The Payson Town Council decided the best action was no action at a special meeting Thursday evening to address the impact of a slumping economy on the town's spending.
Faced with a projected budget deficit of $1.1 billion, Arizona Governor Jane Hull is proposing a 4-percent cut in state revenues shared with counties, cities and towns a potential loss of about $100,000 to the town.
"We can absorb the $100,000 with no problem," Payson Mayor Ray Schum said after the meeting. "Over the past five years, we have not spent all the money in the town budget ... and we anticipate that happening again this year. That being the case, why take any action at all on holding our contingency funds?"
The council's contingency account money set aside for "unforeseen needs" contains $300,000 for the current fiscal year. An issue on the table Thursday evening was whether to freeze that account as a precautionary measure.
Schum said he and Gila County Supervisor Ron Christensen met with Hull at her request last Saturday morning in Payson.
"She pitched the downturn in the economy ... and told us to be prudent in what we're spending," the mayor said.
At that meeting, the governor also indicated that the 4-percent reduction "may not fly," the mayor said. "She said the League of Cities and Towns might fight it."
Schum said he will participate in a meeting of both the house and senate appropriations committees on Oct. 17.
"We will share information regarding the state of municipal finances and hear an overview from the state budget staff," the mayor said.
Following the decision not to cut back on spending, the council adjourned into executive session to "discuss, consult and consider" negotiations with the Tonto Apaches regarding water issues and reservation development with and adjacent to the town. The reservation is the town's largest water customer, and negotiations over a new contract have been protracted.
Following the executive session, the council unanimously passed a motion to send a letter to the Tonto Apaches' attorney expressing its concern over the water issue and its desire to work together with the tribe to achieve an amicable resolution.