and reduce City revenues if signed into law. For those bills that are still active
and with a fiscal note prepared by the JLBC, the estimated annual impact to City
revenue is $(69) million. Additionally, some bills could increase City expenditures
requiring additional resources and further straining the City's budget. Attachment F
provides information from Government Relations on bills in the current legislation
session that if passed could have negative impacts to the City.
Proposed Strategies to Balance the GF Budget
Several options are recommended for City Council consideration to resolve the
projected FY 2025-26 budget shortfall and provide necessary resources going forward
to balance the budget, protect existing programs and services, and provide future
capacity for necessary additions to the budget.
The proposed FY 2025-26 Trial Budget included in this report contains the below
strategies to balance, provides additions to the budget for the Fire Department and
Office of Homeless Solutions and recommends carryforward of resources (set-aside)
to help balance the FY 2026-27 budget and/or provide for future labor increases, or
other City Council and community priorities.
Proposed strategies include:
· Increase the Transaction Privilege Tax (TPT) and Use Tax rate 0.5 percent effective
July 1, 2025, from 2.3 percent to 2.8 percent, as posted on the City's website.
www.phoenix.gov/Documents/2025-PHX-Tax-Notice-Info.pdf.
· Reprioritize spending and reduce ongoing GF costs by $24 million (Attachment B).
· Use of excise tax bond proceeds to pay for public safety and other GF capital needs
totaling $150 million to reduce the up front cost burden to the GF (City Council
approval of an excise tax bond sale is scheduled for April 9).
· Set-aside $92 million in FY 2025-26 to be available to balance FY 2026-27.
· Use of Non-GFs to reduce GF costs for major maintenance and citywide street
transportation and construction services.
The City of Phoenix TPT and Use Tax rate to support GF programs and services is
currently 1.2 percent (of the total 2.3 percent) and has not been increased since 1986
despite the significant growth in population, square miles, and city program and
services over this time period. Phoenix's TPT and Use Tax rate is also lower than six
other surrounding cities. The rate has been increased since 1986 with the most recent
increase in January 2016 to the current 2.3 percent, however past rate increases have
been for specific voter approved purposes including Public Safety, Parks and
Preserves and Transportation with none of the increase applied to the GF. The revised
estimated annual revenue to be generated by increasing the TPT and Use Tax rate
from 2.3 percent to 2.8 percent is approximately $117 million to the GF and $132
million to Non-GFs.
The City posted the required 60-Day Notice of Intent on January 15, 2025, for a
potential TPT and Use Tax rate increase in compliance with Arizona Revised Statute
§9-499.15. To allow the public an opportunity to provide feedback on the proposed rate
increase five community information sessions were held across the City between
January 27 and February 6. Staff also provided information on the City's Newsroom,
Budget and Research Department website, and on social media platforms.
Additionally, staff presented information to the City Council on February 25, 2025, on
the estimated impact of the proposed tax rate increase and the City Council report is
available on the phoenix.gov/budget website. On February 27, 2025, the City posted
the required 15-Day Statutory Notice of Intent to Increase the TPT and Use Tax rates
with City Council consideration scheduled for a vote immediately following
presentation of the proposed FY 2025-26 Trial Budget on March 18, 2025, at 2:30 p.m.
in the Phoenix City Council Chambers, 200 West Jefferson Street, Phoenix, AZ.
Information about the proposed TPT and Use Tax rate increase, and budgetary
considerations for the increase along with the applicable business classifications that
would be increased from 2.3 percent to 2.8 percent if approved by City Council, is
available at: https://www.phoenix.gov/budget.
Additionally, City Council approval of a $150 million excise tax bond sale will be
included on the April 9, 2025, Formal Council agenda for action. Use of excise tax
bond proceeds is commonly used to pay for large capital purchases that will last
multiple years; and will reduce the up front cost burden on the GF. Proceeds will be
used for Fire replacement apparatus ($40 million), replacement of a public safety
rescue helicopter ($8.5 million), replace public safety radios ($30 million), build two
new Fire Stations and purchase additional Fire apparatus to reduce response times
citywide ($50 million), provide resources for the Fire Department's cost share of the
new ShapePHX system ($9 million), and remaining resources will be used for other
major facility or information technology needs (12.5 million).
FY 2025-26 Proposed Trial Budget
The above proposed strategies are estimated to offset the revenue losses caused by
State actions, protect existing programs and services, and provide additional
resources for critical additions to the budget detailed below. The FY 2025-26 proposed
GF Trial Budget as presented, including the proposed strategies referenced in this
report, result in a potential one-time surplus of $17 million; reflecting projected total
resources of $2.172 billion less projected total expenditures of $2.155 billion.
To ensure the budget remains balanced in the future, and considering economic
uncertainty and legislative risks discussed in this report and previously with the City
Council, the City Manager recommends the $17 million one-time surplus be set aside
and carried forward to be available next fiscal year to help balance the FY 2026-27
budget if needed (Attachment A).
Details on the proposed FY 2025-26 supplementals is provided below and also
included in Attachment A.
Phoenix Fire Department (PFD)
The PFD provides lifesaving services to all Phoenix residents and visitors and includes
emergency medical and transportation services, all-hazards incident management,
property protection through fire suppression, and community risk reduction efforts. The
recent fire catastrophe in Los Angeles, CA serves as a reminder the importance of
adequately resourcing the PFD to ensure sufficient levels of staffing, equipment and
facilities are ready to respond to emergencies. A critical measurement of the PFD
effectiveness in operations is emergency response time and is measured from the time
of dispatch of an emergency apparatus to when the unit arrives on scene. The
National Fire Protection Association (NFPA) establishes the standard fire departments
utilize to measure performance. Currently, the PFD’s response times exceed the NFPA
established standards. While the department continuously evaluates innovative ways
to improve response times, additional resources are needed to increase the number of
fire stations and facilities, personnel, and equipment to keep pace with the significant
growth in geographic area and population the department must serve. Supplemental
needs for the Fire Department (Attachment A) include conversion of 32 grant funded
sworn positions to the GF estimated at $3 million in FY 2025-26 and $5 million
ongoing, add 24 sworn personnel to staff the new General Obligation Bond funded Fire
Station 15 at 45th Avenue and Camelback Road estimated at $2 million in FY 2025-26
and $4 million ongoing, and provide a dedicated $25 million in GF resources going
forward to add 134 sworn and 19 civilian personnel to reduce emergency response
times.
Once fully implemented, the estimated impact of additional sworn personnel will be an
improvement in localized and citywide fire response times based on 2024 incident data
at the 90th percentile. Fire critical emergency medical services (CEMS) response
times are projected to improve from 8 minutes and 30 seconds to 4 minutes and 25
seconds in the localized communities where the units will primarily serve. Fire
ambulance response times are projected to improve from 10 minutes and 42 seconds
to 4 minutes and 44 seconds in the localized communities. Based on the estimated
citywide impacts of the budget additions, Fire CEMS response times are projected to
improve from 7 minutes and 23 seconds to 7 minutes and 14 seconds. Based on the
estimated citywide impacts of the budget additions, Fire ambulance response times
are projected to improve from 9 minutes and 38 seconds to 9 minutes and 29 seconds.
These response times could vary based on any future adjustments to unit placement
and the hours of service to meet the community's needs. The additional sworn
personnel will staff new apparatus to be placed in service around the City, and new
Fire stations including Station 71 located at 60th Street and Mayo Boulevard, and
Station 93 at Metrocenter (location site to be determined). The additional apparatus
and fire stations will be funded by excise tax bond proceeds (City Council approval
scheduled for April 9).
Office of Homeless Solutions (OHS)
The OHS has made tremendous progress in addressing homelessness over the last
two years. Investments in the infrastructure of the region’s homeless services system
have been monumental. As we move out of pandemic-era funding, OHS has unfunded
needs necessary to continue its momentum and ensure the transformational projects
and services implemented in the last two years can continue. Also important to note on
November 5, 2024, voters passed Proposition 312 Property Tax; Refund; Nuisance
Enforcement that allows property owners beginning in Tax Year 2025 to apply to the
Arizona Department of Revenue for a property tax refund if the owner documents
expenses caused by a city, town, or county that either (1) declines to enforce existing
laws prohibiting illegal camping, obstructing public thoroughfares, loitering,
panhandling, public urination or defecation, public consumption of alcoholic beverages
or use of illegal substances, or (2) maintains a public nuisance. The City is unable to
project the potential costs associated with Proposition 312 but will have to identify a
funding source. The passage of this proposition furthers the need for the City of
Phoenix to address and provide ongoing resources for homelessness.
GF resources will be needed in 2025-26 for homelessness with revised estimates at
$4.5 million due to the expiration of American Rescue Plan Act (ARPA) funding.
Funding is necessary for a portion of OHS operational costs, operational costs at an
affordable housing site for very low-income older adults, operational costs at three
emergency shelters (Rio Fresco, North Mountain Healing Center, and the temporary
Washington Shelter) and heat relief efforts. The need in 2026-27 and going forward is
estimated at $26.0 million and will fund a portion of OHS operational costs, the
temporary Safe Outdoor Space, operational support for five emergency shelters (Rio
Fresco, North Mountain Healing Center, the temporary Washington Shelter, Central
Arizona Shelter Services, and the Phoenix Navigation Center), some operational costs
at the Key Campus and heat relief efforts. Staff will continue to seek additional external
funding for these programs, and evaluate other City funding sources, which if received
would offset the need for a portion of the ongoing General Fund request.
More information on GF proposed reductions totaling $24 million is included in
Attachment B. The proposed reductions do not include any filled City positions, but
elimination of 18.2 vacant positions; and represent lowering costs for non-personal
related line items included various contractuals, commodities and minor capital outlay.
These reductions will not have a significant impact on service delivery. Finally, more
detail on GF revenue estimates is provided in Attachment E and assumes the
proposed TPT and Use Tax rate increase.
The proposed FY 2025-26 Trial Budget also includes a Non-GF supplemental budget
addition for the Water Services Department to add $5.6 million for 28.0 FTE and 20
vehicles to reopen the Cave Creek Water Reclamation Plant. This addition would allow
the City to expand capacity for wastewater treatment and water purification, maintain
environmental and safety standards, and uphold technological process control and
security standards (Attachment A).
Next Steps
In order to engage the community in the budget development process, staff will be
holding 12 community budget hearings between April 1 and April 16. Attachment D
includes the schedule of budget hearings. Residents are also welcome to contact the
Budget and Research Department directly to provide input or ask questions about the
budget. More information on the budget and how to submit feedback directly to the
City, is available at https://www.phoenix.gov/budget.
The remaining key dates in this year's budget process are as follows:
Date Event
May 6, 2025 City Manager's 2025-26 Proposed Budget
May 20, 2025 City Council Budget Decision
June 4, 2025 2025-26 Tentative Budget Ordinance Adoption
June 18, 2025 2025-26 Funding Plan and Final Budget Ordinance Adoption
July 2, 2025 2025-26 Property Tax Levy Ordinance Adoption
Responsible Department
This item is submitted by City Manager Jeffrey Barton and the Budget and Research
Department.
ATTACHMENT A
2025-26
PROPOSED ADDITIONS
GENERAL AND NON-GENERAL FUNDS
View the Inventory of Programs published online for program details.
2025-26
Department/Program Total
GENERAL FUND
Set-Aside
1. General Fund set-aside of projected one-time surplus to be carried over and $17,000,000
available for potential labor increases, other community and Council priorities or
to balance the 2026-27 budget if needed due to economic declines or further
reductions to City revenues.
Total Set-Aside $17,000,000
Communications Office
1. Communication Outreach to Diverse Communities and Niche Media $0
Convert a temporary Management Assistant I position to ongoing status. This 1.0
position provides Spanish-language interpretation services at high-profile City
meetings and events and provides Spanish-language media outreach support.
Converting this position to ongoing status will provide the City's Spanish-speaking
community with high-quality, seamless interpretation services and support.
Total Communications Office $0
1.0
Environmental Programs
1. Food Systems $0
Convert a temporary Project Management Assistant and a temporary 2.0
Administrative Assistant I to ongoing status. These positions are needed to
administer ongoing food systems programs previously funded by American
Rescue Plan Act grants.
Total Environmental Programs $0
2.0
Finance
1. Banking and Cashiering $0
Convert a temporary Accountant III position to ongoing status in the Treasury 1.0
Banking & Cashiering Division paid for by the Water Services Department (WSD).
The position responsibilities include security administration of payment platforms,
ensuring proper integration with financial and customer billing systems used by
WSD.
Total Finance $0
1.0
2025-26
Department/Program Total
Fire
1. Fire Emergency Medical Services and Hazardous Incident Response $2,579,000
Add funding for 32 sworn firefighter positions previously funded by the SAFER 2021 0.0
grant. This funding will allow the department to maintain service delivery and reduce
the impact to daily constant staffing. Funding for the SAFER 2021 grant is estimated
to be fully expended in December 2025 and the full-year ongoing cost is$4,984,000.
2. Fire Emergency Medical Services and Hazardous Incident Response $2,039,000
Add funding for 24 sworn positions (4 Fire Captains, 4 Fire Engineers, and 16 24.0
Firefighters) to provide dedicated staffing for new Fire Station 15, located at 45th
Avenue and Camelback Road. Funding for the station is from the 2023 GO Bond
Program. Staff costs are anticipated to begin January 2026. The full year ongoing
cost is $4,187,000.
3. Various - Note: Items 3 & 4 include ongoing resources totaling $25 million dedicated $22,836,000
to the Fire Department to improve emergency response times. 134.0
Add funding for 134 new sworn positions (29 Fire Captains, 4 Fire Battalion Chiefs,
77 Firefighters, and 24 Fire Engineers) with the goal of reducing emergency
response times. Once fully implemented, the estimated impact will be an
improvement in localized and citywide fire response times based on 2024 incident
data at the 90th percentile. Fire critical emergency medical services (CEMS)
response times are projected to improve from 8 minutes and 30 seconds to 4
minutes and 25 seconds in the localized communities where the units will primarily
serve. Fire ambulance response times are projected to improve from 10 minutes
and 42 seconds to 4 minutes and 44 seconds in the localized communities. Based
on the estimated citywide impacts of this budget addition, Fire CEMS response
times are projected to improve from 7 minutes and 23 seconds to 7 minutes and 14
seconds. Based on the estimated citywide impacts of this budget addition, Fire
ambulance response times are projected to improve from 9 minutes and 38 seconds
to 9 minutes and 29 seconds. These response times could vary based on any future
adjustments to unit placement and the hours of service to meet the community's
needs. The additional sworn personnel will staff new apparatus to be placed in
service, and new Fire stations including Station 71 located at 60th St. and Mayo
Blvd., and Station 93 at Metrocenter. The additional apparatus and fire stations will
be funded by excise tax bond proceeds.
4. Various $2,164,000
Add funding for 19 new civilian positions to support increased sworn Firefighter 19.0
staffing, facilities and calls for service. Included are one Fire Administrator, one
Supplies Clerk II*U2, one Building Maintenance Worker*U2, one Fire Equipment
Service Worker, three Human Resources Aides, three Administrative Aides, one
Administrative Assistant I, one Accountant I, two User Technology Specialists, one
Info Tech Analyst/Programmer II, one Special Projects Administrator, one Fire
Communications Shift Supervisor, one Fire Emergency Dispatcher, and one
Paramedic Training Coordinator. These positions will ensure the availability of
resources for logistical, information technology, and human resources assistance.
Total Fire $29,618,000
177.0
2025-26
Department/Program Total
Human Resources
1. Labor Relations $0
Convert a temporary full-time Deputy Human Resources Director position to 1.0
ongoing status. This position coordinates and supports citywide labor
negotiations, helping to facilitate effective relationships with labor groups and
efficient negotiation processes.
Total Human Resources $0
1.0
Human Services
1. Homeless Emergency Services $500,000
Add funding to create an operating reserve for the City-owned low-income senior 0.0
housing project being constructed along the Black Canyon Freeway. In 2023, the
Office of Homeless Solutions purchased a hotel located at 8130 N. Black Canyon
Boulevard with the aim of converting the hotel into permanent housing and
supportive services for seniors exiting homelessness. The project will generate
ongoing revenue through the collection of rents; however, the project requires
reserve funds to support operations during initial lease up and until revenue is
able to support the cost of operations and supportive services.
2. Homeless Emergency Services $3,926,000
Add funding for Office of Homeless Solutions (OHS) shelter operations needed 0.0
due to expiring American Rescue Plan Act (ARPA) funds. OHS recognizes the
need for diverse types of shelters throughout Phoenix to meet the individual
needs of people experiencing homelessness. This funding will be utilized to
support shelter operations throughout the city as needs are identified. For fiscal
year 2025-26, several shelters that were previously supported by expiring ARPA
funding will receive support, including: Rio Fresco, which provides 117 units of
shelter that can accommodate couples, pets, and individuals with substance use
disorder; North Mountain Healing Center, which provides congregate shelter for
up to 100 individuals and is limited to people experiencing homelessness within
1.5 miles of the site; and the Washington Shelter, which is a converted City-
owned office building that provides a 200-bed congregate shelter and wraparound
services, operated and provided by nonprofit partners. The anticipated ongoing
GF need to support OHS shelter operations and provide heat relief efforts upon
full expiration of ARPA funds is estimated at $26 million in FY 2026-27.
