Pete Furman

Sedona receives clean audit – Sedona Red Rock News

City has $29K in assets per resident

The city of Sedona received a clean audit during the March 10 Sedona City Council meeting, at which council heard a presentation about the Annual Comprehensive Financial Report for Fiscal Year 2024–25.

The presentation was delivered by Deputy City Manager Barbara Whitehorn; Jean Marie Dietrich, signing director at Clifton Larson Allen LLP; and Renée Stanley, the city’s accounting manager.

“I look at it as large reserves, annual surpluses, a clean audit, low finan­cial risk, all these things you found in audit,” Councilman Pete Furman said. “It’s amazing fiscal performance that I think reflects the culture of folks that work here in City Hall, stemming from the city manager on down through the Finance Department and going into every department this people take these fiscal performance of our city seriously, and it’s a very it’s a pleasure to sit here on City Council and accept reports like this.”

In performing the audit, Dietrich said her firm conducts a risk-based approach, obtaining management’s financials, details and supporting schedules, then examining and verifying management’s assertions on those sched­ules and financials before providing an opinion.

“I do not opine on the health of an organization,” she said.

The city’s total net posi­tion is $284,167,327, calculated as the difference between everything Sedona owns, such as infrastructure and cash, minus everything it owes such as debt. At the end of Fiscal Year 2025 the city’s total net position increased $18.7 million and in Fiscal Year 2024 it increased $27.3 million according to the audit.

“The assets and deferred outflows of resources of the city exceeded its liabili­ties and deferred inflows of resources at the close of the fiscal years 2025 and 2024 by $284.2 million and $261.0 million — net position — respectively,” the audit reads. “Of these amounts, $86.5 million and $59.5 million — unrestricted net position — respectively, may be used to meet the government’s ongoing obligations to citizens and creditors.”

The city approved its $103,291,695 budget on June 24, 2025.

“I tried to explore a new math analysis of the ACFR this year, and I stumbled across looking at net posi­tion per population, and I see that we have $29,000 in assets per resident,” Furman said. “Which I believe is just an extraordinarily high number for a small city like Sedona, and so everybody in this town should just be absolutely happy and proud of the financial position of our city.”

Additionally, “at the close of fiscal year 2025, unas­signed fund balance for the General Fund was $21.8 million, or 68.6% of actual expenditures,” the audit reads. “City policy requires a minimum unassigned balance of 30%.”

In the next three to five years, Dietrich said the city should pay attention to cyber security and grant manage­ment as two financial risks.

“The one thing is, with the city of Sedona, [you] are not highly reliant on federal grants,” Dietrich said. “In fact, we’re completing the second single audit that you’ve had. From a finan­cial reporting risk. It’s your controls over your infor­mation systems that are at highest risk. And warned that employee turnover in grants management could potentially put the city at risk because newer employees could be less familiar with reporting and documenta­tion requirements.”

One such risk is that Yavapai County announced on Feb. 2 that it had fallen for a business email compromise scam and nearly lost $868,982.14, but it recovered nearly 98% of the funds.

Whitehorn said the city has not currently purchased software for grants manage­ment but she sees it as a need.

Vice Mayor Brian Fultz asked how artificial intel­ligence could “be a tool to address some of these risks going forward?”

“AI is assisting with grants management in that it is putting workflows in place that is increasing segregation of duties, AI is assisting with reading and interpreting documents,” Dietrich said. “We always have to read what AI reads, because we trust but verify.”

Furman asked whether the audit identified any financial vulnerability related to the city’s reliance on sales tax revenues. Dietrich said that falls outside the scope of an audit, which focuses on whether financial sched­ules contain any material misstatements.

“We have to really consider that our revenues that drive most of our collec­tions are sales and bed tax, which can be more volatile in challenging economic times,” Whitehorn said. “Because of that, we maintain policy reserves that are higher than the standard kind of minimum of two months or 16% for the general fund. And our policy is 30% and we are well above that 30%.”

“Overall, sales and bed tax revenues comprise approximately 76% of the more than $51 million in General Fund revenues,” the audit reads. ­

6 work on Sedona City Council pay – Sedona Red Rock News

Six residents will help decide whether future Sedona City Council members get a pay raise.

Council members unanimously approved the appointment of six people to the newly formed City Council Compensation Review Work Group, tasked with researching and recom­mending to council, by the end of the year, whether the current monthly sala­ries of $550 for city council members and $800 for the mayor should be increased, by how much or not at all.

The work group is tasked with reviewing and recommending compen­sation including salary, benefits and expense allowances for mayor and council members, ensuring the compen­sation aligns with the size of the city, the workload and similar cities.

During its meeting Tuesday, Feb. 24, council selected Brock Delinski, Kali Galewski, C.J. Tronnier Gershon, Diane Phelps, Laura Rumann and Sean Smith. Human Resources Manager Russ Martin is also assigned to the group. City Councilman Pete Furman, who is leaving office in November, will serve as the chairman and will be a voting member.

Sarah Wiehl, chairwoman of the Planning & Zoning Commission, had applied to the committee as well, but was not recommended because Galewski also serves on P&Z. Henry Silbiger, who is running for mayor of Sedona, also applied, but staff recom­mended no 2026 candidates for council should be selected.

The initiative was proposed by Furman during the December priority retreat “to broaden the opportu­nity to be a council member to more people than what seems to be the pattern of retired Sedona resi­dents,” he said.

Council approved the group’s charter during its Jan. 27 meeting and called for volunteers from Feb. 2 through 16.

Furman has cited the process used by the city of Flagstaff, which in November 2022 approved a phased 250% increase of its mayoral salary from $38,500 to $70,180 and increasing a council member’s salary from $25,000 to $63,800, as well as increasing a travel and meals stipends.

“I have not made up my mind,” Furman said about what he would like council compensation raised to.

“I want to actually learn about what they did in Flagstaff and think about what we could do here,” he said. “But I do know that there’s a significant opportunity cost that’s lost for working people being on the council, and I want to try to address that.”

The work group’s meetings will be open to the public. The specifics for how the work group will operate has not yet been determined —the details will be left up to the work group to decide, though Furman said he is aiming for 90-minute meetings across three to four sessions.

“The future of the city was still, can be still, should be a community of all people that live here, retired here, work here,” Furman said. “That’s what I want to see continue — that Sedona remains a community of people that live here.”

The Work Group should conclude its work no later than September, the council agenda reads.

If approved, any salary increases would not take effect until after the Tuesday, Nov. 3, General Election, and would require final approval by City Council.