Weathering the storm

Posted 3/30/10

“We're not too surprised about it. They've given us months of warnings,” said Mayor Scott Mangold. “We were ready for them to say that cities and towns will be taking the brunt of hits. We were prepared for that.”

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Weathering the storm


City of Powell prepares for reduced budgetCities and towns in Wyoming will have to make do with less — at least for the next few years.As expected, the Legislature trimmed local government distributions, approving $87.5 million in direct payments to municipalities over the next two years, reduced from $145.7 million in the current 2009-10 biennium. That's down from nearly $165 million in the funding cycle before that.

“We're not too surprised about it. They've given us months of warnings,” said Mayor Scott Mangold. “We were ready for them to say that cities and towns will be taking the brunt of hits. We were prepared for that.”

For the city of Powell, it amounts to about $230,000 less for the next fiscal year. In fiscal year 2010, the state allotted $606,210 in direct distributions for Powell. For fiscal year 2011, Powell is slated to receive $378,803 in direct distributions.

“It's a significant drop in general fund revenues,” said City Administrator Zane Logan. “We understood that all indicators pointed to this … it's going to be tough for towns, cities and counties. But we'll work at balancing the budget.”

Logan said the city is beginning its plans for the next fiscal year, which starts in July, and determining how to deal with lower revenue.

“Powell is in a position that it can weather this well, because of a conservative approach in the past,” Logan said.

“It's not easy to do budget reductions, but we've been conservative, and so has the state,” he added.

Originally, Gov. Dave Freudenthal recommended $50 million to be distributed to local governments statewide. The Joint Appropriations Committee added another $20 million, bringing the total to around $70 million.

On the floor, the House of Representatives voted to add another $10 million. In conference between the House and Senate, that amount was reduced to $6.5 million. Legislators approved the $6.5 million addition, bringing the total to $77.8 million in direct distribution to cities and towns.

Though better than what they expected from the governor's recommendation, it is still nearly $60 million less than municipalities received the previous biennium.

Logan said he appreciates the state's conservatism and understands it is necessary with the current economy.

“We're not going to go around doing ‘the sky is falling' routine. We're going to see how to deal with it,” Logan said. “That's the economy of the United States, the state of Wyoming — and we're part of it.”

Rep. Dave Bonner, R-Powell, said he supported the additional funding for municipalities, citing Powell's fiscal conservatism.

“The city of Powell has done a good job spending its money,” Bonner said.

He added that he's concerned about the local economy and sales tax revenue after millions of dollars worth of sugar beets were left in the ground following a devastating freeze last October.

“This is going to be a difficult year for sales tax collections,” Bonner added.

Statewide, the 4-cent sales tax revenue is down by 24 percent, according to a memo from George Parks, executive director of the Wyoming Association of Municipalities.

Though direct distribution payments are reduced, cities and towns will continue to receive federal mineral royalty and mineral sales tax distributions. There is little year-to-year change in those distributions, Parks said.

Statewide, cities and towns will receive more than $18.5 million through the federal mineral royalty distribution. Powell's portion of that funding for fiscal year 2011 is $304,968.

For the mineral severance tax distribution, $14.3 million will be given to cities and towns. Powell is slated to receive $227,690 for the next fiscal year.

Logan said he has met with department heads, explaining that their budgets will be affected.

“We're going to have to look at every budget, every line item,” he said. “Everyone knows that.”

Unfortunately for Powell, the next few years present several unknowns.

Chief among the variables is the Powell Aquatic Center budget.

For the current fiscal year, the city budgeted $417,134. City officials came at that figure through estimating what costs would be. The pool will only be open for a few months of this fiscal year, which ends in June. The next fiscal year, beginning July 1, will be the first 12-month period that the pool is in operation — and it's hard to know exactly what operation costs will be in the first year.

“We have zero history of operations and expenses,” Logan noted. “We have that unknown as we're working on the budget.”

Another unknown related to the aquatic center is the remaining costs for finishing construction at the site.

“We haven't gotten into all the hard costs,” Logan added.

City of Powell crews will complete the parking lot, sidewalks, landscaping and other construction at the site. The city has estimated it will spend about $1 million on those hard costs, but exact numbers haven't been finalized yet. Some prices, such as the cost of concrete, have fluctuated since the original estimations, affecting the bottom line.

“We hope that the total cost will be less than we estimated last year, but we're not sure,” Logan said.

Though Powell hasn't adopted a hiring freeze like other municipalities in the state, Logan said the city may not fill positions that are vacated. He added that employees' merits, such as raises, will also be looked at during budget preparation.

Logan said the city will look at ways to trim its budget and keep it balanced. Training and travel will be reduced, he said, so that employees only go on work-related trips that are necessary, such as those required for certifications.

Some equipment purchases and projects will likely be put on hold, Logan added.