3. Homeless Emergency Services $150,000
Add funding to support Office of Homeless Solutions (OHS) operations due to the 0.0
expansion of department services and staffing. OHS has grown from nine to 34
full-time employees, resulting in increased operational expenses. These funds will
cover employee supplies and equipment, as well as third-party financial audit
costs related to the contracts the department oversees. Currently, OHS is
managing 26 American Rescue Plan Act contracts, which require audit services
to ensure compliance with federal regulations.
Total Human Services $4,576,000
0.0
2025-26
Department/Program Total
Law
1. Civil Division $0
Convert two temporary Assistant City Attorney IV positions to ongoing status. 2.0
These positions will be dedicated to matters related to GO Bond projects and the
Information Technology Services department.
Total Law $0
2.0
Neighborhood Services
1. Blight Reduction Program $0
Convert a temporary Special Projects Administrator position to ongoing status. 1.0
This position was created to oversee implementation of the Community Safety
Plans approved by Council in 2022 and to facilitate coordination of services
between departments. The Community Safety Plans leverage technology and
community-based resources to improve the safety and quality of life along the
19th and 27th Avenue and Hatcher and Bell Road corridors.
Total Neighborhood Services $0
1.0
Office of Arts and Culture
1. Administration $0
Convert a temporary part-time Administrative Assistant I position to ongoing 0.6
status. This position is the first contact point for customer service and supports
Arts and Culture programs by scheduling meetings, creating reports and
presentations, and responding to constituent inquiries, as well as supporting the
public arts, grants, and cultural facilities teams.
Total Office of Arts and Culture $0
0.6
Parks and Recreation
1. Administration $0
Convert a temporary Assistant Parks and Recreation Director position to ongoing 1.0
status. This position is responsible for management of several large department
divisions that provide programming to the community. Additionally, this position is
responsible for management of capital projects throughout the park system.
Total Parks and Recreation $0
1.0
2025-26
Department/Program Total
Police
1. Administration $0
Convert a temporary Senior Public Information Officer to ongoing status. This 1.0
position is responsible for strategic communications planning related to the
Department of Justice (DOJ) report, including collaboration with outside legal
counsel. The position also serves as the technical advisor and support for public-
facing communication and associated efforts, including support of Police and
other City executive staff in public interviews and communications.
Total Police $0
1.0
TOTAL PROPOSED GENERAL FUND ADDITIONS $51,194,000
187.6
PROPOSED SUPPLEMENTALS
NON-GENERAL FUND
Finance
1. Water and Wastewater Financial Planning $0
Convert a temporary Accountant III position to ongoing status in the Finance 1.0
Utilities Division paid for by the Water Services Department (WSD). The position
responsibilities include reviewing transactions and reports in the customer billing
system used by WSD.
Total Finance $0
1.0
Housing
1. Community Partnerships $0
Convert a temporary Project Manager position to ongoing status. This position 1.0
provides project management and coordination for the implementation of various
affordable housing development projects. It also ensures the City meets stringent
federal compliance requirements for grants awarded through the U.S. Department
of Housing and Urban Development (HUD) HOME Investment Partnerships
Program American Rescue Plan (HOME-ARP).
2. Housing Supportive Services $0
Convert two temporary Caseworker II positions to ongoing status. These positions 2.0
support the Family Self Sufficiency Program, which coordinates public and private
resources to help Housing Choice Voucher program participants, public housing
tenants, and tenants in the Section 8 Project-Based Rental Assistance program
achieve financial independence.
Total Housing $0
3.0
2025-26
Department/Program Total
Human Services
1. Head Start Birth to Five $0
Convert multiple temporary Family Resource Centers positions to ongoing status, 8.0
including one Caseworker III, three Caseworker Aide, and four Caseworker I
positions. These positions are funded by the First Things First grant, which the
department has received since 2017. The positions work in the department's
Education Division, providing early childhood support.
Total Human Services $0
8.0
Law
1. Civil Division $0
Convert a temporary Assistant City Attorney IV position to ongoing status. This 1.0
position will be dedicated to matters related to the employee pension fund.
Total Law $0
1.0
Police
1. Various $0
Convert three temporary grant positions to ongoing status, including a Police 3.0
Research Analyst supported by the Urban Area Security Initiative grant program,
and a Criminal Intelligence Analyst and Contracts Specialist I supported by the
Internet Crimes Against Children grant program. These positions oversee grant
management and administrative responsibilities, including coordinating task force
activities, scheduling task processing, collecting data, and submitting reports for
grant performance measures.
Total Police $0
3.0
Public Transit
1. Customer Service Centers $0
Convert two Supplies Clerk II positions from temporary to ongoing status. These 2.0
positions support expanded cash handling operations for public transit regional
partners.
2. Light Rail $0
Convert one Administrative Assistant II from temporary to ongoing status. This 1.0
position in the Light Rail Transit Division is responsible for assuring operational
policies and Light Rail facilities are meeting contractual terms.
Total Public Transit $0
3.0
2025-26
Department/Program Total
Retirement
1. Retirement Member Services $0
Add funding for a Retirement Assistant position to handle increasing workload and 1.0
continuing complexity of retirement program law. With 34% of active employees
reaching retirement eligibility in the next five years, this position will support
general City retirement by handling counseling appointments and retirement
estimates and processing retirement documents. The cost of this position will be
paid by the City of Phoenix Employees' Retirement System trust.
2. City of Phoenix Employees' Retirement System (COPERS) Investment $0
Management 1.0
Add funding for an Investment Manager position to provide guidance and
oversight of pension investments. This position will strengthen the COPERS
investment program, continuing to build a strong investment portfolio that will
meet funding requirements for long-term retirement plan protection. The cost of
this position will be paid by the COPERS trust.
3. Retirement Member Services $0
Add funding for a Curriculum and Training Coordinator position to review, assess, 1.0
and develop training and communication strategies to improve retirement
readiness information. This position will enhance efforts to communicate to all
members the importance and value of retirement benefits in a more transparent,
easy to understand, and accessible way. The cost of this position will be paid by
the COPERS trust.
Total Retirement $0
3.0
Street Transportation
1. Administration $0
Convert a temporary Special Projects Administrator position to ongoing status. 1.0
This position supports the Street Transportation Director's Office, providing
strategic oversight, project management, and coordination of departmental
initiatives, and serves as a critical liaison with internal stakeholders, government
agencies, and community partners.
2. Administration $0
Convert a temporary Accountant II position to ongoing status. This position 1.0
supports, invoices, and reconciles various revenue sources in the Street
Transportation Department, assisting with the oversight and generation of
invoices related to revenues collected from a variety of sources, including
damage claims, revocable permits, and fees for new programs.
2025-26
Department/Program Total
3. Administration $0
Convert a temporary Accountant II position to ongoing status. This position 1.0
supports and manages various grants and federal aid-funded projects, many of
which require quarterly reporting and other mandatory documentation of activities.
Duties handled by this position are expected to increase with the recent passage
of the Proposition 479 transportation initiative, which provides regional
transportation funds over the next 20 years.
4. Transportation Planning $0
Convert a temporary Management Assistant II position to ongoing status. This 1.0
position plays a crucial role in supporting the department's local, state, and
federal competitive grant applications and submissions. Grant opportunities have
increased in recent years, resulting in increases in grant planning efforts, Council
action requests, interdepartmental collaboration, and grant agreement
coordination.
Total Street Transportation $0
4.0
Water Services
1. Wastewater Treatment $5,578,000
Add funding for twenty-eight new positions, plus related vehicles, equipment, 28.0
contractual services, and commodities needed to re-open and expand the City's
Cave Creek Water Reclamation Plant. This addition would allow the City to
expand capacity for wastewater treatment and water purification, maintain
environmental and safety standards, and uphold technological process control
and security standards.
2. Administration $0
Convert two temporary full-time positions to ongoing status, including an 1.0
Administrative Assistant I and an Accountant I. The Administrative Assistant I
provides critical services to ensure compliance with Occupational Safety and
Health Administration (OSHA) requirements and Department of Transportation
Commercial Drivers License federal regulations. The position also helps
coordinate department-wide Safety Standard Operating Procedures and
Environmental Compliance Procedures (ECP). The Accountant I assists with City
incentive programs for residents to install low-flow toilets, smart irrigation
controllers, and to replace turf with xeriscape landscaping. The position also
provides budget development support and produces regular position and financial
reporting for management.
Total Water Services $5,578,000
29.0
TOTAL PROPOSED NON-GENERAL FUND ADDITIONS $5,578,000
55.0
ATTACHMENT B
2025-26
PROPOSED REDUCTIONS
GENERAL FUND
View the Inventory of Programs published online for program details.
2025-26
Department/Program Total
Budget and Research
1. Centralized Budget and Position Control $(158,000)
Eliminate one vacant Budget and Research Analyst position which conducts (1.0)
detailed forecasting, position control, and revenue estimates. Responsibilities of
this position have been assigned to other department analysts.
Total Budget and Research $(158,000)
(1.0)
City Auditor
1. Audits $(73,000)
Reduce funding for the use of outside consultants to conduct specialized audits 0.0
resulting in one to two fewer specialized audits annually.
Total City Auditor $(73,000)
0.0
City Clerk
1. Official Records / Records Management / Various $(201,000)
Eliminate funding not used by the department for the acquisition and 0.0
implementation of a new Records Management System and reduce funding for
computer hardware maintenance, office equipment replacement and official
records and elections shredding services.
Total City Clerk $(201,000)
0.0
City Manager's Office
1. Administration of Policies and Objectives Set by Mayor and Council; Oversight of $(99,000)
Departments
Eliminate one vacant Management Fellow position. The City Manager’s Office (1.0)
would have three management fellow positions remaining to rotate through
various departments and assist with Council meetings and special projects.
2025-26
Department/Program Total
2. Administration of Policies and Objectives Set by Mayor and Council; Oversight of $(35,000)
Departments
Allocate partial costs for one Support Services Aide position to the Public Works 0.0
Solid Waste Division, allowing the PHX311 Information Center to continue to
timely respond to a high volume of resident inquiries and requests.
3. Administration of Policies and Objectives Set by Mayor and Council; Oversight of $(31,000)
Departments
Reduce the Office of Innovation discretionary budget designated for expanding 0.0
the office and various programs.
4. Administration of Policies and Objectives Set by Mayor and Council; Oversight of $(175,000)
Departments
Reduce Office of Accountability and Transparency (OAT) special contractual 0.0
services funding for future OAT expansion.
Total City Manager's Office $(340,000)
(1.0)
Communications Office
1. Communication Outreach $(122,000)
Reduce contractual funding for marketing and citizen outreach. This reduction 0.0
would result in less available resources to conduct marketing efforts such as
promoting City employment opportunities.
Total Communications Office $(122,000)
0.0
Community and Economic Development
1. Business Development $(182,000)
Eliminate one vacant Protocol Program Administrator position. Eliminating this (1.0)
position will require the department to forego adjustments to staff responsibilities
in the Business Development Program aimed at improving project staff and
department efficiency and effectiveness.
2. Business Retention and Expansion $(228,000)
Eliminate one vacant Deputy Economic Development Director position. The (1.0)
reduction requires the department to shift retention and expansion efforts to
another middle manager position.
3. Business Development $(22,000)
Reallocate an Aviation Marketing Supervisor position to an Economic 0.0
Development Specialist resulting in savings for the cost of the position. Due to
challenges filling this position, the department moved position responsibilities to
an Economic Development Program Manager.
2025-26
Department/Program Total
4. Various $(72,000)
Reduce funding for professional services, including Council-requested market- 0.0
area studies, due-diligence research for site acquisitions/dispositions, unplanned
special-event services and economic policy research. This reduction slightly
impacts the department's ability to respond to unforeseen needs.
Total Community and Economic Development $(504,000)
(2.0)
Equal Opportunity Department
1. Small and Disadvantaged Business Enterprise (S/DBE) Programs $(46,000)
Increase Small and Disadvantaged Business Enterprise Program allocations to 0.0
the Aviation and Street Transportation Departments, generating savings to the
General Fund. These allocations are based on additional work Equal Opportunity
Department staff will provide to support the economic growth of local businesses
through administration of the Small Business Enterprise (SBE), Disadvantaged
Business Enterprise (DBE), and Airport Concessions Disadvantaged (ACDBE)
Business Enterprise programs.
Total Equal Opportunity Department $(46,000)
0.0
Finance
1. Financial Accounting and Reporting $(164,000)
Increase a flat rate assessment from the General Fund to the Sports Facility Fund 0.0
for financial reporting and oversight. Due to the Class and Comp Study, the
assessment increased by 20%. Additionally, due to organizational structure
changes, the assessment adds 20% of an Assistant Director and Fiscal Manager
position costs to the assessment.
2. Banking and Cashiering $(22,000)
Reduce banking services not needed due to higher than anticipated credits from 0.0
favorable Federal Reserve interest rates.
3. Debt and Investment Management $(226,000)
Eliminate one vacant Deputy Finance Director, in the Treasury and Debt (1.0)
Management Division, that has management and financial oversight over all City
banking activities; all City investment activities; and all City debt issuances,
monitoring, accounting, and reporting. Eliminating the position will require other
Deputy Finance Directors to oversee the area of Treasury and Debt Management.
4. Sales Tax Licensing and Accounting $(154,000)
Eliminate one vacant Senior Tax Auditor in the Tax Compliance and Education (1.0)
Audit Team. The position requires specialized knowledge of complex tax
regulations. Responsibilities would be assigned to other staff on the team
increasing respective workloads.
2025-26
Department/Program Total
5. Goods & General Services Procurement and Contract Management $(107,000)
Eliminate one vacant Buyer position in the Central Procurement Division. The (1.0)
position is tasked with researching procurement matters, assisting with the
administration of contracts, and handling small dollar purchases and informal
procurements. Responsibilities would be assigned to other staff in the division
increasing respective workloads.
6. Banking and Cashiering $(77,000)
Eliminate one vacant Account Clerk III in the Treasury and Debt Management (1.0)
division. The position serves as a Cashier in the 305 Finance Payment Center.
The position provides payment acceptance services to City residents and
businesses by accepting payments for City departments in-person, over-the-
phone, and by mail, in addition to providing Spanish language translation services
for customers. Responsibilities would be assigned to other staff in the division
increasing respective workloads.
7. Acquisition, Relocation and Title $(112,000)
Eliminate one vacant Property Specialist, in the Real Estate Division, tasked with (1.0)
leasing City properties for all departments. The position negotiates lease terms,
monitors compliance, and facilitates amendments and renewals. Responsibilities
would be assigned to other staff in the division increasing respective workloads.
8. Financial Accounting and Reporting $(109,000)
Eliminate one vacant Accountant II, in the Financial Accounting and Reporting (1.0)
Division, tasked with processing fixed assets and encumbrances citywide.
Responsibilities would be assigned to other staff in the division increasing
respective workloads.
$(119,000)
9. Risk Management (1.0)
Eliminate one vacant Accountant II in the Revenue & Risk Management division.
The division processes property/liability claims filed against the City, purchases
commercial insurance, and provides risk related consulting services to
departments. Responsibilities would be assigned to other staff in the division
increasing respective workloads.
Total Finance $(1,090,000)
(7.0)
2025-26
Department/Program Total
Fire
1. Various $(5,000,000)
Reduce funding for various non-personal services items including contractual 0.0
services, commodities, and capital outlay items. This reduction includes less
resources for emergency repairs, minor capital projects, technology equipment
replacements, and employee training and travel. While these reductions impact
the department by reducing budgeted resources, the impact is minimal and will
not impact fire service delivery.
Total Fire $(5,000,000)
0.0
Government Relations
1. Federal, State, Regional and Tribal Programs $(88,000)
Reduce funding for business travel and a lobbying firm contract that provides 0.0
supplemental support for federal legislative matters.
Total Government Relations $(88,000)
0.0
Human Resources
1. Safety & Workers Compensation $(147,000)
Generate savings to the General Fund by allocating the cost of a Program 0.0
Manager position in the Human Resources Safety Division to the Workers'
Compensation Trust fund. By charging this position to the trust, a portion of its
costs will be assessed to non-General Fund funding sources.
2. Benefits & Wellness $(200,000)
Reduce planned funding for an emergency back-up care program. This program 0.0
was planned to be added beginning in July 2025 to provide full-time employees
with up to five days of childcare assistance if their normal childcare was
unavailable.
3. Organizational & Learning Development $(30,000)
Reduce funding for the implementation of components of the City's Learning 0.0
Management System, PHXYou. This reduction would delay the migration of
Police, Fire, and other departments away from their internal learning systems to
PHXYou.
4. Labor Relations $(30,000)
Reduce funding for labor negotiation training. City code requires staff to 0.0
participate in labor negotiations with labor groups on a routine basis. This
reduction would decrease the amount of training able to be provided to City staff
on labor law and negotiations processes.
2025-26
Department/Program Total
5. Talent Acquisition & Management $(32,000)
Eliminate a vacant part-time Senior Human Resources Clerk position. (0.7)
Responsibilities would be assigned to other staff increasing respective workloads.
6. Talent Acquisition & Management $(50,000)
Reduce funding for advertising services for applicant recruitment. This would 0.0
reduce resources used for paid search engine optimization, banner ads, paid
social media ads, outdoor billboards, and other advertising functionality to attract
job applicants.
7. Classification and Compensation $(188,000)
Eliminate one vacant Human Resources Supervisor position. This position (1.0)
oversees a team of employees responsible for reviewing position classifications,
pay step placements, special merit recommendations, and classification and
compensation studies. Responsibilities would be assigned to other staff
increasing respective workloads.
