What happens when Home Rule Fails
Florence's Home Rule election defeat
Steps for a Special Election
Alternative Expenditure Limitation Options
 Allowed to use an alternative to the state-imposed limitation (3 options)
 Home Rule Option
 Option must be renewed/approved by voters every four years
 Pure Home Rule option - Utilizes the approved annual budget amount as the
limit for the fiscal year
 This option is used by many municipalities
 Capital Projects Accumulation Fund Option
 Allows a municipality to exclude capital projects and the accumulation of funds
for such projects
 Permanent Base Adjustment Option
 Allows a municipality to approve an adjustment to the base expenditure level and
use the new base going forward
Prior Year Election Results
 Town voters have approved all the Home Rule Option alternative questions since the
constitution was amended in 1980
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1982 – FY 1982/83 to FY 1985/86 ---- passed (could not determine margin)
1986 – FY 1986/87 to FY 1989/90 ---- passed 3 to 1
1990 – FY 1990/91 to FY 1994/94 ---- passed 4 to 1
1994 – FY 1994/95 to FY 1997/98 ---- passed 3 to 1
1998 – FY 1998/99 to FY 2001/02 ---- passed 2 to 1
2002 – FY 2002/03 to FY 2005/06 ---- passed 2 to 1
2006 – FY 2006/07 to FY 2009/10 ---- passed 3 to 1
2010 – FY 2010/11 to FY 2013/14 ---- passed 3 to 1
The ballot question for home rule August 26, 2014
 A “YES” vote will extend the Town Council’s ability to set the budget, thereby
determining the alternative expenditure limitation for the Town for the next four
years
 FY 2015-16 through FY 2018-19
 The Town will be required to hold another home rule option alternative
expenditure limitation in four years.
 A “NO” vote will place the Town under the state-imposed expenditure formula and
will result in a reduction in budget and service cuts for at least the next two years
 FY 2015-16 and FY 2016-17
 The Town would be eligible to hold another home rule option alternative
expenditure limitation in 2016 for FY 2017-18 through FY 2020-21
How did we explain what would happen if Home Rule Failed?
ESTIMATED REDUCTION IN EXPENDITURES
State-imposed
Home Rule
Reduction
2015-16
20,056,093
37,885,135
(17,829,042)
2016-17
21,541,148
37,920,400
(16,379,252)
2017-18
22,584,729
38,346,000
(15,761,271)
2018-19
24,093,532
39,008,800
(14,915,268)
 The total estimated reduction in expenditures over four years is $65 million
 Town loses ability to set its budget based on current needs for at least two years
 State-imposed Expenditure Limitation limits expenditures, not revenues
 Town receives revenues, just cannot spend them
 Projects could be completed by issuing debt or other lawful long-term obligations
Home Rule Fails…..
August 26, 2014 Home-Rule Option Election
 Home Rule Option failed
 YES – 622 votes, 48.25%
 NO – 667 votes, 51.75%
 Voter turnout was 36 percent.
 The Town is now subject to the State-Imposed Expenditure Limitation for at
least the next two fiscal years - FY 2015-2016 and FY 2016-2017
 Cannot seek Home-Rule Option until FY 2017-2018.
 Home Rule can only be placed on a ballot that Council Seats are Elected.
 Ballot question moves Home Rule Option to the Mayoral Election
What Changed in 2014
 2014 – FY 2015/16 to FY 2018/19
 Change in state statute moved elections from spring to fall
 New spending philosophy practiced in FY 2013/14 and FY 2014/15
 From May, 2014 to August, 2014 the following occurred:
 Town received voter authorization to purchase Johnson Utilities in May, 2014
 $121,000,000 purchase price
 A deal was not reached and the Town did not purchase
 Padilla Park Developed
 $700,000 cost
 Project Completed in October 2014
 Project included a controversial splash pad
 New Library and Aquatics Center –
 $13,000,000 cost
 Estimated project completion date is June 2015
 Town Council and Council Candidates debated issue on floor
 Covered extensively in the newspaper
 Council discussed adding a fitness center to the project
 $7,000,000
 Town Council did not authorize
Highlights from Letters to the Editor
 “This project is going to drive us to the poor house.”
 “Thank you to the Council who displayed the moxie to question
and vote against expensive undertakings.”
 “Rushing too fast …. This pretty much sums up the problem.”
 “Town is well funded, but residents also know that just having
the money, is not reason enough to spend it carelessly.”
 “Although the Town’s financial path may seem rocky at this
point, its still possible to lead Florence down the path to a bright
future.”
 “Home Rule is the right thing for Florence, but we believe that
in order to have this occur, the Town must demonstrate sound
and sensible financial responsibility.”
