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Print Deficit spending required to keep Camp Verde afloat
Written by Mark Lineberger   
Wednesday, 02 March 2011 00:00

The Camp Verde Town Council has known for sometime the upcoming budget planning process for fiscal year 2011-12 fiscal year is going to be difficult.

Fortunately, Town Manager Russ Martin thinks the town will be able to ride out the storm, maintaining a level of deficit spending to get the town through the next two or three years while keeping things in relatively good shape.

Camp Verde Town Manager Russ Martin thinks the town will be able to ride out the storm, maintaining a level of deficit spending to get the town through the next two or three years while keeping things in relatively good shape.The town has to have a new budget in place for the beginning of the next fiscal year, which begins Friday, July 1.

Martin said that all depends on how much longer it’ll take the economy to turn around.

“If we’re not at the bottom yet, I hope we can at least see the bottom from here,” Martin said.

Martin said while a sales tax increase would help keep the town from running an operational deficit, he has to work with what the town has.

Voters shot down two proposed sales tax increases last November, one would have brought in more revenue for the town and another would have raised money for a new library and an eastern entrance to town-owned parkland off of State Route 260.

Martin said he wants the council to know it can explain to people that even though the town will be spending a deficit, everything is “going to be fine.”

Martin didn’t have exact numbers last week, as revenue forecasts are still up in the air. The money the state typically shares with municipalities took the biggest hit from the economic downturn, Martin said, but there are some rumblings funding could start to increase again in the next couple of years.

The town had to reach into its savings to fund spending for this year’s budget, Martin said, leaving the town with a little over $2 million in reserve.

That leaves Camp Verde in better shape than a lot of other places, Martin said, and he credited former town leadership for keeping the funds in relatively good shape.

Martin said the cash reserves were similar to what the town had on hand in 2004-05.

“And no one panicked then,” Martin said.

Several things will have an effect on exactly how much money the town has at the end of this fiscal year. Martin said town departments haven’t been spending every dollar budgeted. How the town proceeds with a possible purchase of an equipment yard on Industrial Drive will also have an effect.

The town has had a general hiring freeze in effect. While this has left many town departments understaffed, Martin said it’s also saved around $200,000 in salaries.

Martin said worst-case scenario, the town will have $2.4 million in reserve and run a deficit between $700,000 and $800,000.

Some of the reserve cash is restricted, either by law or policy, meaning the town can’t use it for whatever it wants. Martin estimates restricted funds count for around $600,000 to $800,000. On top of that, town policy won’t let council touch an additional $500,000.

A 2001 policy requires the town to keep a certain amount of money on hand to potentially cover the expenses of maintenance and operation, Mayor Bob Burnside said.

With these reserves, Martin estimates the town should be able to survive on around the same level of spending for the next three years. Hopefully, Martin said, state revenue sharing will kick back in by then.

“This community is in a very good position to survive,” Martin said.

Without economic improvement, however, Martin warns the town would eventually have to take more drastic measures.

Councilwoman Carol German said looking ahead a few years was critical when it comes to economic planning.

“We have to look at the big picture,” German said. “We’re looking beyond the end of our nose.”

Burnside said the upcoming budget would likely be more in-line with budgets the town operated under before the burst of growth and expansion in the middle of the last decade.