Plan to fund new fire station presented at June 10 City Council meeting

FY2025–26 General Fund Budget focuses on fiscal resilience

In a comprehensive budget presentation during the May City Council meeting, City Manager Paul Jepson and various department heads outlined the proposed FY25–26 General Fund budget for the City of Globe. The discussion focused on revenue projections, contingency funds, capital improvement projects, departmental priorities, and a long-range funding plan for a new fire station.

The city anticipates total general fund revenues of $18 million, driven largely by city sales tax collections. Sales tax revenues are conservatively projected to grow by 2.5% to $9.4 million. The proposed budget includes a 2.5% merit pay increase for City employees as well as preventive health screenings for employees.

With regard to CIP funding requests, Jepson provided a list of those requests to Council members. The list totals about $3.5 million, of which $2 million are in the “A” category, “highly needed” projects. Jepson said funding for these projects is “very limited.”

Tentative budget adoption is scheduled for June 10, and final adoption is set for July 8.

Departmental highlights

Prior to tonight’s meeting, during the council’s initial workgroup meeting, staff across city departments presented their biggest challenges. These included:

• The Police Department requested five new 4-wheel-drive F-150 patrol vehicles and two non-sworn support staff positions (scout positions). 
• The Fire Department emphasized the urgent need for a new fire station and a ladder truck. 
• Public Works reported that nearly half of its fleet requires replacement and has requested additional trucks and training resources, as well as multi-year plans for vehicles, sidewalks, and asphalt.
• The Community Development and Economic Development departments stressed the need for expanded staffing, including a marketing and communications role. They also requested a vehicle for use during inspections.
• The Library raised longstanding concerns about the need for more interior space and program storage.
• The Administrative department highlighted the need for succession planning, the RBO initiative (which builds on the current employee survey), and rebuilding the finance department.

Based on the proposed budget, the city plans to outright purchase seven vehicles this year using fund balance resources: five police vehicles and two F-350 dump trucks for Public Works, which will support street and utility operations. The budget provides funding for a new sweeper, but the City is waiting for delivery of a jetter truck, paid for out of last year’s budget.

The proposed budget includes limited new staffing: two police aid positions, one economic development role focusing on social media and marketing, and a part-time administrative support position for the City Clerk’s office. Additionally, the city is continuing efforts to convert key contracted roles (such as the prosecutor, victim advocate, and zoning administrator) to full-time staff positions.

Contingency funds to be established

A major priority in this year’s budget is the establishment of a $3 million Council contingency reserve fund, reflecting council directives for greater fiscal resilience. These funds will be used for major emergencies, failures, or economic crises. 

The City will adopt a policy to guide how the city sets aside and maintains these financial reserves. The policy outlines four key reasons the city might draw from reserves: significant economic downturns, consequences of outside agency actions (such as loss of shared revenues), emergencies including natural disasters or pandemics, and unforeseen opportunities that provide long-term benefits.

Jepson said this policy would give the city a stronger foundation and align its fiscal management with professional standards. Council will discuss this policy further at its June 10 meeting.

Additionally, a new $150,000 capital contingency fund will be available for smaller, unanticipated expenses. Both funds will require council approval for disbursement.

Plans for a new fire station and ladder truck

Jepson introduced a strategic plan to fund a new fire station through bonding or private direct lending. To demonstrate fiscal readiness to lenders, the City must demonstrate its ability to set aside $1.2 million for repayment. The proposed budget includes $300,000 in ongoing general fund revenue allocated toward the project. 

In addition, the city could repurpose the existing 0.3% public safety sales tax, which was originally dedicated to PSPRS pension liability. That goal is now 73% funded, and when it reaches 80%, the money coming from the public safety sales tax could be redirected to the fire station. This means the $900,000 annually coming from the sales tax could go toward the fire station. Combined with the $300,000, these tax revenues could potentially cover the full $1.2 million annual amount that would be required to repay a 20-year bond.

“This is our best chance to, within a year, go out in the market and do the things we need to do to qualify for bonding or for private money to do this.” Paul Jepson

Jepson pointed out that nearly three-quarters of that sales tax is paid by visitors and travelers to Globe, not residents, so funding the fire station in this way would save Globe residents from most of the cost.

The city is also building a plan for funding of $2.4 million to purchase a new ladder truck for the fire department. The City has already put down a $25,000 placeholder to reserve a production spot while the Mayor and staff pursue grants and private support.

Globe receives “excellent” score on Building Code Effectiveness Grading Schedule

Community Development Director Tony Manfredi presented the results of the city’s first-ever Building Code Effectiveness Grading Schedule (BCEGS) audit, conducted by the Insurance Services Office (ISO). Globe received a score of 4—an excellent rating that reflects the city’s commitment to modern codes and strong code enforcement.

The audit assessed the city’s building codes, commitment to code enforcement, permitting and inspection processes, policies, zoning and municipal codes, staff training, staffing, professional certifications, work experience, and disaster preparedness. 

The score of 4 qualifies the city for lower insurance premiums, discounted flood insurance, and access to grants that were previously unavailable, as well as increased disaster relief if it is ever needed. Achieving that score also means Globe residents will enjoy improved property values, better resilience to disasters, increased economic development, and credibility for the city.

“That 4 is very important for us, and I’m very proud of that for our city. We should all be proud of that number.” Tony Manfredi 

Scores can range from 1 to 10, with lower scores indicating better performance. Anything under 6 is considered disaster-resistant.

