The Payson Town Council voted Thursday to take a million-dollar gulp out of the water department’s reserves to make up a fresh projected shortfall in next year’s budget.
The hasty adjustment to an already tight budget came after officials learned the town’s insurance carrier wanted nearly $600,000 more to cover the cost of insurance for retired and present workers.
Moreover, the budget adopted by the Republican legislature would cost the town $230,000 by imposing a three-year moratorium on collecting impact fees — a $7,500 per unit fee the town normally collects to pay for the future construction of the Blue Ridge Pipeline. In addition, the legislature’s budget would take back about $200,000 in anticipated vehicle license fees.
Finally, the council wanted to come up with $63,000 to restore funding for the Payson Humane Society to roughly this year’s level of about $88,000. The previously discussed budget draft would have cut funding from $88,000 to about $35,000. Advocates for the Humane Society vigorously protested the deep proposed cut, saying it wouldn’t cover the cost of caring for stray dogs and cats picked up by people in Payson other than the town’s animal control officer.
However, the town had few choices when it came time to make up for a nearly $1 million increase in operating expenses. The town had already scheduled a public hearing to talk about increasing its property tax rate to the legal limit. But that would only raise about $70,000 and cost the owner of a $200,000 house about $5 a year.
The council hasn’t actually adopted the budget yet, and everything could change again in the next two weeks, depending on actions by the state. But the tentative shifts would bring the projected budget back into precarious balance. Even at that, the budget assumes the recession will ease in the next 12 months, despite a worrisome drop in local sales sales tax revenue in April.
The previous version of the budget had already anticipated a $500,000 loan from the water department to provide the bulk of a wafer-thin $570,000 reserve fund. So the council doubled the size of the loan from the water department to $1 million.
In addition, the council decided to shift the salary and benefits of Public Works Director LaRon Garrett into the water department, which shifts $138,000 in costs from the general fund to the water fund. Finally, the council decided to shift $35,000 in vehicle lease payments to the water fund as well.
The council flinched from other proposed cuts, which could still become necessary when the smoke clears on the state budget showdown between the Republicans in the legislature and Gov. Jan Brewer. The legislative budget avoids a temporary increase in sales taxes proposed by the governor, but makes much deeper cuts in help for schools and local government. Brewer has sued to force the legislature to send her its budget before the fiscal year ends in about two weeks, having vowed to veto it.
Payson Town Manager Debra Galbraith Thursday listed some additional possible budget cut options for the council.
Those included furloughing all employees except police officers and firefighters one day per month to save $464,672. The town already shuts down town hall on Fridays, but that’s just to save utility costs. Town employees work four 10-hour shifts to free up Friday.
The council could also have saved $54,000 by not providing proposed raises for various town employees who have temporarily assumed more demanding jobs to compensate for vacancies and layoffs.
Finally, the council rejected for now a plan to save $402,662 by imposing an across-the-board, 5 percent pay cut. A 2 percent cut would have saved $161,065.
The council still has about two weeks before it’s required by state law to actually adopt the budget for 2009-10.
Galbraith also promised to sit down with the town’s insurance carrier to find out whether the town could do anything to avert the proposed increase in insurance costs.