Payson's spreading, slow motion budget crisis hit home last week, when the Town Council rejected a plan to spend $90,000 upgrading the crew quarters on the Main Street fire station.
Town Manager Debra Galbraith last Thursday sent council members a memo suggesting that until the budget situation improves, the town should spend money only on "mission critical" items.
The firehouse remodeling was first project to get caught in that sense of budget crisis that has grown since budget study session several weeks ago indicated that the town's sales and building fee revenue has fallen nearly $5 million behind projections for this year.
This Thursday, the council will hold a budget study session during which the council members will get their first look at spending.
Fire Chief Martin deMasi walked into the unexpected buzzsaw of the council's new sense of fiscal alarm when he asked for approval of $90,000 to finish work started with money from a 2003 bond election.
Voters approved the bond issue, but shortly after the election the town staff revised cost estimates upward, which forced the postponement of the Main Street Fire Station project. All told, deMasi estimated that the fire station needs another $400,000 in improvements.
The fire department had met with three construction companies and provided them with a list of improvements to the fire station, which included office space, a decontamination area, finishing key fire walls, converting the bare bones dormitory housing for the firefighters, providing an improved kitchen and common area, providing extra storage space and adding a weight and exercise room. Each company detailed how much of that work it could do for $90,000.
Montana Builders in Prescott ended up offering the most improvements, said deMasi. "It wasn't a huge difference," said deMasi, "but we felt it was a better value."
The proposal stimulated a vigorous council discussion about the lowball estimates, the budget crisis and a preference for local contractors.
"Having $400,000 in cost over runs seems like a lot of money," said Fruth.
"No doubt it's a lot of money, but I don't know that I'd call it cost over runs," deMasi said.
Several council members focused on the idea of giving business to an out-of-town firm.
"Any way we can suggest that the supplies and the subcontractors be bought in Payson?" asked Su Connell.
Town Attorney Sam Streichman said that state law allows the state to giver preference to Arizona contractors, but prevents towns from favoring local contractors.
"That doesn't mean we can't have a requirement that they buy 90 percent of their supplies in Payson," said Councilor Mike Vogel.
"It's risky, but we can do it," said Streichman. "But it would be better to do it during the bidding."
Councilor Andy Romance then objected to the whole project, saying that it didn't seem to qualify as the kind of "mission critical" spending Galbraith had recommended in her morning e-mail.
DeMasi said "I would describe it as not immediately mission critical, but in a few years it will be mission critical."
Mayor Bob Edwards said, "this has never been a mission critical project. We're spending $400,000 and getting a minor part of the fire world, without doing the major things, like potential problems with water pressure in the town's hydrant system. This like icing on a cake that's made of cardboard."
But Vogel said that the town also owes it to the voters to finish the projects it promised. "One of the reasons I'm going to go along with this is somebody low balled this thing and we got stuck with the tab. I want to say to the citizens, you were told something and we're going to complete it."
At that point, he moved to reject the bid of the Prescott company and accept the bid of the Payson company.
Several council members objected.
"We are rapidly going in the tank" financially, said Councilor Tim Fruth. "Is this a need or a want? Seems that it's on the ‘want' side to me."
Edwards objected to the proposed violation of the town's bidding process. "It's going to do real damage to our bidding process. I wouldn't want to add even more" to the bill by passing over the low bidder.
The council then voted 5-2 against the motion, with Vogel and Councilor Ed Blair in favor of contacting with the local company.
Councilman John Wilson then moved to approve the bid as submitted.
But that motion died for lack of a second.