Payson’s total spending could jump as much at 86 percent to a whopping $52 million in the coming fiscal year, thanks largely to a potential inrush of federal stimulus grants.
But if you set aside the slew of both hoped-for and already awarded grants that will comprise 36 percent of the total budget, it looks like another lean year.
The town council spent four hours in a budget briefing on Tuesday grappling with the sometimes bewildering details of a spending plan that features a few hires, continued belt-tightening — and the saving grace of $25 million in anticipated grants — including $10.6 million to start work on the Blue Ridge pipeline.
“Municipal budgets have their own language,” said Payson Mayor Kenny Evans, who once ran one of the biggest farms in the country. “This financial statement is more complicated than any financial statement I’ve ever dealt with.”
The town council got an overview of the budget and reports on specific spending plans for about half of the departments on Monday. The council will meet again next Tuesday to hear from the rest of the departments.
The budget anticipates only a handful of new hires, including hiring a chief financial officer. In addition, the budget calls for adding firefighters and police officers, providing the town receives federal grants to offset the proposed salaries.
On the other hand, the budget includes several potentially controversial cuts — including a proposed $53,000 reduction in the contract with the Humane Society to pay for the impoundment of stray stray animals, and a continued near freeze in hiring, salaries and capital improvements.
The budget presented Tuesday represented maximum spending levels for the fiscal year that starts in June. State law won’t let the town spend more than the total in the adopted budget, but does allow a city to spend less. That means the council had to approve a spending total that would accommodate grants the town might get — even if the people handing out the grants won’t make their decisions until after the fiscal year starts.
As a result, the $52-million spending plan, if adopted, would represent the most the town can spend, although the actual spending will likely come in lower — as it did this year.
“It all depends on what we get,” said Town Manager Debra Galbraith of the need to adopt a budget without knowing what grants the town might receive.
“If we don’t get what we thought we were going to get, then we won’t spend what we thought we were going to spend,” she said, drawing council laughter.
That accounts for the incongruity of a huge jump in the spending ceiling due to stimulus grants when department budgets remain close to this year’s shrunken levels.
In fact, spending in the town’s General Fund budget that covers the operations of all the town departments would actually shrink by about $300,000 from even this year’s total — which dropped sharply from the year before.
Even at that, the budget leaves the door open to borrowing $500,000 from the town’s water department.
And that brought up a scary possibility, since news reports this week suggested that state lawmakers are considering taking from cities impacts fees collected from developers and builders to pay for the infrastructure to support growth.
That could put at risk more than $4 million Payson has accumulated from a $7,500-per-unit water impact fee, intended to help pay for the construction of the $30 million to $40 million Blue Ridge pipeline.
“Isn’t that like robbery?” asked Councilor Ed Blair.
“If not robbery, then extortion,” said Mayor Evans.
Town Attorney Sam Streichman noted that the legislature would have to repeal the law it passed forbidding towns from spending impact fees on any other purpose. “The law says that you can’t spend that money on any other purpose than the one for which you collected it, so I would expect the lawsuits would fly.”
The budget projections harbored a few pleasant surprises. Despite the drop in average home values in the past year, the town’s net assessed value should rise from $225 million to $240 million. As a result, property tax collections should rise from $497,000 to $522,000, despite a projected drop in the property tax rate from 22 to 17 cents per $100 of assessed valuation.
The budget includes another squishy number — a projected $136,000 contribution from Friends of Parks and Recreation to help support programs.
Turns out, the citizen support group hasn’t yet promised to raise that much money, but the budget includes an ambitious figure in case they do.
Most of the town’s other sources of revenue will decline, according to the projections.
The budget assumes a 3-percent drop in local sales tax, on top of this year’s 11-percent decline — a loss of $1 million.
The town will also have to adjust to the loss of its $258,300-contract to provide police protection for Star Valley.
The building department remains all but shuttered. The budget assumes a 40-percent drop in building-related fees on top of this year’s anemic total.
The budget also assumes an additional reduction in the state-shared gas taxes, further shrinking the budget for road building and repairs. The HURF money would decline to $1.9 million.
On the other hand, the water department should bring in about $19 million in charges — about the same as last year. The town will end the year with virtually no reserves, so the budget for next year would leave open the possibility of a short-term loan from the water department. The budget also includes a $70,000 payment from the water department for overhead costs.
The bright spot in the budget picture remains the lineup of federally funded grants — some of which the town has already been awarded, some of which may still come through.