Council sets Aug. 28 election on removing state limitation on budget

Apache Junction voters since 1985 have approved every four years a home rule option allowing the budget to be set at the local level. The last vote was in 2016.

In August voters will decide if a permanent base adjustment budget is approved in one election that would be adjusted annually by population and inflation. If approved by voters, the adjustment would be $5.5 million and the city’s budget could be as high as $93 million, which could allow it to fund water, sewer, trash or transit services, officials said.

The Apache Junction City Council on April 3 voted 7-0 on a resolution proposing a permanent adjustment to the 1979-80 base expenditure limitation for the city and placing the question on the Aug. 28 ballot.

Voting yes were Mayor Jeff Serdy, Vice Mayor Chip Wilson and council members Jeff Struble, Gail Evans, Christa Rizzi, Dave Waldron and Robin Barker.

“This will be the most important move this council makes in the last several years,” Mayor Serdy said prior to the vote.

“This particular resolution will get that issue onto the ballot in August of this year and while there are no statutory requirement(s) to have a public hearing on this, my suggestion at the last meeting was that you do so just to see if there’s any public input,” Apache Junction City Clerk Kathy Connelly said at the meeting.

“This is a six-month process you all have been working on through your strategic planning efforts, through your efforts with long-term vision and mission of the city and the position of the financing ability and authority to govern as a local government,” Apache Junction City Manager Bryant Powell said.

No one from the public spoke at the hearing on raising the permanent adjustment by $5.5 million.

The current base budget expenditure limitation through statute allows the city to expend $19,705,150. The home rule election, as last approved by the voters, allows the city to spend $45,127,135. A permanent base adjustment would allow the city to spend up to $93,225,651, Donna M. Meinerts, the city’s finance director, said at the March 19 council work session, according to a video of the meeting.

“If we do this permanent base adjustment, there is no additional cost to our residents. So that’s a really important message that needs to be resonated,” she said.

“It does establish a new state-imposed expenditure limitation; that is our maximum allowable for our budget, but it does not necessarily mean we are going to budget that amount every year. We have the opportunity to be able to do it, but if there’s not a need, we absolutely would not be budgeting it,” Ms. Meinerts said.

The annual budget process remains the same if the permanent base adjustment is made, she said.

“So we would still have the budget meetings and council would still adopt a tentative and a final balanced budget. So none of that changes. It’s just the base changes,” she said.

The additional funds raised could be used for debt and operations on the water and sewer districts should the city desire to absorb those functions, officials said.

“If we were to acquire both of the CFDs that are in the city, the water district’s current budget is just over $5 million and the sewer district just over $7 million,” Ms. Meinerts said of the community facilities districts.

They are the Apache Junction Water Utilities Community Facilities District, with a board of directors made up of members of the Apache Junction City Council; and Superstition Mountain Community Facilities District No. 1, which has a board made up of people appointed by the Apache Junction City Council.

A city budget of $57 million could thus include the two CFDs totaling $12 million, she said.

To acquire the two districts, the city may need to clear existing debt, which is almost $11 million for the water district and $17.5 million for the sewer district, she said.

“That leaves $7,430,000, and that would be for other services the city may decide to start providing such as trash pick-up, transit, whatever else you would choose to do,” Ms. Meinerts said.

“Instead of the home rule amount of the $45 million, it brings us to $93 million,” she said.

“It just gives you a little flexibility that if a future city council wanted to get in the trash business themselves or if a future city council wanted to take on transit or wanted to take on a golf course or wanted to take on … greater services in any way shape or form, you would have plugged into your original permanent base a number for that,” City Manager Powell said at the work session.

Home rule elections

The continuation of the local alternative expenditure limitation, also known as home rule, was last approved by voters at the Aug. 30, 2016, primary election.

Expenditure limitations were put in place by Arizona voters in 1980. Home rule allows city council members to make annual budget decisions for their city “at home” rather than by using the state statute; the latter limits the city to the expenditure of estimated available revenues whether such expenditures are less than or exceed the state-imposed limit. It has been in effect in Apache Junction since 1985. Home rule must be resubmitted to voters every four years, according to city of Apache Junction documents.

City Clerk Connelly at a May 1, 2017, council work session said the city’s first home rule election didn’t pass.

“We were the first ones out of the box to try the home rule election,” she said.

“It failed by a small margin. We did a one-time override and then went back for home rule, which passed,” Ms. Connelly said at the work session.

Tom Belshe, deputy director of the League of Arizona Cities and Towns, attended the May 1 work session to explain the differences between permanent base adjustment and home rule.

The permanent base adjustment takes the state-imposed limitation that was set back in 1979-80 and it is adjusted every year for population and inflation, he said at the work session.

“It’s permanent – it doesn’t require you to go to election or have to go out and explain every four years what you’re doing because you do that as part of your budget process every year,” he said at the work session.

Editor Richard Dyer can be reached at rdyer@newszap.com

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