While most cities are grappling with budget cuts, Star Valley is once again cooing over a plump million-dollar reserve.
The town’s budget picture this year features higher-than-expected revenues and lower-than-expected spending.
The town now expects to end the fiscal budget year in July with an $80,000 increase in income, mostly from taxes and photo enforcement fines than the council included in the adopted budget last June.
In fact, the town will spend $1 million less than it expected, with costs below projections in every major category including court, administration, planning and zoning and council.
However, the positive economic news came attached to a warning from town staff that photo enforcement revenue and the economy both remain unpredictable.
“We are still trying to survive in these challenging economic times,” said Town Manager/Attorney Tim Grier. “We have to weigh saving with smart spending.”
This year, town photo enforcement revenue declined, but still remained $250,000 above last June’s pessimistic projections. Star Valley’s four speed cameras should net the town $483,000, although that’s actually 17 percent lower than what the cameras brought in last year.
Since the town installed the cameras in July 2007, they have grossed more than $3.3 million, despite steady, year-to-year declines.
But that also means the cameras have slowed traffic on the highway.
“The cameras are doing what they should be doing, but that means a decrease in revenue,” said Grier. “We need to brace for that decrease.”
This year, staff planned for a large drop in ticket citations, but ticket numbers held steady. Three years out, staff expects ticket revenue to fall at least $100,000.
Grier warned the council against relying too heavily on such an unpredictable revenue source when he spoke Tuesday night at the regular council meeting.
Town finance administrator Chancy Nutt prepared a brief budget overview of how the town’s finances should end in July and provided projections for the next few years.
The council will hold two budget workshops in the coming months to work out next year’s budget.
This year, the town saw a huge drop in expenditures, with town hall coming in way under budget.
Nutt said the 37 percent reduction stemmed from a reduction in staff that included shifting to a part-time town clerk, dividing up duties from empty positions among other workers and a drop in equipment and supply purchases.
In addition, court, photo enforcement fees, law enforcement, council and building department spending all came in 13 percent to 38 percent under budget.
On the revenue side, the largest income source is taxes. As of March, the general fund is 10 percent above budget figures.
Translation: revenue is up.
Every month, the town’s cash position basis increases $31,000, Grier said.
State shared income remains on budget as well as the city’s sales tax. State shared revenue is distributed from tax collections two years before the current fiscal year, so the town will not feel the brunt of the state’s budget woes for several more years.
However, “the state will continue to find ways to pick municipalities’ pockets,” Grier said.
The majority of the town’s 2 percent local sales tax is collected from retail sales, communication, real estate, rental and leasing sales.
Those numbers are a small fraction of what photo enforcement fines bring in. All told, the cameras increase revenue by $600,000.
With photo enforcement such a huge part of the budget, Grier and the council watch monthly ticket numbers closely.
So far, the town’s bet to install “revenue neutral” cameras has paid off. Not only are people traveling slower, the town has enough money to fund large-scale improvements.
The town paved 80 percent of its roads last year, spending $500,000. The town also spent $245,000 to buy a new town hall.
“Although we have been safe building a reserve, we have also served the community.”
Grier attributed Star Valley’s rosy budget picture to smart spending by the council, not just the cameras catching speeding drivers.