Eloy City Council Budget Work Session - March 30, 2026
Eloy City Council Budget Work Session - March 30, 2026
The Eloy City Council held a budget work session on Monday, March 30, 2026, beginning at approximately 5:00 p.m. (the agenda listed a 4:15 p.m. start). Finance Director Brian Wright presented revenue projections for the FY 2026-2027 annual budget, sought guidance on the proposed property tax rate, and reviewed the Capital Improvement Plan (CIP) and Consolidated Rate and Fee Schedule. Council members reached consensus to adopt the maximum property tax levy and directed staff to update the CIP and fee schedule.
Consent Calendar
- No consent calendar items were on the agenda.
Public Comments & Testimony
- No unscheduled public appearances were made.
Discussion Items
Item V-A: Revenue Projections and Property Tax Rate Guidance
Brian Wright presented key influences on the FY 2026-2027 budget, including uncertainty over Pinal County's half-cent sales tax distribution for roads, state shared revenue impacts from San Tan Valley, inflation (Phoenix CPI about 2.2% as of December 2025), and slower job growth statewide. Wright highlighted that state shared revenue has dropped 37%, and a potential state tax/fee freeze could cap local sales tax increases for four years, but would not affect already-adopted utility rate studies. City sales tax collections have grown modestly (3.39% increase), and general fund revenue is projected at $23.8 million (up from $21.8 million last year), but about $1.2 million in one-time planning/permit fees are from a large commercial project (FreePoint).
On property taxes, Wright noted the current primary property tax rate is 0.9769 per $100 of assessed valuation. New construction added $10 million in valuation. The maximum levy allowed (2% growth) would yield a rate of 0.9848, generating an additional $31,280 over the new construction-only rate (0.9655). Council members Vodraska, Galindo, the mayor, and Sarah all expressed support for taking the maximum levy, citing the stability of property tax revenue and the small impact on taxpayers (less than $3 per year on a $300,000 home). Staff will prepare the Truth in Taxation notice and proceed with the property tax ordinance.
Item V-B: Capital Improvement Plan and Consolidated Rate and Fee Schedule
Wright reviewed the FY 2026-2027 CIP, totaling $36.6 million across 41 projects, with heavy emphasis on water/wastewater infrastructure (about $29 million of the total, including a $21 million utility obligation bond for 10 projects and the $8 million SunLyn Gin overpass/grant project). The five-year CIP includes 197 projects worth $236 million. Council guidance from the retreat was to defer general fund CIP projects, but staff recommended restoring four projects: interior improvements at the senior center, a shade structure at public works, and two police cars (total ~$400,000). Council member Galindo requested adding an animal control facility to the five-year CIP, which Wright agreed to include. Council also asked staff to add AZ Smart Fund grant matches for road projects.
For the Consolidated Rate and Fee Schedule, Wright noted changes highlighted in yellow, including: utility deposits increasing by $25 (to cover water/sewer rate increases); building permit fee restructuring (moving to flat hourly rates for many items to reduce costs for smaller projects like patios and garages, while increasing fees for high-value projects); and a 4.8% sanitation rate increase (residential trash from $30.04 to $31.00 per month) effective July 1, 2026, per the Waste Management contract. Dan (Public Works) explained that the fee changes target 75% cost recovery and aim to keep Eloy competitive while covering increased inspection costs. Wright noted that water rates will increase 14% and sewer rates 11% on November 1, 2026 (second year of a five-year rate plan).
Landfill Study Update
Council member Galindo asked about the ongoing landfill study. Staff reported it is 85% complete but discovered historical fill rate data inaccuracies. A flyover will be conducted to reassess true fill rates, and a contract for that may come to council in May. A community outreach process will follow before any decisions on mothballing, privatization, or continued operation of the landfill.
Key Outcomes
- Consensus to adopt the maximum property tax levy at 0.9848 (a $31,280 increase over new construction only). Staff directed to prepare public notices and the property tax ordinance.
