Originally Published: May 4, 2012 9:51 p.m.
PRESCOTT VALLEY - The Town Council and department heads wrapped up discussion of the proposed $66.7 million budget for the upcoming fiscal year ahead of schedule Wednesday evening.
Town Manager Larry Tarkowski opened the session by saying, "I know you are already familiar with this process," which started with a council retreat with staff this past November.
The council followed up on the retreat with an open house in December, and conducted a second retreat in January, Tarkowski said.
"The direction from all department heads is zero increases in their operating budgets," Tarkowski said. He reiterated his point that he took the first austerity measure - a hiring freeze - in October 2007 because of a looming drop in revenues with a worsening economy.
He said the town's budget peaked at $111 million in the 2007-2008 fiscal year and has dropped since then. The 2012-2013 fiscal year begins July 1.
The proposed budget for 2012-2013 year is $266,269 smaller than the budget for the current fiscal year. Revenues under the General Fund - which covers general operating functions of the town government - will drop $772,607, to more than $26.5 million in 2012-2013.
The budget is dropping despite an increase in fuel costs, Tarkowski said.
Tarkowski said elections next year mean the town clerk's budget will increase. The draft budget document shows the town clerk's budget climbing from $290,939 for the current fiscal year to $378,666.
He said the Police Department is the only town department that will show a significant increase in spending. The budget document shows a proposed increase from $7.2 million in the current fiscal year to more than $7.9 million come July 1.
Tarkowski said tax receipts are increasing, commenting, "We are seeing a turnaround that started in the last fiscal year," he said.
Responding to a question from Councilman Don Tjiema, Tarkowski said the Central Arizona Project is urging local jurisdictions to set aside a dollar per resident to support regional economic development. That will amount to about $38,000 in Prescott Valley.
Tarkowski turned over the general overview to Management Services Director Bill Kauppi, whose office prepared the budget document.
Using a Powerpoint presentation, Kauppi said the proposed budget is the lowest it has been since the 2003-2004 fiscal year.
Kauppi said the hiring freeze "more or less has been eliminated." He added sales tax revenues have dropped since peaking at above $15 million in 2007-2008.
Sales tax revenues are likely to exceed $11 million in 2012-2013, Kauppi said.
Kauppi also expressed concerns that the state Legislature will raid state-shared revenues, which include Highway User Revenue Funds generated at the gas pump.
The town's revenues will total $51.7 million. Sales taxes and intergovernmental revenues (which include state-shared revenues and grants) account for 40 percent of the total revenue pie.
Department heads followed the talks by Tarkowski and Kauppi.
Council members Mary Mallory and Patty Lasker did not attend the meeting, and Mayor Harvey Skoog came late.
No members of the public attended the meeting, and council members said they have received few comments.
"I have not had any public inquiries," Councilman Michael Whiting said after the meeting. "I think you can understand if you review the budget book it is very complicated."
The budget meeting resumed Thursday evening with more presentations by department heads. The council plans to adopt the tentative budget May 24 and approve the final budget June 28.