Mayor Bobby Tyler and Holbrook city council members voted unanimously in favor of the proposed final budget for the 2015-16 fiscal year as presented by Finance Director/Assistant Manager Randy Sullivan. The vote was cast in a special session last Thursday night approving the new $10,709,419 plan, which shows a $677,020 limit increase from the previous year’s budget due to the recent Home Rule vote that allows for the city to set its own budget rather than follow the limitations set by the state. The previous year it had been left off the ballot in error and a one-time override allowed for a $500,000 increase over budget.

The council called for the special session on Thursday after requesting during its regular Aug. 11 meeting an explanation of adjustments to the adopted tentative budget that had been presented in the proposed final budget.

Sullivan outlined to the council a summary of the adjustments based on projected expenses and revenues allocated to the city’s General Fund, Utility Fund, state of Arizona Highway User Revenue Fund (HURF) and Arizona state grants.

High points of Sullivan’s breakdown included:

* An $88,335 intake of HURF and state grant monies to cover repaving of McLaws Road and pavement and related improvements at Holbrook Municipal Airport.

* A $48,880 General Fund expense allocation for regular wages and salaries of newly hired city employees Michael Nilsson is working as an assistant to Kathleen Smith in community development and Larry Durant who is now with the Parks Department overseeing the maintenance of the Splash Pad.

Councilmen Tim Dixon and CJ Wischmann requested clarification of a related $27,681 expense increase for health insurance, which Sullivan explained is allotted to cover the annual insurance premium payments for the two new hires who are paid per permanent part time and full time terms, respectively.

* A $10,000 reduction of projected General Fund fuel and utilities expenses due to a ledger error related to Hidden Cove Golf Course operations recorded during the prior fiscal year.

* A modification to the Utility Fund expense detail reflecting the change in ledger description of regular wages and salary for city employee Joe Martinez. Sullivan explained that to more easily balance the Utility Fund for fiscal year 2015-16, Manager Ray Alley divided the account’s wages and salaries line items into separate subcategories for the sanitation, water and wastewater operations. Martinez’ wages and salary remain unchanged.

* A $148,982 decrease in HURF transfers from the General Fund, which Sullivan explained reflects adjusted wage, salary, retirement, health insurance and related expenses for city employee Joe Montez, who has elected to retire ahead of Sullivan’s projected retirement date for the employee.

* A $10,000 decrease in projected Rental and Maintenance payments to the HURF due to the city’s decision not to rent heavy excavating equipment for street and pavement repair projects.

Sullivan further clarified for Councilman Wischmann that the city does not plan to fill the two positions slated to be vacated by retiring employees later this year. “We don’t feel there’s a need for that right now,” he said. Prior to his casting the initial motion to approve the final budget as presented, Councilman Richard Peterson asked Sullivan to clarify who decides if and how funds are reallocated once the budget is approved by the council.

“Once you adopt the budget that number is fixed. Any funds not used remain in the General Fund,” Sullivan assured the council.

Peterson also noted a $24,000 Utility Fund deficit for waste water operations recorded during the prior fiscal year and inquired whether the proposed budget is structured to absorb these types of shortfalls, particularly during an emergency or other unexpected scenario. Sullivan pointed out that a ‘cushion’ is factored into the city’s annual budget to avoid exceeding its overall limits.

“Our auditors check our total expenditure limitations for the whole city. We’re conservative on revenues, so we are conservative on expenses,” he said.

The city council will hold its next regular meeting at 6 p.m. on Aug. 25.