Broadband advocates on Thursday will try again to convince the Payson Town Council to add $90,000 to next year’s budget to help update the infrastructure for reliable high-speed internet.
The council met last week with a local broadband consortium and representatives of Cable One to discuss the $90,000 annual commitment for the next 10 years they say is necessary to help string a new line to Phoenix to provide a signal loop to prevent future outages. The money would trigger a matching state grant and would help finance an approximately $8 million line from Payson to Phoenix.
The commitment would have a modest impact on a proposed town budget that already has money from growing sales tax revenues that will fund an increase in reserves, a new capital improvement fund, pay raises, big increases in contributions to police and fire pensions, a loan repayment to the town’s water department and other projects.
The council on June 13 will hold a special meeting at 3 p.m. right before the already scheduled budget meeting to discuss adding a $90,000 placeholder line item for broadband. The council voted 4-3 recently to get more information before reconsidering the proposal. Several council members who voted against the original proposal attended the session with the broadband consortium.
Town Manager LaRon Garrett and Town Attorney Hector Figueroa said once the council puts the money in the budget, they could negotiate with Cable One. If the town cannot agree on the terms, the town won’t spend the money. In that case, the money would end up in the “carry-forward” fund.
The quest to solve Rim Country’s broadband issues started five years ago with a local group of business leaders. They worked with several cable providers until Cable One came in with a plan.
During those five years, Rim Country experienced several outages when the line from the Valley and Camp Verde was either accidentally or deliberately cut. Once cut, all service to the area died — no cell phones, no points of sale or access to websites worked.
One man got into an accident when he drove south of town looking for cell service during an outage. Passersby were unable to call for an ambulance from the scene and the man died.
The message from the recent broadband meeting: Rim Country must solve its broadband reliability challenge for the safety and economic viability of the area.
“Today, it is not about capacity, it’s about redundancy and resiliency,” said Nick Robinson, a current broadband consultant and member of the consortium.
He volunteered, along with Mac Feezor and Greg Friestad, to sit with concerned citizens, town councilors and local business owners to explain the need for the town’s support. After years of negotiations, Cable One is the only broadband company to put money on the table to help Rim Country obtain reliable internet service, they said.
“They have offered to do all the engineering,” said Robinson.
They also explained that Cable One has the financing to get a cable from Show Low to Payson. However, Cable One needs help financing the line from Payson to Phoenix.
The town’s contribution would trigger a matching grant from the state.
Kenny Evans said the $2 million the MHA Foundation paid Cable One to bring the cable from Show Low to Payson has a clause allowing for a full refund if all expectations are not met. The line from Show Low would boost speeds for businesses along the highway that connect, but wouldn’t provide a signal loop to prevent outages.
Garrett said he would seek the same arrangement for Payson.
“I guarantee you their performance guarantee will be in the contract,” said Garrett. “But if we have no money appropriated, we cannot negotiate.”
General Fund Budget
The $90,000 may not have a big impact on a general fund budget that has grown to $20 million.
On May 30, Payson Chief Financial Officer Deborah Barber unveiled a spending plan that includes pay raises, more capital spending, bolstered reserves, repayment of a loan from the water department and big increases in contributions for police and fire pensions.
Thanks to the ongoing effects of the boost in sales taxes in 2017-18 and an additional $400,000 rise in property taxes this year the town has additional spending options.
The town’s budgeted general fund operating expenses will stay about the same — increasing just $18,000 to $18.6 million. However, the increase looks a little bigger — a roughly 12 percent increase — when compared to the $16.6 million actually spent in this year.
The town is providing raises to most town workers as well as filling various positions added this year.
The raises will be bigger in some areas due to the conclusions of a recent salary study, comparing Payson to other Arizona towns. The study suggested changes in the salary schedule with raises ranging from as little as $.02 an hour to as high as $8.41 an hour.
The only position added to the upcoming budget is a graphic designer.
The budget team put a high priority on building up, by several million, the town’s long-neglected fiscal reserves.
The budget also includes some $260,000 for a new splash pad in Green Valley Park. Money for that project will come from capital money already set aside for a new fire truck.
The truck will take a year to build and deliver, so the town will use that money for a splash pad and add money for the truck to the 2020-21 budget.
Barber in the 2019-20 budget wants to create a separate “capital replacement fund,” to prepare for future capital purchases.
“Our policy requires that we have a program for capital replacement. We have not met that policy,” she said.
This year, Barber wants to put $320,000 left over from a bond issue into the capital fund, however, the town has no identified source of revenue for this fund going forward, said Barber.
Capital spending within the general fund will rise from a year-end total of $735,000 this year to $844,000 next year, which is actually about the same as the budgeted amount for fiscal 2018-19.
Next year’s budget would also transfer out $1.4 million, mostly to repay a water department loan from years ago. That compares to $740,000 in the same category this current year.
Reserve and carry-forward funds
One of the biggest changes this year remains the growth in various reserve and carry-forward funds.
During the recession, the town often kept just a couple hundred thousand dollars in reserve in violation of the town policies. Those policies actually call for keeping enough in reserve to run the town for 90 days.
The new budget comes much closer to that goal. The town will have $1 million in the reserve fund, $1 million in the contingency fund and about $1.8 million in “carry forward” money, which was budgeted, but not spent this year.
That’s still $2.4 million short of Barber’s goal — but millions of dollars ahead of previous budgets.
Finally, the council weighed in on its priorities — a splash pad, money to study a new road connecting to Main Street and road maintenance townwide. From those discussions, the council added more than $500,000 to the budget. Barber covered about half of that increase by shifting money from other funds, including roads and the capital fund to buy fire engines.
Those other projects are merely postponed, so they’ll hit the bottom line in future budget years.
The total budget for all funds comes to $39 million, but that includes money the town might not actually receive or spend. It includes the $18 million operating cost of the general fund and the $7 million water department as well as spending by several property-tax-funded improvement districts.
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