PINETOP-LAKESIDE – The town council adopted the FY2020-2021 tentative budget at their July 16 council meeting in the amount of $12,889,342.
Adoption of that budget establishes the maximum expenditure limitation for the following fiscal year. The tentative budget will now be posted on the town’s website and twice in the local paper. It will be brought to council for final adoption on Aug. 6.
Council began preparing for the budget in a work session on Feb. 20. Town Manager Keith Johnson and Finance Director Kevin Rodolph began meeting with departments in March regarding their operational budgets and capital budget requests.
Rodolph told the council that all the information presented at the June 9 and July 7 work sessions in the town manager’s Proposed Budget is the same information that is on the state budget forms with just a few changes. The adopted Tentative Budget will be the spending plan for the town for FY2021 budget.
“The biggest change,” said Rodolph, “is on the police department, which was raised from $150,000 to $200,000. There are a couple of smaller (items) in community services - a $1,000 for events and a few smaller things like that. Most everything is similar to July 7,” and the total budget for the year is summarized on the last line on schedule E which is the $12,889,342.
The proposed budget focused on maintaining current operations and service levels. Rodolph explained that once the tentative budget is adopted, the final budget can be decreased but not increased. Only what is budgeted as an expenditure can be spent.
After home rule the expenditure limit is $12,600,000. The $12,889,342 budget estimation excludes such things as grants, the Arizona Highway User Revenue Fund (HURF) and debt service funds. AZCARES, monies the state gave to cities and towns, based on population, also falls into the exclusion category. Pinetop-Lakeside received $513,000 for the period of March 1 through Dec. 30, 2020. Rodolph said Federal rules do not allow the money to be used to replace lost revenue. To be in compliance they used it for public safety costs such as police, fire and EMS to offset all costs related to COVID expenses. The town had to submit police payroll costs, not including overtime, for the period of March 1 through Dec. 30, which would be over $1 million.
“Without home rule our expenditure limit is way down,” said Rodolph in a later conversation with the Independent. “Without home rule the exemption limitation would be $6,602,163. It allows us to estimate exclusions but I have to file a report at the end of the year with the exact amounts.”
In November 2018 the voters passed Home Rule, which gave the town control of its expenditures rather than having to adhere to state-enforced spending limits established in 1980. Simply put, it gives the town the ability to spend over the amount the state says they can spend.
Rodolph said that council wanted contingencies in the general fund and there are 17 items on that list. (A contingency is a provision for an unforeseen event or circumstance). He and Johnson ranked the top three but did not rank the others. The three ranked include $15,000 which they could possibly need if the referendum on the Recreational Vehicle Park zoning goes to ballot; $200,000 for the police department building which will include moving the utilities, dirt work and design and the third one is employee raises.
“Raises,” said Rodolph, (we) did not do but if we have more money, we figured three percent with benefits which totals $107,000.
The entire Tentative Budget can be found on the Town of Pinetop-Lakeside’s website: https://www.pinetoplakesideaz.gov/ArchiveCenter/ViewFile/Item/534.
Model City Tax Code
In another action following the adopted tentative budget, the town held a public hearing and passed a resolution incorporating into the local tax code all the Model City Tax Code (MCTC) changes approved by the Municipal Tax Code Commission which were made from 2012 through 2014. If there are future changes, another amendment for adoption will be brought back to the council for consideration.
Rodolph said the League of Cities and Towns realized that many cities and towns had not adopted the tax code changes. He said they tailored it to what was needed and provided it to those who had not yet adopted them. He added that it is basically legalese and definitions and will bring the town’s tax code up to date. He confirmed that it does not affect the current tax rates.
The MCTC is maintained by the Arizona Department of Revenue and is designed to assist the business community in determining which items are taxed by each individual city and town as well as those things that are can be exempted and provides uniformity.