Cave Creek adopts tentative FY2027 budget with major placeholders for water and open space

The Cave Creek Town Council adopted its tentative budget for fiscal year 2027 after a detailed presentation from the town’s finance director and questions from council members about capital, water and parking priorities.

Finance director Sherry said the tentative expenditure budget is up about $4.9 million from FY26, driven largely by capital improvements. She listed large placeholders in the CIP: “about $12 million as a placeholder for what we may end up coming up with related to new water resources during fiscal year 27,” “$16 million for open space related to the acquisition of the 4,000 acres of open space,” and roughly $6.22 million for the town hall remodel and expansion project. Operating highlights included roughly $5 million for fire operations, $3.5 million for streets maintenance, $1.5 million for law enforcement and $10.77 million for utility operations; contingency amounts total about $4.2 million (about $1.2 million general contingency and $3 million for potential grants).

“Adoption of the tentative budget is setting a cap for our fiscal year 27 budget,” Sherry told the council, adding that the final budget cannot exceed that total and that adjustments after adoption can only reduce the total or reallocate existing amounts. She also explained debt and reserve assumptions, noting recent bond proceeds and potential early payoffs of certain WIFA loans could alter debt service costs.

Councilors pressed staff on several points during the debate: whether $83,000 in overruns for the Water Ranch office reflected a true project overrun or routine carryover; the basis for a $100,000 placeholder tied to a potential shared‑parking agreement at Desert Awareness Park and Stage Coach Village; and the timing and public outreach planned before any agreement returns to council. Staff explained the $83,000 related to unanticipated electrical service work and said they would return with fuller justification. On the shared‑parking item, staff stressed that the budget line is a carryover placeholder and that any formal shared‑parking agreement would be brought back to council for public meeting and approval.

Sherry also described utility fund structural issues and possible rate pressure: for Cave Creek Water she said current assumptions would require cumulative rate increases on the order of 30% to cover a projected post‑debt deficit, and that transfers from the general fund and new debt financing are part of the proposed approach to balance water CIP needs over the coming five years.

A motion to adopt the tentative budget as presented was made and seconded. Council recorded the motion as carried; councilors later confirmed full support in the transcript record. By statute the town will proceed to the required hearings and the scheduled final adoption process.

What happens next: adoption of the tentative budget sets the FY27 spending cap and preserves staff flexibility to prepare a final proposed budget within that cap. Staff said the final budget adoption is scheduled to follow required public notices and hearings.