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The Sedona City Council is moving forward with a plan that it hopes will cover the costs of many traffic mitigation projects over the next decade.

Near the end of a five-hour meeting on Wednesday, Sept. 27, the majority of the council was in favor of directing staff to pursue a halfpercent sales tax increase.

Vice Mayor John Martinez was seeking a 1 percent increase, Councilman John Currivan said he’d consider no more than a quarter-cent increase while Councilman Tom Lamkin wanted to consider more in the range of a threequarter cent bump. The meeting was for discussion only and no official action was taken. Council will be required to hold additional public hearings before a vote is taken. If approved, the tax is expected to be implemented by Thursday, March 1.

For the last 10 months a Fiscal Sustainability Work Group has been meeting once or twice a month to discuss just that — fiscal sustainability. The committee, made up of Ronald Budnick, Kurt Gehlbach, Doris Granatowski, Lou Harper, Charlotte Hosseini, Sedona Fire District Fire Chief Kris Kazian, Holli Ploog and Economic Development Director Molly Spangler, covered several topics including fund balance, bonds and funding sources.

The group unanimously voted to recommend the following to city council: 

  • Increase the city sales tax rate by 1 percent to be dedicated to the funding of transportation-related projects and the cost of additional personnel and project management toaccelerate the completion of those projects. n Set a sunset on the tax increase of 10 years, or less if deemed appropriate. 
  • Continue to fund other non-transportation-related projects with the current funding sources. They also recommended council adopt changes to the current fund balance policy and debt policy. 

City Manager Justin Clifton presented the council a breakdown of the dozen or so traffic mitigation projects that have been discussed. He listed each along with what percentage of each that could be undertaken [50 to 100 percent] yet still be effective. In the end, Clifton presented an estimated budget over the next 10 years of nearly $35 million. 

This cost would be covered by both a tax increase and use of capital reserves. The estimated cost to fully fund all the projects is around $62 million.

“The really big caveat to this is that we understand that this particular arrangement of projects and revenue assumptions is likely to change quite a lot,” Clifton said after the meeting. “In other words, it’s really not a commitment to complete the projects as they’re outlined on the spreadsheet. Rather, it reflects that there are various scenarios that could play out but that in any event we should be able to complete a lot of great projects with a half-cent sales tax.”

An increase to the sales tax rate only requires adoption by council via an ordinance. If this option is pursued, the group recommends that outreach meetings be held with the community to explain the reason for the increase. If a half-cent tax is approved, the rate in the Yavapai County part of Sedona would increase to 9.85 percent while in the Coconino County side [Uptown and the Chapel area] it would be 10.4 percent.

Based on recent figures, a half-percent tax increase would equate to $2.7 million a year with $1.8 million coming from visitors and $900,000 from residents. A 1 percent hike would bring in $5.3 million, $3.5 million of which would come from visitors and $1.8 million from locals. A half-cent increase would equate to about $7.50 in additional spending a month for the average resident.

“My assertion is, whatever we think we’re doing today, won’t hold a year,” Clifton said. “We had an initial idea of building Barbara’s Park and it changed. Each and every one of these will go up or down in future years — unanticipated or anticipated. There will be things not on this list that I can almost guarantee will find its way on to the list. There will also be things we assume we will do that we won’t do. All of the above is true.”

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