Taking A Closer Look At The 'Reserves'



The Town of Payson's budget for fiscal year 2005/2006, which ends June 30, 2006, shows potential expenditure of $39,825,431 against projected revenues of only $31,775,330, making it appear that the Town was planning to spend $8,050,101 in "reserves" during the fiscal year.

The fact of the matter, however, is that much of what might at first glance appear to be "reserves" are simply the carryover of revenues received in or saved from prior years for restricted purposes. Included in the $8,050,101 in carryover funds are:

  • $492,182 in a restricted street grant for the N. McLane Road project, which bid last week
  • $192,000 in development impact fees, which are budgeted for and can only be used on road improvement projects
  • $374,312 in development impact fees, which are budgeted for and can only be used for new park facilities development
  • $271,742 in bond sale proceeds for the Town's public works facility and airport hangars which can only be used to retire debt for those projects
  • $1,774,240 in bond sale proceeds, which can only be used for the Fire Station 11 remodeling project and the new public safety communication system
  • $1,449,993 in Central Arizona Project trust fund acquired through the 1994 sale of the Town's CAP allocation and which can only be used for new water resource development
  • $334,240 in debt service fund
  • $1,535,250 in water operating fund capital improvements.

These categories total $6,423,959, leaving $1,626,142 that could be described as "reserves" from an expenditure standpoint. However, $886,947 of the total is a general fund transfer to provide matching funds for street improvements. Furthermore, the budget projects $1,495,122 as the fund balance to start fiscal year 2006/2007, which includes the Town's rainy day fund of $997,073.

While this much bean counting may be confusing, the bottom line is that the Town is not spending down "reserves" to keep operating. The Town is not a profit-making entity and is simply using most of the money it has available in any given year to provide the services desired by our citizens.

For further information on this and other budget issues, contact Glenn Smith, Chief Financial Officer, at (928) 474-5242, ext. 231.

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