The Holbrook City Council adopted it’s $31.9 million tentative budget for fiscal year 2026-27, setting the city’s overall spending limit while leaving several major decisions open before final adoption next month. City Manager Randy Sullivan explained that the vote locks in the total amount the city may spend but does not prevent the council from moving money between line items before the final budget is adopted. The final budget and property tax levy are scheduled to return to the council July 8.
The largest point of discussion was a $1 million item tied to a possible city pool project. The budget places the money in the Cemetery, Parks and Recreation budget under contract services, with a note describing the amount as “Pool design 10% of $10 million.”
Council members made clear the vote does not mean the city has committed to spending $1 million on the pool this year. Vice Mayor Mike Nilsson said the amount would allow the city to go to an architect, determine the scope of the project and get a clearer cost estimate before making a larger decision. Councilmember Robert Black had concerns about setting aside that much money for the pool when Holbrook has other needs.
Councilman Roxanne Pergesen also had concerns about the pool discussion and asked for a separate work session before the final budget vote. She said that with Holbrook’s tight budget, extra money should go toward projects that can generate additional revenue or leverage grants, especially when the city has match requirements for grant-funded projects.
Mayor Kathleen Smith said the money could still be moved before the final budget is adopted or amended later in the year. She said the council could leave the money in place, move it to contingency or redirect it toward grant matches.
“I just want everybody to be comfortable to know that even in two weeks if we still pass it on that July 8 budget, that doesn’t mean we’re beholden to spend $1 million for the pool this year,” Smith said. “That’s not what we’re saying at all. We’re just putting it in the budget in case circumstances change and things come up.”
The city’s general fund budget is listed at $9.13 million for both revenues and expenses. Major general fund revenue sources include $3.9 million from the city’s 2% sales tax, $1.95 million from the city’s 1% sales tax, $1.02 million in urban revenue sharing, $729,219 in state sales tax and $475,115 in vehicle license tax. Property tax revenue is budgeted at $120,157.
On the expense side, the police department remains one of the city’s largest general fund departments, with a proposed budget of $3.15 million. Cemetery, Parks and Recreation increased to $1.69 million, largely because of the $1 million pool design item. The golf course is budgeted at $794,281, administration at $1.35 million, the library at $349,569, animal control at $240,912, fire at $268,910 and the judicial court at $257,360.
The budget also creates a new Community Development section, budgeted at $494,393. That includes $170,100 in regular wages, $150,000 for professional and consulting services and $55,000 for code enforcement abatement related to abandoned buildings.
The city’s all-funds budget is much larger than the general fund because it includes grants, special revenue funds, utilities and capital funds. The grants fund alone is budgeted at $16.43 million, making it one of the largest pieces of the overall spending plan. Other major funds include $1.35 million in Highway User Revenue Fund spending, $1.07 million in the Water Preservation Fund and $2.71 million across sanitation, wastewater and water enterprise funds.
The council also approved a new fee for planned unit development applications, often referred to as PUD applications. Sullivan said the fee is meant to cover staff time required to review larger and more complex development proposals. He noted that Holbrook has not historically received many PUD applications, but that could change if the city grows and sees more large development proposals. He said those applications can require more research from staff than smaller or more routine requests.
“When a [PUD] developer comes in it’s for bigger projects, which means they have the money to spend,” Sullivan said. “I do get the concerns with some of the council of nickel-and-diming our citizens. However, since we don’t have this fee in years past, we really haven’t had a whole lot of planned urban development applications.”
A comparison included in the council packet found discretionary land-use review fees in nearby jurisdictions generally range from about $150 to $600, depending on the type and complexity of the application. The ordinance sets it at $250. It passed with a 4-1 decision with Vice Mayor Nilsson voting nay.
In other business, the council approved a liquor license request for Circle K, which will be located at 1001 Navajo Blvd., in the old Tate’s auto complex and is set to begin construction soon.
The council also held the first reading of an ordinance which would transfer a small corner of the abandoned right-of-way to Calvary Chapel of Holbrook. A tiny piece of land in the corner of the church’s parking lot was owned by ADOT but was relinquished to the City of Holbrook to facilitate the transfer to the church so they can resurface their parking lot without interfering with government land. Staff said a similar process was used when the church previously expanded. No vote was taken because the ordinance was only on for a first reading, though council members discussed bringing the item back during a special meeting so the church would not have to wait longer.
The council also approved three memorandums of understanding with local organizations that provide community services and support tourism, seniors and local business development. The agreements include $54,000 per year for the Navajo County Historical Society, $36,000 per year for the Holbrook Senior Citizens Center and $28,800 for the Holbrook Chamber of Commerce.
The council also appointed Jackie Dwyer as city clerk effective July 1, following the retirement of Lisa Hunt. During the meeting, the council also approved past meeting minutes.
