Star Valley’S Budget Features Huge Reserve Fund

Council likes budget format that puts off decisions on major water, road projects

“There are no loaded balloons in there.  It’s realistic. There are no outstanding, glaring items ...”
Vern Leis
Star Valley councilor

“There are no loaded balloons in there. It’s realistic. There are no outstanding, glaring items ...” Vern Leis Star Valley councilor


The Star Valley Town Council Tuesday expressed satisfaction with a budget for fiscal 2012-13 that includes money to run and upgrade its new water company and a big reserve fund to fund still unspecified projects.

The town remains in far better shape than most, thanks to state formulas that have rewarded it for population growth and revenue coming in from traffic ticket cameras at both ends of town. The town each year brings in between $300,000 and $400,000 more than it needs for ongoing operations, giving it money for special projects.

Town Manager Tim Grier made an overview presentation to the council, including a discussion on how to handle some $2.5 million in reserve funds. That reserve includes a $600,000 rainy day fund set aside for emergencies and health and safety concerns and roughly $300,000 in accumulated gas tax funds the town can only spend on road projects.

The council ultimately went along with Grier’s recommendation that it not allocate reserve funds for particular projects to allow the town flexibility down the road. The major projects under consideration include a $125,000 overhaul of a portion of Moonlight Drive and a $300,000 project to revamp one of the well sites the town bought from Brooke Utilities. The town hopes to get a federal water infrastructure grant to cover the cost of that water project, but won’t know for sure until September.

“A lot of what is going to drive the decisions you make as a council is what we are going to do with the water company,” said Grier. “We could run it at break even (on customer payments), but it would be patch, patch, patch as it has been in the past.”

For instance, Grier said the town might want to buy a $20,000 dump truck, apply for more federal grants or undertake road and drainage improvements at Sprague and Quail Hollow.

The council must also still decide whether to put money back into its $600,000 emergencies-only rainy day fund, which it raided to help make the nearly $800,000 purchase of the water company. The council originally wanted to buy the water company so it could become a water provider and buy into Payson’s Blue Ridge pipeline. However, the council recently decided not to buy into the pipeline after all. Now, the council is grappling with how much money to put into upgrading the decaying infrastructure of the water system, which will provide the town with a backup water supply to augment the shallow, private wells on which most residents rely. Only about 400 residents are currently customers of the water company.

The budget contracts out many of the services larger towns like Payson provide directly. For instance, the independent Hellsgate Fire Department provides fire protection, mostly with its own property tax assessment. Star Valley pays the Gila County Sheriff’s Office nearly $400,000 annually to provide police protection.

In addition, Star Valley has started contracting with Payson to perform building inspections. The deal allows Payson to keep the fees charged to business owners and builders. However, it will also save Star Valley about $100,000 annually, compared to hiring its own staff to handle the relatively small number of inspections, said Grier.

“Using Payson so far we’ve had five inspections and that seems to work pretty well. Having a part-time inspector really doesn’t work. I think Payson will do a good job,” said Grier.

The town’s largest source of gross revenue remains speeding tickets, which brings in a total of about $900,000 annually, which is down by 23 percent since 2008. However, Grier said that the town has to cover substantial costs of running the speed cameras and collecting the fines. As a result, the net revenue from the cameras totals about $360,000 annually, he said.

The town also gets $651,000 annually from various sources of state-shared revenue, including gas taxes, income taxes, state-shared sales taxes and vehicle license fees.

The growth in the area’s population in the past decade has provided Star Valley with a small windfall when it comes to the state’s formulas for distributing that money, unlike Payson — which has seen a vexing decline.

The local sales tax brings in another $159,000, although that total has been on the decline. By contrast, in Payson the sales tax provides more than half of the revenue.

The town spends about $200,000 on salaries, a big chunk of the roughly $600,000 it spends on general operations. That doesn’t include things like road projects and the new costs associated with the water department.

The town council seemed content to approve a budget that increases operating costs modestly and takes on substantial new costs to run the water department — but postpones the big-ticket decisions on streets and infrastructure projects until later in the year. Star Valley’s budget relies on pulling from its huge contingency fund as needed, rather than the line-item details included in Payson’s budget.

The council praised the new budget format and the overall financial status.

“I’m comfortable with it,” said Mayor Bill Rappaport. “I like the way it’s set up, where we don’t have so many line items — although I might like to see the money for roads taken out of that contingency fund.”

“We’ve spent so much more money on roads than the county ever did,” said Councilor George Binney, in reference to nearly $1 million worth of road projects in the past several years. “I don’t think we’ve got a lot left to do.”

Councilor Vern Leis said the budget “was superior to anything we’ve looked at before. There are no loaded balloons in there. It’s realistic. There are no outstanding, glaring items. It’s a good budget.”

The only extended budget debate at the Tuesday meeting centered on whether the council should apply to what amounts to a $21,000 grant to cover still undetermined engineering costs for upgrading the water system. The federal grant would require the town to come up with about $14,000 in matching funds.

Grier said he needed approval of the possible expenditure of $14,000 so that he could complete the grant application before July 1 — although he conceded that he wasn’t entirely sure a total of $35,000 in engineering work remained in the water department overhaul.

The council debated whether to apply for the money, given the uncertainties and the tight timeline.

Councilor Binney said the town shouldn’t apply for federal money unless it had a clear need. “It’s still taxpayer money and if we don’t need it, let’s not waste their time.”

But Leis said the town might end up needing the technical assistance money. “There’s so many unknowns right now, it’s hard to make a decision.”

In the end, the council decided to put off applying until November, by which time the need for design work should be more clear and the town would know if it would receive a separate, $300,000 grant to upgrade a well.


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