Administrator lists budget concerns
Editor’s note: This is the first in a series of stories covering the Yuma City Council retreat held Feb. 11-12.
Yuma will face some budget challenges in the next fiscal year, including increases to the minimum wage and personnel costs to cover new pay plans to keep city employee salaries competitive with other communities.
Other concerns for Fiscal Year 2019-2020, which begins July 1, include deteriorating road conditions and perhaps more sweeps of the Highway Users Revenue Fund by the state, which was intended to pay for road improvements.
The City Council heard an overview of the upcoming budget, as well as successes, from City Administrator Greg Wilkinson during the first day of an annual retreat being held Monday and Tuesday.
WHAT’S NEW?
The city approved the first maintenance improvement district this past year, and multiple districts will come up this next year. The city is following the Yuma County model, which has 350 or so districts.
The police and fire departments also changed their recruiting process. The Police Department has a full-time recruiter and now pays signing bonuses and moving expenses to attract recruits. The new Arizona Western College
Law Enforcement Training Academy should kick off next month, which is expected to save the city money by not having to send some recruits out of town for their training.
The fire department is now hiring only certified personnel and will be adding three firefighters, leading to savings in overtime.
The city will have additional expenses if the annexation of the Mesa del Sol subdivision goes through. Among the expenses would be the purchase of Far West Water and Sewer, which serves the area.
FUNDING THE PAY PLANS
It’s too early for specific numbers for the FY 2020 budget, Wilkinson noted. However, he compared revenues from 2008 to 2019, which show that the local economy has “pretty much recovered” from the recession but the city is “much bigger” than it was in 2008, he said.
The goal set by the council is to increase personnel costs by $2.2 million to cover newly adopted pay plans for the police and fire departments as well as bumps in salary for other employees.
The good news is that medical insurance costs will not increase, Wilkinson said. While the Public Safety Personnel Retirement System costs for the police department increased, the cost for the fire department decreased, resulting in an overall decrease in costs.
On the negative side, the city will have to do some juggling to come up with the increased personnel costs. “Remember that last year we did our 2 percent increase in January? So in order to fully budget for that 2 percent increase, we have to take 1 percent and add it in to next year’s budget just to make the 2 percent. We only budgeted for six months, now we’re budgeting for a full year,” Wilkinson explained.
The rest of the funds might come from an expected 3 percent growth in sales tax, which would yield $225,000, and unused levy funds from the property tax, which would bring in another $1.13 million.
Raising the rest of the funds “will hurt” and will have to come from department budget cuts, Wilkinson said.
A budget cap increase of 2 percent has been set on all departments after putting in personnel costs, which will result in a 1 percent cut across the board. However, he added, some of the smaller areas probably cannot take a 1 percent cut. At the end of the day, the police, fire and parks departments will have to absorb most of the cuts from their operations and maintenance budgets.
LEGISLATIVE ACTION
Other concerns include legislative bills that could be “very damaging” to the city such as a proposed grocery sales tax cut, which would mean a loss of $4 million to the city. Other bills propose tax cuts to diapers, feminine products and digital goods.
Attempts by the Legislature to repeal the $32 vehicle registration fee that would go toward funding the Department of Public Safety, thus putting a stop to the HURF sweeps, would be more bad news for the city. HURF sweeps by the state are blamed for much of the road deterioration in many communities, including Yuma. According to an assessment conducted last year, the city would need $8 million per year to maintain the current state of roads and $13 million to improve road conditions but only has $3.7 million per year for roads.
Some legislative bills are considered positive, such as one that would establish a space authority and a spaceport in Arizona. Yuma is considered a strong contender for the spaceport. Another bill that would have a positive impact on Yuma is a proposed increase in the gas tax, Wilkinson said.
Locally, the political action committee Fix Our Roads is still looking at the possibility of coming back in spring 2020 with another shot at the road tax, which was rejected by voters last year. Wilkinson noted that about 30,000 citizens voted, with only about 20,000 voting on the citizens initiative. It failed by less than 1,000 votes.
Another proposal calls for a countywide road tax that would be distributed to cities in the county, Wilkinson said.
Another concern is the minimum wage increase, which will jump by a dollar to $12 in 2020 and affect a “significant” number of positions, the city administrator said. It will also bring up compression issues, meaning that entry-level workers will be making more than their supervisors. To solve this issue, the city will have to also raise the wage for supervisors.
REVENUE IDEAS
Among the revenue ideas listed by Wilkinson were a use tax and a sewer sales tax. He noted that all cities in the area assess it except for Yuma. This tax is paid when a person buys something outside of Arizona and has not paid sales taxes and the person brings it into the state, such as a vehicle. The main source of the revenue would come from the Motor Vehicle Division.
The sewer sales tax was passed by the Legislature a couple of years ago but the city has not charged it. Wilkinson said staff will soon be taking it the council. Other revenues might come from property and sales taxes after annexations and online stores for the art center, civic center, golf course, etc.
In a brainstorming session, Councilman Mike Shelton shared a couple of ideas: selling the city’s biosolids as fertilizer and promotion at the Pacific Avenue Athletic Complex, such as marquee ads and naming rights. Debbie Wendt, director of parks and recreation, said that her department is already working with a couple of folks interested in paying for the rights to name some PAAC amenities.
Mayor Doug Nicholls said he believes the best approach is “growing the pie” through economic development.
SUCCESSES
Wilkinson listed several successes for the city, including a drop in the unemployment rate and increases in family income, new homes, jobs and revenue.
The infill development standard has also been a “big success,” leading to development of dirt lots and other areas. Other successes include Yuma’s designation as a Bicycle Friendly Community Bronze Level and the city’s art community and Little- wood Co-Op making it into schools, colleges and universities the Final 3 for the Governor’s are willing to Art Award. adapt their programs to
Sports tourism is on train the needed workforce. the rise due to the PAAC, with the city talking to Another “plus” are the five hotels and possibly a new flights at Yuma International sixth who are interested in Airport to Dallas/ opening new facilities in Fort Worth, which will the area, with four in the bring more people to Yuma proximity and two right and benefit companies. next door. The second day of the retreat
The University of Yuma will start at 8:30 a.m. is gaining traction with Tuesday at the Ray Kroc “very significant” companies Complex, Arizona Western committing to the College Law Enforcement project. The challenge is Training Academy Facility, providing them with a 1280 W. Desert Sun workforce. The local high Drive.