Final approval on the $992.84 million budget will not come until June 2. Council also passed a tax levy of $25.88 million, maintaining a secondary property tax rate of $0.9896 per $100 of assessed valuation.
The budget is about $56 million less than the Fiscal Year 2019-20 budget of $1.05 billion. The tax levy is an increase of $1.63 million.
Council was divided on both issues, passing them by 5-2 votes with Council Members Jared Taylor and Aimee Yentes voting in dissent of both.
Taylor and Yentes voiced objections to some spending included in the budget during the economic downturn from the coronavirus pandemic.
They also parted from their fellow council members on whether taxes were being raised through the higher levy.
“Now is not the time to raise taxes on people,” Taylor said. “We’re facing the worst economic situation in our lives.”
The levy supports the debt service for two previous streets bonds and the Public Safety Training Facility bond, which received voter approval in 2018. Taylor, as he has on previous occasions, took aim at the facility, calling it needed but wasteful.
“We have a lot of people that are already struggling, and as long as we keep these restrictions on our businesses, more people are going to lose their jobs and more small businesses are going to close,” Taylor said. “And to tell them that we're going to raise their taxes for something that was not fiscally responsible is completely inappropriate.”
Mayor Jenn Daniels, as she has done in the past, pushed back against Taylor’s assertion that the town was raising the secondary property tax on residents.
“Regardless of what the levy is, our community has grown,” Daniels said. “We have far more commercial businesses, far more rooftops, so how that money is spread out is very different than it was in 2009. So I'm proud of the work that we've done to lower that [tax] rate.”
Taylor said the town could be looking at some closures of services, suggesting Cactus Yards, which operates at a structural deficit, as a possibility for reducing spending.
Yentes zeroed in on additional hirings in the budget and the salaries associated with them. Taylor and Yentes expressed concern about the ambulance line of service that opened within Gilbert Fire and Rescue last fall.
Daniels again defended adding the service, using the volatility in the ambulance market as a reason to have it in the town.
“I am not willing to leave to chance that our residents don't get the kind of transport that they need in their most desperate time,” she said. “I think we should absolutely work with our teams to make sure we're doing that efficiently.”
Daniels called the budget one of the best she has seen through the 13 budget cycles on which she has served on council. She said the community entrusts council to make thoughtful decisions on their tax dollars.
“I think without a doubt, we can say that we get a tremendous value in the town of Gilbert for every single dollar,” she said. “I don't like to compare us to other municipalities, frankly because it's not fair to them. Gilbert does an amazing job with a lean budget and a lean staff.”
In her presentation to council, Budget Director Kelly Pfost went over the town’s revenue pools with March data in, giving the town the first glimpse of where it stands as a result of the slowdown from the coronavirus pandemic.
Because the town uses conservative estimates of revenue when budgeting, Pfost said collections to this point are largely ahead of projections for year to date, leaving the town able to absorb lower collections in the final months of the fiscal year, which ends June 30.
For example, the town’s sales tax revenue already has reached 83% of what it projected to receive for the year. On state shared sales tax, the town has collected 76% of its projection.
Pfost said the state shared income tax distribution is a stable fund because of how the state figures it.
The hardest hit area is money from recreation programs because of programming being shut down.
“Overall you can see Gilbert is very strong and in a very good position,” Pfost told council. “We know that there has been an impact because of COVID-19 and an economic decline. What we don't know is how will the recovery be. Will it be fast? Will it be slow?”
Use of budget triggers
Pfost said the town’s base budget includes triggers for the town to judge expenditures against revenues in the event of medium or large impacts on revenue from COVID-19’s downturn.
“As the path unfolds and we get data over the next several months, we will be able to make different changes in our expenditures to match whatever the revenue forecast is looking like,” Pfost said.
Taylor and Yentes praised the use of the triggers in the budget’s preparation.
In council communication documents, Pfost wrote that the budgets reflects a decrease of $77 million in capital improvement projects, an increase of $2 million in debt service payments, and an increase of $9 million for new personnel and operating requests throughout the town’s lines of service—the general fund, enterprise funds, streets, transport and replacement funds.
The budget also includes a capital projects contingency budget of $100 million to allow council the flexibility and authority to respond to community needs. That is in line with what the town has done in previous budgets, Pfost wrote.
Pfost told council that its annual zero-based budgeting review of one-third of the town’s operations will save the town $2.1 million this year. All of the town’s departments receive that review every three years on a rotating basis.
In other business:
- The council approved the Capital Improvement Projects document, a 10-year planning document for the town’s capital projects. The vote was 5-2 with Taylor and Yentes dissenting. Taylor said he approved of many of the projects but had concerns about the expenses involved with some. Daniels said the planning document did not tie the town to having to do all the projects and their costs.
- Council unanimously approved rezoning 54.7 acres on the southwest corner of Higley and Riggs roads from regional commercial zoning to 39.9 acres of single family residential zoning, with different densities, while maintaining 14.8 acres for regional commercial. The resulting project from Vestar, called Cordillera, received some objections on size and density of the housing and the loss of commercial space, but also received approval from the Planning Commission and support from the Gilbert Chamber of Commerce and some neighbors.
- Yung Koprowski was sworn in as a council member, filling the last vacant seat on council. Koprowski was appointed April 21 to fill the seat vacated when Jordan Ray resigned to run for justice of the peace of the Highland Justice Court. She will serve the final 32 months of Ray's term.