Mesa Council tackles budget, bonds, ballot
May 26—Before the holiday weekend, the Mesa City Council signed off on a slew of major business items that have been months in the making.
At its regular meeting, the council adopted a tentative $2.69 billion budget for the fiscal year beginning July 1. The figure surpasses the record $2.56 billion spending plan for the current fiscal year.
Next year's budget includes several new staff positions and projects, including some added in recent weeks: $390,000 to expand efforts to reduce the feral cat population in Mesa and $561,000 for emergency heat relief.
Though next year's budget is larger than ever, the increase appears more modest than the current budget, with fewer full-time employees added to city payrolls.
A budget summary indicates 32 new employees next year, mostly in police and fire, compared with 221 positions added this year. Non-public safety employees are getting a 3% step-pay increase. Police and fire compensation is guided by memoranda of understanding with those employee groups.
There are two new positions to stimulate infill and redevelopment in blighted areas of Mesa and three new positions to administer Temporary Traffic Control permit reviews — helping to address resident complaints of extended road closures.
For City Manager Chris Brady, the current moment is the best of times and the worst of times for Mesa's finances.
"I would put this time, this financial point, up against any other time in the City of Mesa, as far as its financial strength," he said at a May 2 study session. "But we are facing significant headwinds."
The headwinds are the state's elimination of local rental taxes and the implementation of the state flat tax, which will reduce Mesa's cut of state shared revenue.
Those two revenue hits blew a $115 million hole in Mesa's anticipated funds for the next five years, and the city hasn't figured out how to fill it yet.
"For the first time, the revenues coming in will not be sufficient to cover expenditures, so it will draw down reserves," Brady said.
In the short-term the city has ample reserves to handle the shortfall, Brady said, but in later years as the deficits pile up, "something will have to give," he said.
"It's very painful to turn this big ship around," Brady said.
Ballot
In the same meeting, council also voted unanimously to send two issues to the November ballot: The updated General Plan, called Tomorrow's Mesa 2050, and a request for a $148 million permanent base adjustment.
The council discussed but didn't vote on a potential third ballot item — a $250 million public safety and quality of life General Obligation bond.
The council is set to vote on that measure on June 3.
The council appeared united on sending the quarter-billion bond authorization to voters in November, but members engaged in some spirited debate over details of specific bond projects.
In one notable exchange, Councilwoman Julie Spilsbury expressed strong reservations about the tentative location of a proposed $66 million indoor recreation center.
She said additional indoor recreation centers are badly needed in Mesa, but she thought there was inequity in putting it on city-owned land at Greenfield and McKellips roads.
She argued that the relatively affluent area is not far from an existing recreation center — Red Mountain Multigenerational Center — and a facility was needed closer to central Mesa, where families are further from amenities and may have fewer financial resources for recreation.
Council members also dueled over a $7 million project to enhance Center Street. The Safe Streets for All Center Street project aims to make the corridor safer for pedestrians and bicyclists traveling to and from downtown.
Mesa's engineering department is eyeing separated bike lanes and wider sidewalks on the road.
But tentative plans to remove lanes from Center Street to accomplish the safety goals sparked disagreement among council members, with Spilsbury and Councilman Mark Freeman expressing reservations about eliminating parking spaces and lanes on the road.
"I'm on Center Street every day," Freeman said. "I'm really not in favor of reducing the lanes. Culturally, we are not getting rid of our vehicles."
Such measures — often referred to as "road diets" have sparked a huge furor in Scottsdale, forcing the city to suspend several lane-cutting projects.
Downtown Councilwoman Jenn Duff said, "I'm pretty adamant that we need to slow traffic down." She said that fewer lanes would not necessarily mean fewer cars could travel the corridor.
On both issues, the city manager and city attorney tried to reassure council members that the details of the project would not be set in stone by the bond authorizations and that the city could work out the questions of recreation center location and lane reductions later.
"Council in the future will make the final decision," City Attorney Jim Smith said of project details.
Before the vote on the permanent base adjustment, Management and Budget Director Brian Ritschel told the council that without permission from voters to exceed state spending limits, Mesa would have to cut $1.1 billion from its budget.
The State Legislature set base spending limits for cities and towns in the 1979-80 fiscal year. Cities can overspend the legislative limit, which is adjusted for population and inflation, but they must get permission from voters.
Many Arizona communities seek to raise their legislative expenditure limits because the formula for calculating the limit used by the state does not consider dedicated funding sources approved by local voters after 1979-80.
For Mesa, city staff gave as examples the Public Safety and Local Streets sales taxes as well as Maricopa County's regional transportation sales tax.
The permanent base adjustment would reduce how often the city needs to go to voters for permission to overspend the state limit.
In 2022, Mesa voters approved the Home Rule option for exceeding the expenditure, which lasts for four years.
City staff said the proposed permanent base adjustment would likely meet the city's budget needs for 30 years.
