Cottonwood City Council approved the final budget for fiscal year 2011-2012 by unanimous vote Tuesday, Aug. 2, capping total spending around $78.5 million.
Several areas of the budget increased compared to last year, drawing criticism from resident Bob Oliphant.
Oliphant claimed areas of the budget are “out of control” and argued residents wanted to know what areas are out of control, how out of control and what, if anything, is anticipated to be done.
In response, Councilman Jesse Dowling read from the formal budget document, stating, “There were issues that were out of our control such as rising health insurance rates, retirement contribution increases, utility costs and common expenditures in general.”
Finance Director Rudy Rodriguez highlighted some areas of the budget for the benefit of council.
Despite the struggling economy, for example, the employee merit program, which rewards city staff for outstanding achievement, will be revived, but there will be no across-the-board cost of living adjustments made.
As required by state law, contributions to employee retirement savings accounts will go from 21.94 to 23.2 percent for the police department and from 14.55 percent to 12.35 percent for the fire department, according to city records.
Contributions for other employees under the Arizona State Retirement System increased from 9.85 to 10.75 percent.
The city budgeted slightly less than $15.7 million for capital projects, which includes a transfer to the Sewer Fund of $3.3 million for continued design of the water reclamation project at Riverfront Park.
Also planned are flood improvements, architectural and remodel work on some Old Town buildings and parking lot improvements.
The city also plans to construct solar water heating for the Cottonwood Recreation Center and will continue a feasibility study for a possible Regional Public Safety Communication Center.
Enterprise funds created to fund water and wastewater projects increased compared to last year, from roughly $23.6 million to $29.5 million. The nearly $6 million increase is due to State Route 260 design and construction projects and a water reclamation facility project.
The local economy is still the single largest challenge the city faces, City Manager Doug Bartosh wrote.
After three consecutive strong fiscal years, 2004 to 2006, fiscal year 2007 brought the worst economic downturn in 16 years.
“This downward spiral in the economy has slowed but is expected to continue well into fiscal year 2012,” Bartosh wrote. “The most critical component of this fiscal decline has been the local sales tax.”
The decline in tax revenue, however, appears to be slowing and the city has experienced some positive months recently, he wrote.
The budget also reflects a decrease in state-shared income tax. The state is expected to transfer about $106,000 less to the city in fiscal year 2011-2012 than it did the previous year.{jcomments on}
