The Payson council on Thursday only tinkered with a proposed town budget that features an 8 percent reduction in spending and a wafer-thin reserve, but no staff layoffs.
The subdued council asked an hour's worth of mostly technical questions about the often-confusing charts and graphs, before mostly accepting the recommendations of Town Manager Debra Galbraith.
The council asked for more clarification on the cost of several proposed added projects. They will vote on the proposed tentative budget next Thursday. Once the town adopts a tentative budget, it cannot spend above that self-imposed limit. The town has until early July to adopt a final budget.
Finance Director Doug Hall presented the $36 million spending plan -- down $3 million from this year and featuring a $400,000 contingency fund. He then immediately listed about $165,000 worth of additional items -- including some items carried forward and some new expenses.
The councilors asked some questions, but only Councilman Mike Vogel, participating by phone, suggested additional cuts. He suggested sending town staff to negotiate a reduction in the Rim Country Chamber of Commerce's request for $36,000 to help operate a welcome center for visitors on Highway 87. Several years ago, the town gave the chamber about $72,000 annually in funding, but the town cut off that funding last year.
After a back and forth discussion, the rest of the council voted against his motion, leaving the $36,000 for the chamber in the budget.
Vogel also asked the fire department to seek a reduction in its mutual aid agreement with the Hells Gate Fire Department, in which Payson pays the neighboring fire district $140,000 to respond to calls at the edge of town and help in the case of major fires.
Several councilors expressed concern about numbers that continued shifting day to day and the lack of budget detail provided.
"I'm disappointed we didn't have more detail on this," said Councilor John Wilson, a retired IRS auditor.
"I'm coming from a business environment and I'm used to a budget with more clarity," said Councilor Su Connell. "I'm a little frustrated."
In particular, she wanted a better sense of what capital improvements were dropped and the timing of construction and budget impacts for the roughly $6 million worth of improvements that survived. The capital improvements budget took the biggest hit -- dropping from $9 million to $6 million. That 33 percent cut in the capital budget represented the net spending drop for the whole budget.
A budget summary indicated that personnel costs will decline less than 1 percent and that operating costs will actually increase 12 percent -- from $10.3 million to $11.6 million. None of the council members asked how operating costs could increase 12 percent when many of the departments had operating cost reductions of 10 percent or more.
Council questions did reveal qualifications in the overall descriptions of the budget assumptions in the presentation.
For instance, Hall said that the budget featured a ban on overtime. The ban largely exempted the police and fire departments, which account for most of the actual overtime.
Fire Chief Martin deMasi later said his department spent about $322,000 on overtime this year. The proposed budget would cut his overtime to about $259,000 in the upcoming year.
The budget presentation also featured a hiring freeze.
However, the freeze exempted the police department, which has vacancies for three sworn officers with another vacancy expected in February due to a retirement. The proposed budget would enable the department to fill those vacant slots, at a cost of roughly $200,000. Not filling those four positions for sworn officers would cut the force by more than 10 percent.
The hiring freeze would apply to one half-time position in the fire department and three positions elsewhere, including a finance manager, clerk and permit technician.
Councilors expressed concern about charts showing that historically the town has each year projected a deficit, which generally turned into a surplus due to conservative revenue estimates.
That pattern faltered in the past two years. In the 2006-07 fiscal year the town spent about $500,000 more than it took in. This fiscal year, the town spent about $1 million more than it took in. The budget for 2008-09 assumes revenue from sales and property taxes plus building permit fees will bring in about the same as this year -- about $36 million. But the $400,000 contingency fund, which the added changes suggested Thursday could shrink to $300,000, leaves little margin for error. The "rainy day" fund that once totaled some $2.7 million was consumed in the past two years.
"I would love to have a bigger contingency fund," said Hall, "but we just don't have it."
Town Manager Galbraith, who was finance director before her promotion to town manager late last year, said this time the revenue and spending projections should be accurate. "This budget is the first budget being done in a different way by different people in a decade."
No one at the session suggested any measure to increase income, like a change in the property tax rate.
The latest spending plan backs off some of the politically sensitive lists of possible cuts in earlier versions. This version would fully fund the various community groups that receive support from the town.
The budget would eliminate several pots of money for public relations and promotion. It left in place the roughly $200,000 added to fund the town's new tourism and economic development department.
The Park and Recreation budget took a hit, although the actual program cuts remain unclear. The year to year decline in park and recreation funding stands at about 37 percent according to figures provided by the town. Parks Director Rick Manchester said his operating cost reduction totals about 10 percent. That would include shutting Taylor Pool on Sundays during the summer and ending the swim season about a month early at the end of the summer. Presumably, the rest of the cuts involve money flowing to the park budget from impact fees, used mostly for park acquisition and new facilities.
The town and the sanitation district combined take in about $15,000 in impact fees for every unit built. Although Payson normally issues 250 to 400 building permits per year, in the past year the town has issued barely 100 permits, which reduced money flowing to parks and other departments.
Most of the council discussion centered on the short list of projects Hall asked the councilors if they wanted added to the budget. That included $42,000 to help residents of Woodland Meadows and an adjoining subdivision file a map with the federal government showing that their homes were no longer in a flood plain, which would save them thousands on flood insurance.
The homeowners asked the town for help when they discovered the original developer never filed the paperwork with the federal government.
The other added items included:
- $56,000 as the town's share of a grant-funded purchase of 13.5 acres next to the airport, although federal grants will probably eventually pay back the $56,000
- $26,000 to design the reconstruction of Bonita Street, which would then help the town get a state grant that would pay most of the actual construction costs.
- $35,000 to pay a consultant to finish a set of design standards for signs and landscaping along the highway.
The council asked staff to investigate whether the town could recover costs from various grants or insurance companies and perhaps postpone the consultant's contract.
The Town Attorney said the council needed to include in the budget money that might be covered by a grant, since the town couldn't spend more than the total of the tentative budget. The council could always elect not to actually spend the money if the anticipated grants didn't come through, he said.