Total Human Resources $(677,000)
(1.7)
Human Services
1. Strategic Initiatives $(76,000)
Eliminate a vacant Secretary III position from the Strategic Initiatives Division. (1.0)
This position provides administrative support within the division. Responsibilities
would be assigned to other staff increasing respective workloads.
Total Human Services $(76,000)
(1.0)
Information Technology Services
1. Various $(5,000,000)
Reduce funding for various non-personal service items including primarily staff 0.0
augmentation working to support technology modernization efforts, server and
storage environment, SharePoint migration, technical writing, service delivery,
projects for small departments, and other initiatives, telecommunications network
power supply and fiber management, and technology software and licensing for
management of mobile performance and implementing enhancements and/or
automation of software integration.
Total Information Technology Services $(5,000,000)
0.0
2025-26
Department/Program Total
Law
1 Various $(242,000)
Eliminate one vacant Legal Secretary*Lead and two Court/Legal Clerk II (3.0)
positions. The Legal Secretary*Lead position provides secretarial support for
three attorneys within the Community Prosecution and Appeals bureaus. The
Court/Legal Clerk II positions ensure files are complete, motions are filed, and
work requested by a Prosecutor or Legal Assistant is completed timely.
Responsibilities would be assigned to other staff increasing respective workloads.
Total Law $(242,000)
(3.0)
Library
1 Various $(249,000)
Reduce non-personal services funding for library materials and information 0.0
technology needs. This reduction would result in fewer new materials being
purchased, more wear and tear on current physical collections, and gradual
degradation of the audio visual capabilities of library public meeting room spaces.
Total Library $(249,000)
0.0
Municipal Court
1 Criminal and Civil Case Adjudication $(106,000)
Eliminate one vacant part-time pro tem City Judge position. This position makes (0.5)
judicial decisions in a criminal courtroom. This elimination would result in more
cases being moved to existing courtrooms and be scheduled further into the
future.
2. Interpreter Services - Management Services Division $(7,000)
Reduce funding for interpreter and translation services, which is used for services 0.0
for non-English speaking court participants.
3. Administration $(86,000)
Reduce funds for information technology training for staff and communications 0.0
equipment in courtrooms. This reduction will impact the team's ability to assist its
technical staff in keeping their skills current with the evolving technical toolsets
they must employ as part of their daily activities.
Total Municipal Court $(199,000)
(0.5)
2025-26
Department/Program Total
Neighborhood Services
1. Targeted Neighborhood Revitalization Programs $(741,000)
Replace funding in the General Fund for the Gated Alley Program with 0.0
Neighborhood Block Watch Program (NBWP) funds. In December 2024, the City
Council approved the use of $3 million in available NBWP funds for the program.
It is anticipated NBWP funds will be available going forward to continue the Gated
Alley Program as planned. Future use of additional funds will be brought to the
2. Targeted Neighborhood Revitalization Programs $(74,000)
Reduce funding for landscape maintenance. This service is scheduled monthly for 0.0
multiple city-owned properties located throughout Phoenix and ensures they
remain blight free and in compliance with City Code. With this reduction,
landscape maintenance will be completed 7 times per year, rather than 12 times
per year and is not expected to have a material impact.
3. Blight Reduction Program $(150,000)
Reduce funding for the Private Property Cleanup Program. The costs of the 0.0
program are less than originally estimated and the reduction is not expected to
result in adverse impacts to residents or service levels.
Total Neighborhood Services $(965,000)
0.0
Office of Arts and Culture
1. Public Art Program and Cultural Facilities Development and Property $(175,000)
Management Services
Reduce funding for maintenance of the City’s Municipal Arts Collection and for 0.0
facility maintenance for the Children's Museum of Phoenix, Phoenix Art Museum
and Phoenix Theatre.
Total Office of Arts and Culture $(175,000)
0.0
Parks and Recreation
1. Various $(2,000,000)
Reduce various non-personal services items primarily including park maintenance 0.0
and capital equipment replacement funding. This funding supports general park
and facility maintenance needs and also funds the replacement of aging or broken
equipment. While these reductions impact the department by reducing budgeted
resources it is not expected to impact park service delivery.
Total Parks and Recreation $(2,000,000)
0.0
2025-26
Department/Program Total
Phoenix Convention Center
1. General Fund Garages $(208,000)
Reduce funding for re-stripping of parking stalls at the 305, Adams Street, and 0.0
2nd Avenue Garages.
Total Phoenix Convention Center $(208,000)
0.0
Police
1. Various $(6,000,000)
Reduce various non-personal services items primarily including approximately 0.0
$1.5 million in funding no longer needed due to the planned rollout of the new
Records Management System (RMS) beginning in June 2025. It also includes
reductions to training, technology, various police equipment, maintenance, and
supplies. While these reductions impact the department by reducing budgeted
resources, the impact is minimal and will not impact police service delivery.
Total Police $(6,000,000)
0.0
Public Works
1. Facilities Management and Maintenance $(500,000)
Eliminate non-critical minor maintenance projects for city facilities including 0.0
asphalt reconstruction, carpet replacement and flooring repair, illuminated strip
replacement, landscaping regrading and gravel replacement.
Total Public Works $(500,000)
0.0
Street Transportation
1. On-Street Parking Program $(87,000)
Eliminate one vacant Parking Meter Repair Supervisor position. This position has (1.0)
been vacant for an extended period of time due to hiring challenges, and its
elimination would have limited impact on current daily operations.
Total Street Transportation $(87,000)
(1.0)
TOTAL PROPOSED GENERAL FUND REDUCTIONS $(24,000,000)
(18.2)
ATTACHMENT C
2023-24
SUPPLEMENTALS UPDATE
GENERAL FUND
2023-24
Department/Program Total
Fire
1. Fire Emergency Medical Services and Hazardous Incident Response $2,021,000
Add funding for twenty-four sworn positions (four Fire Captains, four Fire 24.0
Engineers, and sixteen Firefighters) to provide dedicated staffing for the new Fire
Station 74, located at 19th Avenue and Chandler Boulevard. The Fire Department
intends to hire personnel to staff this fire station beginning January 2024. The full-
year ongoing cost will be $3,796,000.
Status Update: All 24 firefighter positions are filled and trained, allowing the
placement of Engine 74 and Rescue 74 into service at temporary locations
until the opening of Fire Station 74. This has improved overall service
delivery to the growing community in west Ahwatukee.
2. Fire Emergency Medical Services and Hazardous Incident Response $1,355,000
Add funding for seven new sworn positions (Firefighters) and one new vehicle 7.0
(ambulance) to provide dedicated staffing and apparatus for one new Rescue
unit. These positions and equipment will significantly improve service delivery
citywide. The full-year ongoing cost, excluding initial vehicle purchases, will be
$1,049,000.
Status Update: All seven firefighter positions are filled and trained, allowing
for a new rescue company to go into service, which will have an impact on
reducing response times and will help improve overall service delivery to
the community.
3. Administration $71,000
Add funding for a new Human Resources Aide position to support the processing 1.0
of payroll and leave transactions for the Fire Department. This addition will reduce
the number of transactions per employee to reduce human errors in the payroll
process and ensure that employees are paid correctly. The full year ongoing cost,
excluding initial equipment purchases, will be $69,000.
Status Update: The position is filled and supports the Fire Department's
payroll section in processing payroll and leave transactions.
Total Fire $3,447,000
32.0
2023-24
Department/Program Total
Human Services
1. Client Services $500,000
Add funding to compensate for the loss of Low Income Home Energy Assistance 0.0
Program (LIHEAP) funding from the Arizona Department of Economic Security
(DES). Administrative changes in the DES funding process have resulted in a loss
of revenue to the City's program. The anticipated reduction will negatively impact
the City's ability to adequately staff the LIHEAP program, resulting in reduced
levels of service to residents qualifying for home energy assistance. This addition
helps ensure continued service.
Status Update: This funding was designed to replace anticipated lost
funding from DES. Unexpectedly, DES provided temporary funds for
navigation support, in place of LIHEAP administrative support. The
additional DES funds supported the program for the first part of FY 2023-24.
In March 2024, the department began to spend the supplemental funding,
which continues to support LIHEAP activities.
2. Victim Advocacy Services $450,000
Add funding to offset expiring Victims of Crime Act (VOCA) grant funding. These 0.0
funds will enhance the department's ability to provide domestic violence and
sexual assault referrals, reducing caseloads, preventing case backlogs, and
maintaining adequate response times.
Status Update: This funding was designed to replace anticipated lost
funding from the Office for Victims of Crime (OVC), based on its
communication of a 50% reduction of funding levels for FY 2023-24.
However, the State of Arizona used American Rescue Plan Act (ARPA)
funds to make up for the shortfall. As a result, no supplemental funds have
been spent to date. For FY 2024-25, OVC is again communicating a potential
50% reduction in funding, which would result in the need to utilize the
funding approved in this supplemental.
3. Homeless Outreach Services $600,000
Add funding to expand the department's Behavioral Health Engagement Teams 0.0
(BET) contract. BET teams provide outreach to specific and targeted areas of the
city that are experiencing high instances of substance abuse and behavioral
health issues, which may contribute to people experiencing homelessness.
Status Update: The BET contract is in place and has more than 100
engagements with people experiencing homelessness. While positive exits
are challenging with these encounters, the team has been able to achieve 42
positive exits, including shelter, detox, and permanent housing. To date,
more than 2,000 services have been delivered. Services include case
management, obtaining identification or securing forms, transportation, and
benefits assistance. The additional resources for this contract support
positive outcomes and increased community engagement for people with
mental health needs and substance use disorder.
2023-24
Department/Program Total
4. Homeless Community Engagement $600,000
Add funding to expand the department's PHX CARES Outreach Teams contract. 0.0
The expansion will dedicate teams to hot spots throughout the city where there
are high concentrations of encampments. The teams will provide outreach from 5
a.m. to 11 p.m., seven days per week, with the goal of reducing people
experiencing homelessness.
Status Update: This contract has served more than 500 individuals with
mental health needs, substance use disorders, and chronic health
conditions. A total of 202 individuals were exited to shelter, two were exited
to transitional housing programs, 10 were exited to live with family or
friends, and 68 exited to substance use treatment or detox. 255 individuals
engaged through this contract are identified as chronically homeless. The
additional funding for this contract supports positive outcomes and
increased engagement with high need populations.
5. Homeless Emergency Services $5,200,000
Add funding needed to continue emergency services for shelter operations 0.0
throughout the city serving individuals experiencing unsheltered homelessness.
The City is developing a new shelter that will house up to 280 individuals per night
at 3000 S. 22nd Ave, which will be operated by a nonprofit shelter and wrap
around service provider. Additionally, the City and Maricopa County are co-
funding Community Bridges Inc.’s (CBI) acquisition of a hotel to be converted into
an emergency shelter called Rio Fresco Healing Center. Although the acquisition
is not finalized, the rooms at the hotel are currently being rented by CBI, serving
140 individuals per night at that location. Together the two shelters supported with
this funding will serve up to 420 individuals per night and approximately 1,260
individuals per year. While operational funding for both locations is being sought
through additional federal, state, county, and private sources, this funding will
facilitate operations through June 2024.
Status Update: The original project planned for this funding was not viable,
so funds were used for a temporary shelter while a new site for a City
shelter was identified. A contract with A New Leaf was executed on October
1, 2023 for emergency shelter services via temporary lodging. This
temporary lodging site provides 100 non-congregate beds and accepted its
first residents on October 18, 2023. The funding will continue to support
City shelter efforts in the future.
6. Head Start Birth to Five $250,000
Add funding to support the Phoenix Day Early Childhood Education Center 0.0
(PDECEC). This one-time allocation will allow the PDECEC to retain and expand
teaching staff and training to increase enrollment to a sustainable level. Impacts
from COVID resulted in a $1 million deficit in funding. A New Leaf has developed
a plan to increase enrollment and is on track to reach sustainability by 2024.
Status Update: This one-time funding allowed PDECEC to continue to
increase student enrollment and hire teachers to meet their 2024 financial
sustainability goals. The funding specifically supported three lead teachers,
an enrollment coordinator, and a compliance manager.
2023-24
Department/Program Total
Total Human Services $7,600,000
0.0
Law
1. Criminal Division - Victim Services Unit $344,000
Fund five Federal Victim of Crime Act Assistance (VOCA) Fund grant positions 5.0
with General Funds. Grantees were informed funding will be reduced by 50-60%
beginning fiscal year 2023-24. These positions provide services to victims and
assistance to comply with mandated victims' rights. The full-year ongoing cost will
be $447,000.
Status Update: Four of the five positions are filled. Services have been able
to remain at existing levels.
2. Civil Division $0
Add four Management Assistant II and two Assistant City Attorney IV positions. 10.0
Convert from temporary to ongoing status a Chief Assistant City Attorney, an
Assistant Chief Counsel, a Management Assistant II, and a Special Projects
Administrator. These positions are needed to facilitate and coordinate immediate
and ongoing needs related to the Department of Justice investigation of the
Phoenix Police Department. The cost of these positions will be offset with salary
savings within the Police Department budget.
Status Update: One Assistant City Attorney IV position assigned to the
Phoenix Police Academy, recently became vacant and a recruitment is
underway. The second Assistant City Attorney IV positions is assigned to
the Police Department Professional Standards Bureau and is filled. The
Chief Assistant City Attorney and Assistant Chief Counsel are filled. The
Chief Assistant City Attorney is the citywide project manager for the
Department of Justice Investigation and receives support from the Assistant
Chief Counsel. The five Management Assistant II and one Special Projects
Administrator positions were transferred to the Police Department and are
no longer in the Law Department.
Total Law $344,000
15.0
Neighborhood Services
1. Targeted Neighborhood Revitalization Programs $352,000
Increase funding for the Gated Alley Program. In 2022-23, 45 gated alley 0.0
segments are scheduled to be initiated, which will expend all current program
funding. By increasing program funding, an additional 32 gated alley segments
already approved will be able to be initiated. The ongoing funding will provide for
approximately 77 gated alley segments per fiscal year.
2023-24
Department/Program Total
Status Update: This funding helped contribute to GAP gating 156 alley
segments in FY2023-24 through a combination of General Funds,
Neighborhood Block Watch Program (NBWP) funds, and other funding
sources. In November 2024, Council approved the allocation of $3 million in
NBWP funds to help meet current GAP demands. Since the start of FY 2024-
25, GAP has received 195 requests. This year’s General Fund budget
allocation will allow 80 alley segments to be gated. Of the 115 remaining
requests, 58 have been fully vetted, are ready for permitting, and will use
NBWP funds to complete the work.
Total Neighborhood Services $352,000
0.0
Office of Arts and Culture
1. Public Art Program $0
Add a Project Manager position to help manage and coordinate the City's 1.0
nationally-recognized public art program. This position will coordinate the
implementation and completion of Capital Improvement Program (CIP) percent-for-
art public art projects, as well as providing technical and program support for
other public art projects. The cost of this position will be offset by charging Capital
Improvement Projects.
Status Update: The Public Art Program completed hiring of the Project
Manager position to help manage and coordinate the City’s nationally-
recognized public art program. The position is now coordinating,
implementing, and completing Capital Improvement Program (CIP) percent-
for-art public art projects.
2. Community Investment and Engagement Program $250,000
Increase funding for the Community Arts Grants Program from $125,000 to 0.0
$250,000 to enhance efforts towards greater equity of funds to arts organizations,
including providing support to renters at City cultural venues to help offset
performance and production costs. The increase will provide ongoing annual
funding from Community Arts Grants of $1.45 million.
Status Update: The additional $250,000 Community Arts Grant funding has
enhanced efforts toward more significant equity of funds to arts
organizations. This includes providing support to renters at City cultural
venues to help offset performance and production costs. 126 applications
were received for the FY 2024-25 Community Arts Grant Program, a nine
percent increase from FY 2023-24.
Total Office of Arts and Culture $250,000
1.0
2023-24
Department/Program Total
Parks and Recreation
1. Park Rangers-Community and Neighborhood Parks $1,537,000
Add funding for one Park Manager, two Park Ranger III, and 12 Park Ranger II 15.0
positions to create an overnight shift of two Urban Park Ranger Teams. By
creating these two teams, Park Ranger coverage will be available 24 hours per
day, seven days per week throughout the 186 parks within the City's 500 plus
square miles. The full-year ongoing cost, excluding initial vehicle purchase costs,
will be $1,344,000.
Status Update: These positions were filled in July 2023. Since that time, the
positions have been critical to the ongoing education and enforcement of
the Parks and Recreation Department's Code of Conduct. The Park Rangers
are currently performing regular patrols of urban parks overnight, where
they educate park users on code of conduct rules. Additionally, the Park
Rangers assist with large cleanup efforts throughout City parks. These
positions have also increased the ability to respond to issues related to
people in closed parks overnight.
2. Specialized Maintenance-Skilled Trades $394,000
Add funding for an additional Forestry crew consisting of one Parks Foreman, two 5.0
Urban Forestry Technician, and two Equipment Operator II positions. The
Forestry section provides citywide tree planting, tree maintenance activity,
technical support, and 24/7 emergency response. Additional staff are needed for
irrigation system installation, maintenance and operation of controllers, tree
planting, staking, and pruning. These activities will support the Tree and Shade
Master Plan, an important component of the City's Climate Action Plan. The full-
year ongoing cost, excluding initial vehicle purchases, will be $353,999.
Status Update: All positions have been filled except for one Urban Forestry
Technician position, which is currently in the hiring process. These
positions have enhanced tree planting, maintenance, and emergency
response efforts across the City.
