Lake Havasu City Budget and CIP Overview Work Session – April 16, 2026

The Lake Havasu City Council held a work session on April 16, 2026, at 9 a.m. to review the proposed fiscal year 2026-27 budget and the five-year Capital Improvement Plan (CIP) for fiscal years 2027 through 2031. City staff presented detailed financial projections, revenue assumptions, and a $197 million CIP. Council members discussed priorities, including the timing of park multi-use fields, an outdoor pool, public safety facilities, and street improvements. The session concluded with direction to staff on project sequencing for the final budget adoption in June.

Budget Overview

• City Finance Director Jill Olson presented the budget overview, noting a flat property tax rate is proposed. The general fund is projected to be balanced with limited ongoing revenue for new expenditures. Sales tax remains the city’s primary revenue source.
• Water and wastewater rates are projected to need increases in years three through five of the CIP: 8.5% annually for water and 4.5-5% annually for wastewater to fund planned projects.
• The expenditure limit is estimated to be under by about $7 million for FY27, but ongoing commitments (e.g., staffing Fire Station 7 at $1.2 million/year) will increase pressure.

Capital Improvement Plan Overview

• Public Works Director Ron Fogan presented the five-year CIP totaling $197 million, described as balanced and fully funded assuming the approved water/wastewater rate increases. No new debt is recommended.
• Key FY27 projects include: Fire Station 7 ($9 million), Phase 2 of the Police Department and Jail Rehabilitation, the Second Bridge ($35.5 million), multiple water main replacements ($4.5 million), street repaving (e.g., Acoma, Lake Havasu Avenue), and public safety equipment storage.
• Multi-use fields at Buena Vista are shown as a placeholder ($3.5 million) pending design and a lease agreement with the school district.

Public Comments & Testimony

• Donna Bess Carlton urged the council to consider using updated general plan elements for grant applications rather than a new Parks Master Plan, and she committed to raising community funds for fields. She also noted that the city has highly capable staff.
• Lucas Stewart, a local business owner and parent, emphasized the severe shortage of youth sports fields, describing late practice times (8-9 p.m.) and competition among organizations. He expressed strong support for moving the multi-use fields forward.

Discussion Items

• Multi-Use Fields: Council members unanimously supported accelerating the $3.5 million multi‑use fields project from FY28 to FY27. Staff noted that a design phase would spend approximately $1 million in FY27, with construction in FY28. The project is contingent on a lease agreement with the Lake Havasu Unified School District for property near Buena Vista. The current intergovernmental agreement (IGA) expires June 30, 2026, and negotiations are underway.
• Outdoor Pool: Council discussed moving the $3.5 million outdoor pool from FY27 to FY28 to allow time for potential partnerships (e.g., GCU) and to better align with available funding. The CIP shows a deficit in FY28 if the pool remains in FY27 due to revenue timing. Council directed staff to move it to FY28, noting the flexibility to accelerate later.
• Splash Pad: The $1.5 million splash pad was discussed; staff estimated only a 20% chance of securing the intended grant. Council expressed reluctance to fund it with general fund dollars and directed staff to keep it in later years pending grant opportunities.
• Parks Master Plan: Vice Mayor Diaz questioned the $250,000 plan. Grant writer Alexis Williams explained that a current master plan is critical for scoring higher on grants (e.g., Arizona State Parks, potential $1.5-30 million grants). Council reaffirmed support for the plan.
• Fire Station 7: Staff confirmed the $9 million budget is based on 100% designs; a guaranteed maximum price is expected within 30 days. Ongoing operating costs (six firefighters/EMTs) are estimated at $1.2 million annually and will be addressed in the May operating budget workshop.
• Public Safety Equipment Storage: Chief Sterling explained that the project (formerly titled “parking structure”) would cover expensive equipment (BearCat, command trailer) currently stored outdoors. The $1.3 million project remains in the CIP.n- Water and Wastewater Projects: Councilmember Campbell expressed concern about aging infrastructure in alleys and the golf course area, though no specific projects were added. Staff noted ongoing main replacement is funded at $4.5 million annually, targeting lines based on age and break history.

Key Outcomes

• Council directed staff:
  • Move the multi‑use fields project to FY27 (design) and FY28 (construction), with an estimated $1 million for design in FY27.
  • Move the outdoor pool project from FY27 to FY28 to enable partnership exploration and align with available funding.
  • Keep the splash pad in later years unless grant funding materializes.
  • Continue negotiations with the school district for a new IGA that includes a long-term lease of Buena Vista property for fields.
• An updated CIP will be presented at the May work session for tentative adoption. The final budget and property tax rate are scheduled for adoption on June 23, 2026.