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FY 2009 Tentative Budget Adoption July 15, 2008 City Council Chambers 826 N. Main St. Cottonwood, AZ Difficult Times and Difficult Decisions – A Brief.

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Presentation on theme: "FY 2009 Tentative Budget Adoption July 15, 2008 City Council Chambers 826 N. Main St. Cottonwood, AZ Difficult Times and Difficult Decisions – A Brief."— Presentation transcript:

1 FY 2009 Tentative Budget Adoption July 15, 2008 City Council Chambers 826 N. Main St. Cottonwood, AZ Difficult Times and Difficult Decisions – A Brief History

2 Timetable – FY 2008  September 2007  July Sales Tax was down 26.95% over last year  Council was briefed of the situation  The City began making plans  Reduce costs  Hiring Freeze  Postpone capital purchases  November 2007  Council suspended Longevity Plan  December 2007  Plans get underway for new FY 2009 budget

3 Timetable – FY 2008  February 2008  Budget Season gets underway  March 12, 2008  Council Goal Setting Meeting  Discussed Major Revenues  Made changes to 1% sales tax distribution  Eliminated allocation for Sewer Facilities  Shifted monies to General Fund and Streets  Postponed contributions to Capital Accumulation Fund (CAF)  Shifted to General Fund operations & maintenance

4 Budget Season Gets Underway  Budget begins to take form  Revenues are projected by Finance  Expenditures projections are made by departments using these guidelines:  Base budget – only those costs necessary to keep current services  No new staffing or reclassifications  No new programs or projects  No capital expenditures

5 Budget Shortfall Meeting Emergency Departmental Meeting  $2,297,465 shortfall & plan  Administrative Responsibilities  No capital outlay  No additional new programs  No additional staffing or reclassifications  No additional outside agency support  At this point there were no planned cuts in current services funding  Reduction in overtime (mostly Public Safety)  Suspend Continuing Education for employees

6  $2,297,465 shortfall & plan  Legislative Responsibilities  Eliminate contributions to Outside Agencies  Senior Center  Old Town Association  Youth Commission  Reduce or eliminate contingency accounts  Change our Travel Policy  Change our Cellular Phone Policy  Move Capital Sales Tax to operations & maintenance Budget Shortfall Meeting Emergency Departmental Meeting

7  $2,297,465 shortfall & plan  Additional Reductions  Departments under $500K – 5% reduction  Departments over $500K – 8.5% reduction  Postpone Building Communities Grants  At the end of the day the City was still nearly $600,000 short of goal Decision was made to go to Council for additional direction

8 Pre May 29 th Meeting  Departments prepared budgets as instructed  Departments under $500K – 5% reduction  Departments over $500K – 8.5% reduction  New budget numbers were compiled  Concerns were discussed with mgmt  Impact projections were prepared in advance of the May 29 th meeting

9 May 29 th Council Meeting  Revenues were discussed  Sales Tax  State Shared Revenues  Large dealership moves out of town  Budget is discussed  Steps taken to reduce base budget  Shortfall remaining  Possible impacts of reduced budget  Tax Structure

10 May 29 th Council Meeting (cont)  Steps taken to reduce base budget  Personnel issues  Cut staffing  Eliminated Cost Of Living Adjustment (COLA)  Reduced Overtime by 25% (mostly in Public Safety)  Reduce pool and weight room hours  Affects Mingus High School most of all  Affects a group of lap swimmers and evening swim programs  Reduce book budget and open hours for the Public Library

11 May 29 th Council Meeting (cont)  Steps taken to reduce base budget  Reduced contractual services  Custodial  Weeding and insect control  Reduce or eliminate recreational programs  Rhythm & Ribs  Farmer’s Market  Concert Series  Reduce travel and training, and employee continuing education

12 May 29 th Council Meeting (cont)  Possible impacts of a reduced budget  Eliminate support to outside agencies  Increased response time from Public Safety  Deterioration of vehicles due to lack of scheduled maintenance  Loss of “Quality of Life” programming  Ill maintained or close parks  Reducing hours at the Library  Closing the Dog Park