3. General Recreation $101,000
Add funding for a Volunteer Coordinator position. This position would serve as a 1.0
single point of contact to brand and promote a Parks volunteer program
supporting urban flatland parks citywide. The department receives a large number
of volunteer requests from the public. This position would receive those requests,
plan, develop, and implement volunteers, and conduct fundraising and/or
community service programs.
Status Update: In an effort to better align the job duties with the needs of
the department, this position was reallocated to an Administrative Assistant
II and was filled in January 2025. The development of the volunteer program
is ongoing and is the primary responsibility of the position.
4. General Recreation $250,000
Add funding for up to three cricket fields and explore development of partnership 0.0
opportunities to expand more sites in the future.
2023-24
Department/Program Total
Status Update: Funding enabled the development and installation of two
cricket pitch sites: Turtle Rock Basin, located near 12th Street and Bell
Road, and Grovers Basin, located near 20th Street and Grovers Avenue.
Both sites have been constructed and are open to the public. During the fall
2024 allocation season, the cricket pitches were reserved for a total of 526
hours. For the 2025 spring season, 119 adult teams and 13 youth teams
have been allocated 2,240 and 220 hours, respectively.
5. Parks Maintenance $125,000
Add funding for additional maintenance and repair items at Sueño Park and other 0.0
Parks sites.
Status Update: Parks and Recreation staff worked with the community to
identify improvements to the park, including new benches, picnic tables,
and grills throughout the park, a new bleacher by the basketball court,
backstop replacement, and chilled drinking fountains. All improvements
have been made and are being enjoyed by the community.
Total Parks and Recreation $2,407,000
21.0
Police
1. Various $0
Add funding for 20 Civilian Investigator positions and related equipment to support 20.0
the department's ongoing civilianization efforts. These positions perform select
investigative functions and enhance investigative capacity, provide staffing
flexibility, and allow the department to use sworn staff where they are most
needed. The full-year ongoing cost will be $1,917,000; however, the cost for FY
2023-24 will be absorbed utilizing savings from vacant sworn positions.
Status Update: These positions are assigned to a variety of bureaus, with 18
of the 20 positions currently filled. Their work supports the Homicide
Squad, Drug Enforcement Bureau, Property Crimes Bureau, Employment
Services Unit, as well as Real Time Operation Centers. Essential tasks
include data collection, communicating with residents, liaising with other
government agencies, and relieving sworn staff of duties that would keep
them from needed public safety work.
2. Various $0
Add funding for three Police Research Analyst positions and three Criminal 6.0
Intelligence Analyst positions and related equipment to the Investigations and
Patrol Divisions and the Compliance and Oversight Bureau as part of the
department's ongoing civilianization efforts. These positions will provide key
analytics and research work to support a variety of department efforts, including
work with the Office of Accountability and Transparency and the Professional
Standards Bureau addressing community concerns. The full-year ongoing cost
will be $575,000; however, the cost for FY 2023-24 will be absorbed utilizing
savings from vacant sworn positions.
2023-24
Department/Program Total
Status Update: All positions are currently filled. The Organizational Integrity
Bureau is assigned two Police Research Analysts, and the Department of
Justice (DOJ) Investigative Detail is assigned one Police Research Analyst.
These positions support DOJ activities, work with the Organizational
Integrity Unit, support early intervention efforts, provide assistance on
analytics and dashboards, and handle community complaints. The Strategic
Information Bureau currently has two Criminal Intelligence Analyst
positions, and the Compliance and Oversight Bureau has one Criminal
Intelligence Analyst. Two of the positions are assigned to the Compstat
program, which provides crime trend information to leadership. One
position conducts data queries, develops reports, responds to public
records requests, and provides research and data analysis to assist with
ongoing investigations and solving crimes.
3. Training Bureau - Training, ALEA & AZPOST $0
Add funding for four Civilian Curriculum and Training Coordinator positions 4.0
working as Law Enforcement Training Specialists in the Training Bureau. These
positions are needed to enhance training capacity, benefitting both new recruits
and existing sworn staff. The full-year ongoing cost will be $384,000; however, the
cost for FY 2023-24 will be absorbed utilizing savings from vacant sworn
positions.
Status Update: The Training Bureau has utilized these positions to alleviate
workload normally handled by sworn staff. All four positions are currently
filled. The coordinators conduct daily physical conditioning with recruits,
teach health and wellness classes, and assist with the PHXYou learning
management system. Additionally, they create and prepare lesson plans for
the Phoenix Police Academy, proctor exams, document grade reports,
conduct orientations and information training, and manage the Academy’s
data dashboard. These positions have allowed Field Training Officers to
spend more time training recruits.
4. Laboratory Bureau - Crime Scene Response/Crime Suppression $0
Add funding for five Crime Scene Specialist II positions, vehicles, and related 5.0
equipment in the Laboratory Services Bureau. These positions play a pivotal role
in the investigative process and processing of crime scenes. Due to increased
work volume, additional positions are needed to keep pace with national
standards and best practices. The full-year ongoing cost will be $381,000;
however, the cost for FY 2023-24 will be absorbed utilizing savings from vacant
sworn positions.
Status Update: All five positions are filled and are in various stages of
training, with all positions available to respond to crimes scenes. Two staff
have completed training and are responding to violent crime scenes. These
positions have increased the number of investigated scenes, resulting in
improved support overall for criminal investigations.
2023-24
Department/Program Total
5. Various $0
Add funding for 10 Police Assistant positions, vehicles, and related equipment to 10.0
the Patrol Division and Logistical Resources Bureau. The Police Department
recently partnered with Arizona State University in a collaborative assessment of
calls for service, resulting in the identification of four call types that could best be
performed by Police Assistants. Among other tasks, these positions will ensure
the integrity of chain of custody and preservation of property. The full-year
ongoing cost will be $680,000; however, the cost for FY 2023-24 will be absorbed
utilizing savings from vacant sworn positions.
Status Update: These positions are assigned to various bureaus. Nine
positions are filled, and one is vacant. The positions assigned to precincts
relieve sworn patrol staff by responding to non-emergency calls not
requiring a sworn officer. Positions in the Property Management Bureau
purge items from the Records Management System in accordance with
policy, serve as the Abandoned Vehicle Coordinator, and assist with drug
disposals. Additionally, they are the subject matter experts for Evidence on
Q, the Property Management Bureau’s new evidence management program.
These positions have allowed sworn officers to spend more time
responding to emergency calls for service.
Total Police $0
45.0
Street Transportation
1. Street Cleaning $150,000
Add funding to allow Street Transportation Maintenance to clean, cut, and remove 0.0
debris in up to three additional washes annually, and to enhance the clean-up of
medians. This would reduce the turnaround time each wash is maintained,
shortening the time frame between each cleaning. Additional cleanings will help
reduce calls for service and citizen complaints.
Status Update: Street Transportation Maintenance has utilized the
additional funding of $150,000 to service three additional washes. In
addition to the immediate benefits of maintaining a wash, the increased
frequency of service reduces future service times and effort required to
maintain the wash. This increased service level contributes directly to
increased citizen satisfaction and reliability of the wash during storm
events.
2. Street Cleaning $100,000
Add funding for a street sweeper for bike lanes. The sweeper will improve the 0.0
safety and cleanliness of protected bike lanes on city streets. Bike lane sweepers
can remove debris and other hazards from the lanes, making them safer for
cyclists to use. Regularly cleaning the lanes can help promote cycling as a viable
mode of transportation, contributing to a reduction in traffic congestion and air
pollution.
2023-24
Department/Program Total
Status Update: Street Transportation Maintenance is working with Fleet
Services to complete the procurement and deployment of the bike lane
sweeper machine. The sweeper will improve the safety and cleanliness of
protected bike lanes on City streets by servicing these areas that traditional
street sweepers cannot access.
Total Street Transportation $250,000
0.0
TOTAL GENERAL FUND $14,650,000
114.0
SUPPLEMENTALS UPDATE
NON-GENERAL FUND
Aviation
1. Terminal Safety, Security & Communication Center $167,000
Add two Airport Access Agent positions to provide security badging services to an 2.0
active badge population of 19,000. These additional positions will reduce wait
times and increase the number of available appointments. They will also assist in
meeting regulatory requirements of security functions such as background
checks, security training, and badging services. The full-year ongoing cost,
excluding one-time equipment purchases, will be $122,000.
Status Update: All positions were filled in November 2023, reducing wait
times, increasing available appointments for badging customers, and
allowing for additional walk-in customers.
2. Terminal Safety, Security & Communication Center $750,000
Increase the Airport Police Bureau fleet by adding 10 new vehicles. Due to the 0.0
growth in passenger traffic, geographic footprint and the Sky Train expansion, the
Police Bureau is gaining 12 additional officer positions. This increase to the fleet
will help support daily operations.
Status Update: All 10 vehicles were procured December 2023 and delivered
in the first quarter of 2024-25. The vehicles are currently in make-ready
status awaiting to be upfitted, therefore not currently in operations.
Total Aviation $917,000
2.0
2023-24
Department/Program Total
Planning and Development
1. Administration $335,000
Add funding for a Planning and Development Team Leader position, Plan Review 3.0
Coordinator position, and a Senior Business Systems Analyst position to support
the SHAPE PHX technology replacement project and ensure continuity of IT
support services. The project will replace numerous highly-customized legacy
systems with a new application that supports planning, zoning, historic
preservation, and plan review and permitting. The Team Leader position will
supervise Business Leads, oversee involvement of subject matter experts, and
ensure turnaround times and customer service levels are maintained. The Plan
Review Coordinator position will support the largest project release which
includes civil and commercial plan review and permitting and serve as the liaison
between the team and the vendor. The Senior Business Systems Analyst position
will respond to customer requests from residents, the development community,
and staff. The full-year ongoing cost, excluding initial computer and office supply
purchases, will be $324,000.
Status Update: The Planning and Development Team Leader position is
filled. The Plan Review Coordinator (Business Lead) position is vacant due
to an unsuccessful recruitment process. Recruitment will be revisited. The
Senior Business Systems Analyst position was filled at the end of FY 2022-
23. The position is dedicated to overseeing internal and external customer
communications regarding SHAPE PHX Portal Accounts and Permit
Application questions. It also oversees Glance, a resource/tool for staff to
assist external customers with questions regarding Planning and
Development Services Portal processes. The position oversees intranet and
internet pages for needed updates. The positions support the SHAPE PHX
Project and work to ensure continuity of IT support services in the
department. SHAPE PHX is a transformative technology project that
replaces numerous highly customized legacy systems with a consolidated,
secure, transparent, and modern land-based application that supports
Planning, Zoning, Historic Preservation, Plan Review and Permitting.
2. Administration $83,000
Add funding for a Chief Engineering Technician position for the Electronic Plan 1.0
Review administrative team. This position will facilitate plan review submittals and
processing. This will allow staff to manage turnaround times and support the
demand of high-profile projects without adversely impacting other teams. The full-
year ongoing cost, excluding initial computer and office supply purchases, will be
$79,000.
Status Update: The position was filled on November 13, 2023. The main
functions of the Self-Cert Electronic Plan Review Team are administrative
processing of highly confidential projects, coordination and plan review of
Self-Certification submittals and to maintain a report for ARS 9-835 (SB
Report) to make sure all plan reviews are being conducted in the SB
Timeframe in order to not refund the customers. This position adds support
to these key functions and allows for more in-depth research for the ARS 9-
835 report.
2023-24
Department/Program Total
3. Administration $71,000
Add funding for a Human Resources Aide position to reduce turnaround times for 1.0
HR transactions and processing. The full-year ongoing cost, excluding initial
computer and office supply purchases, will be $67,000.
Status Update: This position is filled. The current workload for
Leave/Transactions/Payroll functions was previously distributed between
two HR Aide positions which proved to be a workload burden, creating
longer time frames for HR processes causing unnecessary delays. By
having a third HR Aide position, we are able to distribute the workload more
evenly, creating much more manageable workloads and efficiencies.
Total Planning and Development $489,000
5.0
Public Transit
1. Facility Construction and Maintenance $50,000
Increase funding for clean-up, removal of debris, and overall maintenance of bus 0.0
stops. This funding will enable additional services through multiple existing
contracts to include bus stop cleaning, bus stop repairs, landscaping, and other
maintenance and improvements.
Status Update: Bus stops across the city are being cleaned more often.
Total Public Transit $50,000
0.0
Regional Wireless Cooperative
1. Regional Wireless Cooperative $51,000
Add a part-time Accountant I position to support the administrative and accounting 1.0
responsibility of the VHF (Conventional) Radio Network. This position will assist in
the following areas: accounts receivable, accounts payable, audit, budgeting,
projections, member inquiries, research, and special projects specifically related
to the VHF system. This position was approved by the RWC Board of Directors
on December 1, 2022.
Status Update: The part-time Account I position was filled in October 2023.
The creation of this position provides for more efficient accounting support
to all RWC members. After a one year review it was determined that a full-
time Accountant I was required to meet the demand for increased
accounting support for the VHF Network. In February 2025, the position was
converted to full-time; the department plans to begin recruitment for the full-
time position in the spring of 2025.
Total Regional Wireless Cooperative $51,000
1.0
TOTAL NON-GENERAL FUND $1,507,000
8.0
ATTACHMENT D
2025-26 Community Budget Hearings
Council
Date/Time District(s) Location Information
Tuesday, April 1, 2025 Communitywide Hybrid City Council Chambers
6:00 pm (virtual/in-person open to all 200 W. Jefferson Street
residents) www.phoenix.gov/budget/hearings
Wednesday, April 2, 2025 D4 Steele Indian School Park
6:00 pm Memorial Hall
300 E. Indian School Road
Thursday, April 3, 2025 Spanish Language South Mountain Community Center
6:00 pm (English interpretation available) Century Room
212 E. Alta Vista Road
Friday, April 4, 2025 D1 DoubleTree by Hilton Phoenix North
8:00 am Terrace Room
10220 N. Metro Pkwy E
Saturday, April 5, 2025 Communitywide City Council Chambers
10:30 am Bilingual Hybrid 200 W. Jefferson Street
(virtual/in-person open to all www.phoenix.gov/budget/hearings
residents)
Monday, April 7, 2025 D8 South Mountain Community Library
6:00 pm 7050 S. 24th Street
Tuesday, April 8, 2025 D5 Maryvale Community Center
6:00 pm Multipurpose
4420 N. 51st Avenue
Thursday, April 10, 2025 D3 Sunnyslope Community Center
8:30 am Multipurpose
802 E. Vogel Avenue
Thursday, April 10, 2025 D7 Desert West Community Center
6:00 pm Multipurpose
6501 W. Virginia Avenue
Monday, April 14, 2025 D6 Devonshire Senior Center
8:30 am Multipurpose
2802 E. Devonshire Avenue
Monday, April 14, 2025 D2/D3 Paradise Valley Community Center
6:00 pm Multipurpose
17402 N. 40th Street
Wednesday, April 16, 2025 Spanish Language Maryvale Community Center
6:00 pm (English interpretation available) Multipurpose
4420 N. 51st Avenue
ATTACHMENT E
BUDGET AND RESEARCH DEPARTMENT REPORT B.R.D. NUMBER
2025-05
SUBJECT DATE ISSUED
General Fund Revenue Estimates March 18, 2025
This report provides General Fund (GF) revenue estimates to explain recommended revenue
projections. The City is committed to providing a transparent and open budget process. Providing this
information enhances the review and understanding of how revenue projections are developed to
better facilitate discussions during the annual budget development process.
Careful examination of revenue estimates is required to ensure projections are as accurate as
possible to maintain fiscal stability and long-term budget management. Predicting future revenue
growth is challenging and requires consistent and diligent analysis based on sound forecasting
principles and methods. Revenues are monitored closely, and an updated revenue report is prepared
and distributed to the City Manager’s Office, the City Council, and the community for review monthly.
GF revenues are comprised of several categories, all of which are unique and require separate
analysis. The primary revenue categories include local taxes and related fees, primary property taxes,
state shared sales, income and vehicle license taxes, and user fees and non-tax revenues.
Included in this report is an explanation of how GF revenue is projected, the sources relied upon to
assist in developing estimates, economic assumptions and the methods used to analyze revenues.
Also included are historical revenue actuals and growth rates, the recommended revenue estimates
for 2024-25 and 2025-26, and an explanation of the influencing factors used by staff in analyzing
each major revenue category. Revenue estimates for Local Taxes assume City Council approval of a
proposed Transaction Privilege Tax and Use Tax rate increase from 2.3% to 2.8% effective July 1,
2025. The City Council is scheduled to vote on the proposed tax rate increase on March 18, 2025.
The table below summarizes the 2024-25 and 2025-26 estimated GF revenues and the primary
reason for the variance:
GF Revenue Category 2024-25 2025-26 Amount Percent Primary Reason for Difference
(millions) Estimate Estimate Change Change
Assume moderate growth and a
Local Taxes $718.4 $840.9 $122.5 17.1%
0.5% TPT rate increase.
Increase in assessed property
Primary Property Tax 215.4 222.7 7.3 3.4%
valuation.
State Shared Sales
252.5 262.7 10.2 4.0% Moderate growth is expected.
Tax
Based on collections received two
State Shared Income
351.0 328.3 (22.7) -6.5% years prior. Includes impact of
Tax
Senate Bill 1828.
State Shared Vehicle
88.0 90.9 2.9 3.3% Moderate growth is expected.
