Star Valley Budget Still Rosy


Seven months into the fiscal year and financially Star Valley is keeping its head above water. While its neighboring town continues to drown in financial shortfalls, Star Valley’s financial consultant reports the town is doing well thanks to solid reserves and a gain in sales tax and photo enforcement revenue.

In November, when the number of photo enforcement tickets began decreasing rapidly, council members worried that they may fall

short of the $1 million it was expected to bring in. They hired Smith late last year to analyze the town’s budget, current standing and prepare next year’s budget.

In a progress report released by Town Manager Tim Grier at a meeting Feb. 17, all signs point to a profitable year for the town entering its fourth year of existence. But with state-shared income tax and other state funds decreasing as a result of the recessive economy, Star Valley will come in under budget in some areas, which could take away from its plans to start a reserve fund. The town is also facing a possible $160,000 hike in its police

contract and Intergovernmental Agreement with the courts for ticket processing.

Photo enforcement revenue is the single largest source of revenue for the town, but also the most unpredictable, said Glenn Smith, the town’s financial consultant.

“The use of these funds must be done with the understanding that they may or may not continue at its current collection rate,” he said.

Even with its unpredictable nature, after seven months, ticket revenue is almost $200,000 above budget, increasing nearly 9 percent from December to January. Smith predicts the town will make its budget of a million dollars in revenue by year-end if the current rate continues.

Revenue numbers do not take into account operating expenses, such as employees, paying Redflex Traffic Systems, which owns the two cameras and reviews each ticket and accompanying photo for accuracy.

Calculating how much the town can consistently make off the tickets is a priority in the new budget for Smith and Grier.

According to Smith’s records for the period ending Jan. 31, the town has around $750,000 sitting in the bank unreserved, as a result of bringing in $1.6 million during the first seven months of the fiscal year and spending around $878,000.

Although the town has $750,000 sitting in the bank, at the end of November the town reported having $1.3 million in the bank. This drop of $550,000 could be due to the fact the town spent an additional $340,000 in December and January, up from $540,000 for the first five months of the fiscal year.

The town’s major sources of revenue, besides photo tickets, are sales tax, income tax and various state grants, including highway user funds.

State shared sales tax came in almost $8,000 under budget through Jan. 31.

“If this reduction in revenue amounts continue through June 2009, I am estimating that you will only get about 89.9 percent of your budget, a loss of $18,400,” Smith said.

Other revenue sources feeling the economic pinch include the auto in lieu tax and highway users fund, which both came in 8 percent under budget. Smith predicts both will come in between 12 and 16 percent under budget for the year.

The town’s sales tax revenue continues to outperform the budget, raking in $11,000 more than budgeted.

Smith said former Town Manager Vito Tedeschi budgeted very conservatively for town sales tax, which is now working to the town’s advantage.

“I am currently projecting that you will come in about 8 percent or around $33,000 above your budget, Smith said.

Grier and Smith still say the town needs to create a rainy day fund. Once the expenditure and revenue budgets are revised, Smith will present the town with a better outlook on how much they need to save.


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