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State budget woes will affect Benson
Thelma Grimes/San Pedro Valley News-Sun
The growing state budget deficit will likely become a City of Benson problem in the near future.
In a presentation Monday night, Finance Director Jim Cox said the city has been surviving these tough economic times, but the state could sink their efforts.
Mayor Mark Fenn said Tim Bee of Gov. Janet Brewer's office said while things were bad in 2009, they are going to get worse in 2010 and 2011. Arizona went from being the second-fastest growing state in the nation in 2007, to 43rd in 2009.
This has created a more than $3.4 billion deficit, and Cox said the Arizona Legislature has only made $220 million in cuts so far.
"The city is slowly climbing out of this recession, but the state is not," Cox said. "The state's crisis could become the city's crisis. Some projections say things will get better, but I don't see any signs that it's getting any better. Things are bad at the state level, and they are getting worse, and nothing is being done about it."
The city is facing a $100,000 cut in state-shared revenues, $28,000 in cuts to state sales taxes and a $33,000 loss in highway user funds.
Besides the $161,000 in cuts, Cox said the state is already considering paying the $1.1 million they already owe the city in IOU's.
Not getting promised funds from the state means the city now has to make cuts.
Cox asked the council to direct department heads to look at what can be cut from their budgets. This could mean cuts to services such as lights at Lions Parks, halting street sweeping or layoffs.
Cox said other ideas include continuing the hiring freeze that has been in place since last year, early retirements, furloughs, salary reductions, layoffs and the elimination of positions.
Cox is expected to report the results of the proposed cuts during the Feb. 22 council meeting.
There is a real possibility that personnel will be cut because Cox stressed it makes up 68 percent of the city's expense.
Cox said the city does have some contingency money, but with state officials estimating cuts to continue through 2011, there is not enough.
In other business, the council unanimously approved a trust assurance agreement with the Southeast Arizona Economic Development Group (SEAEDG) to continue subdivision improvements to a project known as House Ridge Estates near Pearl Street in north Benson.
Public Works Director Brad Hamilton said the original developer went bankrupt, and the bank donated the land to the SEAEDG, a non-profit organization directed by former Benson Mayor George Scott.
Hamilton said SEAEDG will now have to hire an engineer and follow city procedure to develop the land.
Mayor Mark Fenn voted in favor of the measure, noting he is a member of SEAEDG. City Attorney Michael Massee backed the mayor's vote, stating it is not a conflict of interest because it is a non-profit organization.
Besides Scott and Fenn, the Arizona Corporation Commission lists Larry Demptser, Mark Battaglia, David DiPeso, Judy Thomas and Dennis Criswell as members of SEAEDG.
The council also approved a trust assurance agreement for the 224-home San Pedro Golf Estates development, which has been sold to new owner BIF-Benson LLC. The Arizona Corporation Commission has the statutory agent of BIF-Benson listed as Chris Heeter of Scottsdale.
The growing state budget deficit will likely become a City of Benson problem in the near future.
In a presentation Monday night, Finance Director Jim Cox said the city has been surviving these tough economic times, but the state could sink their efforts.
Mayor Mark Fenn said Tim Bee of Gov. Janet Brewer's office said while things were bad in 2009, they are going to get worse in 2010 and 2011. Arizona went from being the second-fastest growing state in the nation in 2007, to 43rd in 2009.
This has created a more than $3.4 billion deficit, and Cox said the Arizona Legislature has only made $220 million in cuts so far.
"The city is slowly climbing out of this recession, but the state is not," Cox said. "The state's crisis could become the city's crisis. Some projections say things will get better, but I don't see any signs that it's getting any better. Things are bad at the state level, and they are getting worse, and nothing is being done about it."
The city is facing a $100,000 cut in state-shared revenues, $28,000 in cuts to state sales taxes and a $33,000 loss in highway user funds.
Besides the $161,000 in cuts, Cox said the state is already considering paying the $1.1 million they already owe the city in IOU's.
Not getting promised funds from the state means the city now has to make cuts.
Cox asked the council to direct department heads to look at what can be cut from their budgets. This could mean cuts to services such as lights at Lions Parks, halting street sweeping or layoffs.
Cox said other ideas include continuing the hiring freeze that has been in place since last year, early retirements, furloughs, salary reductions, layoffs and the elimination of positions.
Cox is expected to report the results of the proposed cuts during the Feb. 22 council meeting.
There is a real possibility that personnel will be cut because Cox stressed it makes up 68 percent of the city's expense.
Cox said the city does have some contingency money, but with state officials estimating cuts to continue through 2011, there is not enough.
In other business, the council unanimously approved a trust assurance agreement with the Southeast Arizona Economic Development Group (SEAEDG) to continue subdivision improvements to a project known as House Ridge Estates near Pearl Street in north Benson.
Public Works Director Brad Hamilton said the original developer went bankrupt, and the bank donated the land to the SEAEDG, a non-profit organization directed by former Benson Mayor George Scott.
