By Rita M. Wentzel
Interim Town Manager/Clerk
Town of Superior
IT’S BUDGET TIME! is the gun that signals cities and towns to begin their upcoming fiscal year revenue estimates, including debt service requirements. This year, the Town of Superior began our 2012-2013 budgeting cycle in May and held four separate work sessions to prepare departmental expense estimates, debt servicing requirements and revenue estimates – including the property tax levy. The Town Council and town staff worked diligently over the past three (3) months–finally approving the tentative budget and property tax levy on July 19.
A public hearing will be held Thursday evening (August 2, 2012) at 6:00pm prior to the adoption of Superior’s 2013 final spending plan. This meeting will be at the Superior Senior Center, 360 W. Main Street, Superior, Arizona.
The overall 2013 budget for the Town of Superior was tentatively approved at $4,039,624. The 2013 Property Tax Levy is tentatively $575,511—an increase of $.04368 per $100.00 of assessed value over 2012.
There were some very discouraging discoveries and some difficult decisions that were made during this budget planning process. First, during the last several years, the Debt Servicing Schedule had not been completed or taken into consideration. Second, fiscal years audits are not current, but as of June 30, 2010, the General Fund had borrowed approximately $2,581,967 from the Special Revenue Fund (restricted to use on streets) and needs to establish an immediate repayment plan. Last, in order to continue to operate, the General Fund (Superior’s largest user) we must continue to utilize or borrow Special Revenue Funds until we can make the necessary changes to be self-sufficient.
How did we get here? Some of the causes for overspending and borrowing over the years are:
Failure to comply with the Auditor General’s requirement to conduct annual audits on time for the past three (3) years – resulting in large borrowing between the General Fund and Special Revenue Fund to subsidize uncontrolled expenditures and inflated staffing.
Failure to pay our state and federal payroll taxes on a timely basis — incurring large back payments along with substantial interest and penalties;
Failure to pay our bond and loan debt servicing – causing a lien to be placed on our State Shared Revenue;
Failure to put Home Rule on the ballot and not adhering to the State Expenditure Limitations — rather holding an Override Election to allow excessive spending;
Violation of Truth in Taxation for two separate years – causing our property tax collection to be capped at the prior year’s rate with no increase allowed;
Over-collection of construction sales tax – requiring long-term monthly repayment;
Foreclosure on residential properties for collection of sewer debt – resulting in large legal and clean-up expenditures that were not able to be or cannot be collected by the sale of the property;
Incurring additional long-term debt by purchasing new accounting software and a new town hall property – increasing our debt-servicing load to over 50 percent of our revenue;
Paying bills late – incurring late charges, finance charges.
How do we restore our finances? Some of the ways staff and Council propose are:
Waiving Council stipends and Discontinuing Health Benefits;
Reducing employee salaries across the board by three (3) percent;
Allowing employees to waive Health Benefits;
Moving full-time employees to part-time – reducing salaries and eliminating associated benefits;
Not filling positions that become vacant through employee terminations;
Discontinuing monetary and in-kind contributions to all groups and organizations—non-profit or otherwise;
Reducing services in the community service areas, such as Library, Pool, Recreation and Senior Center;
Enforcement of our Town Code – creating overall compliance and collecting revenues due the Town for city sales taxes, sewer and refuse services, ambulance services, etc.;
Globally reducing expenses and increasing direct revenue generation.
Is there a light at the end of the tunnel?
Absolutely. Superior is a town of hope and change. We have survived the “boom and bust” of the mine closing – reopening – and closing again. We believe that we can be empowered and accountable to make changes and curtail spending so we will balance our budget. We believe that we can be empowered to develop direct revenue generation and not depend entirely upon the State to provide our revenue sources to assist with our balanced budget.
How long will this take?
That’s a good question and we don’t really know the answer. The situation appears grim with no immediate solutions at hand. We know this will be a work in progress and we will take stock of the impact of the changes every two (2) months to see what works and what additional changes/reductions are needed. And, we will continue to keep you posted on the results.
What we also know is whether or not we created the problems, we own this. We are not going to jump ship in any way, and we are going to fix our problems. This Council and staff are committed to making our community Superior in every way!