License Tax
User Fees & Non- Projected decline in interest
194.0 191.3 (2.7) -1.4%
Taxes earnings.
Total $1,819.3 $1,936.8 $117.5 6.5%
Revenue Projections & Trusted Sources
Projecting revenues involves complex analysis and continuous monitoring to identify variances and
recommend adjustments so that expenditures do not exceed available resources and a balanced
budget can be maintained. As part of the overall forecasting process, assumptions about the
direction and strength of the national, state, and local economy are considered along with indicators
such as population, job growth and personal income. Information on program and service activity
levels, rates, and fees that influence certain revenues are evaluated and proposed legislation is
monitored to determine potential impacts to revenue categories such as sales taxes, state shared
revenues, emergency transportation service revenues and property taxes.
For example, the State enacted Senate Bill (SB) 1131, which prohibits municipalities from taxing
residential rental property starting Jan. 1, 2025. The estimated five-month impact to the GF for
2024-25 is approximately $(19) million and the ongoing annual impact beginning in 2025-26 is over
$(47) million. Additionally, SB 1828 reduces individual income tax rates beginning in tax year 2022
to the current flat tax rate of 2.5%. The City receives state-shared income taxes based on actual
collections from two years prior. Compared to FY 2023-24 collections, state-shared income tax
revenue will decrease by $(85) million in FY 2024-25, followed by an additional reduction of $(23)
million in FY 2025-26. To address the revenue decline resulting from the State’s actions and to
support both existing and future costs to deliver programs and services to the community, the City
proposes increasing the Transaction Privilege Tax (TPT) and Use Tax rate from 2.3% to 2.8%,
effective July 1, 2025, as reflected in the revenue forecast. The City Council is scheduled to vote on
the proposed tax rate increase on March 18, 2025.
In addition, information from City departments on user fees and non-tax revenue is requested and
analyzed each year as part of the technical budget review process. Finally, trusted economic and
financial sources are relied on to provide certain revenue projections and insight into the overall
direction and strength of the economy and include experts from the State’s Finance Advisory
Committee (FAC), Joint Legislative Budget Committee (JLBC), Arizona State University, University
of Arizona (UofA) Economic and Business Research Center (EBRC), Arizona Department of
Revenue, National Blue Chip, Western Blue Chip, and the U.S. Bureau of Labor Statistics and
Bureau of Economic Analysis.
The City is also a member of the Forecasting Project through the EBRC at the UofA. This project is
a community-sponsored research program providing project members with economic forecasts for
Arizona and the Phoenix-Mesa metro area. Budget & Research (B&R) staff attend quarterly
meetings, participate in discussions with other local government and private enterprise members,
and receive quarterly economic reports. In the fall of 2014, Budget and Research consulted with the
UofA’s Eller College of Management, EBRC to enhance the City’s sales tax revenue forecasting
process. Dr. George Hammond, EBRC Director, and Dr. Alberta Charney, Senior Research
Economist, spent several months working with City staff to develop an enhanced econometric sales
tax forecasting model for all categories of city and state sales taxes. In the summer of 2017, staff
worked with EBRC to update the tax forecasting model. In March 2021, the EBRC revised the City’s
model again by including online sales tax. The EBRC leads the State of Arizona Forecasting
Project, which provides in-depth economic forecast analysis and databases on a subscription basis
to businesses, organizations, and government via membership. The additional consulting with Dr.
Hammond has provided the City with solid, independent economic and statistical expertise used to
develop a statistically valid forecasting model specifically for the City of Phoenix. The projected
growth rates in each category of sales tax for the 2025-26 estimate and the out years of the forecast
are based on projections developed with the enhanced econometric forecasting model.
Economic Assumptions
Several of the primary revenue categories are influenced by the economy and the sources
mentioned above provide valuable information about the expected growth of the economy. These
sources are used in developing projected revenue growth rates. B&R staff continuously monitor
economic variables and what these experts are predicting when developing revenue estimations.
The U.S. economy experienced the most robust recovery from the COVID-19 pandemic compared
to other major developed economies, demonstrating resilience and potential for continued growth.
Real Gross Domestic Product (GDP), a common economic measure, grew 2.8% in 2024, compared
with an increase of 2.9% in 2023. According to the U.S. Bureau of Economic Analysis (January
2025), the 2024 growth was attributed to increases in consumer spending, nonresidential fixed
investment, state and local government spending, and exports. However, the Blue Chip Economic
Indicators (BCEI) consensus projects that real GDP will grow at a slower pace, with an estimated
growth of 2.2% in 2025 and 2.0% in 2026. Uncertainties and market volatility are still expected to
persist throughout the year, driven by factors such as geopolitical conflicts, policy shifts under the
new administration, high consumer debt levels, low housing affordability, labor market challenges,
high interest rates, global supply chain disruptions, and inflationary pressures.
The U.S. economic growth established a platform for continued solid gains in Arizona in 2024.
Inflation is currently below the national rate, and job growth is occurring at a faster pace than in the
US (Arizona Governor’s Executive Budget, January 2025). As of December 2024, Arizona’s
Consumer Price Index (CPI-U) was 1.9%, which is lower than the U.S. City Average of 2.9%.
Furthermore, Arizona’s job growth reached 2.1% for the twelve months ending in December,
outpacing the national average of 1.6%. Additionally, the Phoenix MSA average hourly earnings
within the private sector have increased by 6.5%, exceeding the Phoenix MSA CPI-U of 2.2% in
2024. The Arizona economy experienced a solid year in 2024, but faced several challenges such as
slowing growth, housing affordability issues, and uncertainty regarding new government policies.
Arizona taxable retail sales growth (including remote sellers) has decelerated in recent months.
Year-to-date (YTD) statewide taxable retail plus remote sales tax increased by only 2.3% in
December 2024, a decline from 2.8% in December 2023 and 6.4% in December 2022. YTD sales
tax collections for Prime Contracting grew by only 2.8% in December 2024, compared to 17.3% in
December 2023 and 21.6% in December 2022. According to the JLBC, this is the lowest growth rate
for the comparable period since December 2021 when the construction industry in Arizona was
adversely affected by the pandemic (JLBC, January 2025). Furthermore, Arizona’s job growth has
been decelerating. As of December 2024, the year-over-year job growth rate for non-farm
employment has slowed to 1.7%, a decline from 2.4% in 2023 and 3.4% in 2022 (U.S. Bureau of
Labor Statistics, January 2025). Following the COVID-19 pandemic, Arizona has experienced a
surge in home and rent prices; housing affordability has remained a primary challenge for the state.
The number of building permits issued in Arizona has continued to drop. Statewide new housing
units for single-family and multi-family homes decreased by 38.8% in December 2024 compared to
December 2023 (EBRC Benchmark).
Revenue Forecasting Methods
Several forecasting methods and practices are used to estimate City revenues and vary depending
on the type of revenue being analyzed. Evaluating historical growth patterns and current actuals is
an important component to analysis and provide insight into the direction of the various revenue
categories and the growth needed to achieve estimated revenues. Information is also collected from
the economic sources mentioned earlier to ensure the current and subsequent year’s estimates are
reasonable and in-line with what these experts are predicting. The State FAC provides valuable
information from a panel of respected economists and financial professionals. Included in their
materials are projections of state sales tax and income tax collections. These projections are
considered when developing city sales tax, and state shared sales and income tax revenues for both
the current and subsequent fiscal years. Additionally, information is collected from City departments
during the annual technical review process to analyze the user fee and non-tax revenue category.
The department’s knowledge of the revenues generated by various City programs and services is
essential to developing accurate projections. Staff also considers one-time revenues, adjustments,
and contractual agreements impacting growth when developing estimates.
In conjunction with considering historical growth, current trends, and information from trusted
sources and departments, B&R staff uses several forecasting methods when preparing the
estimates. The most common methods of revenue estimation used are averages of actual revenue
experience by varying periods, annualization of year-to-date actuals, and most often a percentage of
prior year method. This last method involves analyzing the amount of revenue collected at a point in
time during prior fiscal years, for example, the 7-month actuals represented a certain percentage of
the total collections for the entire fiscal year and then applying it to current year-to-date actuals. This
method accounts for the seasonal nature of many City revenues and is often a more effective
method than using an average or annualizing approach. Additionally, the growth rate needed to
reach the budgeted or estimated revenue is considered. If the percentage growth needed for the
remaining months of the fiscal year is substantially higher or lower than the current growth rate,
adjustments are made to arrive at a new estimated revenue amount for the fiscal year.
Once the current fiscal year estimate is developed, assumed growth rates are then applied to this
amount to arrive at a projected revenue amount for the following fiscal year. These assumed growth
rates take into account historical and recent trends in revenue data, one-time revenue adjustments,
and information from City departments and our trusted sources to ensure projections are not overly
conservative or aggressive.
Finally, as part of the annual budget development process each year, revenue estimates are
presented to the City Manager’s Office, the City Council and the community as part of the GF Multi-
Year Forecast, the proposed Trial Budget and City Manager’s Budget recommended for
consideration and approval prior to final budget adoption in June.
General Fund Revenue
To assist in explaining the basis for how GF revenue is estimated for each of the major categories,
historical revenue growth and estimated revenues for the 2024-25 and 2025-26 fiscal years are
provided graphically, along with a description of the revenue category and the methodology used
to develop recommended revenue estimates beginning with total GF revenue.
Total General Fund Revenue
Actual & Estimated General Fund Revenue $ % Change 13%
$1,937
13% $1,905
2 0 0 .0 2 0
%
10% 8% $1,819
6% 4% $1,693
3%
1 8
0 0 .0
2% 3%
1 0
%
6%
1 6
0 0 .0
$1,496 0 %
$1,379
$ Millions
-5%
$1,259
1 4
0 0 .0
$1,173 $1,221
-1 0 %
$1,075 $1,106
1 2
0 0 .0
-2 0 %
1 0 0 .0
-3 0 %
8 0 .0
-4 0 %
6 0 .0
-5 0 %
4 0 .0
2 0 .0 -6 0 %
* Projections for 2024-25 and 2025-26 assume no fee increases, changes to state shared revenue formulas or legislative
changes that have recently been proposed or discussed during the current legislative session. The 2025-26 estimate includes
a potential TPT and Use Tax rate increase of 0.5%, effective on July 1, 2025, if approved by City Council on March 18, 2025.
As mentioned, GF revenue consists of local taxes and related fees, primary property taxes, state
shared sales, income and vehicle license taxes, user fees and non-tax revenues. Estimating
revenues for each category is conducted separately to predict the revenues for the current and
following fiscal year more accurately. Each category is unique with respect to the variables that
comprise the revenue and influence growth. Variables that impact revenue growth include
economic factors such as inflation, consumer sentiment, discretionary income, population,
unemployment, job growth and construction activity. Other influencing factors may include
legislative action, City Council policy directives, legal restrictions and mandates, state statutory
formulas, program enhancements or reductions, and changes in rates and fees. For these
reasons, evaluating each major category separately is preferred and generates more accurate
revenue projections.
Local Taxes and Related Fees, 43% of Total General Fund Revenue
Actual & Estimated Revenue $ % Change $841 30%
5% -2%
16% 7% 17%
800.0
20%
12% $730 $718
8% $697
2% 3% 2%
10%
$650
700.0
1%
0%
$559
$ Millions
600.0
-10%
$490 $501
$453
500.0
$437 $441
-20%
-30%
400.0
-40%
300.0
-50%
200.0 -60%
Local taxes and related fees consist of city sales taxes, privilege license fees and other excise
taxes. The majority of revenue is derived from city sales taxes, which is comprised of 15 general
categories collected based on a percentage of business income accruing in each category. The
table on the following page provides the local sales tax rates by category and the percentage
allocated to each fund. The table reflects a proposed 0.5% increase in the TPT and Use Tax rates,
raising them from 2.3% to 2.8%, effective July 1, 2025, pending City Council approval on March 18,
2025.
Privilege license fees are assessed to recover the costs associated with administering the local tax
system. Other excise taxes include the jail tax and the excise tax collected on water service
accounts, which provide resources to help offset jail costs paid to Maricopa County and other GF
services.
Projections provided by the UofA were used to develop city sales tax estimates. Staff analyzes
historical and recent trends in sales tax data by category, evaluates cumulative growth and uses an
econometric forecasting model constructed by the UofA to develop projections. Estimates provided
by the FAC and JLBC are also considered to ensure projections are reasonable and not overly
aggressive or conservative in nature. Sales tax can be volatile and typically correlates to the local
economy and consumer spending behavior. Increases in sales tax collections are expected when
the local economy expands due to underlying fundamentals such as increases in population,
discretionary income, business expansion, jobs, and real estate growth. The opposite holds true
during times of economic contraction or recession as evidenced in 2008-09 and 2009-10 during the
Great Recession, and most recently during the COVID-19 pandemic. The federal stimulus
assistance provided during the pandemic and more than expected revenue collections from retail
and contracting sales taxes offset the revenue loss in the hospitality and leisure sales tax
categories which prevented a severe decline in City revenues. Additionally, the recent surge in
inflation has positively impacted the City by drawing in greater tax revenue from higher-priced
taxable goods and a rise in wages. However, significant economic uncertainty and volatility in sales
tax revenue collections in the first seven months of FY 2024-25 require a cautious approach to
forecasting. Staff is closely monitoring revenue collections and may revise revenue estimates as
more information is available. Currently, the growth estimated in 2025-26 of 17.1% assumes a
potential 0.5% increase in the TPT and Use Tax rates, effective July 1, 2025, if approved by City
Council on March 18, 2025. The forecast also accounts for moderate growth and the negative
impact of the elimination of residential rental sales tax. The State recently enacted SB 1131, which
prohibits municipalities from taxing residential rental property starting Jan. 1, 2025. The estimated
five-month impact to the GF for 2024-25 is approximately $(19) million, and the ongoing annual
impact beginning in FY 2025-26 is over $(47) million.
Privilege license fees and other excise tax projections are developed using the existing fee
structures, assumptions about historical trends, averages, recent collection experience and use of
the percent of prior year method to account for seasonal influences in revenue activity. Privilege
license fees are projected to decline by 45.5% in 2025-26. Starting January 1, 2025, income from
residential rentals of 30 days or more is exempted from Transaction Privilege Tax, leading to a
significant decrease in these fees. The growth estimated in 2025-26 for other excise taxes assumes
conservative growth and continuation of current year-to-date experience.
Local Sales Tax Rates by Category
Public Public Parks
N’hood Safety Safety & Transp. Conv. Sports Capital
GF Protection Expansion Enhance. Pres. 2050*** Center Fac. Const. Total
Advertising – – – – – – 0.5% – – 0.5%
Contracting***** 0.9% 0.1% 0.2% – 0.1% 0.9% 0.6% – – 2.8%
Job Printing***** 0.9% 0.1% 0.2% – 0.1% 0.9% 0.6% – – 2.8%
Publishing***** 0.9% 0.1% 0.2% – 0.1% 0.9% 0.6% – – 2.8%
Transportation/Towing***** 0.9% 0.1% 0.2% – 0.1% 0.9% 0.6% – – 2.8%
Restaurants/Bars***** 0.9% 0.1% 0.2% – 0.1% 0.9% 0.6% – – 2.8%
Leases/Rentals/ 1.5% 0.1% 0.2% – 0.1% 0.9% – – – 2.8%
Personal Property*****
Short-Term Motor 1.5% 0.1% 0.2% – 0.1% 0.9% – 2.0% – 4.8%
Vehicle Rental*****
Commercial Rentals***** 1.6% 0.1% 0.2% – 0.1% 0.9% – – – 2.9%
Lodging Rentals 1.5% 0.1% 0.2% – 0.1% 0.9% 2.0% 1.0% – 5.8%
Under 30 Days*****
Lodging Rentals – – – – – – – – – –
30 Days and Over******
Retail (Level 1 – amounts 1.5% 0.1% 0.2% – 0.1% 0.9% – – – 2.8%
= < $13,886 for a single
item) **** & *****
Retail (Level 2 – amounts 1.2% 0.1% 0.2% – 0.1% 0.4% – – – 2.0%
> $13,886 for a single
item) ****
Public Public Parks
N’hood Safety Safety & Transp. Conv. Sports Capital
GF Protection Expansion Enhance. Pres. 2050*** Center Fac. Const. Total
Amusements***** 1.5% 0.1% 0.2% – 0.1% 0.9% – – – 2.8%
Utilities 2.7%* – – 2.0%** – – – – – 4.7%
Telecommunications 2.7% – – – – – – – 2.0% 4.7%
*The General Fund portion of the utilities category includes the 2.7 percent franchise fee paid by utilities with a franchise agreement.
**The Public Safety Enhancement designated 2.0 percent sales tax applies only to those utilities with a franchise agreement.
***The Transportation 2050 Fund (Proposition 104) was established by the voters effective January 1, 2016 and replaced the Transit
2000 Fund (Proposition 2000) to fund a comprehensive transportation plan with a 35-year sunset date. The Proposition increased
the transaction privilege (sales) tax rates by 0.3% for various business activities.
****Proposition 104 also established a two-tier tax rate structure applicable to retail sales of single items in excess of $10,000, to be
adjusted biennially for inflation. Effective January 1, 2018, the first $10,303 (Level 1) is subject to the 2.3% tax rate, while
transactions over $10,303 (Level 2) are subject to the 2.0% tax rate. The criteria for Level 1 and Level 2 were adjusted on January 1,
2024, and the current threshold is $13,886, which will be adjusted again on January 1, 2026.