Failure of the Election
 August 26, 2014 – Alternative Expenditure Limitation Home Rule
Option Failed
 Town now be subject to the State-Imposed Expenditure Limitation
for at least the next two fiscal years
 2015-2016
 2016-2017
 The Town’s future budgets will be significantly lower than the
current Town budget
 Reduced spending
 Revenues remain intact
Penalties
 The state-imposed expenditure limitation hefty penalties if exceed
Amount exceeded Limit
by
Penalty
Estimated Maximum
Penalty
< 5 percent
excess amount
$852,800
Between 5 and 10
percent
3 times excess
amount up to next
year’s state-shared
income tax
$3,343,300
≥ 10 percent
5 times excess or 1/3
of next year’s stateshared income tax
$1,114,400
State-Imposed Expenditure Limitation Exclusions
 Expenditures for natural or man-made disasters subject to certain
requirements regarding declaration of Governor, Town Council
 possible voter-approval requirement
 Expenditures made with certain revenues, including:
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Bond and other long-term debt proceeds
Debt service
Interest income
Grants and donations
Quasi-external interfund transactions
Voter-approved use of revenue for land, buildings or improvements
HURF revenue in excess of FY 1979/80 ($64,189)
Unspent revenue from above carried forward
State-Imposed Expenditure Limitation Calculation
POPULATION FACTOR COMPUTATION
Prior Fiscal Year
Population
/
1978 Population
=
Population Factor
2015-16
26,370
/
3,175
=
8.3055
2016-17
27,600
/
3,175
=
8.6929
2017-18
29,110
/
3,175
=
9.1685
2018-19
30,800
/
3,175
=
9.7008
Fiscal Year
STATE-IMPOSED EXPENDITURE LIMITATION
Fiscal Year
1979-80
Base Limit
x Population Factor x
Inflation Factor
Projected StateImposed
=
+
Expenditure
Limitation
Estimated
Exclusions
Total Expenditures
=
Under StateImposed Limit
2015-16
714,110 x
8.3055
x
2.8758
=
17,056,487 +
2,999,606 =
20,056,093
2016-17
714,110 x
8.6929
x
2.9245
=
18,154,380 +
3,386,768 =
21,541,148
2017-18
714,110 x
9.1685
x
2.9706
=
19,449,461 +
3,135,268 =
22,584,729
2018-19
714,110 x
9.7008
x
3.0200
=
20,920,864 +
3,172,668 =
24,093,532
Amounts
2015-2016 Budget Scenario
Operating/Recurring
$19,114,000
New Operating/Recurring
$794,300
New Operating/Recurring
$0
Capital/Non-recurring
$7,982,900
Contingency
$2,000,000
Total subject to Limit
$29,891,200
• Operating/recurring = based on FY 2014-2015 budget
• Capital/non-recurring = based on CIP
Impact of the State-Imposed Expenditure
Limitation on the Town Budget
State-Imposed Expenditure Limitation, Budget Impact
Amounts
2015-2016 Reduction
Expenditures subject to Limit
$29,891,200
State-imposed Limit
$17,056,500
Budget reduction
$12,834,700
• Expenditures not subject to limit
• HURF = $3,121,800
• Debt Service = $1,155,200
• Grants
Impact of the State-Imposed Expenditure
Limitation on the Town Budget
State-Imposed Expenditure Limitation Budget Impact
State-Imposed Expenditure Limitation Budget Impact
Amounts
2015-2016 Reduction Scenario
Budget reduction
$12,834,700
Eliminate Capital/non-recurring
($7,982,900)
Eliminate Contingency
($2,000,000)
Remaining reduction needed
(from Operating/recurring)
$2,851,800
Council Work Session
 Work Session with Town Council held to discuss options
 Determine what options Council is willing to consider
 Immediate options allowed under the State Constitution
 Hold election on third Tuesday in May to ask voters to
approve a specific amount above the State-Imposed
Expenditure Limitation
 Issue debt prior to expenditure
 Discuss options to consider in future
 Election asking voters to approve Alternative Expenditure
Limitation Home Rule Option for four years beginning with
FY2017-2018
 Election asking voters to approve a Permanent Base
Adjustment
 Election asking voters to approve revenue used for acquiring
and/or constructing land, buildings or improvements (Capital
Projects Accumulation Fund)
May 19, 2015 Special Election –Ballot Language
“Shall the Town of Florence regain local control and
exceed the state-imposed expenditure limitation for
Fiscal Year 2015-2016 by $15,000,000, to allow the
Town to adopt a budget no greater than the amount that
was adopted for Fiscal Year 2014-2015?”
May 19, 2015 Special Election – Ballot Language
A “YES” vote shall have the effect of continuing
existing services by regaining local control of the
expenditure of existing revenues by Florence residents.
May 19, 2015 Special Election- Ballot Language
A “NO” vote shall have the effect of preventing the
local control of expenditures by Florence residents and
will require expenditures instead to be limited by the
state-imposed expenditure formula based on Fiscal Year
1979-80 expenditures, resulting in cuts in existing Town
services and programs.
