Council approves tentative spending plan The Chandler Arizonan

Council approves tentative spending plan

Council approves tentative spending plan
City News
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By Kevin Reagan
Arizonan Staff Writer

Chandler City Council has tentatively passed a $931-million budget for the fiscal year beginning July 1 that accounts for reductions the city may have to make due to the COVID-19 pandemic.

In a 5-2 vote, the council chose to initially adopt a budget that added an extra $30 million to its spending capacity at the last minute thanks to some assistance from the federal government.

Going into Thursday night’s meeting, the budget totaled $901 million – nearly 3-percent smaller than the city’s current budget – but then the council voted to infuse some financial aid it’s expected to receive through the Coronavirus Aid, Relief and Economic Security Act.

Up until last Wednesday, it had been unclear whether Chandler would get any CARES Act funding through the state since the Ducey administration had been silent on the matter. But then the governor rolled out a distribution plan for local governments and small counties.

Council members will discuss in the coming weeks how to spend that money but some have already expressed interest in using the $30 million to help out small businesses hurt by the pandemic.

Council members Mark Stewart and Terry Roe voted against the tentative budget, citing concerns they had about how COVID-19 was impacting the local economy.

Roe said he objected to how the budget still allowed for the opportunity to grant merit-based salary raises to some personnel.

It’s “bad optics” to be handing out raises, he said, during a time when so many have recently lost their jobs. At least 20,000 Chandler residents have filed claims for unemployment compensation as of May 15 and that number likely has grown.

Stewart said he wanted to review more data on Chandler’s tax revenue before making a final decision on the city’s finances.

The city of Chandler collected about $11.3 million in sales tax revenue last month –  5-percent less than what it collected in April 2019.

Tax revenue from Chandler’s hotel transactions shrunk by more than 50 percent in April 2020 and restaurant tax revenue decreased by about 28 percent, according to financial records. Retail taxes grew by about 5 percent compared to April 2019 and taxes from property rentals increased by 3.6 percent.

Mayor Kevin Hartke emphasized that Chandler’s budget only sets a limit for what the city can spend in the next fiscal year.

The council can still make adjustments and decide not to make certain expenditures after the budget is adopted, he said. 

Matt Dunbar, the city’s budget manager, said the 2020-2021 budget is designed to flexibly react to the unexpected nature of the ongoing pandemic.

It accounts for nearly $30.5 million in expenditure reductions that were made as a result of the health crisis, he said.

Shortly after business closures and stay-at-home orders wreaked havoc on Arizona’s economy, Chandler announced it would be holding several job openings from getting filled and would limit travel expenses among staff.

Over the last several weeks, city staff have had to re-evaluate all the spending requests submitted by the city departments and decide whether to remove them from the upcoming budget.

Dawn Lang, the city’s management services director, said several spending requests had to be removed from the pending budget because staff felt there was too much uncertainty about the city’s financial future.

The tentative budget does allow for a slight reduction in the city’s property tax rate from 1.128 to 1.120 per $100 of assessed value.

The 2020-2021 budget includes $386 million for departmental operating expenses, $59 million for debt service, $7 million for equipment and car replacements, and $102 million held as reserves and contingencies for various funds.

The budget further appropriates $345 million for the city’s capital projects fund. Chandler has decided to invest a considerable amount of capital next year in order to address the city’s aging infrastructure.

Chandler is planning to take a “phased” approach with how it schedules out certain capital projects. Because the full effects of COVID-19 are not yet known, the city has picked out some improvement projects that can be delayed by a few months until the city’s economic forecast looks clearer.

Council will reconvene on June 11 for a final vote on the city’s new budget.

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