We made it. Payson didn’t go broke after all.
In fact, the town’s long-delayed, fiscal-year-end June financial report offered mostly good news: Slowly rising sales tax totals, a boom for local hotels and tight budget controls in every department.
Unfortunately, that’s still 20 percent below the peak in 2008.
In effect, the local economy has fallen and can’t get up — but at least it didn’t roll down the stairs.
Sales tax collections remain one of the best measures of the region’s economic health. Payson’s total sales tax collections for the year rose by about $59,000 — a scant 1 percent, but at least we didn’t suffer the double-digit declines of the two years before that.
The town also gets $1.2 million in sales tax collected by the state and distributed on the basis of population. That total rose about $47,000 this year, a 4-percent rise reflecting the fragile, state-wide recovery.
Tourists contributed mightily to Payson’s ability to hold its own, despite fears of a double-dip recession and a stubbornly high unemployment rate.
Sales tax collections from hotels and other accommodations rose an impressive 36 percent to $301,000.
Surprisingly, despite the strong showing by hotels, the spending in restaurants and bars actually declined by about 5 percent. Maybe the locals ran out of beer money.
Retail trade accounted for $3.2 million — nearly half of total sales tax revenue. In that category, sales remained virtually unchanged from the year before.
The once-reliable construction sector continues to languish, despite a last-minute surge in building permits that offers some hope for the coming months.
Building permit fees rose about 6 percent to $123,000 and plan review fees rose a whopping 34 percent to $76,000.
Of course, that still amounts to just 28 percent of the $700,000 cost of the community development department, which has had only a handful of building permits to process for the past three years.
Sales tax revenues from construction for the year ending in June declined 14 percent to $325,000 from the already miserable showing last year. Back in 2008, sales taxes on construction amounted to $954,000 — three times this year’s shriveled total.
Town officials delayed the closely watched figures on town spending and taxes for months, waiting for a final bottom line from the state for what amounts to the final report of the year. Unfortunately, the town council had to adopt its budget back in June and hope for the best when it comes to the actual year-end balances.
Overall, the town’s departments mostly ended the year right on target.
The town spent a total of $29 million in all categories in the fiscal year ending last June. That works out to about $2,000 per resident.
The town had $25 million in total revenues, which means it had to pull about $4 million out of its various reserve funds — mostly money accumulated from water impact fees for construction of the Blue Ridge pipeline.
The town has spent most of the money accumulated for Blue Ridge on buying pipe and doing the preliminary engineering and environmental studies. The water department’s reserve fund for the pipeline once approached $12 million but has dwindled to about $2 million. The town hopes the resumption of growth will generate more water impact fees — including about $7.5 million from a deal to build a college campus here. In the meantime, the town hopes to get low-cost federal loans to finance the balance of the $34 million project. The town council also approved steep increases in water rates in case the federal loans and grants and local impact fees don’t come through — a move necessary to issue the bonds required for the project.
That total spending figure includes all sorts of special improvement district and federally funded airport improvements, so it offers a misleading view of the cost of the town’s services.
The town’s water department has a separate fund, supported by water bills, impact fees and state and federal grants. The town’s water customers pay about $4 million a year into the fund and the department this year spent about $3.3 million on operations — with the balance stockpiled for future improvements.
The rest of the town’s day-to-day operations come out of the $12.4 million general fund, supported mostly by sales taxes. The town also gets money from fees and a vehicle license tax — which has declined slightly from last year to roughly $1 million. In addition, the town got $1.4 million in gas tax money from the state, about the same as last year.
On the other hand, the town took a $490,000 hit to its share of the state income tax. The town’s cut of “urban revenue sharing” declined to $1.5 million, down a third from the year before. That’s not as bad as it sounds when it comes to predicting the direction of the economy, since the state’s payments to the cities lag about two years behind income tax collections. That means the 33-percent decline hitting Payson now reflects the big drop in income taxes collected at the onset of the recession in 2008.
The police department’s $4.3 million budget remains the most expensive single expense, accounting for more than one third of the general fund — totaling about $300 per resident.
The fire department’s budget stands at $2.7 million — about $180 per resident.
The rest of the town’s departments lag behind the big three, with the planning department’s $700,000 representing a distant fourth.
The Parks and Recreation Department’s $358,000 budget remains a shadow of its pre-recession self, accounting for just 3 percent of general fund spending.
The town spends comfortably more for the town attorney’s office ($453,000) and computer operations ($545,000) and for street maintenance and engineering ($476,000).
In addition, the budget includes $948,000 for “Central Services,” mostly employee benefits that apply to all of the departments.
On paper, it looks like the town’s departments all overspent the general fund budgets by about 9 percent.
However, the town manager’s memo that accompanied the budget summary explained that the apparent overspending actually reflected a shuffle of funds in and out of the town’s new self-insurance fund for employee benefits.
The town shifted from its old plan to a new plan that includes a host of public agencies, resulting in a change in the allocation of insurance costs that made it look like the departments were spending over their budgets adopted last June.
“Once the insurance premiums begin to be paid from the insurance fund, the appearance of overspending should disappear, unless there is overspending in another area. At this time, three are no departments over budget,” wrote Town Manager Debra Galbraith.