*****The tax rates reflect a proposed 0.5% increase, from 2.3% to 2.8%, effective July 1, 2025, pending City Council approval on
March 18, 2025. The rounded tax rates for each fund are provided for demonstration purposes, with the specific percentages used in
the actual allocation.
******SB 1131 prohibits municipalities from taxing residential rental property starting January 1, 2025.
Primary Property Tax, 11% of Total General Fund Revenue
Actual & Estimated Revenue $ % Change
4% 3%
6% 5% 3% $223
$215
230.0 20%
6% 7% $206
210.0
2% 3% 5% 5% $192 $201 10%
190.0
$182 0%
$170
$162
$155
170.0 -10%
$ Millions
150.0
$141 $146 -20%
130.0 -30%
110.0 -40%
90.0 -50%
70.0 -60%
50.0 -70%
Arizona property tax law provides two separate tax systems. A primary property tax is levied to pay
current operations and maintenance expenses. Therefore, primary property tax revenue is
budgeted and accounted for in the GF (and is illustrated in the above graph). A secondary property
tax levy is restricted to the payment of debt service on voter approved long-term general obligation
debt. Therefore, the secondary property tax revenue is budgeted and accounted for as a special
revenue fund. The primary property tax levy forecast reflected here is based on the net assessed
value stated in the annual “Levy Limit Worksheet” for the City of Phoenix, issued by the Maricopa
County Assessor, multiplied by the projected primary property tax rate. The primary property tax
revenue forecast assumes that 99% of the projected primary property tax levy is actually collected.
The annual amount of the primary property tax levy is limited by the Arizona Constitution to a two
percent increase over the prior year levy limit plus an estimated levy for previously unassessed
property (primarily new construction). Provisions in Chapter XVIII of the City Charter limit the City’s
primary property tax rate to $1.00 per $100 of assessed valuation with the exception of costs to
operate library services. The proposed 2025-26 primary property tax rate, not including the portion
of the rate allocated to cover the Library Department operating costs, is $1.00 per $100 of assessed
valuation. The proposed primary property tax rate for 2025-26 of $1.2658 is equal to the 2024-25
primary property tax rate and is lower than the rate allowable under the state constitutional 2% levy
limit of $1.2755, which limits the Primary Property Tax to an amount 2% greater than the prior-year
levy on previously taxed properties. Although the primary property tax rate remains constant, the
primary property tax revenue estimate increases for 2025-26 to $222.7M, which is $7.3M or 3.4%
more than the 2024-25 revenue estimate of $215.4M due to increased taxable net assessed
valuations (property values) and new construction.
State Shared Sales Tax, 14% of Total General Fund Revenue
Actual & Estimated Revenue $ % Change
14% 3% 1% 4%
5%
$263
2 0
%
8% $250 $253
4% 5% 6% 4% 17% $242 1 0
%
$230
2 5
0 .0
0 %
$201
$ Millions
-1 0 %
2 0 .0
$172
$165 -2 0 %
$156
$144
1 5
0 .0
$138 -3 0 %
-4 0 %
-5 0 %
1 0 .0
-6 0 %
5 .0 0 -7 0 %
State sales tax revenues received by the City are governed by Arizona State Statute §42-5029.
State sales tax revenues are split between a “distribution base”, of which Phoenix receives a share,
and a “combined non-shared” category, which is allocated entirely to the state. With the exception
of some tax categories, the distribution base consists of either 20, 32, 40, or 50 percent of
collections depending on the tax category. State statute §42-5029 stipulates of the monies
designated in the distribution base the Arizona Department of Revenue shall pay 25 percent to
incorporated cities on the basis of relative population percentages. The population share changes
annually based on Census Bureau Population Estimates. The 2025-26 City of Phoenix population
share is estimated at 27.71 percent and is based on the 2023 Census Bureau Population Estimate.
State sales tax is estimated similar to how city sales tax is forecasted. Staff analyzes historical and
recent trends in sales tax data by category and evaluates cumulative growth when developing
revised estimates. Projections provided by the UofA EBRC, using an econometric sales tax model,
were used to develop 2025-26 estimates; and information from the FAC and JLBC were considered
to ensure current fiscal year estimates are reasonable and in-line with what these experts are
projecting.
State Shared Income Tax, 17% of Total General Fund Revenue
Actual & Estimated Revenue $ % Change 41%
500.0
44% $436 450.0
400.0
$351
10% 12% $328
9%
350.0
5% $308
-1% -2% -11%
$ Millions
300.0
$240 -6%
250.0
$200 $197 $215 $213
$191 -19%
$174 200.0
150.0
100.0
50.0
0.0
State shared income tax revenue, also known as the Urban Revenue Sharing (URS) Fund, was
established by voter initiative in 1972 and is governed by Arizona Revised Statute §43-206. The
statute stipulates that 15 percent of the net proceeds of state individual and corporate income tax
collected two years preceding the current fiscal year be distributed to incorporated cities and towns.
Laws 2021, Chapter 412 (Tax Omnibus) increased the Urban Revenue Sharing distribution from
15% to 18% starting in 2023-24. Individual cities receive their portion based on the cities’ share of
the state population. The 2025-26 City of Phoenix population share is estimated at 27.68 percent
and is based on the 2023 Census Bureau Population Estimate. This rate will change annually
based on Census Bureau Population Estimates. As a result of the initiative, Arizona Revised
Statute §43-201 stipulates the area of income taxation is preempted by the state and a county, city,
town, or other political subdivision shall not levy income tax as long as the Urban Revenue Sharing
Fund is maintained as provided in state statute §43-206.
Since state shared income tax revenue is based on actual collections from two years preceding the
current fiscal year, the 2024-25 and 2025-26 projected revenue is known and is based on actual
collections received in 2022-23 and 2023-24, respectively. The negative growth of (19.4) % in FY
2024-25 and (6.5) % in FY 2025-26 are primarily due to significantly lower state shared income tax
collections caused by the State’s actions to lower the individual income tax rate to the current “flat
tax”. Senate Bill 1828 reduces individual income tax rates beginning in tax year 2022 to the current
flat tax rate of 2.5%.
State Shared Vehicle License Tax, 5% of Total General Fund Revenue
Actual & Estimated Revenue $ % Change 3%
5%
$91
13% 4% $88
90.0
-1% 2%
$80
20%
8% 8% $81 $84
5% $79
80.0
3% 0%
$70 $71
0%
70.0
$67
$62
$60
$ Millions
-20%
60.0
50.0
-40%
40.0
-60%
30.0
20.0 -80%
State shared vehicle license tax has been distributed to cities and towns since 1941. The tax is
levied per $100 of a vehicle’s assessed value. For the first 12 months of the vehicle’s life, the
assessed value is 60% of the manufacturer’s base retail price. For each subsequent year, the
assessed value is 16.25% less than the previous year. The rate per $100 of assessed value is
$2.80 for new vehicles and $2.89 for renewals. The Arizona Department of Transportation (ADOT)
collects and distributes the tax according to Arizona Revised Statute §28-5808. The distribution to
individual cities is based on their relative population within the county. The 2025-26 City of Phoenix
population share is estimated at 39.19 percent and is based on the 2023 Census Bureau Population
Estimate. This rate will change annually based on Census Bureau Population Estimates.
Vehicle License Tax (VLT) revenues are often correlated to the overall strength of the economy.
Similar to sales tax revenues, this revenue category tends to grow when the economy is expanding,
as illustrated in the graph above. Revenues are estimated by evaluating historical growth patterns,
year-to-date cumulative growth and applying the percent of prior year method to year-to-date
actuals, which accounts for the seasonality in collections. Staff also consider projections
provided by ADOT, which are published annually for this revenue source, and any available recent
economic information pertaining to projections on the local economy and vehicle sales when
formulating recommended current and subsequent year estimates. The projected growth rate for
2025-26 is expected to be 3.3%, assuming a moderate growth rate based on the ADOT forecast in
September 2024.
User Fees and Non-Tax Revenues, 10% of Total General Fund Revenue
22%
Actual & Estimated Revenue $ % Change
$200 $194 $191
24%
200 .0
16% 13%
30%
-4%
180 .0
0% -5% $164
-2% -11%
$142 $137
160 .0 10%
$131 $117 $132
$125 $122 -3% -1%
140 .0
-10%
$ Millions
120 .0
-30%
100 .0
80. 0 -50%
60. 0
-70%
40. 0
-90%
20. 0
0.0 -110%
User Fees and Non-Tax Revenues include collections from licenses and permits, fines and
forfeitures, cable television fees, user fees from several City departments designed to recover the
costs of providing specific City services including Parks and Recreation, Library, Planning, Police,
Fire, and Streets; other service charges including interest income, parking meter revenue, in lieu
property taxes, sales of surplus property, various rental income, parking garage revenues and
concessions; miscellaneous service charges in Finance, Housing, Human Services and
Neighborhood Services.
B&R staff relies on departments to provide essential information concerning activity levels, fee
increases or decreases and program changes which impact the variety of revenue sources in this
category. Technical revenue reviews are conducted twice each fiscal year as part of the annual
budget development process. Departments are asked to provide revenue estimates and reasons for
changes from prior year actuals. Staff conducts a line-item analysis of all revenues and uses
various methods including annualization and percentage of prior year, as well as consideration of
one-time and contractual revenues, program enhancements or reductions and other adjustments
when developing estimates.
The projected negative growth rate of (1.4)% in 2025-26 was attributed to a decline in interest
earnings, which offset the moderate growth of emergency transportation services. Some non-tax
revenues, such as cable communications and police personal service billings, are expected to
decrease in 2025-26 due to a decline in collection trends and one-time revenue collections in 2024-
25.
In addition to the technical reviews conducted twice each fiscal year, B&R staff monitors revenues
monthly to determine if adjustments to projections are needed. The proposed estimates are then
reviewed by B&R management and the City Manager, and finally incorporated into the GF proposed
revenue projections for consideration by the City Council and the community.
This report is for informational purposes only and is intended to provide the City Council and the
community with explanations on how GF revenues are analyzed and developed to better facilitate
discussions during the annual budget development process.
Yung Pham
Principal Budget and Research Analyst
ATTACHMENT F
Government Relations staff closely monitor State legislation each year and have
identified bills that if passed could further limit local control, reduce City revenues or
increase expenditures causing negative impacts to the budget.
Staff have identified top priority bills in the current session actively moving through the
State Legislature that could have an estimated annual revenue impact of $(69) million
according to JLBC fiscal notes:
• SB1318 income tax rate; reduction; surplus
o For each tax year beginning with 2026, the Department of Revenue is
required to reduce the individual income tax rate for the current tax year
by 50 percent of a "structural surplus" for the immediately following fiscal
year.
• SCR1014 surplus; income tax rate; reduction
o The 2026 general election ballot is to carry the question of whether to
amend state statute to require the Department of Revenue to reduce the
individual income tax rate for the current tax year by 50 percent of a
"structural surplus" for the immediately following fiscal year.
• SB1371 income tax; subtraction; retirement distribution
o For individuals 67 or older, subtracts distributions from pension and
retirement accounts and non-deductible contributions to individual
retirement accounts (IRA), excluding Roth IRAs, from the calculation of
Arizona gross income tax.
• HB2918 tax rates; reductions
o Reduces the rates for several tax categories including property tax and
individual income tax. For the individual income tax rate reduces the rate
from 2.5% to 2.47% beginning in Tax Year 2026.
Staff have identified the following bills that increase obligations on the City’s General
Fund:
• HB2689 cancer insurance; retirees; public safety
o Permits people on the Public Safety Cancer Insurance Program whose
eligibility is expiring to remain eligible for coverage paying 50% of the
premium and requiring the employer to pay the remaining amount of the
premium.
• SB1365 PSPRS; member contributions
o Effective January 1, 2026, caps the Tier 3 member contribution rate at 9.5
percent and requires Public Safety Personnel Retirement System
employers to pay the difference if the member's contribution rate must be
higher.
• SB1288 police vehicles; inspection; requirements
o Requires police patrol vehicles to be replaced 10 years after the
manufacture date or when the odometer reaches 115,000 miles.
Staff have identified the following bills that impact Mayor and Council’s ability to balance
the City’s budget:
• HB2221 law enforcement; defunding; prohibition
o Prohibits a city from reducing the annual operating budget for a law
enforcement agency.
• HB2943 municipal fire departments; defunding; prohibition
o Prohibits a city from reducing the annual operating budget for a fire
department.
• SB1013 municipalities; counties; fee increases; vote
o Prohibits the common council of a municipality or the board of supervisors
of a county from increasing an assessment, tax or fee without a two-thirds
vote of the governing body.
• SCR1008 municipalities; counties; vote; fee increases
o The 2026 general election ballot is to carry the question of whether to
amend state statute to Prohibit the common council of a municipality or
the board of supervisors of a county from increasing an assessment, tax
or fee without a two-thirds vote of the governing body.
Staff would also like to bring attention to the following two bills that pose significant
budgetary risks to the City if passed. While these bills are effectively “dead” they may
return in the form of amendments or in future legislative sessions. Per JLBC fiscal notes
the estimated annual impact to the City if signed into law is $(120) million.
• HB2421 corporate income tax rate; reduction
o Reduces the Corporate Income Tax rate from the current rate of 4.9% to
2.0%
• HCR2012 income tax; rate; reduction
o The 2026 general election ballot is to carry the question of whether to
amend state statute to reduce the Individual Income Tax rate from the
current rate of 2.5% to 2.0%, beginning in Tax Year 2027.
Report
Supporting documents
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Item text
Public Hearing on the Proposed Amendment to Chapter 14 of the Phoenix City
Code Relating to Tax Rate Increase
As required by State law, this item requests the City Council conduct a public hearing
on the Proposed Amendment to Chapter 14 of the Phoenix City Code relating to tax
rate increase for purposes of receiving public comments.
Responsible Department
This item is submitted by City Manager Jeffrey Barton and the Budget and Research
and Finance departments.
ATTACHMENT A
ATTACHMENT B
15-Day Statutory Notice of Intent to Increase Transaction Privilege Tax (TPT) and Use Tax
Rates (ARS 9-499.15 and ARS 42-6054)
Notice Date: February 27, 2025
Council Date: March 18, 2025
Type: Tax
Description: 15-Day Notice of Proposed Increase to Transaction Privilege Tax (TPT) and Use
Tax Rates
1. Date, time, and place of meeting.
The final proposed tax increase will be considered by the Phoenix City Council at the policy
session meeting on March 18, 2025, commencing at 2:30 p.m. The meeting will be held at the
Phoenix City Council Chambers, 200 West Jefferson Street, Phoenix, AZ 85007.
2. Details
See information related to the proposed tax under notice date of January 15, 2025
https://www.phoenix.gov/public-notice-tax-and-fee-changes.
Department: Finance Department
Statutory Reference: Phoenix City Code Chapter 14
More Information/Contact: Brandi Flores, Deputy Finance Director, at 602.495.3758 or via e-
mail at brandi.flores@phoenix.gov
ATTACHMENT C
THIS IS A DRAFT COPY ONLY AND IS NOT AN OFFICIAL COPY OF THE FINAL
ADOPTED ORDINANCE
ORDINANCE G-
AN ORDINANCE RELATING TO PRIVILEGE AND EXCISE
TAXATION; PROVIDING FOR AN INCREASED TAX RATE ON
MULTIPLE PRIVILEGE TAX BUSINESS CLASSIFICATIONS AND
THE USE TAX FROM TWO AND THREE-TENTHS PERCENT
(2.3%) TO TWO AND EIGHT-TENTHS PERCENT (2.8%) AND
ESTABLISHING AN EFFECTIVE DATE.
_______________
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PHOENIX as
follows:
SECTION 1. Phoenix City Code Section 14-410 is amended to read as
follows:
Sec. 14-410. Amusements, exhibitions, and similar activities.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of providing amusement that begins in the city or takes
place entirely within the City, which includes the following type or
nature of businesses:
***
SECTION 2. Phoenix City Code Section 14-415 is amended to read as
follows:
Sec. 14-415. Construction contracting – Construction contractors.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business upon every construction contractor engaging or continuing
in the business activity of construction contracting within the City.
***
SECTION 3. Phoenix City Code Section 14-416 is amended to read as
follows:
Sec. 14-416. Construction contracting – Speculative builders.
a. The tax shall be equal to two and three EIGHT-tenths percent
(2.38%) of the gross income from the business activity upon every
person engaging or continuing in business as a speculative builder
within the City.
***
SECTION 4. Phoenix City Code Section 14-417 is amended to read as
follows:
Sec. 14-417. Construction contracting – Owner-builders who are
not speculative builders.
a. At the expiration of twenty-four (24) months after improvement
to the property is substantially complete, the tax liability for an
owner-builder who is not a speculative builder shall be at an
amount equal to two and three EIGHT-tenths percent (2.38%) of:
***
SECTION 5. Phoenix City Code Section 14-425 is amended to read as
follows:
Sec. 14-425. Job printing.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of job printing, which includes engraving of printing plates,
embossing, copying, micrographics, and photo reproduction.
***
SECTION 6. Phoenix City Code Section 14-427 is amended to read as
follows:
2 Ordinance G-
Sec. 14-427. Manufactured buildings.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income, including site
preparation, moving to the site, and/or set-up, upon every person
engaging or continuing in the business activity of selling
manufactured buildings within the City. Such business activity is
deemed to occur at the business location of the seller where the
purchaser first entered into the contract to purchase the
manufactured building.
