Responses to Questionnaire 2010Return to previous page. What financial shape do you think City government is in? City staff say (a RRN article Jan 15) that some stories and opinion pieces are using incorrect or misleading information in discussing City finances. What does being fiscally responsible mean to you?Dan McIlroy -- It is clear that sales and bed tax revenue are in serious decline. The city's budget and incoming revenues are not in balance. We need to bring our revenues and expenditures into balance by going line by line on our proposed budget and cut unnecessary expenditures. The city has been drawing down the Reserve Fund to pay day to day operational expenses. This trend cannot be allowed to continue.Sedona must begin to live within its income. We cannot depend upon the Reserve Fund to make up the difference. The Reserve Fund is for emergencies, not everyday expenses. Michael Ward -- In short, city spending needs to be reviewed and reduced. Our city government is a business and needs to be operated like a business. There needs to be accountability within departments and a logical ratio between managers and workers must be maintained. Revenues need to be enhanced by collecting and auditing city sales taxes which is being addressed by the current City Council. The failure of the city to increase sewer fees for the last 14 years needs to be addressed. The wastewater collection and treatment swallows up nearly half of the city’s expenditures. Last June I spent a considerable amount of time investigating the city’s financial status and I wrote a report two detailed reports that I hope is understandable to the lay person. that I hope is easily understood by the average person. Please go to mike-ward-sedona.com and select the Revenues and Expenditures tab to read the report and view the graphed information. My conclusions in that report are as follows: There is a need for fiscal transparency. There is a great deal of public confusion over the fiscal condition of Sedona. This has resulted in the public being unintentionally (and perhaps in some cases, intentionally) misled with financial information taken out of context. The city should issue an easily understood financial statement at the end of each fiscal yar to inform residents of revenues by source, expenses by category and the distribution of reserve funds and the reserve fund balance./ The City Council should provide clear justification to the public when voting to spend a large amount of money on a project or study. In recent years there have been several spending decisions by the City Council that have been perceived by many in the community as ill-advised. The city needs a more realistic budgeting process. I believe that the budget should be more in line with the actual revenue and expenditure forecasts for the upcoming fiscal year. Constructing a budget that is nearly twice the actual fiscal expenditures is too formless, misleads the public and allows too much wiggle room in moving funds and reallocating spending. The City Council should control the depletion of the “rainy day” Reserve Fund. The City Council should set a “rainy day” cap for using Reserve Funds to cover city expenditures at no more than 10% of the current fund balance. The fiscal health of the Wastewater Fund is in question. The Wastewater Fund as “an albatross around the city’s neck.” The fiscal health of the Wastewater/Enterprise Fund is a major issue within the city’s budget. Therefore, the Wastewater/Enterprise Fund and sewer controversy are the subject of my next position statement. To view the second report dealing with our wastewater fund dilemma, please go to mike-ward-sedona.com and select the Sewer System tab to read the report and view the graphed information. My conclusions in that report are as follows: The Wastewater Fund should be of serious concern. Even without any future additional capital improvements, which is unlikely as the system must be maintained; operations and debt service costs will be over $12.3 million annually. The combined wastewater user fees and connection permits cover only $3.8 million of the system’s costs. The shortfall will continue to be financed by a combination of city sales tax revenue, which could be used elsewhere, and drawing down the city’s reserve funds. However unpopular, unless wastewater user fees are significantly increased, the wastewater debt service costs will seriously impair Sedona’s financial health, resulting in major cuts in other city services and operations. In addition, the city needs to study the advantages and disadvantages of either leasing our $100 million sewer infrastructure to a professional private company to run and manage our wastewater collection and treatment, or perhaps divest the system entirely to a private company. Rob Adams -- There is a lot of inaccurate and misleading information that is being circulated regarding the budget. The fact of the matter is that the overall expenditures in the 2009/2010 budgets have been reduced by over $10,000,000 as compared to the 2008/2009 budgets. Council began the expenditure cuts shortly after I was seated as Mayor in 2008 in response to the slowing economy. I have every reason to believe that we will have a balanced budget in the next budget cycle. Additionally, Sedona has a cash reserve in the General Fund of approximately $9.5 million, which is about 80% of the General Fund operating budget. That is possibly the best ratio of any city in Arizona. Fiscal responsible means that we should not be spending more than we are taking in and we always maintain a healthy reserve that give us a “cushion” during the lean times. Barbara Litrell -- With sales and bed tax revenues continuing to slide, and with the Wastewater Fund being used to service debt, and 46% of sales tax revenues subsidizing the wastewater fund, the city's finances are not in good shape. That doesn't mean it can't be fixed. Expenses must be reduced, new sources of revenue must be generated. The Council and City Manager are working on this now. Being fiscally responsible means having a realistic budget, not spending more than we take in, finding new revenue sources, and communicating well with all sectors -residents and businesses. As a councilor it is important to understand all the details of how the budget works, be realistic in budgeting, and look ahead to the city's future needs. Granted Council is now addressing this. But they should have been addressing it for the past 5 years. We would be in better shape. Dennis Rayner -- Sedona definitely has severe budgetary problems, which were until the past year ignored by our recent past City Councils. Our biggest issue is spending more than we take in via the excise and bed taxes – our major source of revenues. To me being fiscally responsible means balancing the budget and reducing debt in a variety of ways: reassessing where the money is spent and making sure any spending benefits the City; balancing operations, costs and employees; raising fees and cutting unnecessary expenses where possible. Our biggest problem is the ‘subsidy’ the City gives to fund the wastewater plant operation. This plant should be self-sustaining, which will mean higher fees over time. The City should also consider renewable energy (specifically solar panels) to eventually cover the huge electric bill for necessary operations at the wastewater plant. With subsidy incentives higher for industry and government solar is an environmental and cost-effective solution. Nancy Scagnelli -- The City is in very good financial shape as we enter the second year of the Great Recession. We have approximately $41 million dollars in reserves in our 3 major funds, and have made substantial cuts – approximately $2 million - to the current budget to protect those reserves. That is being fiscally responsible. (As a point of comparison, Cottonwood has approximately $3 million in reserve.) Dan Surber -- We are in one of the worst recessions in history. The State finances are dismal and Sedona’s sales tax revenue has decreased the past two years. With that all said we continue to have a healthy reserve (41 million in rainy day fund) and with budget cuts of 10 million over the last two budgets we are looking at a possible $150,000 surplus by the end of the fiscal year. The steps the city is taking for this current fiscal year and the next fiscal year will reduce spending and increase the revenue coming into the city. Jeffrey Sietz -- No response! Jerry Frey -- No response! Return to previous page.
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