Carefree Truth

Issue #394, May 12, 2015

 

 

 

Gary Neiss reported that there were public budget workshop meetings held in March and April.  Although public attendance was very low, our readers who are interested in the process can view the workshops in full on these videos.

3/24/15

https://vimeo.com/user18676056/review/125160511/360551b65e

https://vimeo.com/user18676056/review/123951460/d2ef4d55e3

4/15/15 https://vimeo.com/user18676056/review/123994045/bba3a443a1

Areas of responsibility

https://vimeo.com/user18676056/review/125247097/fa68e45f68

4/21/15 https://vimeo.com/user18676056/review/125887058/34feeabbd2

Adoption of the tentative budget, i.e. the bottom line, was discussed at the May 5th meeting, and the final budget will be officially adopted at a special meeting on June 2nd at 4:45, before the start of the regular June Council meeting.  The 2015/2016 Fiscal Year (FY) begins on July 1st.

 

 

 

Mr. Neiss explained that most municipalities derive their income from a combination of local fees and taxes, state revenues, and property taxes.  Because Carefree does not impose a local property tax, the Town is dependent solely on local sales tax and permit fees, and state shared revenue. 

 

 

 

The revenue budgeted for FY 2015/2016 is generated from Local Sales Tax-41%, General Fund Transfer-22%, User Fees-21%, and State Revenue-16%, totaling $7 million.   Budgeted expenses are Public Safety-28%, Operations-26%, Economic Development-23%, Salaries and Benefits-20%, and Contingency-3%, totaling $7 million.  

 

 

 

Mr. Neiss stressed that Carefree has exceptionally healthy Town Reserves.  As of the end of March, the latest available  figures, the account contains a $2.5 million "rainy day" fund and a $3.6 million capital improvement fund, for a total of $6.1 million.  Historically, money has been used for water, fire protection, administrative offices, open space, and most recently the extensive street maintenance projects.  The next area of focus will be investments in economic development to help diversify and sustain sales tax revenue.  Although the Town has spent millions of dollars over the years in strategic investments, over the past 10 years the reserves have actually grown by a million dollars.  (See the 10 year chart on a slide in the video.)  Over the next several fiscal years, the Town plans to invest in its economic engine to diversify the tax base, which is why $1.5 million is included in the fiscal year 2015/2016 budget for economic development.  

 

 

 

Once the bottom line is set, money may be moved around within the budget, but the bottom line may not be exceeded.  Similar to every community, forms from the Auditor General will be used to advertise the budget, as is legally required.  Formal Council approval of the final budget will be done at a special meeting on June 2nd at 4:45, before the regular June Council meeting begins.

 

 

 

Mayor Les Peterson thanked Mr. Neiss and Town Accountant Jim Keen for their "outstanding" work preparing the budget.  He asked them to talk about the additional $50,000 that was added to the budget, and about the state imposed spending limit. 

 

 

 

Mr. Neiss explained that $50,000 was added due to an unfunded federal mandate in association with the Clean Water Act-National Pollutants Discharge Elimination System that requires mitigation of pollutants being discharged into storm water facilities.  A contractor must be engaged to demonstrate that compliance.  Vice Mayor John Crane commented this study is federally mandated, but not funded.  So an agency has dictated that everyone has to do this without giving any money for it, and we have to "pony up" $50,000.  Mr. Neiss confirmed that is correct.

 

 

 

Mr. Keen explained that since the late 1970s, the Arizona Constitution has set spending limits on municipalities.  Carefree's FY 2015/2016 limit is $9.3 million.  If the expenditure limit is exceeded, the offending municipality receives a hefty fine, the amount of which is deducted from the state shared revenue funding.  When the audit is done each year, it always shows that Carefree has not exceeded the limit.  That is a separate report, sent to the Auditor General.  Home Rule, which was adopted by Cave Creek, can circumvent the limit.  But since Carefree has not come close to exceeding it, there is no reason to ask the voters to pass Home Rule here.  Mr. Neiss also explained that debt service and facilities districts are not applied to the expenditure limit. 

 

 

 

The Council voted 7-0 to accept the bottom line figure. 

 

https://vimeo.com/user18676056/review/127335804/5c6b151c18

 

 

 

Lyn Hitchon

 

 

 

Prepared by Carefree Truth

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