By Nick Worth
The Holbrook City Council heard a first read-through of the proposed 2013-14 budget in a special work session held last Monday evening.
City Finance Director Randy Sullivan and City Manager Ray Alley explained to the council that the budget would be subject to a state-imposed $6.8 million spending limit because the city did not hold a home-rule election, as is required every four years in order to select an “alternate” budget limit.
Alley explained that he and Sullivan thought the contingency fund monies would not be included in the spending limit, so there was no need for a home rule election. They later found out contingency monies are included in the state-imposed cap.
Sullivan told the council there are penalties for exceeding the state-imposed limit.
“If you go over the limit by up to 5 percent, you are penalized three times that amount,” Sullivan said. “If you exceed the limit by up to 10 percent, the penalty is five times the amount spent over the limit.”
Alley added that, because of the way the rule is written, if the city had to exceed the spending limit it would actually be cheaper to exceed the limit by over 10 percent.
“If we’re going to go over the budget, we need to go over big,” said Alley.
He told the council the penalty for exceeding the limitation by over 10 percent is one third of the city’s Urban Revenue Sharing, which is $500,000.
“In our case, that one-third would be about $180,000,” Alley said.
He told the council despite the limited spending under the state mandate, there is still $400,000 budgeted for streets in the coming year.
“I don’t think the public will see quite as much done, but they will still see a lot of work done,” Alley said. “A $6.8 million budget is small, but we’re running that lean already.
“I strongly think we should stay within this spending limit,” Alley told the council. “The good news is we have a really tight, balanced budget with $400,000 in improvements.”
Sullivan told the council another feature of the proposed budget is an across the board $4,000 raise for every permanent city employee.
“We haven’t had a raise in four or five years,” Sullivan said. He said full time employees who are currently making below $30,000 per year, will have their wages increased to the $30,000 level.
The budget also includes a 0.4 percent increase in Arizona Retirement to 11.3 percent, a public safety retirement rate of 44.01 percent and an increase in medical, dental and vision insurance coverage of 2.7 percent that is not being passed on to the employees.
“The city will absorb that cost,” Sullivan said.
Alley told the council he is also eliminating all overtime pay and will instead have city employees take comp time for hours worked in excess of their regular hours.
The budget also includes new departments for Safety and for Animal Control. The Safety Department will employ a Safety Officer who will ensure the city meets all relevant safety regulations.
Animal Control is currently under the police department, but Sullivan said Holbrook Police Chief Mark Jackson asked for it to be split off from his department.
Sullivan noted the police department has the largest share of the budget at nearly $1.7 million. The PD budget is down only $21,260 from the 2012 budget.
The Holbrook Library budget for the coming year is $214,658, up from a budget of $152,720 for 2012-13. The difference, according to Alley, comes from a program to purchase e-readers.
City of Holbrook Librarian Wendy Skevington told the council the e-book readers are expensive and, unfortunately, licensing the books for the readers is expensive, but the program is needed to stay current.
According to Sullivan, the book licensing fees alone will cost the city approximately $7,000 per year.
Vice Mayor Charles Haussman told Sullivan he would like to see something in the library budget to replace some of the old furniture in the library.
Skevington said there is currently only one table and its chairs that need to be replaced. Haussman then suggested a $5,000 addition to the budget to purchase some replacement furniture.
The Library and the Fleet Management departments were the only two general fund budgets that showed an increase for the upcoming fiscal year. All other general fund and utilities departments lost money from their budgets.
Alley told the council there are no contingency funds in the budget, which puts the city in danger of going over the limit if some large problem should occur.
Mayor Jeff Hill noted that the work session was an informational session only and that nothing could be voted on.
Sullivan said discussion of the budget would be on the agendas for the next two regular session council meetings if council members decided they wanted to address anything in the budget before voting on it.
By Nick Worth