Hamilton said SEAEDG will now have to hire an engineer and follow city procedure to develop the land.
Mayor Mark Fenn voted in favor of the measure, noting he is a member of SEAEDG. City Attorney Michael Massee backed the mayor's vote, stating it is not a conflict of interest because it is a non-profit organization.
Besides Scott and Fenn, the Arizona Corporation Commission lists Larry Demptser, Mark Battaglia, David DiPeso, Judy Thomas and Dennis Criswell as members of SEAEDG.
The council also approved a trust assurance agreement for the 224-home San Pedro Golf Estates development, which has been sold to new owner BIF-Benson LLC. The Arizona Corporation Commission has the statutory agent of BIF-Benson listed as Chris Heeter of Scottsdale.
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The following are comments from the readers. In no way do they represent the view of bensonnews-sun.com.
Jim Cox wrote on Jan 27, 2010 4:55 PM:
" The following letter was sent to the News Sun today. Please call me at 520-720-6314 if you would like to listen to the full presentation.
Jim Cox
January 27, 2010
Ms. Thelma Grimes
San Pedro Valley News Sun
200S. Ocotillo
Benson, AZ 85602
RE: “State budget woes will affect Benson” article
Dear Ms. Grimes:
The article in the January 27 issue of the News Sun has a misleading theme and many inaccurate statements. They are addressed below.
Misleading Theme
The headline states “State budget woes will affect Benson”. The first paragraph is “The growing state budget deficit will likely become a City problem in the near future”. The tone continued throughout the article, as if a contingent event had already happened or was about to happen. It gives the impression that the state is now preparing to pull the financial plug on the City.
The title of my presentation was “Potential City Budget Crisis”. Throughout the presentation I stressed the words “potential” and “contingency”. In fact, I am not aware of any discussion of the state paying bills with IOU’s. I am also not aware that any other Arizona city is doing the contingency planning that we are doing. The presentation was done because of my knowledge of the state’s finances, my concern that the state may not have the cash to pay its bills, and my professional responsibility to keep Council informed about City finances. My job is to plan proactively rather than to wait for bad news, then react. I hope I am wrong about the potential state actions, but the City will be prepared to react promptly and responsibly if I am correct.
Inaccurate Statements
There is no “current $3.4 billion deficit”. I clearly showed on the power point that the anticipated deficits are $1.2 billion by June 30 and $3.4 billion next fiscal year.
The “known cuts the City is facing” are estimates for fiscal 2011, not current amounts.
The state is NOT “already considering paying the $1.1 million they already owe the city in IOUs”. Those statements are wrong. The state does not owe the City $1.1 million today. My preliminary budget projects that the City will receive $1.1 million in fiscal 2011. The City has no knowledge whatsoever of any state plan or intent to pay its bills with IOUs. That notion is merely my professional concern that the state may not have the funds to pay its bills.
“Not getting promised funds from the state means the city now has to make cuts.” That statement is wrong. The City does not have to make cuts, because the contingency that was the subject of the presentation has not happened.
“...with state officials estimating cuts to continue through 2011…” That statement is wrong. Nothing of that sort was said during the presentation. State officials are very aware that their budget crisis will last well beyond 2011. As stated above, no state official has said anything publicly about cutting state shared revenues.
Summary
The article is so misleading and factually incorrect that I request it be corrected in the next edition of the paper. If a corrected article is published, I would appreciate the opportunity to review it just to make certain that the facts are correct.
I am thankful that City employees were informed in advance about the reasons for the presentation. That article would have caused widespread discontent (to say the least) if they supposedly learned of imminent layoffs, etc. in the newspaper. As it is, I’ve gotten only some good natured ribbing about “lying” to them while telling the “truth” to the media.
I invite you to listen to the minutes of the meeting (I did), then try to reconcile what was written with what was said and shown on the power point that you already have. It puzzles me that the article was written as it was, because you normally demonstrate excellent professional journalism when writing articles about city finances.
Thank you - and I have faith that you will do what is right.
Sincerely,
James F. Cox
Finance Director
cc: Mark Fenn, Mayor
Glenn Nichols, City Manager
City Council Members
Department Heads & Supervisors "
Jim Cox
January 27, 2010
Ms. Thelma Grimes
San Pedro Valley News Sun
200S. Ocotillo
Benson, AZ 85602
RE: “State budget woes will affect Benson” article
Dear Ms. Grimes:
The article in the January 27 issue of the News Sun has a misleading theme and many inaccurate statements. They are addressed below.
Misleading Theme
The headline states “State budget woes will affect Benson”. The first paragraph is “The growing state budget deficit will likely become a City problem in the near future”. The tone continued throughout the article, as if a contingent event had already happened or was about to happen. It gives the impression that the state is now preparing to pull the financial plug on the City.
