The Avondale City Council approved a resolution on Sept. 20 proposing to ask voters to decide on a $10,408,000 permanent adjustment to the city’s base expenditure limitation. Voters will consider this question at the Aug. 2 election.
The state of Arizona imposes a limit on how much cities can spend each year based on how much they spent in 1980. This state-imposed limitation is adjusted each year for inflation and population growth.
However, the current expenditure limit does not consider new revenue sources approved by voters since 1980 for new or enhanced services. City services have changed a lot since it was a small town of 8,168 residents with one fire station and 19 police officers.
Today, Avondale provides many neighborhood and family services, additional parks and recreation opportunities, and has five fire stations and over 160 police positions. These additional services cannot be provided with Avondale’s state-imposed expenditure limitation, which is $59.7 million for FY 2022.
The state does allow cities to set alternative expenditure limitations, with the approval of local voters. The state constitution provides three options for cities and towns to exceed or modify the state-imposed expenditure limitation: home rule, permanent base adjustment and one-time override.
Since 1981, Avondale voters have adopted an alternate expenditure limitation, also known as the Home Rule option, and voters approved it at the 2020 election. The Home Rule option expires at the end of 2025.
Because voters have approved the expenditure limitation for the past 40 years, staff recommends referring a new alternate expenditure limitation, the permanent base adjustment, to the voters on Aug. 2.
If voters approve a new alternate expenditure limitation, Avondale will no longer present the Home Rule option to voters every four years. The city is proposing adjusting its base expenditure limitation by $10,408,000 to provide sufficient capacity within the expenditure limit as the city grows and available resources increase.
“Shifting from Home Rule to a permanent base adjustment does not increase taxes,” explained Lindsey Duncan, Avondale deputy city manager.
“It means residents will no longer be required to vote every four years on Avondale’s base expenditure limitation. Instead, the expenditure authority limit will increase, allowing council to set the annual budget within that amount.”
The city will still need to adopt a balanced budget annually, with expenditures equal to or less than available resources.
If voters do not approve a new alternate expenditure limitation in 2022, the city will be subject to the Home Rule alternative expenditure limitation through fiscal year 2025.