Town bracing for budget hit in 2010-11
With no major capital projects in the works, the Town of Prescott Valley faces a budget $26 million smaller than what the Town Council adopted for the fiscal year ending June 30.
Moreover, town officials plan to continue a hiring freeze and other austerity measures because sales tax revenues are likely to continue to drop and home construction likely will remain stagnant.
The good news is town officials will continue a no-layoff policy, Town Manager Larry Tarkowski pointed out.
Tarkowski and Management Services Director Bill Kauppi unveiled a draft budget for 2010-2011 of $67.2 million, down from a budget of nearly $93.3 million for the current fiscal year. The council scheduled a workshop on the draft budget for 5:30 p.m. Wednesday and Thursday in the library auditorium, 7401 E. Civic Circle.
Kauppi explained capital spending is likely to drop from nearly $32.1 million in 2009-2010 to $10.8 million in 2010-2011.
The budget decline began after it peaked at nearly $108 million in 2007-2008, according to the budget document.
Town officials began cutting costs in October 2007 when Tarkowski imposed a hiring freeze, he noted in the budget document's first chapter. The freeze in turn led to a staffing reduction exceeding 16 percent. Town officials have budgeted about 216 jobs for 2010-2011.
Moreover, he imposed a 5 percent pay cut - excluding sworn police officers - this past October by cutting hours from 40 to 38 per week for hourly employees, carrying out furlough days for salaried staffers, and reducing the workweek to four days for most departments.
Town officials also did not fill positions when the new library opened in October and instead transferred employees from other departments to work in the library.
The budget document envisions continuing the hiring freeze, four-day workweek and hourly cuts with new austerity measures for 2010-2011. They include closing the Mountain Valley Splash pool (open from the Memorial Day weekend to the resumption of classes in the Humboldt Unified School District in August) on Sundays and closing the library on Mondays.
The library will be open five days a week and the pool will be open six days during its season, Tarkowski said.
Tarkowski said he expects the upcoming budget to have a less federal stimulus money, which paid for projects such as the Glassford Hill Road overlay. Grant money is likely to drop from $15.7 million in the current fiscal year to $6.8 million in 2010-2011.
Town officials project total revenues of $52.4 million in 2010-2011, down from $71.1 million in 2009-2010. Cash reserves of $14.8 million will bring the total to $67.2 million, thus preventing a deficit.
Revenue projections include $12.5 million for utility fees and charges, up from $12.1 million; and $11.9 million from sales taxes, down from $13.1 million.
Kauppi indicated projections for sales tax revenues for the current fiscal year might have been optimistic because some retailers, including Wal-Mart, have not opened. Retail sales account for about 40 percent of all sales tax revenues.
The General Fund will account for nearly $24.3 million of overall spending, down from $36.3 million in the current fiscal year. General Fund spending will drop because spending on the new library covered the first six months of the fiscal year, Kauppi said.
Councilman Rick Anderson commented, "I think we have done a good job (on the budget). We have managed to show fiscal responsibility with the public's money."
The council scheduled adoption of the tentative budget for May 20 and the final budget June 24.