Expenditure Limitation/Home Rule Option

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Expenditure Limitation/Home Rule Option

• Special Elections

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Expenditure Limit

• All cities and towns in Arizona are subject to
  some type of expenditure limitation.
• 79 cities and towns have adopted Alternative
  Expenditure Limitations
• 55 - Home Rule Option
• 24 - Permanent Base Adjustment
• Four year election cycle
• 30 in 2016
• 24 in 2018
• 1 in 2019 City of Phoenix

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Why Expenditure Limitation

• 1970s property taxes were increasing at a greater
  rate than were personal incomes.
• In order to keep balance and ensure that local
  government did not raise property tax wildly they
  adopted rules known as Expenditure Limitation.
• Section 20 and 21 added to Article IX of the
  Arizona Constitution
• A.R.S 41-1279.07
• Home Rule is based on FY 1979-1980 expenditures
  revised annually
• Population changes
• Inflation

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Home Rule Approvals

• Approvals Required
• City or Town Council
• Auditor General (analysis of proposal)
• Voters Must be a candidate election
• Once Approved
• Begins the following fiscal year
• Effective for four fiscal years

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Florence Example - If Not Approved

• 2014 Election failed
• 2015 Special Election (3rd Tuesday in May)
  One-time Override.
• 2016 Special Election (3rd Tuesday in May)
  One-time Override.
• 2016 Primary Election Home Rule Option
• 2 year waiting period before re- proposal

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Follow the Dots

• Leagues Guide for Alternative Expenditure
  Limitation
• Election calendars
• Reports on requirements
• Sample reporting forms
• Requirements for adoption
• Leagues Municipal Budget and Financial Manual
• Auditor Generals Webinars
• https//www.azauditor.gov/reports-publications/cit
  ies-and-towns/webinars

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Team Effort

• Clerk noticing public hearing, agenda, election
  documents, IGA with county, publicity pamphlet,
  etc.
• Finance Director all financial documents,
  Auditor General Liaison, etc.
• Public Information Officer Educational Materials
  
• Attorney legal review
• Manager approval authority and the face of
  education session

.
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Partners

• County (IGA for election services and Voter
  Registration)
• State (Auditor General review required)
• Printer (county does not print town publicity
  pamphlet)
• Translation (Spanish translation required)

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Steps to Election

• Chronological Order
• No date included always refer to League
  Materials
• Receive state imposed expenditure limitation
• IGA with County
• Agreement with printing company
• Publish Notice of Public Hearings
• A.R.S 39-204
• Once a week for two consecutive weeks prior to
  public hearing
• Hold two public hearings
• Council Adjourn to Special Meeting to Adopt
• 2/3 vote of Council required

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Steps Continued

• Publish record of vote A.R.S 41-563.01
• Amount of Expenditure Limit
• Purpose for the Excess
• Publish notice that you are accepting arguments
• Include amount charged
• 200 words
• Submit to Auditor General
• Summary and detailed analysis
• Latest is 60 days prior to election the earlier
  the better
• Call of Election
• 100 days prior to election
• Not required but notices the public
• Publish in newspaper 2 consecutive weeks (weekly)
  4 times (daily)

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Steps Continued

• Receive review from Auditor General
• 15 days after submitted
• Receive arguments for and against
• Not less than 90 days A.R.S. 19-141 (B)
• Education session with public
• City or Town is not allowed to expend any funds
  to influence the outcome of the election. A.R.S.
  9-500.14
• Prepare publicity pamphlet
• Send publicity pamphlet to AG for review
• Send public pamphlet to printing company

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Voting Methods

• Make early ballots available
• 33 days before election
• Cannot distribute more than 27 days before
  election
• Mail publicity pamphlets
• Prior to early ballots being disturbed, but not
  less than 10 days prior to election A.R.S.
  19-141 (A)
• Distribute early ballots
• Election
• Canvas Votes
• Inform Auditor Generals Office and Economic
  Estimates Commission A.R.S. 41-563-.03(F).

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State Imposed Expenditure Limit
Fiscal Year Prior Fiscal Year Population / 1978 Population Population Factor
2017-2018 27,700 / 3,175 8.7244

Fiscal Year 1979-80 Base Limit x Population Factor x Inflation Factor Projected State-Imposed Expenditure Limitation Estimated Exclusions Total Expenditures Under State-Imposed Limit
2017-2018 714,110 x 8.7244 x 2.9594 18,437,598 2,999,606 21,437,204

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The Math

Purpose 2017-18 Source 2017-18
Public Safety 9,433,948 Federal 500,000
Parks and Recreation 3,577,854 State 8,755,000
Library 403,507 Local 25,587,000
Street Maintenance and Construction 5,552,370 Total Revenues 34,842,000
Water Utility 4,896,759
Sewer Utility 4,045,852 Exclusions 2,999,606
Sanitation 823,024
General Government 6,108,686 Budget 37,691,104
Total Expenditures 34,842,000 State Imposed 21,437,204
   
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Exclusions

• Interest Revenue
• Grant Revenue
• Highway User Revenue
• Highway User Fund Tax
• HURF 1979/80 expenditure debt serve
• Debt Service

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Life Lessons Learned

• Home Rule/Expenditure Limitation is special
• Do not assume anyone understands the rules for
  why Home Rule exists or what it is
• Education session are a great way to communicate
  with citizens
• If your election ever fails
• Call the League
• Call Florence
• Dont panic learn about Special One-Time
  Election
• Dont call it an Override
• Override equal tax increases to citizens (school
  districts)

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Importance of the Clerk

• Joint project among departments
• Clerk in a leadership role
• Get out and be part of a speakers bureau
• Learn all the facts about the budget
• Engage in the community
• Leadership support
• Helps promote the role of the Clerk!

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Questions?
Lisa Garcia Florence Deputy Town Manager/Town
Clerk Florence, AZ 85132 Lisa.Garcia_at_florenceaz.go
v (520) 868-75522