Sedona AZ (June 7, 2011) – You may have read recently that the City of Sedona is projecting about a $1 million surplus in the general operating fund of the City. At the same time, you are probably seeing more dreary stories that show continued slashing of city budgets across the country. So, you might ask, “What really happened in order to make the financial picture work?”
Since about the year 2000, the City of Sedona steadily received revenue in excess of expenditures. While revenues were growing, some new programming was added and costs did increase; however the increased expenses did not grow at the same rate that the increased revenue grew. The result was an increase in savings. In the general fund, this built up as a cushion for a rainy day or to be used for one-time or short-term expenses and opportunities. In addition, the wastewater fund, capital fund, and special revenue funds each have their own separate savings accounts. These savings are typically used for the more expensive construction projects in the City.
The savings account in the general operating fund has continued to grow, and is projected to increase again at the close of the fiscal year on June 30, 2011. We project to have operating fund savings of about 100% of ongoing operating costs to start out the next fiscal year on July 1, 2011. The City has used some savings in other funds for major construction projects, but substantial savings remain in those accounts as well.
As the revenue picture declined in Sedona and nationwide, staff and council began delaying several capital projects and reducing expenses as early as October 2008. We approached major service impacts cautiously at first, but made a series of operating reductions in December 2008 that included cost control measures like a hiring freeze that included hiring only essential personnel, reductions and elimination of programming, and providing a review of wastewater fees to provide a better picture of cost recovery.
By far the largest impacts came in the years 2009 and early 2010. The first year of a five-year rate increase to wastewater fees was implemented, with year two going into effect for the August 2011 billing – another 15% increase. These rate increases will allow for a ten-year goal to reduce the sales tax subsidy to wastewater operations – freeing that revenue source to be used for citywide operations and projects. A new capital planning process that requires all projects to compete for the same sales tax dollars instead of providing direct funding was also instituted. The City instituted a series of new business practices. Underway for less than a year, the first-ever sales tax audits have discovered about $375,000 in unpaid taxes. In addition, businesses are now required to have a City business license and to pay local sales taxes directly to the City, not the State, which provides more detailed information and timely payment of taxes. Finally, a layoff in the spring addressed anticipated future declines in revenue from the State which are likely to be realized not only next year but beyond.
In essence, while other cities used one-time resources and cuts – band-aids that also left lingering problems to address, Sedona ripped off the band-aid and addressed its finances early. Sedona’s combination of cost controls, cost reduction, and financial policy changes combined to place us in a positive financial position now and in the future. Staff is planning for the addition of several one-time projects in next year’s budget and are approaching this next budget as a transitional year, with a conservative budget that still signals caution at the weak but rebounding economy.
For more information about the budget and financial reports, visit us at www.SedonaAZ.gov/finance. This Eye on Sedona Finance Expectations for 2012 article was written and submitted by City of Sedona employee, Alison Zelms, Assistant City Manager.
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Mayor’s State of the City Address on June 29, 2011: Mayor Rob Adams will present the 2011 State of the City address on Wednesday, June 29, 2011 at 5:30 p.m. in the Sedona City Hall Council Chambers, 102 Roadrunner Drive.
In his first State of the City address, Mayor Adams will share Sedona’s accomplishments from the year, which sets the stage for the City’s future. The free event is open to all residents. A reception with the Mayor and City Council prior to the speech will commence at 5 p.m. and light refreshments will be available. For more information, please contact the City Manager’s office at 928-204-7127.
(sent from FB) as a MN tax man this was pretty well done for a gen ed piece be sure to ask tuff questions
attend the Community Plan Meeting on June 30. 2011. The Citizens Steering Committee for the Community Plan is hosting another innovative program on Thursday, June 30 at 6:30 p.m. at West Sedona School in the multi-purpose room.
This program will build on the energy from the May community events and provide residents an opportunity to be heard in a meaningful way. The public will join in a lively and uniquely orchestrated exchange of ideas for Sedona’s future. You will witness how everyone’s ideas will be recorded and organized and how they will be published to the community at large. You will also hear from fellow citizens at our May meetings who provided thoughtful comments and their dreams of how we can have a brighter future through planning.
An important goal in creating the new Community Plan is to make it easy to read and use and one that sets the stage for all land uses, recreational and business uses, redevelopment, new development, preservation of open space and traffic improvements. During this phase of the two-year planning process, it is essential that all perspectives be heard – the youth in our community, business owners and employees, retirees, homeowners, renters, artists, and the spiritual and faith-based communities. This meeting focuses on capturing ideas from all points of view. By doing so, we will begin the process of defining a vision based on the values we hold in common.
Cities and Towns in Arizona are required by state law to have a general plan and to update it at least every ten years. The Sedona Community Plan is our general plan and guides city decisions on future growth and development in the community. Taking a fresh look at the Plan allows us to respond to conditions and priorities that may have changed in the last ten years.
