Payson officials ransacked their budget projections for spare change and windfalls and came up with an estimated $600,000 in added revenue — enough to avert threatened layoffs and probably even restore full funding to the Rim Country Regional Chamber of Commerce.
A rise in projected state revenue sharing, a projected increase in taxes on utilities and other sources of money prompted the Payson Town Council to cancel a meeting last week it had called to set the layoff process in motion.
“We went line by line by line by line,” said Payson Mayor Kenny Evans. “There’s not a rock left we haven’t turned over four times.”
The brightening fiscal picture came just weeks after an emotionally charged meeting during which Town Manager Debra Galbraith said the town faced a $721,000 deficit that would require laying off three town workers and slashing funding for the Chamber of Commerce’s Visitors Center from $36,000 to just $11,000.
Evans said part of the added projected revenue comes from the rise in monthly bills for Internet, television and propane, all of which pay a town tax based on the total of the bill. Moreover, the town has raised water rates.
The budget also does not take into account added sales tax generated by the arrival of the Arizona State University football team to train at Camp Tontozona in August, nor the added economic activity likely to stem from the start of construction on the Blue Ridge pipeline.
The revised budget projections also generated an extra $200,000 or so in state-shared revenue. Prior to the recession, Payson got about $1.9 million annually in these various state-shared revenues. That fell to $1.4 million in each of the past two years. The town’s initial projections suggested the total would fall to $1.2 million in the fiscal year starting in June, but updated figures from the state prompted Payson to project an extra $200,000 from those sources.
“We found enough that we can fend off the layoffs, but it leaves us with very little in the way of reserves,” said Vice Mayor Michael Hughes, who served on the council’s budget study committee.
However, the town will leave in place a wage and hiring freeze. Moreover, the town will forego almost all street and capital improvement programs for another year and employees will have to pay roughly $200 more each month for their health and retirement benefits.
State formulas also forced the town to substantially increase its contributions to retirement plans for police and firefighters. The town had to shell out an extra $85,000 last year and faces a $130,000 increase in the upcoming year.
The town spends nearly $700,000 annually in retiree health care costs — or about $17,000 for each retiree. State law prevents the town from reducing those benefits or even asking employees to pay a greater share of the increased costs.
The town won’t actually adopt a final budget until July, but in the case of layoffs the process of approving the cuts comes much sooner.
Despite the cancellation of the layoffs, the town faces a fourth year of scrounging for budgetary cash. The town’s general fund budget totals about $13 million, half of which comes from sales taxes.
The continuation of a hiring freeze means the town won’t have the money to fill any of the five open slots for police officers. Those vacancies have resulted in one less officer on most shifts, although reports of major crimes have continued to fall despite the decline in patrol officers.
The freeze also means Payson still cannot provide full, three-man staffing for the new fire truck the council bought to post in the third fire station, built last year with leftover bond money. The town had hoped this year to get federal grants to hire enough extra firefighters to man the third station. But when the town didn’t land the grant, fire officials shifted to two-man crews on most shifts and bolstered the ranks of the volunteers.
Studies suggest that two-man paramedic crews are slower in performing certain critical tasks, like making the first entry for rescue into a burning house, getting water onto the fire and handling some critical medical situations. Moreover, firefighters on two-man crews suffer a higher injury rate according to some studies, probably because firefighters working alone try to lift heavy hoses and equipment, instead of waiting for the arrival of another truck with extra crew members.
Despite the shortage of firefighters, the town isn’t considering mothballing the third fire station and reviving its long-standing agreement with neighboring Hellsgate Fire Department.
Evans clarified figures on the potential savings of shutting the third fire station and going back to paying Hellsgate either $50,000 per quarter or $160,000 per year to provide primary response in the eastern area of town now served by the third fire station, located at Highway 260 and Tyler Parkway.
The third station costs $230,000 annually to operate. But even if the town closed the station, it would still have to pay $70,000 to $90,000 in ongoing costs for the building. That leaves a net savings of about $150,000, said Evans.
However, the Hellsgate contract cost the town $160,000 annually for a multi-year agreement, for $200,000 annually for a contract renewed every three months.
“That more than offsets the $150,000 in savings by closing the fire station,” said Evans.
Chamber officials declined comment on the budget situation, noting that the council hasn’t yet decided whether to boost the funding for the visitors center back to this year’s total of $36,000.
The possibility of a $24,000 cut in the chamber’s $105,000 budget several weeks ago came as a surprise to chamber officials, who at the time said they would probably have to curtail the hours of operation for the visitors center.
About 12,000 people stop by the visitors center every year to get information about local attractions, hotels, restaurants, campgrounds and hiking trails. Monthly visits to the center bottom out at about 500 in December but top 1,200 monthly during the season.