City Manager Annette Spicher and finance staff told the Sedona City Council that the Arizona constitutional expenditure limit (often called the state expenditure limit) would sharply constrain local spending if Sedona did not retain home rule.

Whitehorn and Spicher explained the mechanics: the statutory limit is calculated from a 1980 base, local population growth and an inflation factor. Because Sedona was incorporated after 1980, the state applies county proportions to determine the 1980 base; staff said the resulting limit this cycle was about $15.4 million (state figure reported as $15,411,542). By contrast, the city’s budgeted base that would be subject to the limit exceeds $83 million, meaning the limit would cover only a small fraction of current expenditures.

Why it matters: Losing home rule would, staff said, require the city to make immediate, deep reductions to services. Whitehorn presented a slide showing that only a portion of police operations would be covered under the limit and that many essential services—police, streets, wastewater, facility operations and debt service—would be reduced even if debt service were excluded.

Councilors also discussed process options. Staff said the city must either run another home‑rule election or seek a permanent base adjustment (PBA) at the ballot to establish a higher local spending cap. Officials noted that PBAs and home-rule elections have different trade-offs and historic outcomes in Sedona; staff also flagged that special elections carry direct costs (the clerk estimated a ballpark $25,000–$30,000 depending on county consolidation and timing).

State legislation and timing: Councilors raised a separate legislative risk — a House bill identified in the meeting as HB2221 concerning restrictions on law-enforcement funding — and asked whether a future state law could complicate local budgeting decisions. Staff said constitutional requirements and statutory changes could interact and that legal advice or litigation could be required if conflicts arose.

Next steps: Staff told the council it would provide clearer cost estimates for any special election and return with materials for the councils future decision whether to place home rule or PBA measures on a ballot.