In April the Arizona League of Cities and Towns reported that more than 80 percent of the municipalities in Arizona had experienced steep declines in revenue for the 2009 fiscal year, which ends June 30.

Even more communities (86 percent) expect revenues will continue to decline during the next fiscal year.

“The results of the league survey indicate that cities and towns’ revenues are still falling sharply throughout Arizona,” said Ken Strobeck, executive director of the League of Arizona Cities and Towns.

“Our revenue condition is mirroring that of the state government. Unfortunately no one is sheltered from diminishing revenues in these extraordinary times.”

While the Town of Fountain Hills is headed into the final month of the fiscal year hanging on in the black, the revenue picture has been bleak, as outlined by the league report.

In a report prepared by Town Deputy Town Manager/Finance Director Julie Ghetti for an April budget presentation, it showed revenues for the General Fund operating budget down $1.7 million in 2009 from 2008, or about 11 percent.

Ghetti has taken another $300,000 off budget projections for the upcoming 2010 fiscal year.

The hit is coming from a reduction in state shared revenues. While the Legislature has not yet acted to reduce shared revenues to help cover the state’s deficit, the money simply isn’t coming in to the funds.

Communities receive a share of state income tax, gasoline taxes and a portion of the state sales tax.

The town’s local sales tax revenues are down also, although not as sharply as some communities.

The town receives its retail sales taxes primarily from grocery stores and department stores, which seem to be holding their own during the recession.

However, revenue the town receives from local construction sales taxes and permit and development fees has all but dried up. Those revenues contribute significantly to the town’s capital reserve fund.

So how has the town been able to keep its head above water so far during this recession?

STUPID cuts and more

As Town Manager Rick Davis puts it, the town has been successful in eliminating the non-essential “STUPID” expenses. STUPID is an acronym for Silly, Time consuming, Unnecessary, Problematic,  and Darned expensive.

Looking ahead to the 2010 budget the belt tightening has had to go a little further than just the non-essentials.

Ghetti has proposed numerous cuts that include a wage freeze, no overseeding of parks next fall except Fountain Park, a cutback on landscape maintenance such as mowing and palm tree trimming, taking unnecessary vehicles off the street, a reduction in preventative maintenance on the Fountain, a reduction in printing town newsletters, skipping wash maintenance for a year and a reduction in pavement management.

According to Human Resources Administrator Joan McIntosh, the town will save about $75,000 by implementing the wage freeze for employees of the town.

McIntosh also said she is reviewing the potential savings as a result of the “Green Friday” closure of Town Hall since January. She is scheduled to make a presentation to the Town Council on that in early June.

Cutting back on the winter overseed at the parks may in fact be beneficial to the turf, according to Parks Director Mark Mayer.

“The existing bermuda grass actually gets a better chance to grow its roots when not competing directly with the seasonal rye grass we plant,” Mayer said.

The reduction in mowing is a direct result of not planting the winter grass. The bermuda goes dormant and will not need to be mowed as frequently, and less water also means less growth to mow.

Mayer says staff will be learning from the cut backs, but he does not expect there to be any issues related to delaying the palm tree trimming next year.

In fact the tree trimming may only be delayed for a few months, as the trees have been trimmed within the past couple of weeks, and could be trimmed early in the 2011 fiscal year if money is available.

The vehicles that have been taken out of service are no longer needed. Some have been replaced with more efficient equipment, according to Streets Supervisor Ken Kurth.

“All eligible employees still have been assigned vehicles for their use,” Kurth said.

This includes building and engineering inspectors, code enforcement officers, public works and the street departments.

Plans for disposing of the unnecessary vehicles will be made once the final budget is adopted, Kurth said.

Perhaps the greatest potential for concern comes with the reduction in maintenance to the Fountain.

“The valve that was to be replaced would have been the second valve to be replaced of three, under the preventive maintenance program,” Mayer said.

“While none of the valves have failed due to wear the firm that we contract with to help maintain the equipment had recommended that they be replaced because of their age.

“If a valve were to fail we would be able to switch to the third pump either while emergency repairs were made or possibly until the next budget year comes around.”

Beginning July 1, the town’s newsletter, AveNews, will be printed only once each quarter to be mailed to residences in town.

The electronic version will continue to be updated and sent to subscribers by email twice each month, but new printed copies will be sent only quarterly. One version each month had been printed and mailed.

An aggressive wash maintenance program over the past decade or more has left the washes owned by the town in good enough shape to skip a year.

The program was implemented to mitigate fire hazards and drainage or flooding issues.

“We feel confident that the washes are in good shape for the next year, and verified that with the fire department staff,” Public Works Director Tom Ward said.

When it comes to street pavement maintenance next year, some streets will simply be skipped over for a year.

Ward said they are taking the zone scheduled for slurry seal next fiscal year and dividing it into two, which will be done over two years.

Staff believes the cuts made to the budget for the upcoming year will result in a healthy budget with minimal impact to the citizens of Fountain Hills.

Review: 
Economic series, Part One: Surviving financial fallout
Economic series, Part Two: Sanitary District
Economic series, Part Three: School District
Economic series, Part Four: Construction industry
Economic series, Part Six: Laid off teachers
Economic series, Part Seven: Stimulus money
Economic series, Part Eight: Food Bank
Economic series, Part Nine: Retailers
Economic series, Part Ten: Mayor impacted
Economic series, Part Eleven: Real Estate