Please join us on Thursday, June 30 at 6:30 p.m. at the West Sedona School, Multi-Purpose/Cafeteria Room (building 100) to “Imagine Sedona – 2020 and beyond”!
For more information, please visit our website at http://www.SedonaAZ.gov/planUpdate or e-mail, call or write city staff:
Mike Raber, Senior Planner, mraber@SedonaAZ.gov, 928-204-7106
Kathy Levin, Associate Planner, klevin@SedonaAZ.gov, 928-203-5035
City of Sedona
Department of Community Development
102 Roadrunner Drive
Sedona, AZ 86336
REMINDER OF WASTEWATER RATE INCREASE: Wastewater rates will increase on July 1, 2011, as adopted by Sedona City Council on April 13, 2010. For more information regarding the rate increase, please visit: http://www.SedonaAZ.gov/wwratestudy.
Barbara Ashley, Director of Financial Services, 928-204-7205
On Thursday, June 30th at 6:30 p.m. at the West Sedona School multi-purpose room, you can participate in the on-going conversation about our next Community Plan. What do you feel passionate about? Show up and speak up!
The Community Plan is the policy document that guides the Planning and Zoning Commission and City Council in its decisions on growth and development. We have just begun a two-year process that is built on citizen involvement. Your participation is key to the success of this important community project.
Please ask your friends and neighbors to attend and pass this message onto them.
Thank you.
Kathy
Mayor’s State of the City Address on June 29, 2011: Mayor Rob Adams will present the 2011 State of the City address on Wednesday, June 29, 2011 at 5:30 p.m. in the Sedona City Hall Council Chambers, 102 Roadrunner Drive.
In his first State of the City address, Mayor Adams will share Sedona’s accomplishments from the year, which sets the stage for the City’s future. The free event is open to all residents. A reception with the Mayor and City Council prior to the speech will commence at 5 p.m. and light refreshments will be available. For more information, please contact the City Manager’s office at 928-204-7127.
Ginger Wolstencroft
Notice of Intent to Adopt Changes to the Model City Tax Code Posted Date: 6/28/2011 5:00 PM
NOTICE OF INTENT TO ADOPT CHANGES TO THE MODEL CITY TAX CODE Per ARS 9-499.15 the following proposed changes to the Sedona City Tax Code are set forth below.
Following a posting period of 60 days, the City Council will consider adoption of these changes at a future city council meeting. View entire document and links to State of Arizona Legislative bills.
/s/ Randy Reed, June 28, 2011_
Randy Reed, MMC, City Clerk
OUTLINE OF CHANGES TO MODEL CITY TAX CODE
The attached Model City Tax Code changes, summarized below, were approved by the Municipal
Tax Code Commission in April 2011.
Section 1
This section adds language to the existing definitions of “Food” and “Prosthetic”, and creates a new definition for the phrase “Medical marijuana”. These changes were made for the purpose of
specifically excluding medical marijuana from those definitions, and thus excluding sales of medical marijuana from the related exemptions available under the Retail classification of the Model City Tax Code (MCTC).
The additional language makes it clear that medical marijuana sales are taxable at the regular Retail tax rate in all cities and towns. This section shall be effective from and after June 1, 2011.
Sections 2-4
The changes in these sections are to comply with the 2010 regular legislative session passage of HB 2700. HB2700 changed the sunset date under Contracting in A.R.S. 42-5075(B)(14) for installed solar energy devices, extending the deadline from January 1, 2011 to 2017. The three
affected sections of the MCTC have the same language and these changes align the sunset date in the MCTC with the State statute. A technical correction adding reference to the Arizona Revised Statutes is also being added to the exemption for development fees in each section.
These sections shall be effective from and after July 29, 2010.
Section 5
New subsection 445(s) is added to incorporate HB2510, passed during the 2010 regular legislative session, which prohibited cities and towns from taxing commercial rentals between two corporations when either the landlord or lessor corporation owns at least 80% of the voting stock of the other corporation. Also allows exemption if a third corporation owns 80% of both the
landlord and the lessor corporations, and treats a “reciprocal insurer” as if it were a “corporation” for purposes of the exemption. This section shall be effective from and after July 29, 2010.
Section 6
The changes in this section were made based on cooperation and compromise between the Unified Audit committee and banking interests. The changes address the treatment of successor privilege tax liability in the event of a foreclosure. The new language allows for the deferral of
payment of the delinquent privilege tax until after the creditor subsequently sells the property, aligning the cash flow related to the property with payment of the tax liability. In addition, this amendment will allow for the creditor’s tax base to be based on their subsequent selling price, and also provides for tax credits in the event the debtor comes forward to pay their liability after the creditor’s payment. This section shall be effective from and after May 1, 2010.
Section 7
During the 2009 regular legislative session, SB1196 created a use tax exemption for school districts and charter schools which was not previously incorporated into the MCTC. This preemption in A.R.S. 42-6004(F) exempts the storage, use, or consumption of tangible personal property by a school district or charter school. This section shall be effective from and after
September 30, 2009.