After years of decline, Payson’s $14.7-million general fund budget is set to go on a bender — jumping a 18 percent from this year’s spending.
Town officials have repeatedly characterized the 2011-12 budget as bare bones, but the figures released when the town adopted its preliminary budget showed some big spending increases.
The increases look even larger if actual, estimated year-end spending is compared to the proposed budget for 2011-12. In that comparison, the increase in general fund spending balloons to 23 percent. However, budgets typically include money for grants the town never actually receives. This year, the town actually spent $3.5 million less than the general fund budget adopted last June. The estimated, year-end spending tally came in 32 percent below last year’s adopted $11.8-million general fund budget.
Town officials said voters should view any year-to-year comparisons cautiously, given the complexity of the state laws on preparing a town budget. Moreover, the town won’t know for sure exactly what it spent and what revenues it received until about August, due to a lag in reports from the state.
Town officials said the bulk of the increases come from a jump in employee benefits costs, which were artificially reduced last year when the town changed plans and used a $1 million medical insurance reserve fund.
Town officials also took issue with some of the budget figures used in this story, although all the figures came from the budget posted on the town’s Web site. The figures in this analysis are based on comparing the adopted budgeted expenditures for 2011 to the budgeted expenditures/expenses for 2012 taken from the version of the budget posted on the town’s Web site.
For instance, the budget for “central services” which mostly includes employee benefits for retirees will jump 40 percent to $1.5 million. Town officials said that really reflects the distorting effects of a big write-off this year when the town changed benefit plans.
The fire department budget is slated for a 27 percent increase to $3.2 million. That increase reflects both capital costs and the cost of operating a third fire station. It takes nine firefighters to provide an around-the-clock, three-man crew on a fire truck. The town hopes it will receive a $350,000 federal grant or to manage by hiring three firefighters and adding volunteers to the reserve force.
Town officials asked for comment on the increase, said that when nearly $700,000 in capital spending is excluded, operational costs will actually decline by $131,000.
The police department will get an 11 percent general fund boost, to $4.8 million. Town officials suggested the real increase is closer to 7 percent, although the offered figures differed from the published budget figures on the Web site.
The town council’s budget will rise 55 percent to $133,600. Payson Mayor Kenny Evans said that increase is based mostly on higher health insurance costs for those members of the town council that have elected to get health coverage through the town.
Several other departments have double-digit increases including information technology (up 24 percent to $671,000) and Human Resources (up 14 percent to $207,000).
Several other departments stuck to single-digit percentage increases, including public works (5 percent to $500,000), magistrate court (6 percent to $239,000), town manager (up 4 percent to 224,000), tourism and economic vitality (up 8 percent to $111,000) and the town clerk (up 6 percent to $267,000).
Only a few, forlorn departments saw a decline.
The parks and recreation budget, already a frail shadow of its former self, declined another 12 percent to $313,000. However, town officials said the parks and recreation budget is scattered among several different funds. If spending from all those funds is combined, spending will actually increase by one-third to $689,000.
The community development budget fell 7 percent to $657,000, after three years with almost no major commercial or residential projects to review. However, town officials said that if spending across all funds is considered, the budget for community development will actually fall by $400,000 or 36 percent. Much of that decline stems from a $550,000 grant put into the budget this year, but never actually received.
The town’s water department operates out of its own, separate fund. The proposed budget for next year will rise 11 percent from this year’s adopted budget.
The often-confusing town budget process often leaves observers dazed and confused, lost in the maze of different funds and hypothetical totals.
For instance, the town’s budget actually stands at $47.5 million — which would work out to nearly $3,000 per resident if the town ever actually spent that money.
However, that includes millions of dollars in grants, improvement districts and other specialized funds. By law, the town has to include grants it hopes to get — even if it probably won’t. For instance, last year the budget included $24 million in hoped-for federal stimulus grants town officials knew they had little chance of actually winning. However, if they don’t put the money in the budget they can’t spend the money if their long-shot grant application lottery ticket comes in. Nonetheless, state law required the town to include all those hoped-for funds in the budget.
In some cases, the town’s budget ends up serving as the bank account for improvement districts that sell bonds to put in sewers and streets and other infrastructure. In that case, the money shows up in a special fund in the monster budget, even though the money stays entirely within the improvement district.
Some of those funds include $6.2 million to put in streets and water mains in an improvement district on 200 acres recently annexed near the airport, a $630,000 equipment replacement fund, $460,000 in a Central Arizona Project water settlement fund that will pay for water system improvements, $202,000 to pay off bonds for Green Valley Park, $97,000 to pay off bonds for Rumsey Park, a $1.8 million gas tax fund for street improvements and a host of others.
The council has already tentatively decided to raise the town’s modest property tax rate to near the legal limit — about 30 cents per $100 of assessed valuation. For homeowners, that increase will be offset by a decline in the secondary tax rate to pay off old bonds. But a 17 percent drop in assessed value all over town will eat up most of the money from the rate increase — so property tax revenue will rise an estimated $6,000 to about $612,000.
However, most residents won’t notice that increase, since the town will also retire a bond issue used to pay for fire stations and other public improvements, hence lowering the town’s secondary tax rate.
The budget also includes some very hopeful assumptions about the recovery of the construction industry.