Sedona staff present smaller FY2026–27 budget, emphasize 0‑based review to tighten spending

Sedona City Manager Annette Spickered told the City Council on April 15 that the proposed fiscal 2026–27 budget is smaller than the current year and built around tighter spending and partnerships. “Weare proposing a budget that is lower than the current year budget,” Spickered said, noting staff used a new 0‑based budgeting (ZBB) approach and updated financial software to re‑examine every line item.

Deputy City Manager Barbara Whitehorn and Budget and Investment Manager Sterling West walked the council through key figures: projected revenues of about $68.5 million, base operating expenditures near $58.4 million, and policy reserves of roughly $61 million. Unassigned fund balance is currently estimated at about $38.7 million. Staff said the base operating surplus and savings let the city continue to cash‑fund many capital improvements rather than bond them.

Sterling West explained why the council adopted ZBB: Sedonahas historically spent roughly 75–80% of budgeted CIP and operations, creating a gap between budget totals and realistic year‑to‑year spending. "ZBB helps us be realistic about what we can spend in a year," West said, adding the exercise forced departments to justify individual line items and improved the citys ability to prioritize projects.

Council members pressed for more granularity and trend visuals. One councilor asked staff to show the same presentation for prior budget cycles to make changes clearer; staff agreed to provide that detail in the next work session. Staff also said they would bring department‑level programmatic examples to illustrate how ZBB changed line‑by‑line decisions.

Why it matters: the council faces choices about using savings for capital projects versus preserving reserves for contingencies. Staff noted key drivers of increased long‑term costs include tourism‑driven infrastructure maintenance and rising utility and insurance costs. The City plans two additional budget work sessions next week and adoption steps in May and June, with council decisions on candidate decision packages and community service provider contracts scheduled during that process.