13 May 29 th Council Meeting (cont)  Possible impacts of reduced budget  Deterioration of buildings due to lack of maintenance  Harm outside agencies  Increased liability costs  Lack of Operations & Maintenance for Recreation Center & Library

14 May 29 th Council Meeting (cont)  Tax structure comparison  Used Yavapai communities  Compared sales and property taxes  Cottonwood sales tax rate is below 50% of communities  Cottonwood is only community with no property tax for a municipal function  City  Special District  Fire District

15 Clarkdale, Az

16 Camp Verde, Az

17 Jerome, Az

18 Sedona /Oak Creek

19 Cottonwood – In Fire District

20 Cottonwood, Az – Outside Dist.

21 Current Property & Sales Tax Comparison CommunityProperty Taxes Town or City Function Sales Tax Rate Spending to Property Tax Clarkdale$1,746.00$ %$20,952 Camp Verde$2,287.00$ %$45,740 Jerome$1,456.00$ %$5,824 Sedona$1,324.00$ %$11,475 Cottonwood – In Dist$1,742.00$ %$0 Cottonwood – Out Dist$1,312.00$ %$0  Cottonwood has the lowest property tax  Second lowest sales tax  Last column shows average additional household spending to make up the property tax

22 May 29 th Council Meeting Council Directives  Directed staff to budget sales tax with an additional 0.8%  Keep expenditures at base budget and limit expenditures  Continue support for outside agencies  Minimal capital expenditures that use O&M funds

23 May 29 th Council Meeting Use of fiscal responsibility  All capital purchases are minimal and will be scheduled  Minimal additional staffing and reclassifications  Already have changes in Financial Operations Guide policies:  Wireless Communication Device Policy (currently being implemented)  Travel Policy (already in place)  Less patrol cars driving and more use of the Mobile Data Terminals(MDTs)

24 May 29 th Council Meeting Use of fiscal responsibility (cont)  Items that need to meet revenue estimates  Cost of Living Adjustment is delayed until 01/2009  Compensation Study delayed until last fiscal quarter of 2009  Compensation Study implementation is delayed until 1 st quarter FY 2010  Will be back to the Council in November with Major Revenue update

25 Common Misconceptions .8% sales tax means 8/10 th on each dollar, not 8¢ on each dollar  $285,000 for new transit buses are 93% grant funded – City cost is $19,950  Additional staffing is most grant funded or funded by the enterprise funds  Additional battalion is 75% funded through a Federal grant  Cottonwood Area Transit (CAT) driver is mostly funded by Arizona Department of Transportation (ADOT)

26 Utilities Highlights  Bella Montaña Water Reclamation Facility $5,565,000  Highway 260 Water/Sewer Line Construction $3,400,000  Arsenic Mitigation $1,950,000  Water/Wastewater upgrades $3,068,000  Water Storage  Improved Fire Flow  Collection System Master Plan

27 Streets Highlights  Pavement Preservation $350,000  Willard St. Extension $910,000  Begins Construction within weeks  Paula St. Reconstruction $345,000  In design phase  W. Mingus Reconstruction$1,030,000  Will be designed this year  Construction to begin next summer

28 Streets Highlights  12 th St. Reconstruction $460,000  Birch St. to Mingus Ave. (in design this year)  Funded by a Community Development Block Grant-CDBG  12 th St. Reconstruction $1,595,000  89A to Fir St. (in design this year)  Initially Highway Expansion & Extension Loan Program  Northern Arizona Council of Governments Grant  Street Contingency & Sidewalks $725,960

29 Other Highlights  Airport Improvements$660,000  95% Grant Funded  2.5% State Funded  2.5% Local Match  Library Expansion$784,420  Greater AZ Development Authority Loan  Land Acquisition$675,000  Greater AZ Development Authority Loan


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