- CIP updates: Add animal control facility to the five-year plan; include AZ Smart Fund grant matches for road projects; proceed with the four restored general fund CIP projects (senior center, shade structure, two police cars).
- Consolidated Rate and Fee Schedule: To be posted for 60 days; a resolution for adoption will be brought to council in May (the second meeting). Changes include utility deposit increase, building permit fee restructuring, and 4.8% sanitation rate increase effective July 1, 2026.
- Future consideration: Wright suggested a potential half-cent sales tax increase in six to nine months to offset state revenue losses, but no action was taken.
- No formal votes were taken; this was a work session to provide guidance.
Meeting Transcript
Thank you. All right. Good evening, and welcome to the Eloy City Council work session. Today is Monday, March thirty. The time is approximately five PM. Madam Clerk, may I get a roll call and please remember Sarah? Of course. Councilmember Altraska. Here. Council Member Curtis. Thank you. Vice Mr. Here. Councilmember Schneider, excused. Council Member Garcia is expected in about 15 minutes or so. Council Member Golender. Here's here. I don't see anybody here for public appearances. So that brings us to item five, discussionizing presentation by Brian Wright Finance Director or revenue projections for the FY 2026-2027 annual budget, seeking guidance on proposed property tax rate, Mr. Wright. Okay, good evening, Mr. Mayor, members of the council and uh four staff members. Um the first item will be the a little bit of a revenue presentation. Um a lot of this information uh was it will look familiar to you because it was we talked about it at the uh council retreat about a month and a half ago almost two months ago. So um I'll go through it and at any time there's questions, please feel free to stop me and we can address those and and stuff like that. Um so you know, starting off, you know, we're we're gonna just kind of go through um the the agenda tonight with this. We're gonna look at the the key impacts, talk a little bit about that, the general fund, um, we're gonna go over the property taxes. Um what has been recommended uh for that. Uh we're gonna go over the special revenue funds, um, which will be this uh water streets and kind of the airport cemetery, and then over the utility funds, which is water sewing sanitation. So kind of when we started to look at this uh uh presentation, and this presentation was uh with our finance intern, Abe Mace. Um he helped prepare this. So I mean that was one of his first things looking at uh this budget. So I do want to give him the uh a little shout out because he did help with this and a lot of the the layouts. So but uh when we're looking at the 26, 27 uh fiscal presentations, you know, some of the key influences are is is with Pennell County. You know, and when I say Pennell County is because we still have not gotten any word from them or any guidance, any feedback on what's going on with that half cent sales tax, how they're gonna distribute that to the cities and towns when it comes to the road tax. Um that road tax because of Santan Valley, that you know, what are they going to do? Are they going to make you know eat that and take and reduce their share or they're gonna split it through uh so that's one of the key influences when we're looking at this budget? You know, the property tax, um, you know, will council go through and uh go through and uh accept the maximum levy limit that we've been doing. Um we'll get into that a little later, but that's one of the the key influences, and also state shared revenue. We've heard that time and time again about San Tan Valley, so you know that's been a key influence on this inflation impact. You know, yes, the inflation really does drive up our expenses, but as inflation and those indicators hit our what people are buying food at, buying uh local things at the bar and restaurants. Yes, that's more money to the city, so those influences um are in here, the state economy. You know, when it comes to job growth, when it comes to wages, you know, that plays a part in our overall um outlook. And then locally sales tax, where are we? How does it look? So some of those are the things that we've looked at as part of this budget. But when we kind of look at uh the annual impact on inflation, you know the the the graph on the left is just more of an indicator of the last several years of how the CPI when it comes to the Phoenix area, you see it's went from the high as 9.5 and roughly back in December of 2025 is about uh it's about 2.2 percent. So, you know, we look at that as part of our our our model that we look at. And then the chart on the right is more looking at how things have changed from a year ago, and these are some of the indicators out there uh by major changes, and you'll see you know, recreations up six percent, you know, non-alcoholic beverages are up about twelve percent. Um housing is just a little over uh half percent, but gas and gasoline and oil.
openpublica.com