Eloy City Council Budget Work Session - May 20, 2024

The Eloy City Council held a budget work session on Monday, May 20, 2024, at 5:30 PM in the City Council Chambers. The meeting focused on reviewing the proposed tentative FY 2024-2025 budget and discussing a long-standing water line project on Houser Road. The total proposed budget is $75,266,235, an increase of over $11.6 million from the previous year, driven primarily by economic development reserves, capital projects, and sewer line expansion.

Public Comments & Testimony

• Marla Shu (60 West Houser Road) spoke about the Houser Road water line project, which has been unresolved for 24 years. She described the existing water line as substandard (placed a few inches under grade using outdated materials) and urged the council to address it, even if split into two phases. She noted that money had been allocated in the past but the project had stalled.
• Marie Frazier (neighbor) addressed the issue of the holdout neighbor (Mr. Lyle) who had not signed right-of-way documents. She explained that Mr. Lyle did not understand the legal language and feared losing property. She offered to help communicate with him in layman's terms and requested that the city send a clearer explanation.

Discussion Items

• FY 2024-2025 Budget Overview (Brian, Finance Director)
  • The total budget of $75,266,235 includes $5 million for economic development, $2.3 million for sanitation capital improvements, and $4.7 million for a sewer line expansion from the plant to 11 Mile Corner. Capital improvements total $18.4 million, including $2.8 million in road projects, $2.1 million in airport projects, and $7.6 million in water/wastewater enhancements.
  • Personnel costs of $13.7 million include a 4% general increase effective July 1, 2024, a new pay scale with a starting rate of $14.54/hour, and reclassification of a public works operations manager to deputy director. The budget also includes a $5 million reserve for economic development and a $1.1 million general fund contingency.
  • Staff presented detailed breakdowns of each fund: street fund ($3.6 million, decrease of $450,185), streets one-time fund ($1.93 million, increase of $1 million due to pavement project on Sunshine and Santa Cruz), capital projects fund ($3.6 million, 27% increase), economic and community development fund ($1.8 million, increase of $742,000), and various impact fee funds (parks, police, water, wastewater, streets) with no projects identified.
  • Enterprise funds: water fund ($5 million, slight decrease), sewer fund ($7.8 million, increase of $3.3 million mainly due to sewer line extension), sanitation fund ($4.66 million, increase of $2.4 million due to capital upgrades).
  • General fund departments were reviewed: city council ($311,180), city clerk ($56,235), HR ($387,405), city manager ($691,295), magistrate court ($646,190), finance ($1.04 million), legal ($164,845), community development ($1.25 million), police administration ($1.65 million), field operations ($4.28 million), animal control ($200,000).
  • Councilmember Schneider noted that many funds have unallocated balances and questioned whether the city could use them for grant matches. Staff explained that most funds are restricted by state law or court mandates.
• Houser Road Water Line Project
  • The project was originally budgeted at $300,000 but was removed from the CIP because of right-of-way acquisition delays and a revised cost estimate of $650,000 for the full scope. Staff presented two options: Option 1 (staff recommended) would replace the substandard line and extend Houser Road water line for $400,000-$450,000, but requires Mr. Lyle's signature. Option 2 would simply replace the failing line within the existing easement at lower cost but without serving all residents.
  • Councilmember Tarango suggested phasing the project: first complete the Houser Road portion, then address the Charleston extension later. Council agreed to revisit the project, work with Mr. Lyle on a clearer explanation, and bring phased options back for future budgeting. The project will not be added to the FY 2024-2025 CIP.

Key Outcomes

• Budget Direction: Council received the budget overview and gave general direction to proceed. The tentative budget will be adopted at the regular council meeting on June 10, 2024, with a public hearing and final adoption scheduled for a special meeting on June 27, 2024, and property tax adoption on July 8, 2024.
• Second Budget Work Session Canceled: Council agreed to cancel the second day of budget work sessions (May 21) as no further questions remained.
• Houser Road Water Line: Council directed staff to:
  1. Work with Mr. Lyle by providing a simplified, layman's explanation of the right-of-way dedication to secure his signature.
  2. Develop phased options (e.g., Phase 1: Houser Road line; Phase 2: Charleston extension) with cost estimates.
  3. Bring the phased options back to council for discussion and future CIP budgeting (FY 2025-2026 or later). No funds are allocated for this project in the current fiscal year.