Increasingly, Payson’s struggle to recover from the downturn looks like a long ride in an old Jeep on a bad road.
After it hit a nice stretch of smooth driving in September, the town’s sales tax figures rattled through a series of potholes in October, according to the most recent monthly budget tracking report from the town.
Four months into the fiscal year, sales tax collections are some $53,000 above last year —but still $219,000 below the same period in the year before the recession took hold.
All told, the town in the past four months has been taking in as much sales tax revenue as it did back in 2006, before the short-lived building boom.
The October figures blunted hopes briefly raised by a surge in September. Despite the teeth-rattling return of the budgetary washboarding, Town Manager Debra Galbraith remained faintly optimistic in the budget summary for October.
“It is estimated that this growth trend will continue, however, it is impossible to predict how much growth will occur,” said the report.
However, if the deterioration from September to October persists, the town could wind up in a budgetary ditch.
Most the town’s revenue sources showed a parallel slump in October.
For instance, urban revenue sharing from state-collected income tax slumped by $163,000 for the four-month period.
State-shared sales tax distributed on the basis of population dropped $5,485 for the fiscal year to date compared to last year and a full $48,000 from the same period in 2008.
Vehicle License Taxes also have dropped $2,800 this year and $27,485 from 2009.
Even in the building department, the signs of revival recorded in September faded away in October. Building permit revenues rose $4,400 for the first four months of the fiscal year, but remained $47,000 below 2009. Plan review fees dropped $3,100 so far this fiscal year, which left them $15,000 below the same period in 2009.
On paper, the town appeared to be sliding toward budget problems — with revenues below projections and spending running ahead of projections.
In the crucial general fund so far this fiscal year, the town took in $3 million, but spent $4 million.
However, the budget report noted that most of that developing deficit is a matter of timing — with big payments for things like dues, computer equipment leases and other one-time expenses front-loaded in the fiscal year.
Another chunk of the on-paper deficit connects to the town’s decision to change its insurance plan.
Galbraith concluded that the deficit should melt away in the next few months, unless the economy once again takes a drive off the shoulderless switchback.
“The ending (general) fund balance as of July 30 was (negative) $498,838. It has improved $350,000 in the last two months. The deficit is $20,463 less than last month and will clear completely soon.”
Galbraith offered a similar explanation for the figures suggesting several town departments are over budget, including the council, the town manager, human resources, central service, public works and information technology.
Some of those higher-than-projected expenses relate to the town’s shift to a different self-insurance pool, which created a temporary transitional period that made insurance payments look higher — but which should even out in the next few months.
The misleading over-spending otherwise connects to big up-front payments, which will even out month by month. That includes the $24,000 payment to state parks to help operate Tonto Natural Bridge out of the city manager’s office budget, $139,000 worth of lease payments in the computer department, $143,000 in up-front rent for the magistrate court building and a $72,000 lease payment for the town yard in the public works department.
The town’s water fund continues to dwindle. The budget envisioned $5.4 million in revenues to this point in the fiscal year, but actual revenues so far have totaled just $2.7 million. However, the bulk of the shortfall relates to a hoped-for but probably not coming $1.8 million federal grant to help with the Blue Ridge Reservoir pipeline. The town council earlier this year adopted a 10 percent hike in water rates, with another 10 percent increase poised to take effect if a revival of new construction or approval of a college campus don’t bring a new surge of water impact fees. Currently, the town charges $7,500-per-unit water impact fee, intended to cover the bulk of the roughly $30 million to $50 million cost of building the Blue Ridge pipeline.
However, the collapse of construction in the past two years has forced the town to raise water rates to demonstrate it will have enough money to repay the bonds it will have to issue to actually build the pipeline.
Roughly $30 million worth of big projects put into the original budget on speculation remain unrealized — including about $25 million in hoped-for, renewed federal stimulus funds the town included at the suggestion of Congresswoman Ann Kirkpatrick, who was just defeated in her re-election bid by Flagstaff dentist Paul Gosar.
The budget also includes a million dollars to rebuild Bonita Street, which the town probably won’t get from the state, $800,000 for a project at the airport the Federal Aviation Project might fund in the spring, $1.8 million in federal funds for the water fund and $6.2 million to put in streets and water lines for the Montezuma Castle Improvement District, involving land near the airport recently swapped with the federal government.
Many of those windfalls now look increasingly unlikely.
So after September’s stretch of good road, the town’s back to picking through the potholes and getting shoulder bruises from the seat belt