Ten year plan

This graph shows the balance between revenues and expenditures the city of Maricopa is projecting for the next 10 years, including the point where expenditures are expected to be more than revenues if nothing changes.

MARICOPA — The long-term outlook for Maricopa is strong, as long as the city sticks to a plan, council members were told Tuesday.

The 10-year financial plan was presented at the city council work session, discussing city expenditures, revenues, economic outlook, population and funding for the next 10 years. 

The plan is one of the strategic objectives that was adopted in the city’s strategic planning this year, providing a 10-year perspective on the financial aspect of the city’s general fund. The plan gives the chance for the city council to make budgetary decisions or corrections in the upcoming fiscal years, according to the presentation. The plan updates every year based on new knowledge, projecting the next 10 years.

“Any plan really is based on assumptions,” said City Manager Rick Horst. “Because we don’t know what’s going to happen in the upcoming years.”

Horst explained that those assumptions are based on past trends and current information, and the assumptions that are made in the document are very conservative.

“I think (the plan is) almost too conservative, but I would rather it be too conservative than we’d be surprised,” Horst said.

The forecast assumes operating revenue in the local taxes category to increase no more than 3.55% per year. Other general fund revenues is predicted to grow no greater than the CPI 10-year average, which is 1.53%.

“I think our growth economically will pick up in pace but there could be a recession or something that could slow it down,” Horst said.

For expenditures, the salary and wage forecast is predicted to increase annually at no more than 4%.

“The economic outlook is very promising,” Horst said.

The rise of the housing market, low unemployment and commercial development are factors that contribute to the economic development of the city. Other aspects such as high average household income at $80,801 and high education levels play a part in the advantages for the city.

Population is another growth factor that supports the economic outlook for Maricopa. Although Horst emphasized the conservative prediction, the population is expected to grow past 60,000 next year and 85,000 by the year 2029.

If the population grows faster than other municipalities, the city’s shared revenues will increase as well.

Currently, the city funds mostly come from property taxes. However, the sales tax number is growing.

“Increases come from growth — as you know we’ve had the same tax rate for five years,” Horst said.

According to the presentation, based on long-term trends and current projects, the forecast projects growth in property tax at minimal rate of 5%. Horst emphasized that this is not because of the tax rate increase but because of new construction and growth of the city.

Sales tax growth is expected to be at 3.5%, which is due to new businesses and retail developments.

There are no significant gaps between the expenditures and the revenues, Horst said, which means that the city is not over-taxing the citizens and the collected money is spent on services for Maricopa.

In the general fund forecast, Horst explained that in the Fiscal Year 2026-27, the expenditures out-pace the revenues.

“That means we’ve got seven years to start making course corrections to make sure we don’t have that dilemma,” he said.

The corrections could potentially be based on new revenues, less spending or both.

“The purpose of this is to make sure that we’re attentive to it, and we don’t wait until we have a crisis and that we prepare for it accordingly in advance of that pending day,” Horst said.

Horst recognized the financial team, including Angele Ozoemelam and Cassandra Brown, who collaborated with Horst to put the plan together.

“The decisions we make today impact tomorrow,” Horst said.