Payson finally has a budget — but the council still has no idea whether the town will go on a record-breaking federally funded spending spree or wind up resorting to more layoffs and cutbacks.
The tentative budget adopted unanimously Tuesday includes about $26 million for town operations and $26 million in grants, mostly hoped-for federal stimulus funds.
Setting grants aside, the town will likely spend a little more money than it takes in — assuming revenues remain pretty close to this year’s totals. The town plans to cover the potential shortfall with a $1 million loan from the water department.
About 20 people attended the final budget hearing, which lasted about 45 minutes and provoked little comment from the council.
Councilor John Wilson said the budget includes a lot of merely hoped-for grants and revenues.
“I want everyone to realize that if things don’t go as optimistically as we hope, the spending plan still includes the possibility of layoffs and the possibility of not working a day here and there. We wanted the greatest flexibility possible.”
Humane society money restored
Perhaps the most controversial item in the $57 million plan was a proposed $50,000 cut in the contract with the Humane Society to run the animal shelter. However, the council restored the $50,000 with little fanfare on Tuesday, although negotiations continue with the Humane Society about the precise contract amount.
Other last-minute changes approved Tuesday included shifting various expenses to the separate fund set up for the town’s water department, including a $35,000 lease payment on a vehicle, the $138,000 for salary and benefits for Public Works Director LaRon Garrett and a potential $1 million loan from the water fund. The budget also increased by $50,000 the estimate for revenue from the vehicle license tax, nicely offsetting the restored funding for the Humane Society.
The budget does include several new hires and raises for some employees with special circumstances — like lower-level workers who have taken on management jobs as a result of vacancies and layoffs. The budget would continue to provide only minimal street maintenance and few street or trail improvements. The town’s operating budget would increase about 5 percent after a more than 30 percent reduction in the current fiscal year.
Most departments will see little change next year from this year, including the police and fire departments, which together account for nearly $10 million out of $13 million in general fund spending.
The big budget loser on paper was once again the parks department, with a $546,000 budget — down from $1 million this year.
However, that figure remains a little misleading, since the cost of maintaining the parks was moved to the public works department. The parks department lost several full-time workers and all the seasonal workers, but will get back the part-time workers in the upcoming year, thanks to a change in fees and donations that have made the recreation programs almost all self-supporting.
Payson Mayor Kenny Evans later said that despite the small turnout for the budget sessions, he thinks residents support the budget and the tradeoffs — including the possible loan from the water department.
“The water department loan is really plan E — we’re budgeting for it, but we’re not planning for it. We will use that if all our other efforts fail and we continue to be hammered the way we’ve been hammered by the economy and the legislature,” said Evans. “If we do have to borrow that money, we’ll at the same time adopt a plan to pay it back. It’s not like we’ll get a million this year and two million next year.”
Still, the budget remains balanced on some wobbly assumptions.
For one thing, once the smoke clears on the bewildering state budget battle, the town could lose hundreds of thousands of dollars in revenue from the state. The town’s budget assumes sales tax receipts will come in at close to this year’s total of about $6 million, which assumes the economy won’t continue to decline.
Property tax rate increase
Finally, the budget includes about $70,000 from raising the town’s property tax rate to the legal limit, although the town hasn’t yet gauged public reaction to the plan to be aired on Aug. 6 at a special council meeting.
The budget includes a wafer-thin reserve fund of about $650,000, even after taking the $1 million loan from the water fund into account.
On the other hand, the town might come up the big winner in the federal stimulus lottery. Payson has already scored with an $11 million grant to help build the Blue Ridge pipeline and $1.8 million to finish the Tonto Apache Tribe’s sewage treatment plant. Just those two grants work out to more than $800 per resident from the federal government.
Other federal stimulus grants the town has applied for include $3.8 million to build a third fire station, $450,000 to remodel the Main Street Fire Station, $250,000 for federal community development money to help low-income residents and $300,000 in housing grants. The town has also applied for a $1 million federal grant for airport facilities, $1.1 million in federal grants to hire firefighters and buy equipment, $700,000 worth of police department grants and nearly $1 million in community development grants, which includes money to revamp a short stretch of Main Street.
Street work on hold
For the second year in a row, the town will do little street maintenance or construction.
Only projects covered by grants or money from improvement districts made it into the $2.2 million capital improvement budget for streets. That includes $1.5 million in the Ranch del Tonto improvement district, $200,000 in the Cedar Lane improvement district and $390,000 for a roundabout at Airport Road. The budget also includes $50,000 for sidewalks on Wade Lane, but that will come from money donated to the town by the Tonto Apache Tribe.
The last two items on the road capital improvement list provoked some conversation at the otherwise low-key meeting. That includes $5,000 to come up with designs for the northward extension of Mud Springs Road and $10,000 to continue buying right-of-way for the eventual reconstruction of Bonita Street.
Councilman Ed Blair pushed to have the $5,000 for Mud Springs taken out of the budget, saying that many people living along Phoenix Street still oppose any extension of Mud Springs, for fear it will lure drivers off the sometimes-gridlocked highway.
“I’d rather that not be in there,” said Blair. “It’s controversial.”
However, Garrett said the goal was to make sure the million-dollar street extension was “shovel ready,” in case the feds put out another round of stimulus money. Bonita Street, Mud Springs and Manzanita Drive top the town’s priority list for street improvements, but all three remain in limbo due to the budget crisis and the collapse of the building market.
Councilor Blair also advocated putting more money into getting Bonita Street ready to rebuild, in case Congress approves another round of stimulus funding.
The water department’s budget included $15 million in new projects, but the two stimulus grants already awarded accounted for the bulk of that. However, the budget included a hefty $2 million in additional projects.
The town probably won’t receive all the stimulus money in the budget nor even actually undertake all of the water department improvements, but state law requires the town to set a spending limit prior to mid July — so the swollen budget includes money for anything the town might possibly do.