Sedona council holds second hearing on extending home-rule expenditure limit before July ballot

Sedona held a second public hearing March 10 on whether the city should extend a home-rule option for its expenditure limitation, a measure the council said would appear on the primary ballot on July 21, 2026. Barbara, a city staff presenter, outlined the three paths available to the city — the state-set limit, home rule and a permanent base adjustment (PBA) — and explained the fiscal and procedural differences between them.

Barbara said the state limit is determined by a population-growth formula and a statewide inflation factor and therefore does not reflect local revenue sources such as utilities, bed tax or visitor-driven demands. "The revenue collected above the limit is unavailable for a minimum of 2 years," she said, describing consequences if Sedona were required to operate under the state-set limit. She told the council Sedona has used home rule every four years since 1996, and that the city most recently approved home rule in 2022 with 64% in favor.

In the presentation Barbara walked council members through examples from other Arizona cities, noting there is no consistent pattern tied strictly to city size: "Phoenix does home rule," she said, and other cities use PBAs or the state limit depending on local needs. She described PBAs as an option to adjust the 1980 base and said communities typically judge how long a PBA should last; while one city predicted 30 years, she suggested PBAs more commonly last 10–15 years.

The staff presentation included a graphic showing required local functions and other services. As stated in the presentation, the state limit figure discussed was 15,400,000 and Barbara said the city was "in excess of the limit by over $70,000,000" compared with the city's adopted budget (reported in the presentation as "103"). The presentation also noted required functions were about 25.5 million and additional functions about 61.5 million. Barbara emphasized the city follows established practices, including public budget workshops, a Citizen Budget Work Group and annual independent financial audits; she also noted Sedona has received awards and a long-running certificate of achievement from the Government Finance Officers Association (GFOA).

Council members asked for clarification about timing and mechanics. One councilor asked whether a one-time override could be used repeatedly and whether home rule or a PBA must be on a regular election. Barbara said a one-time override is a special-election mechanism for a fiscal year and that home rule or a PBA generally needs to be placed on a regular primary or general election; she said she would verify specific timing and legal points.

During the public-comment period, Sedona resident Tim Perry addressed the council and urged a "No" vote on home rule. Perry accused city staff of prioritizing staff interests, questioned whether services such as policing, parks and wastewater should be provided by the city, and said "Home rule is simply a form of legal graft which staff use to transfer the public dollars to their own pockets and to pet projects." He also criticized budgeting for public-works spending figures as presented and urged reductions.

No formal vote or motion was taken at the March 10 hearing. The council closed the public hearing after the single public comment card, asked staff for a future timeline on implementation options, and adjourned until 4:15 p.m. The measure, if placed on the ballot by council action, is scheduled for the July 21, 2026 primary election.