The title of my presentation was “Potential City Budget Crisis”. Throughout the presentation I stressed the words “potential” and “contingency”. In fact, I am not aware of any discussion of the state paying bills with IOU’s. I am also not aware that any other Arizona city is doing the contingency planning that we are doing. The presentation was done because of my knowledge of the state’s finances, my concern that the state may not have the cash to pay its bills, and my professional responsibility to keep Council informed about City finances. My job is to plan proactively rather than to wait for bad news, then react. I hope I am wrong about the potential state actions, but the City will be prepared to react promptly and responsibly if I am correct.
Inaccurate Statements
There is no “current $3.4 billion deficit”. I clearly showed on the power point that the anticipated deficits are $1.2 billion by June 30 and $3.4 billion next fiscal year.
The “known cuts the City is facing” are estimates for fiscal 2011, not current amounts.
The state is NOT “already considering paying the $1.1 million they already owe the city in IOUs”. Those statements are wrong. The state does not owe the City $1.1 million today. My preliminary budget projects that the City will receive $1.1 million in fiscal 2011. The City has no knowledge whatsoever of any state plan or intent to pay its bills with IOUs. That notion is merely my professional concern that the state may not have the funds to pay its bills.
“Not getting promised funds from the state means the city now has to make cuts.” That statement is wrong. The City does not have to make cuts, because the contingency that was the subject of the presentation has not happened.
“...with state officials estimating cuts to continue through 2011…” That statement is wrong. Nothing of that sort was said during the presentation. State officials are very aware that their budget crisis will last well beyond 2011. As stated above, no state official has said anything publicly about cutting state shared revenues.
Summary
The article is so misleading and factually incorrect that I request it be corrected in the next edition of the paper. If a corrected article is published, I would appreciate the opportunity to review it just to make certain that the facts are correct.
I am thankful that City employees were informed in advance about the reasons for the presentation. That article would have caused widespread discontent (to say the least) if they supposedly learned of imminent layoffs, etc. in the newspaper. As it is, I’ve gotten only some good natured ribbing about “lying” to them while telling the “truth” to the media.
I invite you to listen to the minutes of the meeting (I did), then try to reconcile what was written with what was said and shown on the power point that you already have. It puzzles me that the article was written as it was, because you normally demonstrate excellent professional journalism when writing articles about city finances.
Thank you - and I have faith that you will do what is right.
Sincerely,
James F. Cox
Finance Director
cc: Mark Fenn, Mayor
Glenn Nichols, City Manager
City Council Members
Department Heads & Supervisors "
citizen D wrote on Jan 27, 2010 6:23 PM:
" thou this city is in a budget crises, maybe we should look at some cuts, examples being, city streets crew, if theres no money for projects, which there isn't then why should we keep a full staff? same with park services, im sure one or two people can handle the parks by themselves. Now we need to not cut funds to our emergency services Departments ,( police and fire) Its funny nobody cares if they have enough money to do there jobs until there house is on fire, or there mom is needing medical assistance, or your house gets broken into, these departments cannot be sucked dry of what little funds they have. "
Vicky Konrad wrote on Jan 31, 2010 5:37 PM:
" Citizen D is wrong! I cannot even image our city without the street and park crews! Our city depends on tourist and winter visitors for a lot of our economy and people will not stay somewhere that is not well maintained! I have been gladly paying city tax for twenty years but would not feel that way if I had to buy new tires every year because of pot holes and if my grandkids could not play sports at the park! Great job City of Benson for making our city a great place to live! "
Phillip Keuter wrote on Jan 27, 2010 2:36 PM:
I'd say that's an understatement or an actual misstatement because what is being done will actually make the situation worse! First rule in hole digging: When you are in a hole, STOP DIGGING!
Our legislative leaders, those libertarians that erroneously call themselves Republicans, are busy right now passing another tax cut to their wealthy country-club friends and another tax cut to big corporations. In other words, they are DIGGING THE HOLE DEEPER!!
Insterad of bringing in revenue, giving our state the infusion it needs to stay alive, they are instead giving away even more revenue.
Let's be clear: more tax cuts will not refill the state coffers. More tax cuts will not create more jobs. More tax cuts will not help communities like Benson! It will hurt us further.
And a consequence of their action that not many people are talking about, espeicially the republicans in charge who are passing these deleterious bills instead of being responsible and helping citiznes in towns like ours, is a huge tax burden is being shifted away from the state onto local counties. OUR PROPERTY TAXES WILL GO UP TREMENDOUSLY to pay for these tax cuts to corporations!
I am outraged!! Please contact our local republican legislater and ask him why he and his so-called party are passing these bills that hurt our state, deplete our general funds, and make us pay higher property taxes, and devestate our small towns like Benson and hurt the people who live and work here and trry to raise families here. Ask him why he is giving away our money to big corporations in our state and making us pay higher taxes in return. Ask him why he has decided to help big business at the expense of our small town anfd at the expense of people who live here.
It's outrageous! "