Star Valley In Good Financial Shape

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Despite a drop in revenue from photo enforcement tickets, the Town of Star Valley ended fiscal year 2008-2009 in good financial shape, according to its financial advisor Glenn Smith.

Smith said the town was able to end the year with a budget surplus of $1.2 million and a combined unreserved fund balance of $2.76 million. However, the town must remain cautious with spending in the coming year, given the unpredictable nature of the current economy, advised Town Manager Tim Grier.

Although the unreserved fund balance is $164,000 under their revised estimate, Smith said they came within 5.6 percent of their target figure.

“My bottom line is you did fine last year,” he said to the council Tuesday night. “The only thing that we detected was in the general fund. We were $200,000 under what we thought we would be.”

The general fund is the town’s main source of operating money. It had an unreserved balance of $2.3 million, which is 8.1 percent less than the revised end-of-year estimates.

The town had planned to transfer some of the general fund’s unreserved balance to the capital projects fund. The town plans to use around $1.57 million for future projects, however there are no defined projects in place now except for the remodeling of town hall.

So why did the town come out $200,000 under what they projected? Smith said the main culprit is photo enforcement.

The town currently has two photo enforcement cameras set up at opposite ends of town. When a camera detects a driver speeding 11 mph over the 45 mph speed limit, it snaps their photo and the court sends them a ticket.

From these tickets, the town budgeted to make $1,000,000 in 2008-2009. This revenue works out to be 55 percent of the total general fund, a significant chunk of change.

If revenue from speeding tickets dips, it has a dramatic effect on the budget since it is a main source of revenue for the small town.

Looking at monthly photo enforcement reports for the year, it appears to be an unstable revenue source. From one month to the next, revenue dips and soars. For example, in October 2008, revenue spiked at $155,000. However, the following month it dipped to $74,000 and then rebounded to $109,000 only to fall to $62,000 for the next three months.

So while the town still made money off the cameras, it was not as much as they thought it would be.

Grier offered several possible reasons for why photo enforcement revenue was down.

“When we talk about photo enforcement revenue, we have to look at the expenditures, which are pretty high,” he said.

Although the town uses Grier to prosecute cases and Stephanie Jones, town clerk, does a lot of the paperwork, it still costs a lot to run the system.

Another possible reason, he offered, is that the cameras might be doing what they are designed to do — slow people down.

“It is slowing people down and making Star Valley a safer place,” he said.

Last year, there were 2,000 fewer flashes than the year before.

“That means people are going slower, meaning photo enforcement is doing exactly what it is supposed to do,” he said. “But that also means it slows down revenue.”

The final factor in declining revenue is that the process server was down for several months.

This means that if someone received a ticket and did not pay it, nothing happened.

“People started to know that if you ignored a ticket, nothing happened,” he said.

The process server is now up and running, so people can no longer speed through, ignore the ticket and have nothing happened.

Smith cautioned that the town should keep a close eye on this fund, along with state-shared revenue and town sales tax, which account for 93 percent of the town’s total operating revenue.

“A sudden drop in any of one of them may impact your spending plans, now or in the future,” Smith said. “You need to monitor revenues, but all cities should being doing that.”

Grier said he and his staff would continue updating the council on the budget as the year progresses, so they can make good decisions.

“As a council, you have to be cautious,” Grier said. “We don’t have a lot of fat to cut down at town hall. Other towns can reduce staff, but there is not much to reduce here.”

For fiscal year 2009, the town has $646,000 to absorb any revenue shortages.

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