The Town Council went over a proposed budget of $39.8 million for fiscal year 2017 during a special session on Tuesday, April 19, though changes are already expected due to requests from the Council to see a higher bump in pay for Town staff.

This year’s budget is currently up about $1.8 million from FY16, which was itself down about $7 million from FY15. The current working budget, including transfers, came out to $39,794,769.

Before diving into the budget, Town Manager Grady Miller spoke to the importance of the process of finalizing a budget, as it helps outline a plan for the Town over the next 12 months.

“A lot of work went into this budget,” Miller stated, pointing out that many members of staff who helped create the budget were on-hand during the session.

Miller also pointed out that the proposed budget included the $1 million in “seed money” to kick start the proposed reserve fund, as well as a proposal to reestablish the Public Works Department.

“There’s so much going on in that department, I would like to see it separated out,” Miller explained.

This would result in a bump in staff of 1.63 positions, with the full position for a Public Works director and the remainder equating to about a 30-hour work week for an accounting clerk.

On the subject of staffing, Miller explained that he believes the Town is short about 10-15 employees but, due to the budget, only 1.63 ($149,850) is being requested.

“For the most part, citizens don’t see [that we’re understaffed] unless they come in and see that they have to wait longer in line, as an example,” Miller said.

He meant this as a compliment to the Town staff, who he said have continued to provide the services levels that have always been there, despite the fact that everyone is having to pull more weight than ever.

Miller said he still feels the staff is being “worked to death.”

“There’s a situation that, when people are out, we don’t have anyone available to cover,” he continued.

“[Staffing is a] difficult decision, especially when there are other needs out there.”

Miller said the Town’s various departments made “worthy requests” and he wishes more could have been done, but he felt the most pressing issues were addressed in the proposed budget.

Looking ahead

During the budget session, the Council heard from Finance Director Craig Rudolphy. As has been stated numerous times in recent months, Rudolphy said the town is going to need to find new revenue sources to keep up with expenditures moving ahead.

Looking at the next five years, Rudolphy said he expects expenditures to outpace revenues.

The Town got a little help in that area for this year’s budget, as higher than expected State Shared Revenues will result in about $500,000 going back into the general fund.

This year’s budget was broken down into 10 main categories, with capital projects taking up the largest slice of the pie at $12,196,382. Public safety was next at $7,638,828, with special revenue funds clocking in at $5,821,931.

General government, administration and debt service were at about $3 million apiece, with community services budgeted at $2,172,749.

About $1.5 million was budgeted to excise tax-downtown/ED/tourism, with $921,000 for development services and $827,000 for public works.

Taking into account state shared revenues, local revenues and total general fund expenditures, Rudolphy explained that Fountain Hills is expected to have a $720,576 shortfall by 2017-18, stretching to $2,148,455 by 2020-21.

Miller broke down where revenues are coming from, saying that about 51 percent comes from local taxes, with 33 percent in the area of intergovernmental, and about eight percent coming from building revenue and another eight percent coming from permits/licenses/fees.

Pay raise

The area of personnel and benefits is currently budgeted at $3.9 million, up about 2.9 percent from the previous year due to the proposed new positions and a 2.5 percent salary adjustment for employees totaling another $75,843.

Councilman Alan Magazine opened up a discussion of the possibility of seeing that 2.5 percent bumped up a little more.

“[Staff members] are working their butts off,” he said.

“If we want to keep them, we’ve got to offer a bit more.”

Magazine suggested that, in the next iteration of the budget, he would like to see information on where additional funds might be pulled from in order to bump the salary adjustment for employees by .5 or 1 percent.

Miller stressed that it would be important to keep whatever figure is agreed upon sustainable, as he did not want to face a reduction in force in the coming years because the Town could no longer maintain its staff.

Councilmember Henry Leger agreed with Magazine, saying he would like to see the salary adjustment at least bumped up to 3 percent.

Leger called that figure “reasonable and fair,” saying he expects it to only cost the Town $17,000 to make sure its staff receives a bit more compensation.

“Our staff is well worth that,” he said, adding that the unexpected $500,000 coming back to the town from State Shared Revenues might be an ideal source.

“What better way to spend that money than to reward our staff,” he asked.

“We spend more on maintaining art than paying our staff.”

Councilmember Dennis Brown added that, if the extra bump could be supported, he would be in favor of it, with councilmember Nick DePorter saying he felt the move would be “worth it.”

“There’s a lot of turnover out there,” DePorter added.

“If we can’t provide more support, this is what we can do.”

Miller said that the timing should be good to look at a slightly higher salary adjustment for staff and that he would look into a methodology to fund the hike moving forward.

Conclusion

This being only a proposed budget, Miller said he would return to the Council with requested and needed adjustments, including a bump in the 2.5 percent pay increase to staff.

The Council has two budget resolutions to consider in the coming months. First is the possible adoption of the proposed budget, which will be presented on May 5. Next up, the Council will need to adopt a final budget on June 2.

The full proposed budget, including more detailed information on individual funds, departments and proposed alterations to the fee schedule, can be found at fh.az.gov. From the “Your Government” drop-down menu, click on “Agendas and Minutes.”

The budget is within the agenda for the April 19, 2016 meeting, and the full special session can be watched at any time from that same page.