Holbrook City Council Reviews Proposed $10.6 Million Budget

The proposed budget anticipates the city receiving $728,000 in water fees in the coming fiscal year, but revenues through the end of the current fiscal year are only predicted to reach $612,151. Finance Director Randy Sullivan noted that it appears the revenues will not reach the amount budgeted this year and he will need to make adjustments to the proposed budget to reflect the decline in revenue.

“I feel these numbers are not conservative,” Alley said. “That’s my one concern. I don’t want to raise water rates.” Sullivan told the council that he will review the utility budget and look for ways to balance it with reduced water revenue.

While other changes are also likely to be made to the proposed budget before it is finalized, the current version includes $630,435 in additional revenues and expenditures over last year. Sullivan explained that the larger budget is based on an anticipated $1 million increase in city and state sales tax revenues, which is being offset by nearly $400,000 in increased costs and decreased revenue from other sources.

Vice Mayor Charles Haussman asked what will happen if the city creates a budget based on increased revenues but does not receive them. “We can’t spend it if we don’t earn it,” Sullivan explained.

He told the council that even though the budget is generally based on conservative numbers, the maximum anticipated amount of revenue is included each year because the city cannot spend it if it is not included in the budget. For example, if the city receives $1 million more this year in sales tax revenues than it did last year but does not include the increase in the budget, that money cannot be spent, regardless of the need.

“We want to include it because we can’t increase the budget once it’s set so we try to include it as a contingency so if we earn it we can spend it,” he said.

Councilman Wade Carlisle noted that according to his calculations, the budget includes a little over $100,000 in salary increases and asked for an explanation of the apparent raises. Sullivan told the council that there are no salary increases included in the proposal and that any changes are the result of hiring additional staff and moving individuals between departments. Carlisle noted that, based on the information he was given, the numbers still show a salary increase. Sullivan and Alley agreed to create a document showing all of the salaries for last year, the changes made between departments for the upcoming fiscal year and the new hires so that a clear comparison can be made.

“I think it’s a communication issue,” Sullivan said. “There are no salary increases.”

Mayor Jeff Hill pointed out that there are some city employees who have been on the job for more than a year and make a salary of only $20,000 per year. “That’s not a livable wage and I’d like to see it increased,” he said.

Councilwoman-elect Francie Payne agreed, noting that employees who work hard, readily learn new skills and continuously take on additional responsibilities should receive a living wage. Alley noted that it would be difficult to find the funds in the upcoming fiscal year, but he and Sullivan will review the budget and return to the council with options.

Alley told the council that at the next budget work session he plans to address the lodger’s tax and will be inviting representatives of the Chamber of Commerce, Navajo County Historical Society and the fairgrounds to attend the meeting and provide input since the revenue will be divided among those entities. He also noted that a future work session would delve deeper into the budget by department and offer department heads an opportunity to provide input to the council.

The next budget work session will be held immediately following the council meeting scheduled for 6 p.m. on Tuesday, April 28.