Prescott Valley budget presenter outlines structurally balanced FY27 proposal and $400 million 10-year CIP

Prescott Valley budget staff presented an overview of fiscal-year 2026 results and laid out a proposed budget path for FY27, telling the Town Council on the budget presentation that recurring revenues currently exceed recurring expenses by about $10 million and recommending the town treat an expected $7 million year-end surplus as one-time money to seed strategic projects and reserves.

The presenter, identified in the meeting as Kate, said revenues exceed expenses across meter funds, the general fund, enterprise funds and the highway user revenue fund and walked council through dashboard charts that compare performance to a 75%-of-year benchmark. "We have $10,000,000 more in recurring revenues than we do in recurring expenses," Kate said, adding that the town is performing well this year.

Why it matters: the presentation frames the tentative-budget choices council will face at the end of the month — including how much of the surplus to set aside for one-time projects, how much to seed replacement reserves, and what to include in the first year of a newly expanded 10-year capital-improvement plan (CIP).

Budget and reserves details
The staff report shows roughly $265 million in total available resources and an operating-budget figure near $116 million. The general fund revenue line was presented at about $63 million with expenditures near $65 million, but staff said that comparison includes one-time items and that recurring revenues still exceed recurring expenses. The presentation emphasized that state law requires a balanced budget and that council's adoption of a tentative budget at the end of the month will set the legal upper limit for FY27.

On unfunded pension liabilities, Kate said the town's PSPRS unfunded balance stood at about $4 million at the end of last year and that the town made a $1 million contribution; she said lowering the liability has produced roughly a 4% reduction in public-safety retirement rates and that, if surpluses are dedicated, the liability could be paid down in roughly two to three years.

Self-insurance and replacement reserves
Staff presented three funding scenarios to create a self-insured health-benefits reserve ($2.0 million, $3.0 million and $4.1 million), showing modeled outcomes for low, moderate and extreme claim years and describing options if a low-reserve scenario produced a deficit (additional infusion, premium changes, using reserve earnings or a combination). Kate also proposed creating replacement improvement and maintenance program reserves so large asset repairs can be smoothed across years rather than producing volatile one-year costs.

10-year CIP and major projects
The council was shown a shift from a five-year CIP horizon to a 10-year plan totaling about $400 million. Major items highlighted for early years include an aquatic and recreation center, HVAC work for an entertainment center, the Fayette Bridge in the parks program, roadway projects including a Glass Railroad expansion listed at roughly $8.7 million next year, and a wastewater treatment-plant expansion estimated at $7.0 million. Kate said the Viewpoint multiuse path is a two-phase project: an initial phase funded by a Transportation Alternatives (TA) grant covers the multiuse path, while the larger $11 million figure shown elsewhere reflects the full roadway build-out (lanes, drainage and other work) beyond the TA-funded path.

Council questions and follow-up requests
Council members praised the outreach effort (staff said their outreach reached about 6,300 people though only 130 completed the formal survey) and raised several follow-up items: one council member urged caution on budgeting $800,000 for a Fane Park bridge given uncertainties in park conditions and recommended keeping flexibility to reallocate that money if needed; another flagged a jump in a Viewpoint project cost and staff clarified the difference between the multiuse path and a full roadway build; a question about a jump in professional-services spending was answered by staff as a $15,000 increase for strategic-plan consulting to be budgeted in the coming year.

What happens next
Staff said they will return at the end of the month with a tentative budget that incorporates the operating budget and year-1 of the 10-year CIP, follow that with two public hearings in different locations and then present a final proposed budget. Staff also introduced the budget team: Irene (deputy finance director), Kelly Campbell (budget and rent manager) and Alex Dickinson (budget and research analyst).