At $31.17 million, the proposed 2001-2002 town budget presented to the Payson Town Council Thursday reflects a slowing in town sales tax collections.
The proposed budget for the fiscal year beginning July 1 is about $8.7 million smaller than Payson's current budget, which totals nearly $40 million.
Town officials trimmed $8 million out of the proposed budget by eliminating an $8-million contingency fund for pipelines, pumping stations and storage tanks that was included in the 2000-2001 budget.
The contingency fund was added last year to cover town water development costs in the event the town struck water in the national forest.
"We just don't have a (national forest water) project ready yet," said Payson Town Manager Rich Underkofler, "and when we do, we're going to have to go to the voters for authorization anyway."
Minus the water contingency fund, the proposed budget is $700,000 less than the current budget.
A number of other contingency funds, however, were included in the proposed budget, and when those figures are subtracted from the total, the actual size of the proposed budget is closer to $21 million.
"We never spend as much as we budget," Underkofler said, "but under the expenditure limitation (requirements) we have to be able to anticipate all potential expenditures, whether they occur or not, or else we can't spend it."
Minus contingency funds, the 2000-2001 budget is about $21.5 million.
While sales tax revenues are "still ahead of a year ago by 6 or 7 percent, we were running 8, 9, 10 and 11 percent ahead in past years," Payson's Chief Fiscal Officer Glenn Smith said. At this time last year, the town had collected nearly $5 million in sales tax revenues, about $1 million more than this year.
The general operating budget will be hit the hardest.
"We really had to pare back some department requests, and there will be no new personnel hired during the next fiscal year," Smith said. "But we think we can hold the line, and we are still going to be doing some major construction."
Underkofler agreed, pointing to an extensive list of capital projects budgeted for the next fiscal year. They include completing the new library, a community recreation center feasibility study, sand volleyball courts at Rumsey Park, and cardiac monitoring equipment for the fire department.
In addition, a number of capital projects that are tied to intergovernmental grants also are included in the new budget. They include an engine/pumper truck and special response team for the fire department, the Main Street History Park, the Green Valley restroom project, and the summer concert series.
Capital project requests that have been left unfunded or have been deferred to a later date include the reconstruction of McLane Road from Forest Drive to Airport Road, Rumsey Park basketball courts, and laptop computers for councilmembers and the town clerk.
On the operations side, the budget includes $160,000 for a 15-percent increase in employee and retiree health insurance premiums, $82,750 for the Main Street project, and $160,000 for merit pay increases.
The council also reviewed the latest draft of the corporate strategic plan, which works in conjunction with the budget by establishing council priorities and initiatives. Changes incorporated into this draft include an increase in the local street pavement preservation budget from $250,000 to $400,000, a decrease in the council's general fund contingency account from $400,000 to $300,000, and an increase in water rates sufficient to maintain a 150-percent debt service coverage ratio for financing new sources of water.
Underkofler said the council will eventually be asked to OK a 15-percent across-the-board water rate increase down to 5,000 gallons. "Previously we've held people who use 10,000 gallons a month and less, harmless from any rate increases," the town manager said. "If it won't help conserve water, at least we're doing some pricing that will allow us to get a nest egg together to pay for the debt on this new water supply project. Those who are using the water will be helping to pay for it."
Currently a household using 5,000 gallons of water pays $24.14 per month plus tax. If enacted, the 15-percent rate increase would raise that bill to $27.74 plus tax.
The budget also includes $16,500 in new revenues for fire department services provided for emergency calls to destinations outside of town on highways 87 and 260.
"We can now bill insurance companies for costs incurred under these circumstances," Underkofler said.
Planning on the budget began back in January with the strategic plan. Besides the initial presentation Thursday, budget hearings will be held June 7 and June 21, with tentative approval sometime in July.
"Once we have tentative approval, the budget has to run in the newspaper for two weeks, and then the council will adopt a final budget sometime in August," Underkofler said.