Commentary: The real budget facts for Cottonwood
It is that time of year again when the City of Cottonwood finalizes our budget for this next year and, as usual, there is much information about the budget that gets distributed through the media and other sources.
Some of the information is accurate and we appreciate the help in keeping citizens informed. Other information is incorrect and has caused some citizens to express concern about the financial status of the city.
So let's look at the facts and relieve any concerns that may have been created.
In summary, the city is in stable financial condition. Our budget is balanced as required by law every year, we meet our debt requirements, our employees are compensated consistent with the local market, our reserves meet adopted policies, and we continue to improve the infrastructure of the city.
The city does carry a debt of approximately $54 million primarily related to the purchase of private water companies ($27 million) and the construction of the recreation center ($14 million). The additional debt is associated with roadway projects (12th Street, Mingus Avenue) and the construction of the regional public safety communications center.
Due to the extremely low interest rates, the city also participates in lease purchase financing for vehicles, arsenic systems, and technology equipment. These lease purchase arrangements generally last for five years.
This is not an unreasonable or a concerning level of debt for a city this size and, in fact, the investment that has been made ensures a sustainable future for the citizens of Cottonwood.
When the city purchased the water companies they were in poor condition with frequent summer outages and they were facing a federal mandate to lower the arsenic level in the water.
The fire flows and the number of fire hydrants throughout the city and outside the city were dismal. There are still several private water companies throughout the state that have not met the federal arsenic requirement 10 years after the required timeline.
By purchasing the water companies citizens both inside and outside the city now enjoy a reliable water service that meets federal and state standards and the increased fire flows and hydrants have resulted in a decrease in our insurance rating which means lower homeowner insurance rates.
Most importantly, we are pumping 30 percent less water from the aquifer today and making much better use of reclaimed water. By any measure this was a smart investment.
The recreation center was also a bold move to improve the quality of life in Cottonwood both for those that live within the city and outside the city.
The debt for the construction of the center was approved by the voters and it serves thousands of users a year and is the envy of many other cities.
It is also important to note that we have high financial ratings from Standards and Poor and Moody's and our annual budgets have received the Government Finance Officers Award for the last 16 years for clarity and as a model financial plan for the city.
The city also provides all the information about the budget on the city website which can be reviewed at any time. We also maintain a policy of complete transparency by inviting any citizen to contact the City Council or staff if you have questions about the budget.
The city has still not recovered completely from the recession as reflected by our annual revenues. However, as stated, we are meeting our needs and we are stable financially.
We have the lowest tax burden for any city in Yavapai County as we rely primarily on a 3 percent sales tax and the city does not have a property tax or any special districts that provide services.
The City Council continues to seek and listen to input from citizens regarding new services and infrastructure and they will prioritize those needs as funding is available.
In the interim, you can be assured that the City of Cottonwood is well managed and provides quality services for the lowest cost to our citizens.
Doug Bartosh is the Cottonwood City Manager.