Election Process
Thursday,
November 13,
2014
Public Hearing Ad
to Paper - Ad in
Paper November
20 and 27, 2014
and December 4
and 11, 2014
Monday,
Monday,
Monday,
November 17,
December 01,
December 15,
2014
2014
2014
Agenda items for First Public
Second Public
December 1
Hearing on
Hearing on
meeting due
election
election
Hold second
Work Session
with Council on
Plan
Adjourn Regular
meeting to
Special Meeting.
Council Vote – on
Resolution
2/3 Vote Required
Special Election - Steps to Note
• The one-time Election can occur if two-thirds of the members of the
council and majority of qualified electors approve in the fiscal year prior
to the fiscal year in which the excess is to occur
• A council contemplating an election for a one-time override must hold
two public hearings on the proposed action
• Notice of these hearings must be published once a week for at least two
consecutive weeks in a newspaper of general circulation within the city
or town
• Immediately following the second public hearing, the council must
convene in special meeting and vote on the proposed excess
expenditure
• A record of the vote and, if approved, the purposes of the excess
expenditure must be published in a newspaper of general circulation
within the city or town
Election Process Continues
Monday
Thursday
Thursday
Friday
January 5, 2015 January 29, 2015 March 13, 2015 March 20 –April
20, 2015
Call the Election Call due to paper Invitation to
Receive
will appear in
Submit
Arguments in
IGA for Election paper February 5 Arguments
favor or against.
Services (All Mail and 12, 2015.
Appears in
Ballot)
Appear March 19 Town Charges
weekly – once a and 26
$250 retainer for
week 2
April 2 and 9,
translation and
consecutive
2015
printing cost.
weeks
Daily – 4
consecutive days
Special Election - Notes
• Call to election ARS 16-227. This provision
requires content in the published call that
addresses:
•
•
•
•
•
The purpose of the election
The date of holding the election
The last day to register to vote in the election
The proposed boundaries of the district
The date the mail ballots are mailed to qualified electors of
the district
Special Election - Notes
• There is a publicity pamphlet requirement for this
election, and there are two unique provisions for the
pamphlet.
• A.R.S. §41-563.02, subsection B, paragraph 8 calls
for the city or town to prepare and publish the
argument in support of the override. There is a 200
word limit.
• This requirement that the city or town supply the
argument in favor conflicts with A.R.S. §9-500.14
which prohibits the use of city or town resources
in an attempt to influence the outcome of an
election.
• Arguments for or against may be submitted by
others if received by deadline.
Special Election - Notes
• The second requirement that is different from other
publicity pamphlets is one of timing.
• A.R.S. §41-563.02 sets a deadline of 30 days before
the election for the submission of arguments.
• This is a logistical problem for many reasons. The
most important is the relationship of this deadline to
the deadline for distribution of mail ballots.
• The Town will hold ballots until the publicity
pamphlets are mailed.
• The last possible mail date is 10 days before the
election.
Election Process Continues
Friday
March 20 –
April 20, 2015
Receive
Arguments in
favor or against
Thursday
April 16, 2015
Sample Ballots
prepared and
posted
Town Charges
Early ballots are
$250 retainer for ready to be
translation and distributed
printing cost
Monday
April 20, 2015
Deadline for
submission of
arguments
In this order
Publicity
pamphlets
mailed
Voter registration Ballots mailed
closes
Post on line
Election Process Continues
Friday
May 8, 2015
Friday
May 15, 2015
Monday
May 18, 2015
Tuesday
May 18, 2015
Appoint and send Pre-Election
Instructional
Election Day - last
letters to election Campaign Finance meeting with
day to return your
board
Reports Due
County and
mail ballot
election board
County on site
early balloting
Logic and
ends
Accuracy Testing
Publish notice
Logic and
Accuracy Testing
Election Process Continues
Monday
June 2, 2015
Canvas the election
Thursday
June 18, 2015
Tuesday
September 8, 2015
Post-Election
500 threshold termination
Campaign Finance statements due
Reports due
Voter Education and Outreach
• March 2, 2015 - Council Presentation at Regular Meeting
Filmed and Aired on Channel 11 – Affixed to Town Election
Page
• March 5, 2015 – HOA Meeting - Caliente Area
• March 5, 2015 – Rotary Club
• March 9, 2015 – Three sessions for employees
• March 16, 2015 - Chamber of Commerce Meeting
• March 18, 2015 – Lions Club
• March 19, 2015 – Sheriff’s Posse
• March 26, 2015 – Senior Center
• April – School Board – Anthem HOA – Florence Gardens HOA
Election Results
TOWN OF FLORENCE
2015 SPECIAL ELECTION
MAY 19, 2015 SPECIAL ELECTION RESULTS
19 DE MAYO 2015 RESULTADOS DE LAS ELECCIONES ESPECIALES
Proposition 407 / Proposicion 407
Votes
Percentages
Yes/Si:
1439
77.87
No:
409
22.13
Final Steps
• Send results to Auditor General
• Adopt a budget
• Plan for next year
• Special Election in May 2016
• Regular Election for Home Rule in August 2015
Questions?