By Linda Kor The Holbrook City council met last week in a work session with City Manager Ted Soltis to discuss the upcoming budget. Soltis started out by stating that fiscal year 2020 ended up being a very good year for the city. He outlined some of the savings, starting with the city clerk’s position. With the retirement of the city clerk last year, that position has remained unfilled with duties redistributed throughout the existing staff. He also noted that light bulbs have been switched over to the LED lighting for greater savings. Soltis said that the swimming pool and golf course each now have computers and printers, and receipts will now be provided for those services. One will also be added to the transfer station soon. The computer at the golf course and at the transfer station will be tied in with the ones at the city offices for easy tracking. Soltis went on to address the PSPRS (Public Safety Personnel Retirement System) debt. “Our public safety retirement is not in really good shape but what I’m excited about is that we now have a tool to make sure that we start paying the appropriate fees into that account.” He explained that over the years, the City of Holbrook and other cities throughout the state have not put sufficient funds into that account so the unfunded liabilities have increased for communities all over. According to Soltis, the amount of money that was projected to be owed has been lowered due to actual outcomes. He explained that one assumption that has not been changed as of yet is that all cities in the State of Arizona will provide a 3.5 percent wage increase each year to its public safety personnel. “It doesn’t happen in most communities. That’s something that needs to change but hasn’t changed yet. If PSPRS said no more 3.5 percent, that would increase our contribution amounts significantly. With the new modeler tool that Soltis has, he can accurately project out what the city has to pay but noted that the numbers are pretty dire. Fiscal year 2019 was only funded at 23.9 percent. “As far as cities and towns go, we are the third worst city in Arizona.” The PSPRS system is divided into tiers and the new tier that was introduced several years ago was meant to save money but instead it created a funding shortfall that now has to be accounted for. As an example of the costs, Soltis stated, “If you have a $51,000 salary, we put in $81,000 into retirement. Then for regular people (employees that are not in public safety) that $81,000 would drop to $6,000. That really is a significant expenditure. This year we’re going to put $957,000 into PSPRS for 12 public safety officers and for 36 non-public safety $200,000.” Regarding sanitation rates, Soltis explained that part of the reason the rates are increasing on the administrative end is that the city is no longer billing for commercial use. He said that before, the city was billing for commercial and that was bringing in sufficient revenues. “Due to competition, the commercial businesses will be paying less money for their rates,” referring to the fact that businesses can choose to have their sanitation contract with any of the companies offering services in the area. Soltis also informed the council that he has organized each department to show that the funding earned by that department goes just to that department, in effect treating each one as a separate business. “Now we can clearly see where our problems are. We are not collecting sufficient funds in the wastewater department. We need to raise those fees because we are losing money.” Soltis noted that one thing in the department was a significant discount for seniors. “I had reduced that discount by 10 percent but that concerned me. I was not sure that legally we could do that. There’s no justification for giving someone a senior discount.” He stated that he reached out to the attorneys and that they sent a letter stating that they “couldn’t defend giving a senior discount.” So, prior to the Aug. 13 meeting Soltis will change the rates to remove the senior discount. He went on to explain that employees at the city each have a portion of their wages funded by the departments that they work in so one employee may have a percentage of their wages from the wastewater department and also from human resources or another department to reach their salary rate. “The city has been conservative over the years. We’ve cut pretty much as much as we can. We’ve shifted personnel around. We can’t afford to do any more cutting so we’re going to have to increase rates.” Regarding the Hidden Cove Golf Course, the city is looking to purchase a greens mower and 12 used gas-fueled golf carts in the coming year. The city will also be looking to purchase a new backhoe and a dump truck for city use. “We have three backhoes that are all from about the same time frame and need to be replaced.” It was believed that the newest backhoe was purchased in the 1970s. Soltis noted that the city currently has $7 million in the bank. In the general fund there is $1.5 million but for the coming year Soltis is anticipating a deficit of approximately $10,000. “But by the end of 2021 I’m looking at a positive $309,000. Part of the reason for that is that we’re not paying into the jail district anymore. There’s no longer a jail district. The other part is that we’re not putting money into the wastewater plant, that’s paid off.” He suggested putting that money in the bank. “There’s a lot of volatility out there right now, a lot of uncertainty so I think it’s a good idea that the bulk of that money goes in the bank.” Regarding the lodger’s tax fund, he said that by the end of this fiscal year it’s showing a balance of almost $70,000. “The reason we have that money is that somebody paid back taxes. That allowed us to put that money forward. In 2020 our expenditures were higher than our revenues by $54,000. But by using that fund balance, that will zero out.” Those funds are being allocated to the Navajo County Historical Society, the Holbrook Chamber of Commerce and the Navajo County Fair as they have been each year. “Had we not had access to those back taxes we would have had to decrease the money that we were sending off to those organizations.” Soltis noted that staff will not be receiving a pay increase in the coming year but that will need to be addressed in the future. “Staff haven’t received pay increases for some time. Right now we’re just trying to figure out how to pay the bills. How to not be in debt.” The council also encouraged the citizens to fill out the census as the population determines the funds received from the state including the Highway User Revenue Funds that are used to maintain city streets. As far as staff changes, Soltis noted that the city will not be replacing the city clerk but has added a part-time position at the animal shelter to cover the weekends so that the animal control officer will not have to come in on the weekends to care for the animals. On the topic of community development Soltis stated, “Part of the community development director’s job is tourism related. He (Jason Foutz) attends chamber meetings and deals with the chamber. Ideally, some of that money (his salary) would come out of the lodger’s fund but we’ve made a commitment to the chamber, the Navajo County fairgrounds and the historic society and our commitment to them is to pay them first. But it would sure be nice one day to be able to take a percentage of his salary out of that fund.” Later in the meeting Soltis spoke enthusiastically regarding growth in the city. “The city is moving in a very good, positive direction. We are on the map. There are big businesses that are coming. There are a variety of projects that are in the works, but I can’t talk about those until they sign on the dotted line. I just want you to know, we’re on the map, things are happening. People are looking at this community as an area to invest in. We really are very proactive. We call, we discuss with people and provide them with the information that they need.” He also noted that there has been a discussion about developing at Hunt Park and getting the soccer field developed. “At this point I’d just like to be conservative with the budget. We’re in some crazy times here. But one day, it may happen this year, what I’d like to do is purchase new picnic tables for Hunt Park.” He noted he would look into grants to help support that idea.
