Despite the recession, Star Valley has managed to bank nearly $3 million in cash reserves in just six years.
Town staff credits smart spending and a trim budget for the positive balance sheet.
“Though we have been dealing with decreases in state shared revenue, we have still been able to increase a monthly surplus due to good management, wise purchasing and spending habits,” said Chancy Nutt, finance administrator.
Nutt delivered a brief financial update at Tuesday’s council meeting, along with a warning that “there was no more fat to be trimmed” from the budget and the council needed to stay vigilant of spending.
“Town staff does multiple duties and in the near future we may be asked to do more duties and we may have to increase staff, we may have to increase expenditures,” she said. Later in the meeting, the council approved buying the local water company and Town Manager Tim Grier said town hall staff would take on extra duties, such as billing.
Although Star Valley’s cash reserve is well above that of many Arizona towns, the town has not been immune to declining revenues.
In the last four years, city sales tax has decreased nearly $200,000 and the town’s biggest cash cow, photo enforcement, has been steadily decreasing.
Overall, photo enforcement revenue is falling 13 percent every year, Nutt said.
In 2011, photo enforcement income has been on a roller coaster. The first four months of the year saw a steady increase over last year, but then a decrease from May through July.
In June, revenue ticked back up 45 percent over May, but then fell again in July. August’s total was up 31 percent over August 2010, but September saw another decrease with income falling 14 percent from last September.
The town anticipated photo enforcement revenue would fall and last year over predicted the decline, with the year ending above budget. Staff and council were pleasantly surprised when 2010’s revenue came in $188,000 over budget.
This year, the town expects another decrease due to the recession and more people familiar with the cameras’ placement. Although more people are aware of the town’s four cameras and subsequently slow down, the cameras are still clocking thousands of drivers speeding 11 mph over the 45 mph speed limit.
Without photo enforcement, however, Star Valley would not have its financial standing today.
Although unpredictable, the cameras supply a steady stream of income where most towns rely on state-shared revenues, sales tax collections and property tax.
Looking just at Star Valley’s sales tax, the town’s economic health is suffering.
Star Valley’s total sales tax collections last fiscal year fell $22,000 from the year before — a minor decrease from 2007 to 2008, when sales tax collections went down $176,000.
The town’s other major revenue source, sales tax collected by the state and distributed based on population, has also taken a hit.
Last year, the town received $155,500 from the state; a slight uptick after the 2010 Census showed a population increase and the town got an increase in funding.
However, state shared revenue remains down overall and will continue to decline until there is an overall economic shift, Nutt said. Town hall staff has worked hard to predict these declines and budget accordingly, she added.
Nutt and Grier go over finances weekly and have designed budgets that allow for town improvements, but also bank funds for unexpected costs.
“Through historical data trending we have been able to predict our fiscal budget,” she said. “Understanding this decline has led to a change in spending habits. We have readjusted priorities, cut town hall costs as well as seriously considered expenditures and future spending.”