The Town of Carefree held two budget workshops on the new budget for the upcoming fiscal year. The first meeting on April 17 was a general presentation on overall revenue and expenses. The second meeting held a week later on the 24th looked at the line item budget. The preliminary budget will be submitted to the Town Council for approval at the May 1 Council Meeting. A Public hearing on the budget would then be held at the June 5 Town Council meeting and the Council will be asked to vote for final approval as well. The new fiscal year starts July 1.
Total Revenue estimated for the next fiscal year is $6.4 million with about half that, $3.15 million to come from the Town’s 3 percent sales tax. It was noted that some of those sales tax revenues come from construction sales tax. Of course once a building like the new commercial storage facility is built the construction tax on that ends. It was also noted that Civana should be completed with its remodel by fall and should provide increased sales tax revenue.
The next largest share of revenue is from user fees. Fees contributing to this revenue stream include Right-of-Way utility fees, rental fees of space owned by the Town, court fees, building fees, special event fees and merchandise sales, and other agreements.
It was noted that Carefree produces events to attract people into the Town, to bring attention to Carefree. According to data presented at the meeting, about two-thirds of the money spent on these events is recovered via vendor fees, merchandise sales, and other fees.
The third source of revenue making up less than 20 percent of the revenue is State Shared Revenue. These monies include: State Sales Tax, State Income Tax, Vehicle License Tax, and Highway User Revenue Fund. The latter only consists of $230,000. Carefree roads carry a lot of traffic for other surrounding developments including heavy construction vehicles. According to Mayor Les Peterson, the cost to maintain roads over the next 8-15 years is around $25 million.
Expenses are broken into four primary categories:
Human resources, $1.52 million, 20 percent of budget; The Town will be enrolling in a health insurance pool to keep increases down for both the Town and the employees on the plan. Overall, human resources will have a three percent increase.
Operations, $2 million, 25 percent; Operations covers a broad range of expenses including, legal fees, event logistics, engineering, public works, marketing, and administration to name a few.
Public safety, $2 million 25 percent; $1.5 million is for fire protection, $375,000 to MCSO, the rest is for jail, prosecution, animal control, and sheriff’s posse.
Capital projects, $2.25 million, 30 percent; Expected expenditures include, $1.5 million for street maintenance, $200,000 for Infrastructure Assessment Study, $375,000 for 33 Easy Street Loan Retirement, $75,000 for pedestrian crossing improvements, and $100,000 for median landscaping.
At the presentation of the line item budget Councilman Stephen Hatcher questioned why the budget went from $6.5 million to $8.55 million. Town manager Gary Neiss explained the difference is the result of planned capital improvement projects, with funds for those projects coming from the general reserve fund and from other restricted funds. Mr. Hatcher also questioned what kind of guarantee the town has from Carefree Water Company for repayment of funds loaned to the utility. The Town made a $3.2 million interest free loan to the utility. The utility has paid off its bonds and will now begin making 8 annual payments of $414,000 to the Town starting in the next fiscal year.
Questions about the line item for grants were explained by Neiss by saying it’s more of a placeholder for when the Town gets grant money, examples of grants received by the was the ability to get a $250,000 street sweeper for $10,000, $100,000 to upgrade fire radios, and money for the bike lanes.
Other areas where increases were noted or questioned included; the Public Defender contract, those numbers came from the court; Town Attorney from $5,000 to $50,000, due to the possible acquiring of water customers serviced by the Cave Creek Water Company moved over to Carefree Water Company; and an increase in the Planning and Zoning budget is due needed software upgrades and licensing renewals.
Marketing Director Gina Kaegi made a presentation on her department’s budget. The goals of marketing are to revitalize and reenergize the Town’s image, attract a consistent flow of visitors, support overall economic development, and define the Town’s brand identity, through multiple channels including, events, digital marketing, print advertising, and through other traditional and creative means, and continue to develop a cost recovery model.
She said in 2017/18 the cost recovery goal was $125,000 and that was exceeded with $140,000 taken in. The 2018/19 goal is $175,000. The forecasted expenditures for marketing for next fiscal year is $418,000.
She said there will be more done with digital marketing, including a new visitcarefree.com website that will allow more interactivity for visitors. She explained that digital media used by visitors such as Instagram, Twitter, Snapchat, and Facebook also promotes the town. Social media campaigns by the town can be liked and shared by users and those are seen by people they are connected with as well.
Councilman Mike Farrar asked about the number of events for next year, would there be more or less than this year? Kaegi replied, ‘I’ll do as many as anybody wants to do, but just, I won’t be part of every single one of them.” Explaining all her resources would go to signature events which bring in the most critical mass. She said while she doesn’t organize or run third party events, she does work with them to make sure what’s offered is of high quality.
Farrar said it’s more about the frequency of events and having things happening all the time. Kaegi used the ‘Sights and Sounds’ as an example of that taking place. The discussion then turned to different types of events and marketing ideas. Councilman Michael Krahe said he thought those topics were for a different meeting and that they should stay focused on the budget.
Farrar noted there was nothing in next year’s budget for the trolley if the Council wanted to continue it. He was told the funds for this year came out of contingency funds. Mayor Peterson said, ‘We haven’t seen an analysis of the trolley to see if we want to continue it.’ Farrar said he would do an analysis after the trolley ends and present it to the Council in May.
Mayor Les Peterson made a presentation showing overall cost recovery on marketing expenses for this year, the previous two years, and next year’s projected. He also showed the cost recovery specific to ‘The Enchanted Pumpkin’ and ‘Christmas in Carefree’ events. He then showed total expenditures for the Veterans Day event followed by a line item breakdown for the upcoming Memorial Day event. A heated debate erupted between Councilman Mike Farrar who has announced he is running for the Mayor’s seat and Mayor Peterson over the planning of Memorial Day. The main point of contention is that while Farrar, who is planning and organizing the event, says he has been talking about and planning the Memorial Day program since late 2017, the mayor says nothing was given in writing or presented to the Council regarding the event. Again Councilman Krahe steered the discussion away from the event planning and the history of the planning back to the purpose of the meeting which was to discuss the budget.
Mayor Peterson also presented a page of costs to the town for the Italian Festival which was planned by Councilman Farrar. This event was a private event, held on private property, adjacent to the Town Garden and its restrooms. Councilman Gene Orrico, who also played an active role in the Italian Festival addressed some of the questions saying Gina Kaegi offered them flags but they didn’t need them as they had ordered their own. Orrico said he had talked to staff about allowing the use of chairs similar to how the town uses tables that belong to the Kiwanis. He also said people used private restrooms in the restaurant, mall, and shops adjacent to the parking lot where the event was held, not just the Town’s restrooms. Part of the problem arose when the event which was originally planned for Alberto’s parking lot was changed to the parking lot adjacent to Corrado’s. Once again Councilman Krahe spoke up to get the discussion back on track to the budget. However, they were at the end of the budget presentation. Krahe thanked Kaegi and Neiss for their work. The meeting adjourned shortly thereafter.