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STRATEGIC OUTCOMES |
ACTION |
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Department: |
☒ Safe & Prosperous |
☐ Motion |
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Finance |
☒ Active & Appealing |
☐ Resolution |
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☒ Respected & Responsible |
☐ Ordinance - Introduction |
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Division: |
☒ Connected & Engaged |
☐ Ordinance - Adoption |
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Administration |
☒ Unique & Creative |
☒ Public Hearing |
TITLE: t
Public Hearing: Truth in Taxation, Main Street Mall and Off-Street Parking Maintenance District No. 1, Levy for 13 Municipal Improvement Districts (MID), and Final Budget Adoption for Fiscal Year 2026
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SUMMARY RECOMMENDATION: Summary Recommendation
Conduct a combined public hearing on the proposed City of Yuma primary property tax levy (Truth-in-Taxation); the Main Street Mall and Off-Street Parking Maintenance District No. 1 expenditures and levy, as well as for the 13 Municipal Improvement Districts and the proposed revenues and expenditures (budget) for Fiscal Year 2026 pursuant to A.R.S. § 42-17104.
The City of Yuma expenditure budget for Fiscal Year 2026 in the amount of $547,121,059 which is comprised of a Capital Improvement Plan budget of $221,254,573; 13 Maintenance Improvement Districts combined for $636,884; and an Operating Expenditure / Expense Budget of $325,229,602 including Governmental and Enterprise operations. Following the close of the public hearing, City Council may open a special meeting to adopt the proposed budget resolution, which includes a 3% increase in solid waste fees. (Administration/Finance) (Jay Simonton/Doug Allen)
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STRATEGIC OUTCOME:
Both the Public Hearings and the final adoption by resolution of the Fiscal Year 2026 Annual Budget provide the financial framework for the City Council’s vision and supports all five of City Council’s strategic outcomes across all departments and funds at the City.
REPORT:
Pursuant to the Arizona Revised Statutes, a public hearing will be opened to hear community comments on the City of Yuma Fiscal Year 2026 tentative budget and tax levy, the Downtown Mall Maintenance District, and the 13 Municipal Improvement District expenditures and levies.
Overall, assessed values have increased 4.5% compared to last year FY 2025. This includes an increase of 2.4% to base properties and a 2.1% increase associated with new construction recognized in FY 2026.
The primary tax rate is proposed at the maximum allowed rate of $2.1450 which is more than the FY 2025 primary property tax rate of $2.1321. The FY2026 base levy (excluding new construction) is $490,240 (3.0%) more than the total FY2025 levy. This will result in a total increase in General Fund revenues of $848,219 including both the base and new construction activity.
If the proposed primary tax levy, excluding amounts that are attributable to new construction, is greater than the amount levied in the preceding tax year, a truth in taxation hearing must be held under requirements in Arizona Revised Statutes § 42-17107. The City combines the truth in taxation hearing with the budget hearing.
The Downtown Mall Maintenance District was established in 1969 and the levy for FY 2025 was $156,109 with a rate of $4.2750. The City is proposing to increase the levy to $159,131 with an associated rate of $4.3500 in FY 2026. For a Class 1 business that has an 18% assessment ratio, the annual assessment would be an increased increment of $18.00 per $100,000 of valuation. The City’s financial support for Downtown Mall Maintenance, in addition to the levy, is approximately 54% in FY 2025 and 55% in FY 2026, which the City contributes from the General Fund, with 100% being for general operations and no one-time capital contribution for FY 2026.
In accordance with the property owners’ petitions, the City has established 13 active MIDs for FY 2026 for the maintenance of landscape improvements paid through the levy and collection of assessments on the assessed value of the real and personal property within the MID. The 13 “active” MIDs tax basis is ad valorem, which is based on the value of the property. The costs of the MID are shared based on the property values in the district. To avoid large tax spikes, new MIDs typically begin with a temporary loan from the City. To not over burden the early home buyers, this loan is repaid over time via the MID. As more homes are purchased, the tax base grows to cover the costs of the district.
A summary of the proposed rate, levy, and expenditures each of the 13 MIDs is shown on the following table:
The City Administrator and City staff, after receiving City Council input through several vision and goal setting sessions throughout Fiscal Years 2022, 2023, 2024 and 2025, prepared the Fiscal Year 2026 Proposed Annual Budget for City Council’s consideration. City Council approved the tentative budget by motion on May 21, 2025, which set the ceiling on expenditures for FY 2026 and there have been no changes. Following the close of the public hearing, the City Council may open a special meeting to adopt the Fiscal Year 2026 Annual Budget of $547,121,059 by resolution with accompanying schedules which includes a line item 3% solid waste fee increase.
The FY 2025 budget is comprised of the following amounts:
Adoption of the tax rate and tax levy ordinance is scheduled for the July 2nd, 2025 regular City Council meeting at 5:30 p.m. in the City Council chambers located at City Hall, One City Plaza, Yuma, Arizona. In order to adopt the ordinance, it must be separately introduced following the adoption of the Fiscal Year 2026 Annual Budget by resolution. A separate tax rate and tax levy ordinance introduction is included in this June 18, 2025 Agenda.
Notice of the Public hearings, including the improvement districts and the Main Street Mall and Off-Street Parking Maintenance District No. 1, was published in the Yuma Sun on June 3, 2025, and June 10, 2025 as part of the statutorily required Budget Financial Schedules. The Fiscal Year 2026 Proposed Annual Budget has been available online, in the City Clerk’s office, and at the public library located at 2951 S. 21st Street since April 23, 2025. The proposed budget has been reviewed by the City Administrator, City staff, and City Council. The end result is a Fiscal Year 2026 financial planning document incorporating the vision and strategic outcomes established by the City Council.
FISCAL REQUIREMENTS:
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CITY FUNDS: |
$ 0.00 |
BUDGETED: |
$ 0.00 |
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STATE FUNDS: |
$ 0.00 |
AVAILABLE TO TRANSFER: |
$ 0.00 |
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FEDERAL FUNDS: |
$ 0.00 |
IN CONTINGENCY: |
$ 0.00 |
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OTHER SOURCES: |
$ 0.00 |
FUNDING: ACCOUNT/FUND #/CIP |
TOTAL $ 0.00
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To total; right click number & choose “Update Field” |
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FISCAL IMPACT STATEMENT:
One of the most important duties of the Mayor and City Council is to adopt an annual budget for the City. The budget process provides the Mayor and City Council with the opportunity to match the needs of the City and available resources with the interest of gaining the maximum return on each dollar.
The tentative budget includes funding for all department operating budgets effective July 1, payment of debt obligations, capital improvement projects, enterprise services and contingencies.
ADDITIONAL INFORMATION:
SUPPORTING DOCUMENTS NOT ATTACHED TO THE CITY COUNCIL ACTION FORM THAT ARE ON FILE IN THE OFFICE OF THE CITY CLERK:
NONE
IF CITY COUNCIL ACTION INCLUDES A CONTRACT, LEASE OR AGREEMENT, WHO WILL BE RESPONSIBLE FOR ROUTING THE DOCUMENT FOR SIGNATURE AFTER CITY COUNCIL APPROVAL?
☐ Department
☐ City Clerk’s Office
☐ Document to be recorded
☐ Document to be codified
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Acting City Administrator: |
Date: |
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John D. Simonton |
06/10/2025 |
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Reviewed by City Attorney: |
Date: |
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Richard W. Files |
06/08/2025 |