In a sign of hard financial times, the Marana Town Council has approved a recessionary plan to shave $5.3 million from the town’s $211.5 million budget, and to look at further cuts for fiscal 2010, which begins July 1, 2009.
On Dec. 9, the council voted unanimously on a two-phase plan, with the first phase going into effect immediately.
The impetus for the cuts is a rise in the estimated shortfall in the state’s current budget, from $400 million back in May to as much as $1.5 billion, with expectations of the shortfall reaching $3 billion next fiscal year.
Marana depends on the state for a chunk of its budget.
Also, national trends such as the failure of major financial institutions, declines in the real estate market and belt-tightening of consumers are affecting Marana’s economy. In the first quarter of this fiscal year, July through September, the town’s expenditures exceeded its revenues by $1.6 million.
A new legislature will come into session at the beginning of next year, and nobody knows what changes it might make in funding.
These factors, according to a written report to the town council, have “made it difficult to predict trends and project revenues with a reasonable level of assurance.”
To address financial woes, the town plans to cut $2 million in ongoing expenses from the general fund, along with $1.2 million in one-time expenses. In addition, it plans to cut $1.6 million from the transportation fund and $500,000 from the highway user revenue fund.
The heart of the plan is to keep basic services to the community in place, try hard to retain current employees, go forward with projects that are vital to the town’s economic future and hold off on town projects that can wait, the report said.
“I think the message the council wants to give the community and that I want to make sure of is that we’re not cutting things across the board, which could have negative effects in the long run,” Town Manager Gilbert Davidson said. “We’re trying to be very strategic in making sure the community is maintained for the long run.”
As a start, the town will keep open 14 positions that are already vacant, cutting expenses by $700,000. Many of those positions are related to development and less necessary than before, given the economy’s effect on development, Davidson said.
To cut $1.3 million from the budget, the town will reduce an array of expenses.
“Let’s say a department has identified a need to spend a couple of thousand dollars on a consulting process to put a plan back in place,” Davidson said. “We’ll delay, reduce the scope or bring it in house. When you add all those up and travel and training and supplies, you are able to come up with larger dollar amounts.”
One-time adjustments amounting to $1.2 million will come from delaying a variety of projects, such as getting the Honea Heights residential area hooked up to the county sewer system, putting lights in a park in Continental Reserve, making improvements to the Marana Heritage Park and buying new town vehicles.
The delay in buying new vehicles will not apply to emergency vehicles and those for which failure would bring dire consequences, Davidson said.
“We recommend slowing down that process — making do with vehicles we have,” he said. “Maintenance costs will be adjusted for that. We just need to make vehicles last a little bit longer.”
An additional $2.1 million in one-time savings will come out of projects funded by the transportation fund and Highway User Revenue Funds.
Although details are not worked out yet on Phase 2 of the town’s recession plan, it involves looking at budgeted positions to see which ones might not be filled if they become vacant, figuring out what town services might be adjusted without causing a strain on citizens, and diversifying revenue.
At the Dec. 10 town council session, councilwoman Rozanne Ziegler asked for a list of mission-critical projects that the town plans to protect.
“Maybe I’m sounding like doom and gloom, but I’m only echoing the news here in how bad it’s going to get,” she said. “You’re talking mission critical, and I want to see that list and see that we stay to that list.”
Gilbert said the list, which wasn’t available at the meeting, will protect three areas: the health and safety of the community, infrastructure in which the community has made investments — such as the Twin Peaks interchange — and programs that make life easier in hard times.
Councilman Jon Post added his support to the idea of sticking with big projects.
“At the end of the day, we need to recognize this is a business,” he said. “We need to beat the dirt to bring new jobs to the community and new economic opportunity. When the economy turns around, I want us to be ready for it. I hate to see us quit. This is a slump, not the end of the world. I want to see us continuing with the big projects even if we have to borrow from ourselves.”
Mayor Ed Honea asked Davidson if any creative new revenue sources had been considered, and Davidson mentioned that the town’s bed tax, imposed upon visitors who pay for lodging, is lower than in other parts of Southern Arizona. Marana’s tax is 3 percent, while Tucson’s is 6 percent.
Honea suggested moving forward on increasing the town’s bed tax. Other council members disagreed.
“Our goal is to have Marana be the vacation spot of Arizona,” Ziegler pointed out.