Cave Creek rolls out preliminary FY 2011 operating budget
By Linda Bentley | May 5, 2010
Councilman Ralph Mozilo said he disagreed with transfers from the town’s water utilities to the general fund. Although he said he understood why it was being done, he was steadfastly opposed and stated that was not the reason the Water Advisory Committee recommended raising water rates.
Photo by Linda Bentley
Town budgets for 40-hour work week in hope of economic turnaround
CAVE CREEK – Council unanimously approved a resolution adopting the Maricopa County Community Wildfire Protection Plan (CWPP), recognizing areas within the county for potential risk within the wildland urban interface boundary.
Rural/Metro Chief John Kraetz said adopting the plan does not obligate the town to anything. However, he said, doing so would allow Cave Creek to better protect the community from wildfire risk, better prepare citizens and to become eligible to take advantage of federal and other grant opportunities to implement wildfire mitigation projects and programs.
Councilman Jim Bruce said since there was no cost to the town, he saw no down side in adopting the resolution.
Councilman Dick Esser said, “I hope we have a non-event summer.”
Town Accountant Marian Groeneveld thanked Esser and Councilman Ralph Mozilo as well as community volunteers Dan Baxley, Ted Bryda, George Ross and Gabe Royer, for their input and perspectives in helping the town develop its annual operating budget for FY 2011.
Monday’s budget presentation was for information and discussion with no action taken by council.
Council will approve a tentative budget during the May 17 public hearing and adopt the final budget during the June 21 meeting.
Groeneveld stated the personnel cuts made one and a half years ago have been helpful and said there were no cost of living increases or pay raises, although the town is budgeting for a 40-hour work week, in the event the economy improves.
She highlighted employee health benefits increased by 30 percent for 2011, while payroll expenses increased by 3 percent; the town’s WIFA loan for the wastewater treatment plant is $22.9 million with $2 million forgivable principal, financed at 3.489 percent interest; and the WIFA loan for the purchase of the Desert Hills Water Company is $235,000 at 2.548 percent interest.
Groeneveld then explained transfers made from the general fund to HURF (Highway Users Revenue Fund), streetscape, COP debt service and to the wastewater treatment plant, as well as transfers to the general fund from both the Cave Creek and Desert Hills Water Services.
Transfers were also shown from the half-cent Spur Cross Ranch sales tax split between land debt service and the general fund.
Mozilo said he disagreed with transfers from the water utilities to the general fund.
Town Manager Usama Abujbarah explained to Mozilo the town has no surplus cash to meet its debt service otherwise.
Esser asked if the town was building a reserve fund again.
Groeneveld said it was.
Abujbarah stated the town’s number one priority was to meet its debt service payments.
Councilman Adam Trenk said the transfers concerned him as well and didn’t think the town should be siphoning funds from the water company to bail out the town.
Abujbarah said, “I don’t know how to say this in a polite way, but what you said is completely wrong.”
He said the rates for the water system are based on cost and stated, “We don’t siphon funds for anything.”
Trenk said he used a bad choice of words and didn’t mean to be offensive.
Councilman Steve LaMar said his recollection of the water rate increase was to keep the town afloat.
Abujbarah said, “The town spent way more last year than the $1 million in improvements.”
Groeneveld said revenue exceeded estimated expenditures by $820,000 but the town took a hit on state income tax as part of state shared revenue.
She confirmed Spur Cross would be paid off in 2012.
Mayor Vincent Francia asked if there was an exact date when Spur Cross would be paid off.
Mozilo said it would be paid off on July 1, 2012.
Spur Cross Conservation Area Supervisor John Gunn presented the county budget for Spur Cross and said, “We’ve taken a vicious beating. In about two and a half years we’re going to be broke.”
Revenues for the park are primarily from the town and entry fees, which run about $40,000 to $45,000 annually.
Gunn said there were originally three park police positions that have since been absorbed by Maricopa County Sheriff’s Office and with them went the budget.
The budget reflected $260,995 allocated to MCSO in 2008, $133,896 in 2009, $79,122 in 2010 and $74,088 for 2011.
Spur Cross received $360,000 in 2008 for operations from the town, which was reduced to $120,000 for both 2010 and 2011, making up the difference between revenue shortfalls and operational expenses with its reserves.
Vice Mayor Ernie Bunch stated search and rescue is a function MCSO is statutorily required to perform and said it appears then that the county was charging the town twice for the same services; through the Spur Cross budget and through the town’s contract with MCSO.
Bunch said that comes to more than $1 million.
Esser questioned if combining Cave Creek Recreation Area with Spur Cross would be cost effective.
Gunn said it would appear so under the economies of scale, although he wasn’t prepared to answer that question.
Francia asked how much of the half-cent sales tax was going to Spur Cross.
Gunn responded, “Twenty-five percent.”
Francia wanted to know what the town needed to do to get that back up to 100 percent.
Abujbarah said, “Reserves are for this purpose. Debt service is our number one priority.”
Mozilo explained the IGA expressly states the town can use the half-cent sales tax for any other debt service.
He also said he didn’t want to see trails cut because it brought people to the park along with more revenue.
Bunch reiterated his concern that the town had been double paying for MCSO in Spur Cross.
Abujbarah stated the town has always had a very good relationship with Maricopa County, which came up with $14 million to help purchase Spur Cross.
Court Administrator Yvonne Passey, during her budget presentation to council, said she was grateful to everyone there that the “court was staying in Cave Creek where it belongs.”
During public comment, Reg Monachino said he found it “distressing” that the town was transferring $1.1 million to the general fund from the water utilities.
He said the water rate increase was to ensure the water service paid its own way. He asked, “What does ‘extra’ mean? When does extra end?” and stated, “Maybe the rates are too high.”
Thomas McGuire congratulated council “on being able to stay up this late,” and stated he was pleased with what he said seemed to be a “very responsible budget.”