The Cottonwood City Council unanimously approved the city’s fiscal year 2025 budget and tentative expenditure limitation during its June 4 meeting.
“I love budget,” Financial Services Director Kirsten Lennon told the council happily. “No one else really does, but I love it.”
The city’s expenditure limit for the coming year has now been set at $140,243,961. Lennon noted that “it’s actually a little bit lower than the proposed budget” due to alterations in carryovers from FY24.
Discussion was limited to a question from Councilwoman Lisa DuVernay regarding the city’s plans to hire an information technology director, a position that Lennon clarified was in the budget and would be advertised in the future.
Revenues
City staff estimate that FY25 revenues will be equal to expenditures at $140,243,961, including:
- $65,088,004 in carryover surplus
- $25,707,075 in sales and use taxes. City sales tax is expected to decline by 1% and bed tax by 3% in FY25.
- $18,413,530 in charges for services, including $11,081,230 in user fees, $1,262,590 in dispatch fees and $665,000 in recreation center fees
- $15,778,880 in intergovernmental revenues, including $2,779,650 from revenue sharing, $3,534,635 in Arizona Department of Transportation grants, $1,974,780 from state sales taxes, $1,323,650 in fuel taxes, $1,349,000 in fire grants and $1,066,480 in motor vehicle taxes
- $7,777,592 in transfers
- $2,022,800 in interest income
Capital Projects
Capital improvement projects for FY25 are budgeted at $44,139,310 and will include:
- $10,943,145 for Main Street pavement rehabilitation and lighting work
- $10,604,285 for wastewater construction and upgrades, including a new lift station, blower and aeration upgrades and line upgrades
- $10,578,430 for water system construction and upgrades, including arsenic removal, new generators, hydrant work, line replacement and a new well
- $1,349,000 for fire department equipment
- $1,197,640 for police building improvements and $364,585 for police equipment
- $1 million for airport runway lighting
Staffing
Total salaries and benefits for city employees will come to $27,256,330. The FY25 budget includes a 3.2% cost of living adjustment for city staff and seven new full-time equivalent positions, Lennon said.
Utilities & Infrastructure
Wastewater operations and administration for FY25 are budgeted at $3,336,635, exclusive of the planned upgrade and construction programs. Water operations and administration are expected to cost $10,729,645.
The library budget has been set at $1,270,030, a 14.9% decrease from FY24, while $62,470 has been allocated for the cemetery and $1,007,916 for the airport. The city’s planned transit budget is $3,602,735, including $738,651 for administration and $2,116,867 for operations. Verde Shuttle costs are expected to account for $747,217 of the total. Sedona makes a $332,000 contribution toward the Verde Shuttle program. Street maintenance, exclusive of planned capital and construction projects, is budgeted at $1,815,555.
A total of $300,000 is reserved for the city’s housing program, a decrease of 59.5%. Fire department costs are estimated to be $6,905,591, a decrease of 8.4% from the FY24 budget.
Recreation
The Parks and Recreation Department will receive $1,256,526, an 8% increase from FY24, including $595,000 for new equipment and $180,000 for Thunder Valley Rally. Parks and building maintenance are expected to cost an additional $1,261,091, or a 12% increase. The budget also allocates $1,515,762 to the Cottonwood Recreation Center, a decrease of 17.3% from FY24, including $271,070 in utilities costs; $176,086 to the youth center, a 10.9% increase; and $186,910 for the community pool.
City Operations
In city operations, council expenses are budgeted at $336,600, a decrease of 34.6% from FY24, but still including $180,000 for outside agency expenses, $55,000 for computer support and $20,000 for Christmas lights.
The individual budgets for the City Clerk’s Office, at $273,595, the Finance Department, at $964,166, and public works, at $324,082, remained stable compared to the previous year. The Engineering Department’s budget declined 16.4% to $441,017. On the flip side, the municipal court’s share rose 15% to $847,599, the IT Department will receive $2,321,060, or 30.3% more than last year, and human resources is up 27% to $712,315.
City administration costs rose 37.6% to $1,010,322 from FY24, and $1,656,895 is budgeted for non-departmental expenditures, an increase of 15.5%.
Community Development received the second-largest proportional increase in the budget at $1,684,152, up 51% from last year.
The communications staff will receive $2,576,039, a 14.7% increase from last year. Eighty-nine percent of the department’s total budget will consist of salaries. The police department’s budget will be $9,021,309, a decrease of 17.3% from FY24 due to reduced equipment purchases.
The city’s bond payments are budgeted at $2,021,905, approximately $1.8 million of which will cover payments on wastewater bonds.
The largest increase went to the legal department, which has an FY25 budget of $778,694 — 63.3% more than in FY24; the city is currently using an outside legal firm.
Cottonwood City Attorney Jenny Winkler resigned on the morning of Tuesday, Jan. 9. As a result of the Cottonwood City Council discussions to discuss Winkler’s resignation that evening, Pierce Coleman PLLC, a Scottsdale-based law firm that worked for the city of Cottonwood as its temporary official law firm, fired the city of Cottonwood as a client, effective immediately on Wednesday, Jan. 10.
In the letter by law firm partners Justin Pierce and Steve Coleman, they wrote to the Cottonwood City Council, “We were disappointed to learn that during the Jan. 9, 2024, City Council work session, two council members made misrepresentations regarding our firm by incorrectly stating that we are a defendant in a pending legal claim,” the firm stated in its letter to the city. “Based on this misperception, they expressed discomfort in continuing to use our firm for general municipal law services. To set the record straight, Pierce Coleman PLLC is not a defendant in any pending legal claim — nor would our firm logically be a defendant in an employment claim by a former employee where our firm represents the employer, which is presumably the ‘claim’ that the councilmembers were referring to. Based on the totality of the discussion, it appears to us that these council members — and perhaps others — are bent on creating a narrative to sully the good name of our firm to satisfy their personal agendas …”
On Feb. 6, the Cottonwood City Council hired the Scottsdale law firm Gust Rosenfeld to be the city’s outside legal counsel. Gust Rosenfeld lawyer John Austin Gaylord has served as acting city attorney.