***
SECTION 7. Phoenix City Code Section 14-430 is amended to read as
follows:
Sec. 14-430. Timbering and other extraction.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
following businesses:
***
SECTION 8. Phoenix City Code Section 14-435 is amended to read as
follows:
Sec. 14-435. Publishing and periodicals distribution.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business activity of:
***
SECTION 9. Phoenix City Code Section 14-444 is amended to read as
follows:
3 Ordinance G-
Sec. 14-144. Hotels.
The tax rate shall be at an amount equal to two and three EIGHT-
tenths percent (2.38%) of the gross income from the business
activity upon every person engaging or continuing in the business
of operating a hotel charging for lodging and/or lodging space
furnished to any:
***
SECTION 10. Phoenix City Code Section 14-445 is amended to read as
follows:
Sec. 14-445. Rental, leasing, and licensing for use of real property.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of leasing or renting real property located within the City
for a consideration, to the tenant in actual possession, or the
licensing for use of real property to the final licensee located within
the City for a consideration including any improvements, rights, or
interest in such property; provided further that:
***
SECTION 11. Phoenix City Code Section 14-450 is amended to read as
follows:
Sec. 14-450. Rental, leasing, and licensing for use of tangible
personal property.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of leasing, licensing for use, or renting tangible personal
property for a consideration, including that which is semi-
permanently or permanently installed within the City as provided by
Regulation.
***
SECTION 12. Phoenix City Code Section 14-455 is amended to read as
follows:
4 Ordinance G-
Sec. 14-455. Restaurants and bars.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of preparing or serving food or beverage in a bar, cocktail
lounge, restaurant, or similar establishment where articles of food
or drink are prepared or served for consumption on or off the
premises, including also the activity of catering. Cover charges and
minimum charges must be included in the gross income of this
business activity.
***
SECTION 13. Phoenix City Code Section 14-460 is amended to read as
follows:
Sec. 14-460. Retail sales – Measure of tax; burden of proof;
exclusions.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of selling tangible personal property at retail.
***
d. Nothwithstanding the provisions of subsection (a) above, when
the gross income from the sale of a single item of tangible
personal property exceeds ten thousand dollars ($10,000.00),
the two and three EIGHT-tenths percent (2.38%) tax rate shall
apply to the first $10,000.00. For the amount greater than
$10,000.00, the measure of tax shall be at a rate of two percent
(2%).
***
SECTION 14. Phoenix City Code Section 14-475 is amended to read as
follows:
Sec. 14-475. Transporting for hire:
5 Ordinance G-
The tax rate shall be an amount equal to two and three EIGHT-
tenths percent (2.38%) of the gross income from the business
activity upon every person engaging or continuing in the business
of providing the following forms of transportation for hire from this
City to another point within the State:
***
SECTION 15. Phoenix City Code Section 14-610 is amended to read as
follows:
Sec. 14-610. Use tax- Imposition of tax; presumption.
a. There is hereby levied and imposed, subject to all other
provisions of this chapter, an excise tax on the storage or use in the
City of tangible personal property, for the purpose of raising
revenue to be used in defraying the necessary expenses of the
City, such taxes to be collected by the Tax Collector.
b. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the:
***
e. Nothwithstanding the provisions of subsection (a) above,
when the amount subject to the tax for any single item of tangible
personal property exceeds ten thousand dollars ($10,000.00), the
two and three EIGHT-tenths percent (2.38%) tax rate shall apply to
the first $10,000.00. For the amount greater than $10,000.00, the
measure of tax shall be at a rate of two percent (2%).
***
SECTION 16. The imposition of increased taxes imposed by Sections 1
through Section 15 shall be effective on and after July 1, 2025.
…
…
…
6 Ordinance G-
PASSED by the City Council of the City of Phoenix this 18th day of March,
2025.
___________________________
MAYOR
ATTEST:
_____________________________________
Denise Archibald, City Clerk
APPROVED AS TO FORM:
Julie M. Kriegh, City Attorney
BY: _________________________________
_________________________________
REVIEWED BY:
____________________________________
Jeffrey Barton, City Manager
JS:tml:LF_______:date3-__-2024:2409152v1
7 Ordinance G-
Report
Code Relating to Tax Rate Increase
As required by State law, this item requests the City Council conduct a public hearing
on the Proposed Amendment to Chapter 14 of the Phoenix City Code relating to tax
rate increase for purposes of receiving public comments.
Responsible Department
This item is submitted by City Manager Jeffrey Barton and the Budget and Research
and Finance departments.
ATTACHMENT A
ATTACHMENT B
15-Day Statutory Notice of Intent to Increase Transaction Privilege Tax (TPT) and Use Tax
Rates (ARS 9-499.15 and ARS 42-6054)
Notice Date: February 27, 2025
Council Date: March 18, 2025
Type: Tax
Description: 15-Day Notice of Proposed Increase to Transaction Privilege Tax (TPT) and Use
Tax Rates
1. Date, time, and place of meeting.
The final proposed tax increase will be considered by the Phoenix City Council at the policy
session meeting on March 18, 2025, commencing at 2:30 p.m. The meeting will be held at the
Phoenix City Council Chambers, 200 West Jefferson Street, Phoenix, AZ 85007.
2. Details
See information related to the proposed tax under notice date of January 15, 2025
https://www.phoenix.gov/public-notice-tax-and-fee-changes.
Department: Finance Department
Statutory Reference: Phoenix City Code Chapter 14
More Information/Contact: Brandi Flores, Deputy Finance Director, at 602.495.3758 or via e-
mail at brandi.flores@phoenix.gov
ATTACHMENT C
THIS IS A DRAFT COPY ONLY AND IS NOT AN OFFICIAL COPY OF THE FINAL
ADOPTED ORDINANCE
ORDINANCE G-
AN ORDINANCE RELATING TO PRIVILEGE AND EXCISE
TAXATION; PROVIDING FOR AN INCREASED TAX RATE ON
MULTIPLE PRIVILEGE TAX BUSINESS CLASSIFICATIONS AND
THE USE TAX FROM TWO AND THREE-TENTHS PERCENT
(2.3%) TO TWO AND EIGHT-TENTHS PERCENT (2.8%) AND
ESTABLISHING AN EFFECTIVE DATE.
_______________
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PHOENIX as
follows:
SECTION 1. Phoenix City Code Section 14-410 is amended to read as
follows:
Sec. 14-410. Amusements, exhibitions, and similar activities.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of providing amusement that begins in the city or takes
place entirely within the City, which includes the following type or
nature of businesses:
***
SECTION 2. Phoenix City Code Section 14-415 is amended to read as
follows:
Sec. 14-415. Construction contracting – Construction contractors.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business upon every construction contractor engaging or continuing
in the business activity of construction contracting within the City.
***
SECTION 3. Phoenix City Code Section 14-416 is amended to read as
follows:
Sec. 14-416. Construction contracting – Speculative builders.
a. The tax shall be equal to two and three EIGHT-tenths percent
(2.38%) of the gross income from the business activity upon every
person engaging or continuing in business as a speculative builder
within the City.
***
SECTION 4. Phoenix City Code Section 14-417 is amended to read as
follows:
Sec. 14-417. Construction contracting – Owner-builders who are
not speculative builders.
a. At the expiration of twenty-four (24) months after improvement
to the property is substantially complete, the tax liability for an
owner-builder who is not a speculative builder shall be at an
amount equal to two and three EIGHT-tenths percent (2.38%) of:
***
SECTION 5. Phoenix City Code Section 14-425 is amended to read as
follows:
Sec. 14-425. Job printing.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of job printing, which includes engraving of printing plates,
embossing, copying, micrographics, and photo reproduction.
***
SECTION 6. Phoenix City Code Section 14-427 is amended to read as
follows:
2 Ordinance G-
Sec. 14-427. Manufactured buildings.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income, including site
preparation, moving to the site, and/or set-up, upon every person
engaging or continuing in the business activity of selling
manufactured buildings within the City. Such business activity is
deemed to occur at the business location of the seller where the
purchaser first entered into the contract to purchase the
manufactured building.
***
SECTION 7. Phoenix City Code Section 14-430 is amended to read as
follows:
Sec. 14-430. Timbering and other extraction.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
following businesses:
***
SECTION 8. Phoenix City Code Section 14-435 is amended to read as
follows:
Sec. 14-435. Publishing and periodicals distribution.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business activity of:
***
SECTION 9. Phoenix City Code Section 14-444 is amended to read as
follows:
3 Ordinance G-
Sec. 14-144. Hotels.
The tax rate shall be at an amount equal to two and three EIGHT-
tenths percent (2.38%) of the gross income from the business
activity upon every person engaging or continuing in the business
of operating a hotel charging for lodging and/or lodging space
furnished to any:
***
SECTION 10. Phoenix City Code Section 14-445 is amended to read as
follows:
Sec. 14-445. Rental, leasing, and licensing for use of real property.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of leasing or renting real property located within the City
for a consideration, to the tenant in actual possession, or the
licensing for use of real property to the final licensee located within
the City for a consideration including any improvements, rights, or
interest in such property; provided further that:
***
SECTION 11. Phoenix City Code Section 14-450 is amended to read as
follows:
Sec. 14-450. Rental, leasing, and licensing for use of tangible
personal property.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of leasing, licensing for use, or renting tangible personal
property for a consideration, including that which is semi-
permanently or permanently installed within the City as provided by
Regulation.
***
SECTION 12. Phoenix City Code Section 14-455 is amended to read as
follows:
4 Ordinance G-
Sec. 14-455. Restaurants and bars.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of preparing or serving food or beverage in a bar, cocktail
lounge, restaurant, or similar establishment where articles of food
or drink are prepared or served for consumption on or off the
premises, including also the activity of catering. Cover charges and
minimum charges must be included in the gross income of this
business activity.
***
SECTION 13. Phoenix City Code Section 14-460 is amended to read as
follows:
Sec. 14-460. Retail sales – Measure of tax; burden of proof;
exclusions.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of selling tangible personal property at retail.
***
d. Nothwithstanding the provisions of subsection (a) above, when
the gross income from the sale of a single item of tangible
personal property exceeds ten thousand dollars ($10,000.00),
the two and three EIGHT-tenths percent (2.38%) tax rate shall
apply to the first $10,000.00. For the amount greater than
$10,000.00, the measure of tax shall be at a rate of two percent
(2%).
***
SECTION 14. Phoenix City Code Section 14-475 is amended to read as
follows:
Sec. 14-475. Transporting for hire:
5 Ordinance G-
The tax rate shall be an amount equal to two and three EIGHT-
tenths percent (2.38%) of the gross income from the business
activity upon every person engaging or continuing in the business
of providing the following forms of transportation for hire from this
City to another point within the State:
***
SECTION 15. Phoenix City Code Section 14-610 is amended to read as
follows:
Sec. 14-610. Use tax- Imposition of tax; presumption.
a. There is hereby levied and imposed, subject to all other
provisions of this chapter, an excise tax on the storage or use in the
City of tangible personal property, for the purpose of raising
revenue to be used in defraying the necessary expenses of the
City, such taxes to be collected by the Tax Collector.
b. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the:
***
e. Nothwithstanding the provisions of subsection (a) above,
when the amount subject to the tax for any single item of tangible
personal property exceeds ten thousand dollars ($10,000.00), the
two and three EIGHT-tenths percent (2.38%) tax rate shall apply to
the first $10,000.00. For the amount greater than $10,000.00, the
measure of tax shall be at a rate of two percent (2%).
***
SECTION 16. The imposition of increased taxes imposed by Sections 1
through Section 15 shall be effective on and after July 1, 2025.
…
…
…
6 Ordinance G-
PASSED by the City Council of the City of Phoenix this 18th day of March,
2025.
___________________________
MAYOR
ATTEST:
_____________________________________
Denise Archibald, City Clerk
APPROVED AS TO FORM:
Julie M. Kriegh, City Attorney
BY: _________________________________
_________________________________
REVIEWED BY:
____________________________________
Jeffrey Barton, City Manager
JS:tml:LF_______:date3-__-2024:2409152v1
7 Ordinance G-
Report
Supporting documents
No supporting documents stored.
View on Agenda Online ↗
Item text
Request to Authorize Amendment to Phoenix City Code Chapter 14 Proposed
Tax Rate Increase (Ordinance G-7369)
Consideration of the proposed amendment to Phoenix City Code Chapter 14 to
increase the tax rate for certain business activities from 2.3 percent up to and
including, but not exceeding, 2.8 percent effective July 1, 2025. Further request City
Council approval of such amendment to offset the State's actions to reduce City
revenues, ensure the sustainability of the City's budget going forward and provide
additional resources for public safety and community programs.
THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.
Summary
City revenues were impacted by the State’s actions to diminish the tax base with the
enactment of Senate Bill (SB) 1131 and SB 1828. SB 1131 eliminated residential rental
Transaction Privilege Tax (TPT) collected from businesses engaged in the rental of
residential property effective January 1, 2025. With this change, the City anticipates a
revenue loss of approximately $37.1 million in Fiscal Year 2024-25 (5 months) and an
ongoing annual revenue loss of approximately $90.8 million beginning in Fiscal Year
2025-26 based on revised estimates. City revenues were further impacted due to SB
1828, which transitioned the state’s individual income tax rate to a flat rate of 2.5
percent. State income tax is distributed to cities and towns based on its population in
relation to the total population of all cities and towns and is based on collections from
two years prior. The City relies on estimates provided by the State Joint Legislative
Budget Committee (JLBC) for state shared income tax revenue projections. These
actions will result in less ongoing state shared income tax revenue to the General
Fund compared to prior projections had the tax rate not decreased.
Finally, the City finds it necessary to identify resources to:
· Maintain existing programs and services;
· Provide additional resources to reduce Fire Department response times;
· Continue efforts to address homelessness and replace expiring grant funds;
· Fund operating costs for the voter approved 2023 General Obligation (GO) Bond
Program projects;
· Support major facility maintenance;
· Replace vehicles, fire apparatus, and public safety equipment;
· Invest in City employees to attract and retain a high quality workforce; and
· Address the impact of inflation that has significantly increased the cost to provide
programs and services.
A TPT and Use Tax increase of up to 0.5 percent is proposed for consideration with an
effective date of July 1, 2025 for the business classifications below. This proposed
amendment to Chapter 14 of the Phoenix City Code is estimated to generate the
revenue required to ensure delivery of essential City services and offset anticipated
revenue decreases due to the State’s actions. (See Attachment A)
Although commonly referred to as a sales tax, TPT is a tax on a vendor for the
privilege of doing business in Arizona. The tax rate varies depending on the type of
taxable business activity and the city/town in which the activity occurs. The current
TPT rate for most business categories in the City of Phoenix is 2.3 percent. Individuals
are subject to use tax when a vendor does not collect tax for tangible personal
property used, stored, or consumed.
Public outreach included a series of public notices, social media posts and five
information sessions held in the community from January 27, 2025 to February 6,
2025. On January 15, 2025, a 60-day public notice was published in accordance with
Arizona Revised Statute (A.R.S.) 9-499.15. On February 27, 2025, a 15-day notice of
intent was published in accordance with A.R.S. 9-499.15, as well as notice of public
hearing for March 18, 2025 in the Arizona Business Gazette in accordance with A.R.S.
42-6054. Taxpayers will receive a tax bulletin via postal mail in May and June of 2025.
Notifications of the change will also be included on the City's website at
https://www.phoenix.gov/finance/plt and Arizona Department of Revenue's website at
https://azdor.gov/model-city-tax-code/rate-and-code-updates.
Financial Impact
If approved, the TPT and Use Tax rate increase is anticipated to generate enough to
offset the annual revenue loss from the State's actions and to provide resources to
deliver City programs and services. For more information on the budget and proposed
TPT and Use Tax rate increase visit phoenix.gov/budget.
Responsible Department
This item is submitted by City Manager Jeffrey Barton and the Budget and Research
and Finance departments.
ATTACHMENT A
ATTACHMENT B
15-Day Statutory Notice of Intent to Increase Transaction Privilege Tax (TPT) and Use Tax
Rates (ARS 9-499.15 and ARS 42-6054)
Notice Date: February 27, 2025
Council Date: March 18, 2025
Type: Tax
Description: 15-Day Notice of Proposed Increase to Transaction Privilege Tax (TPT) and Use
Tax Rates
1. Date, time, and place of meeting.
The final proposed tax increase will be considered by the Phoenix City Council at the policy
session meeting on March 18, 2025, commencing at 2:30 p.m. The meeting will be held at the
Phoenix City Council Chambers, 200 West Jefferson Street, Phoenix, AZ 85007.
2. Details
See information related to the proposed tax under notice date of January 15, 2025
https://www.phoenix.gov/public-notice-tax-and-fee-changes.
Department: Finance Department
Statutory Reference: Phoenix City Code Chapter 14
More Information/Contact: Brandi Flores, Deputy Finance Director, at 602.495.3758 or via e-
mail at brandi.flores@phoenix.gov
ATTACHMENT C
THIS IS A DRAFT COPY ONLY AND IS NOT AN OFFICIAL COPY OF THE FINAL
ADOPTED ORDINANCE
ORDINANCE G-
AN ORDINANCE RELATING TO PRIVILEGE AND EXCISE
TAXATION; PROVIDING FOR AN INCREASED TAX RATE ON
MULTIPLE PRIVILEGE TAX BUSINESS CLASSIFICATIONS AND
THE USE TAX FROM TWO AND THREE-TENTHS PERCENT
(2.3%) TO TWO AND EIGHT-TENTHS PERCENT (2.8%) AND
ESTABLISHING AN EFFECTIVE DATE.
