Kingman staff present $344 million FY27 recommended budget; council directs refinements before June adoption

City Manager Tim Walsh told the Kingman City Council at a work session that the recommended fiscal year 2027 budget would total $344,000,000 in expenditures, supported by $254,800,000 in estimated revenues and $89,200,000 in planned use of fund balance and cash reserves. Walsh said the plan prioritizes core services, infrastructure investments and efforts to retain and recruit staff amid a cautious economic outlook.

"The FY26-27 recommended budget reflects a continued commitment to maintaining core city services, investing in critical infrastructure, supporting employee retention and recruitment efforts, and planning responsibly for long-term financial sustainability," Walsh said, summarizing the plan and its drivers.

Tina, the deputy city manager and finance lead, walked council through the revenue mix, noting two unusually large line items driving the citywide totals: a $70,000,000 ‘‘outside participation’’ amount associated with the Kingman Crossing project and a substantial capital program centered on street work including the Flying Fortress Parkway extension. She warned that a one-time $22,000,000 transfer from the general fund to the I-11 East Keenan Connection Project Fund (to support the Flying Fortress Parkway from Airway to Industrial Boulevard) would push reserves below the council's informal 3035% target in FY27 before recovering in later years.

"If we don't budget for it, we can't spend it," Tina said of the outside participation and grant-driven capital lines, explaining that the budget includes conservative assumptions about future large projects and state shared revenues.

Council members pressed staff on key assumptions: a projected 3.7% rise in budgeted revenues over the prior fiscal year, an 11% increase in expenditures largely driven by capital investments and personnel cost changes, and an expectation that building permit activity will recover after a slow start through March. Staff reiterated that the $70 million assumed for the Kingman Crossing is contingent upon the project proceeding and that the city is treating the figure as outside participation rather than locally generated tax receipts.

The council gave staff direction on several points to shape the tentative budget. Members signaled support for advancing a compensation adjustment package that would improve market competitiveness for certain positions while also asking staff to identify approximately $525,000 in capital reductions to cover higher personnel costs. Staff reported they had identified roughly $505,000 in potential adjustments (including moving the Yellow transit route procurement design and deferring some playground equipment) and promised to return a revised tentative budget on June 2 and a final budget for adoption on June 23.

Next steps: staff will incorporate the council's directions on compensation and capital priorities, refine the general fund cash-flow and reserves implications, and present the tentative budget at the June 2 council meeting before returning the final budget for adoption on June 23.