The Scottsdale City Council approved a $1.5-billion budget for next year that includes millions in federal pandemic-relief funds but is otherwise identical to the tentative budget it adopted in May.
The $1.54-billion budget is $30 million to $40 million less than a budget proposed by staff in April as the result of cuts made in response to the economic impact of the pandemic.
In the tentative budget, the city reduced spending from the general fund – which pays for most city services – from $296.1 to $277.7 million, including a 10 percent cut for community services.
Police and fire – the two largest chunks of the general fund budget – each saw reductions of 5 percent and 8.5 percent, respectively, from the April proposal, though both departments have bigger budgets over the fiscal year ending June 30.
Some of those public safety cuts will likely be offset by the $29.6 million in federal virus-relief funding the city received through the state.
General fund spending was reduced by about $12 million to $265 million, but that was replaced by $12 million of the $29.6 million in relief funds.
Technically, that $29.6 million could only be used on existing or forecasted payroll expenses related to the response to COVID-19 from March 3.
Budget Director Judy Doyle said that $17.2 million of the funds was applied to the 2019-20 budget with the remaining $12.4 million has been applied to the budget for 2020-21.
As a result of the federal funds, the city has more flexibility to expand other programs to offset coronavirus-related costs and aid residents and businesses affected by the pandemic.
Essentially, by using the federal money to replace general fund dollars that had been allocated to the police and fire department budgets, the city freed up general fund resources for other uses.
The city has not yet finalized how it will use those freed up dollars, but staff has presented options to City Council.
Doyle said staff would bring a final proposal to the Council for approval on July 1.
Of the $29 million available, up to $14 million could be used for the community, including $6 million for business assistance and $2.5 million to aid vulnerable citizens and $950,000 for utility payment assistance for residents.
It is still unclear how the city will disperse the $6 million earmarked for business assistance.
City Manager Jim Thompson said the city has to be careful not to violate the Arizona Gift Clause or the city’s own anti-subsidy provision that was added to the city charter in 2010.
Scottsdale Human Services Director Greg Bestgen said much of the $2.5 million being allocated to his department could be used to increase social services for the elderly and the city’s homeless population, which has more than doubled in recent years, according to the annual Point in Time count.
Bestgen said the count identified 50 homeless individuals 4 years ago but that number jumped to 102 this year. The count reflects only the number of street people found during a particular period of time on one day.
The city is considering partnering with a medical triage group in Phoenix to provide healthcare to homeless individuals.
Bestgen said he is also working on a Scottsdale Works program modeled after Glendale Works.
The program would use city funds to provide hourly minimum wage work for five to 10 people by having them work with the city’s Parks and Recreation and Human Services departments.
Bestgen said money could also be used to provide dental assistance for seniors, increase meals provided at senior centers and expand home meal deliveries in partnership with local nonprofits.
Staff also proposed using $1.5 million to benefit arts and culture, $2.9 million for safety upgrades to public facilities and $200,000 for technology upgrades.
The remaining $12 million in federal relief funds would offset operational costs connected to COVID-19, including retrofitting city buildings with safety upgrades like air filtration systems.
Some money would also be used to reimburse public safety costs tied to the pandemic, purchase cleaning and protective equipment and prepare for any emergency response if needed.
The city would leave around $3.4 million of the surplus unallocated to be used in the future at Council’s discretion, City Manager Jim Thompson said.
Council was largely supportive of the proposal brought forward by city staff, though some members asked for additional information before the July 1 vote.
Councilwoman Suzanne Klapp – who asked that the allocation for vulnerable populations be increased to $3 million – said she wanted specifics on the needs of various partner nonprofits that provide meal delivery services to at-risk populations.
Councilwoman Kathy Littlefield also asked Bestgen to come back with a plan for additional services in the event the pandemic outlasts the federal assistance funds.
“We can’t feed people for three months and then say ‘we’re done,’” Littlefield said.