_______________
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PHOENIX as
follows:
SECTION 1. Phoenix City Code Section 14-410 is amended to read as
follows:
Sec. 14-410. Amusements, exhibitions, and similar activities.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of providing amusement that begins in the city or takes
place entirely within the City, which includes the following type or
nature of businesses:
***
SECTION 2. Phoenix City Code Section 14-415 is amended to read as
follows:
Sec. 14-415. Construction contracting – Construction contractors.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business upon every construction contractor engaging or continuing
in the business activity of construction contracting within the City.
***
SECTION 3. Phoenix City Code Section 14-416 is amended to read as
follows:
Sec. 14-416. Construction contracting – Speculative builders.
a. The tax shall be equal to two and three EIGHT-tenths percent
(2.38%) of the gross income from the business activity upon every
person engaging or continuing in business as a speculative builder
within the City.
***
SECTION 4. Phoenix City Code Section 14-417 is amended to read as
follows:
Sec. 14-417. Construction contracting – Owner-builders who are
not speculative builders.
a. At the expiration of twenty-four (24) months after improvement
to the property is substantially complete, the tax liability for an
owner-builder who is not a speculative builder shall be at an
amount equal to two and three EIGHT-tenths percent (2.38%) of:
***
SECTION 5. Phoenix City Code Section 14-425 is amended to read as
follows:
Sec. 14-425. Job printing.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of job printing, which includes engraving of printing plates,
embossing, copying, micrographics, and photo reproduction.
***
SECTION 6. Phoenix City Code Section 14-427 is amended to read as
follows:
2 Ordinance G-
Sec. 14-427. Manufactured buildings.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income, including site
preparation, moving to the site, and/or set-up, upon every person
engaging or continuing in the business activity of selling
manufactured buildings within the City. Such business activity is
deemed to occur at the business location of the seller where the
purchaser first entered into the contract to purchase the
manufactured building.
***
SECTION 7. Phoenix City Code Section 14-430 is amended to read as
follows:
Sec. 14-430. Timbering and other extraction.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
following businesses:
***
SECTION 8. Phoenix City Code Section 14-435 is amended to read as
follows:
Sec. 14-435. Publishing and periodicals distribution.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business activity of:
***
SECTION 9. Phoenix City Code Section 14-444 is amended to read as
follows:
3 Ordinance G-
Sec. 14-144. Hotels.
The tax rate shall be at an amount equal to two and three EIGHT-
tenths percent (2.38%) of the gross income from the business
activity upon every person engaging or continuing in the business
of operating a hotel charging for lodging and/or lodging space
furnished to any:
***
SECTION 10. Phoenix City Code Section 14-445 is amended to read as
follows:
Sec. 14-445. Rental, leasing, and licensing for use of real property.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of leasing or renting real property located within the City
for a consideration, to the tenant in actual possession, or the
licensing for use of real property to the final licensee located within
the City for a consideration including any improvements, rights, or
interest in such property; provided further that:
***
SECTION 11. Phoenix City Code Section 14-450 is amended to read as
follows:
Sec. 14-450. Rental, leasing, and licensing for use of tangible
personal property.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of leasing, licensing for use, or renting tangible personal
property for a consideration, including that which is semi-
permanently or permanently installed within the City as provided by
Regulation.
***
SECTION 12. Phoenix City Code Section 14-455 is amended to read as
follows:
4 Ordinance G-
Sec. 14-455. Restaurants and bars.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of preparing or serving food or beverage in a bar, cocktail
lounge, restaurant, or similar establishment where articles of food
or drink are prepared or served for consumption on or off the
premises, including also the activity of catering. Cover charges and
minimum charges must be included in the gross income of this
business activity.
***
SECTION 13. Phoenix City Code Section 14-460 is amended to read as
follows:
Sec. 14-460. Retail sales – Measure of tax; burden of proof;
exclusions.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of selling tangible personal property at retail.
***
d. Nothwithstanding the provisions of subsection (a) above, when
the gross income from the sale of a single item of tangible
personal property exceeds ten thousand dollars ($10,000.00),
the two and three EIGHT-tenths percent (2.38%) tax rate shall
apply to the first $10,000.00. For the amount greater than
$10,000.00, the measure of tax shall be at a rate of two percent
(2%).
***
SECTION 14. Phoenix City Code Section 14-475 is amended to read as
follows:
Sec. 14-475. Transporting for hire:
5 Ordinance G-
The tax rate shall be an amount equal to two and three EIGHT-
tenths percent (2.38%) of the gross income from the business
activity upon every person engaging or continuing in the business
of providing the following forms of transportation for hire from this
City to another point within the State:
***
SECTION 15. Phoenix City Code Section 14-610 is amended to read as
follows:
Sec. 14-610. Use tax- Imposition of tax; presumption.
a. There is hereby levied and imposed, subject to all other
provisions of this chapter, an excise tax on the storage or use in the
City of tangible personal property, for the purpose of raising
revenue to be used in defraying the necessary expenses of the
City, such taxes to be collected by the Tax Collector.
b. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the:
***
e. Nothwithstanding the provisions of subsection (a) above,
when the amount subject to the tax for any single item of tangible
personal property exceeds ten thousand dollars ($10,000.00), the
two and three EIGHT-tenths percent (2.38%) tax rate shall apply to
the first $10,000.00. For the amount greater than $10,000.00, the
measure of tax shall be at a rate of two percent (2%).
***
SECTION 16. The imposition of increased taxes imposed by Sections 1
through Section 15 shall be effective on and after July 1, 2025.
…
…
…
6 Ordinance G-
PASSED by the City Council of the City of Phoenix this 18th day of March,
2025.
___________________________
MAYOR
ATTEST:
_____________________________________
Denise Archibald, City Clerk
APPROVED AS TO FORM:
Julie M. Kriegh, City Attorney
BY: _________________________________
_________________________________
REVIEWED BY:
____________________________________
Jeffrey Barton, City Manager
JS:tml:LF_______:date3-__-2024:2409152v1
7 Ordinance G-
Tax Rate Increase (Ordinance G-7369)
Consideration of the proposed amendment to Phoenix City Code Chapter 14 to
increase the tax rate for certain business activities from 2.3 percent up to and
including, but not exceeding, 2.8 percent effective July 1, 2025. Further request City
Council approval of such amendment to offset the State's actions to reduce City
revenues, ensure the sustainability of the City's budget going forward and provide
additional resources for public safety and community programs.
THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.
Summary
City revenues were impacted by the State’s actions to diminish the tax base with the
enactment of Senate Bill (SB) 1131 and SB 1828. SB 1131 eliminated residential rental
Transaction Privilege Tax (TPT) collected from businesses engaged in the rental of
residential property effective January 1, 2025. With this change, the City anticipates a
revenue loss of approximately $37.1 million in Fiscal Year 2024-25 (5 months) and an
ongoing annual revenue loss of approximately $90.8 million beginning in Fiscal Year
2025-26 based on revised estimates. City revenues were further impacted due to SB
1828, which transitioned the state’s individual income tax rate to a flat rate of 2.5
percent. State income tax is distributed to cities and towns based on its population in
relation to the total population of all cities and towns and is based on collections from
two years prior. The City relies on estimates provided by the State Joint Legislative
Budget Committee (JLBC) for state shared income tax revenue projections. These
actions will result in less ongoing state shared income tax revenue to the General
Fund compared to prior projections had the tax rate not decreased.
Finally, the City finds it necessary to identify resources to:
· Maintain existing programs and services;
· Provide additional resources to reduce Fire Department response times;
· Continue efforts to address homelessness and replace expiring grant funds;
· Fund operating costs for the voter approved 2023 General Obligation (GO) Bond
Program projects;
· Support major facility maintenance;
· Replace vehicles, fire apparatus, and public safety equipment;
· Invest in City employees to attract and retain a high quality workforce; and
· Address the impact of inflation that has significantly increased the cost to provide
programs and services.
A TPT and Use Tax increase of up to 0.5 percent is proposed for consideration with an
effective date of July 1, 2025 for the business classifications below. This proposed
amendment to Chapter 14 of the Phoenix City Code is estimated to generate the
revenue required to ensure delivery of essential City services and offset anticipated
revenue decreases due to the State’s actions. (See Attachment A)
Although commonly referred to as a sales tax, TPT is a tax on a vendor for the
privilege of doing business in Arizona. The tax rate varies depending on the type of
taxable business activity and the city/town in which the activity occurs. The current
TPT rate for most business categories in the City of Phoenix is 2.3 percent. Individuals
are subject to use tax when a vendor does not collect tax for tangible personal
property used, stored, or consumed.
Public outreach included a series of public notices, social media posts and five
information sessions held in the community from January 27, 2025 to February 6,
2025. On January 15, 2025, a 60-day public notice was published in accordance with
Arizona Revised Statute (A.R.S.) 9-499.15. On February 27, 2025, a 15-day notice of
intent was published in accordance with A.R.S. 9-499.15, as well as notice of public
hearing for March 18, 2025 in the Arizona Business Gazette in accordance with A.R.S.
42-6054. Taxpayers will receive a tax bulletin via postal mail in May and June of 2025.
Notifications of the change will also be included on the City's website at
https://www.phoenix.gov/finance/plt and Arizona Department of Revenue's website at
https://azdor.gov/model-city-tax-code/rate-and-code-updates.
Financial Impact
If approved, the TPT and Use Tax rate increase is anticipated to generate enough to
offset the annual revenue loss from the State's actions and to provide resources to
deliver City programs and services. For more information on the budget and proposed
TPT and Use Tax rate increase visit phoenix.gov/budget.
Responsible Department
This item is submitted by City Manager Jeffrey Barton and the Budget and Research
and Finance departments.
ATTACHMENT A
ATTACHMENT B
15-Day Statutory Notice of Intent to Increase Transaction Privilege Tax (TPT) and Use Tax
Rates (ARS 9-499.15 and ARS 42-6054)
Notice Date: February 27, 2025
Council Date: March 18, 2025
Type: Tax
Description: 15-Day Notice of Proposed Increase to Transaction Privilege Tax (TPT) and Use
Tax Rates
1. Date, time, and place of meeting.
The final proposed tax increase will be considered by the Phoenix City Council at the policy
session meeting on March 18, 2025, commencing at 2:30 p.m. The meeting will be held at the
Phoenix City Council Chambers, 200 West Jefferson Street, Phoenix, AZ 85007.
2. Details
See information related to the proposed tax under notice date of January 15, 2025
https://www.phoenix.gov/public-notice-tax-and-fee-changes.
Department: Finance Department
Statutory Reference: Phoenix City Code Chapter 14
More Information/Contact: Brandi Flores, Deputy Finance Director, at 602.495.3758 or via e-
mail at brandi.flores@phoenix.gov
ATTACHMENT C
THIS IS A DRAFT COPY ONLY AND IS NOT AN OFFICIAL COPY OF THE FINAL
ADOPTED ORDINANCE
ORDINANCE G-
AN ORDINANCE RELATING TO PRIVILEGE AND EXCISE
TAXATION; PROVIDING FOR AN INCREASED TAX RATE ON
MULTIPLE PRIVILEGE TAX BUSINESS CLASSIFICATIONS AND
THE USE TAX FROM TWO AND THREE-TENTHS PERCENT
(2.3%) TO TWO AND EIGHT-TENTHS PERCENT (2.8%) AND
ESTABLISHING AN EFFECTIVE DATE.
_______________
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PHOENIX as
follows:
SECTION 1. Phoenix City Code Section 14-410 is amended to read as
follows:
Sec. 14-410. Amusements, exhibitions, and similar activities.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of providing amusement that begins in the city or takes
place entirely within the City, which includes the following type or
nature of businesses:
***
SECTION 2. Phoenix City Code Section 14-415 is amended to read as
follows:
Sec. 14-415. Construction contracting – Construction contractors.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business upon every construction contractor engaging or continuing
in the business activity of construction contracting within the City.
***
SECTION 3. Phoenix City Code Section 14-416 is amended to read as
follows:
Sec. 14-416. Construction contracting – Speculative builders.
a. The tax shall be equal to two and three EIGHT-tenths percent
(2.38%) of the gross income from the business activity upon every
person engaging or continuing in business as a speculative builder
within the City.
***
SECTION 4. Phoenix City Code Section 14-417 is amended to read as
follows:
Sec. 14-417. Construction contracting – Owner-builders who are
not speculative builders.
a. At the expiration of twenty-four (24) months after improvement
to the property is substantially complete, the tax liability for an
owner-builder who is not a speculative builder shall be at an
amount equal to two and three EIGHT-tenths percent (2.38%) of:
***
SECTION 5. Phoenix City Code Section 14-425 is amended to read as
follows:
Sec. 14-425. Job printing.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of job printing, which includes engraving of printing plates,
embossing, copying, micrographics, and photo reproduction.
***
SECTION 6. Phoenix City Code Section 14-427 is amended to read as
follows:
2 Ordinance G-
Sec. 14-427. Manufactured buildings.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income, including site
preparation, moving to the site, and/or set-up, upon every person
engaging or continuing in the business activity of selling
manufactured buildings within the City. Such business activity is
deemed to occur at the business location of the seller where the
purchaser first entered into the contract to purchase the
manufactured building.
***
SECTION 7. Phoenix City Code Section 14-430 is amended to read as
follows:
Sec. 14-430. Timbering and other extraction.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
following businesses:
***
SECTION 8. Phoenix City Code Section 14-435 is amended to read as
follows:
Sec. 14-435. Publishing and periodicals distribution.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business activity of:
***
SECTION 9. Phoenix City Code Section 14-444 is amended to read as
follows:
3 Ordinance G-
Sec. 14-144. Hotels.
The tax rate shall be at an amount equal to two and three EIGHT-
tenths percent (2.38%) of the gross income from the business
activity upon every person engaging or continuing in the business
of operating a hotel charging for lodging and/or lodging space
furnished to any:
***
SECTION 10. Phoenix City Code Section 14-445 is amended to read as
follows:
Sec. 14-445. Rental, leasing, and licensing for use of real property.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of leasing or renting real property located within the City
for a consideration, to the tenant in actual possession, or the
licensing for use of real property to the final licensee located within
the City for a consideration including any improvements, rights, or
interest in such property; provided further that:
***
SECTION 11. Phoenix City Code Section 14-450 is amended to read as
follows:
Sec. 14-450. Rental, leasing, and licensing for use of tangible
personal property.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of leasing, licensing for use, or renting tangible personal
property for a consideration, including that which is semi-
permanently or permanently installed within the City as provided by
Regulation.
***
SECTION 12. Phoenix City Code Section 14-455 is amended to read as
follows:
4 Ordinance G-
Sec. 14-455. Restaurants and bars.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of preparing or serving food or beverage in a bar, cocktail
lounge, restaurant, or similar establishment where articles of food
or drink are prepared or served for consumption on or off the
premises, including also the activity of catering. Cover charges and
minimum charges must be included in the gross income of this
business activity.
***
SECTION 13. Phoenix City Code Section 14-460 is amended to read as
follows:
Sec. 14-460. Retail sales – Measure of tax; burden of proof;
exclusions.
a. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the gross income from the
business activity upon every person engaging or continuing in the
business of selling tangible personal property at retail.
***
d. Nothwithstanding the provisions of subsection (a) above, when
the gross income from the sale of a single item of tangible
personal property exceeds ten thousand dollars ($10,000.00),
the two and three EIGHT-tenths percent (2.38%) tax rate shall
apply to the first $10,000.00. For the amount greater than
$10,000.00, the measure of tax shall be at a rate of two percent
(2%).
***
SECTION 14. Phoenix City Code Section 14-475 is amended to read as
follows:
Sec. 14-475. Transporting for hire:
5 Ordinance G-
The tax rate shall be an amount equal to two and three EIGHT-
tenths percent (2.38%) of the gross income from the business
activity upon every person engaging or continuing in the business
of providing the following forms of transportation for hire from this
City to another point within the State:
***
SECTION 15. Phoenix City Code Section 14-610 is amended to read as
follows:
Sec. 14-610. Use tax- Imposition of tax; presumption.
a. There is hereby levied and imposed, subject to all other
provisions of this chapter, an excise tax on the storage or use in the
City of tangible personal property, for the purpose of raising
revenue to be used in defraying the necessary expenses of the
City, such taxes to be collected by the Tax Collector.
b. The tax rate shall be at an amount equal to two and three
EIGHT-tenths percent (2.38%) of the:
***
e. Nothwithstanding the provisions of subsection (a) above,
when the amount subject to the tax for any single item of tangible
personal property exceeds ten thousand dollars ($10,000.00), the
two and three EIGHT-tenths percent (2.38%) tax rate shall apply to
the first $10,000.00. For the amount greater than $10,000.00, the
measure of tax shall be at a rate of two percent (2%).
***
SECTION 16. The imposition of increased taxes imposed by Sections 1
through Section 15 shall be effective on and after July 1, 2025.
…
…
…
6 Ordinance G-
PASSED by the City Council of the City of Phoenix this 18th day of March,
2025.
___________________________
MAYOR
ATTEST:
_____________________________________
Denise Archibald, City Clerk
APPROVED AS TO FORM:
Julie M. Kriegh, City Attorney
BY: _________________________________
_________________________________
REVIEWED BY:
____________________________________
Jeffrey Barton, City Manager
JS:tml:LF_______:date3-__-2024:2409152v1
7 Ordinance G-
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