Manfredi highlighted how this score will bring vitality to Globe through safer buildings, despite their age. He pointed out how Phoenix at one time faced many of the same problems that Globe has now, and has managed to thrive despite those challenges.

Manfredi praised the city’s leadership and staffing improvements, noting that professional certifications and support from the top down were instrumental in achieving the high rating.

City passes FY2022–23 financial audit with flying colors

Scott Graff of Colby & Powell presented the audit report for the fiscal year ending June 30, 2023. The city received a clean opinion, confirming that its financial statements are reliable. The report included a management discussion and analysis, comparisons to prior years, and insights into budget performance, capital assets, and long-term liabilities.

The audit also included a clean single audit of federal expenditures, which totaled $1.8 million during the year, primarily tied to sewer improvement projects.

This report represents progress in the city’s ongoing efforts to catch up on delayed audits. While the FY23 report was late, Graff emphasized that the finance department has made meaningful improvements, with two more audit cycles needed to be fully current.

A major accomplishment noted during the presentation was the resolution of a prior-year audit finding. In FY22, the city had required a large number of journal entries to meet compliance standards, triggering a reportable issue. Graff confirmed that those issues have now been resolved and no longer appear as findings in the FY23 report.

Several management recommendations were made to help strengthen the city’s financial practices going forward:

1. Late Audit Filing: The audit was not submitted within the nine-month window required by state law. While this remains a concern, it’s acknowledged as part of the catch-up process.
2. Departmental Budget Overruns: Multiple departments, including police, fire, economic development, and the pool, exceeded their allocated budgets. While overall general fund spending remained $4 million under the total budget, the city is advised to make budget transfers more proactively to avoid departmental overages. Council and Jepson discussed the importance of creating clearer internal processes and possibly adding departmental “buffers” to prevent similar issues in the future.
3. Duplicate Bank Transactions: A small number of uncleared and duplicated transactions were identified. These were corrected during the audit, and it was recommended that the finance department review uncleared items over 30 days old as part of its monthly procedures.
4. Capital Asset Reclassification: Some items were misclassified and had to be reallocated during the audit, a common issue during year-end financial closures. Graff recommended improving internal controls over asset accounting.
5. Capitalization Policy for Leases and Software: The city currently lacks a written policy specifying thresholds for capitalizing lease assets and subscription-based software. Graff urged the city to implement formal guidelines, in line with evolving accounting standards, to reduce administrative burden and increase accuracy.
6. Personnel Policy Clarity: The city’s policy on sick leave buyback upon retirement was flagged as vague. Graff recommended defining what constitutes “retirement” to avoid potential disputes and to align with future accounting standards around compensated absences.

Graff emphasized that none of the issues rose to the level of a “material weakness” and therefore are not mentioned in the audit report. 

The audit shows a positive net position (assets minus liabilities) increase of nearly $2 million, indicating fiscal improvement. Jepson pointed out that the City is already preparing for the 2024 audit and said he’s confident ongoing improvements in the finance department will help keep the city on track.

Capt. Lyle Wyatt and Jose Orozco recognized for years of service

Council recognized two City employees for their service: 

• Capt. Lyle Wyatt of the Globe Fire Department was honored for ten years of dedicated service. Wyatt was one of the first engineers promoted when the department reinstated the engineer program, and he currently leads A-shift. Chief Robinson praised his leadership, continued pursuit of education, and commitment to both the department and the community.
• Jose Orozco was recognized for five years of service with the City of Globe in the water department. Vince Mariscal highlighted Orozco’s versatility and consistent contributions across a variety of city projects, including installing drinking fountains and safety handrails at the pool and throughout the city, and building ADA-accessible gates on Round Mountain.

Motions approved

Council also approved motions for the following:

• Accounts payable in the amount of $255,984.80
• Approving a monument sign for the Washington Federal Bank located at 996 N. Broad Street. The sign will be located at the corner of Blake and Broad, and will be set back from Broad. Council discussed the design of the ingress and egress at the site, which Manfredi said is intended meet the needs of emergency vehicle access.
• Approving a Preferred Provider agreement with SimonMed to provide preventive health screenings, including MRIs, for employees, qualified dependents, and Council members. Jepson explained that these services are not covered by insurance because they are not tied to a specific doctor’s referral, but they will be funded through wellness rebate revenues already retained by the city.
• Approving a 10-year contract for solid waste collection with Waste Connections of Arizona for an amount of $25.25 per month per customer. Jepson explained that Waste Connections has been serving the city since 2010, and the extended term will enable the company to purchase two new cabover trucks able to handle Globe’s steep and narrow streets. Jepson said there will be no increase to residential rates for at least five years.
• Council also moved forward the City’s General Fund Contingency Reserve Policy for FY2025, discussed earlier in the meeting during the budget presentation. The policy will come back at the June 10 meeting for approval.

Members of the Globe City Council: Mayor Al Gameros, Vice Mayor Mike Stapleton (District 4), and Council members Freddy Rios (District 1), Mike Pastor (District 2), Jesse Leetham (District 3), Mariano Gonzalez (District 5), and Fernando Shipley (District 6). All members were in attendance at this meeting except Councilmen Leetham and Gonzalez.

To view this meeting online, visit https://www.youtube.com/live/40TFeGkBSok.

To view documents related to this meeting, click here. 

Full minutes can be found by going to the City Hall website.

The Globe City Council meets every second and fourth Tuesday of the month at 6:00 p.m. at City Hall. 

 

To speak to agenda items before or during the meeting, you can call or text (928) 200-0154 or send an email to council@globeaz.gov.