By Naomi Hatch
Snowflake Finance Director Brian Richards gave a yearend report of the town’s financial situation to the town council last week.
The purpose of the report is to “give a good education of where we are at so you (the council) can be informed when you talk to citizens,” said Richards at the Aug. 26 council meeting.
Richards had prepared documents showing the current year-to-date figures (fiscal year 2013-14) and the prior year-to-date figures (fiscal year 2012-13) to give council members an idea of town finances for the past two years.
He reported that sales tax revenue is lower by $47,000 in 2014, and explained that Snowflake is not seeing increases like other cities and towns are. That revenue is based on the businesses in town and the taxes that they collect, Richards noted.
“We are still seeing the effects of the mill closing,” said Town Manager Paul Watson. “It’s a sign of our times; people are leaving, people are cutting down. We’re in this down cycle and we haven’t started coming out of it.”
Richards said that state shared sales tax is up and will be up this fiscal year, as well, noting that that money is based on the state economy.
He also gave a brief update on the Southern Solution, explaining that they are working on the western crossing, and stated, “If we get it substantially complete by next Thursday, (Sept. 4), FEMA (Federal Emergency Management Agency) will give us $96,000.”
Watson said that they are on track to get that money, and said that the town and contractor are working hard to meet the deadline.
The Southern Solution began in 2003 and since that time the town has collectively received $3.6 million from partners on the project.
The town has applied for another grant for the Northern Solution, Richards said, explaining, “Once we get that, we can remove the industrial park from the flood plain and people won’t have to buy flood insurance.”
He advised the council that the Southern Solution will cost roughly $3.7 million and the town will get roughly that amount back from partners, noting, “Obviously, there’s a match on our part, but we do everything we can to get partners on this.”
Returning to the budget figures, Richards said, “One thing that caught my eye is parks and recreation revenue is down,” and have been going down for the past three years.
Because of refunding, (borrowing money at a lower rate and paying off an existing bond) and with the new interest rate, “the town saved hundreds of thousands of dollars over the years,” said Richards.
Refunding paid the original debt, and the town paid $178,000 it had on hand toward the existing principal balance.
“Overall, I’m happy with the general fund revenues, because it’s what we budgeted,” said Richards.
Revenues were down approximately $70,000 for the golf course. Richards explained that the golf course expenditures are somewhat fixed, noting, “There’s not a lot of change with the expenditures.”
Mayor Kelly Willis asked that they address the golf course.
Councilman Lynn Johnson said he felt they should also address parks and recreation.
Council members began discussing solutions to declining revenues in those two areas.
Richards reminded the mayor that the agenda item was a financial update, and they couldn’t talk about policy regarding the golf course.
Willis asked Watson to get facts and figures, and put these on a future agenda.
“Expenditures in all departments were on budget,” said Richards.
He then moved to the utility fund, and said he felt the town needed to raise water rates and sewer rates, suggesting they schedule a work session. He suggested they change the rate so it would be a more fixed rate; more for the base rate and less for additional usage.
Watson explained that because of the computerized system Public Works Superintendent Terry Cooper and Engineer Rob Emmett implemented, the town is able to evaluate where it is more accurately.
“We’re now seeing the numbers of where we’re out and what are the replacements that we need to do,” said Watson, explaining that they are more aware of what is happening now, and won’t be surprised and need to go to the people for a bond.
Richards noted that this year they were able to keep track of employees’ salaries and what department they were working for, such as streets, sewer or water, making expenses to departments more accurate.
“It’s not all that bad,” said Richards, noting that they had $10,000 more they could put into streets.