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      • CAREFREE: Raftelis Rebuttal Report - 7/24/20
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  • LETTERS FROM READERS #2
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  • TOWN MEETING AGENDA
    • Workshop to discuss Fiscal Year 2023-2024 budget 5/25/23
    • Workshop to discuss Fiscal Year 2023-2024 budget
    • Carefree Meeting Agenda: 4/4/23
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    • Carefree Meeting Agenda: Council visioning workshop 2/3/23
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    • Carefree Meeting Agenda: 10/25/22 >
      • 10/4/22 Town Meeting Pics and Slides
      • Carefree Meeting Agenda: Council visioning workshop
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    • 2/9/21 CAREFREE UTILITIES COMMUNITY FACILITIES DISTRICT
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    • Carefree Meeting Agenda: 12/1/20
    • 11/18/20 Swearing In and Strategic Meeting
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    • 10/13/20 STRATEGIC PLANNING WORKSHOP
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Carefree Truth
Issue #637, April 21, 2018

The April 17th workshop presented an overview of the 2018/19 budget.  The numbers were rounded to simplify the presentation.  Gary Neiss explained that this would be the first of 2 budget workshops.  The next meeting, to be held on April 24th at 3 PM in the Council Chambers, will present the line items.  Carefree is probably the only municipality in the state to produce as detailed and specific a line item budget, which even includes office supplies like paper clips, and phone bills for each department.  Carefree is very transparent with its finances.  The line item budget will be available to the Council members for review during the week before the line item workshop, and will be posted on the Town of Carefree website, www.carefree.org, for public review.  The preliminary budget will be approved at the May 1st Council meeting.  The budget hearings and schedules will be advertised for the June 5th Council meeting, where the final budget will be approved.  The next Fiscal Year (FY) begins July 1st.



Revenues:
The overall estimated revenues for FY 2018/19 is $6.4 million.  The main contributors are State Shared Revenue (19%) which is based on population, and Carefree's 3% sales tax (50%) and user fees (31%) both of which are locally controlled.  User fees include building fees, utility right of way (ROW) fees, court fees, special event fees, and agreements such as naming rights and the one with the Carefree Water Company for the WIFA loan.  Carefree does not assess a property tax.  This is a point of pride but does make the Town dependent on elastic local fees, which is why strategic planning and marketing are so important.  Events that help brand the town are critical components that bring people here and help fuel the economic engine.

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The Consolidated Municipal Court saves money for both Carefree and Cave Creek by creating an economy of scale through shared labor costs.  The Court has been pinpointed by the Administrative Office of the Court as a model court, and guidelines have been designed based on our court that are used throughout the state as a model of efficiency.


The municipal sales taxes are estimated at $3,150,000.  New home starts remain strong and a new commercial storage facility will be built.  These generate construction sales tax, but that is "one and done", so can't be counted on in the future.  The large anchor stores are performing well due to strong residential growth in the primary trade area.  Civana, formerly the Carefree Resort, is being expanded and remodeled.  The former Resort Opera House building is being re-positioned as a spa which is expected to be the top spa in the municipal area, the state, and in the desert southwest.  The spa should be finished sometime this summer.  Civana is anticipating the completion of the resort remodel by fall, in time for the 2018/19 season.  The restaurants business is improving.  Bacan opened in Spanish Village in the space previously occupied by Carefree Station and is doing well.  Carefree Bistro is being re-positioned, and Civana will be presenting 2 new restaurant concepts.  The local revenue estimate is very conservative, but there will be many positives contributing to the sales tax revenue over the coming FY.      



Mayor Les Peterson reported that Civana CEO, Kevin Kelly, relayed to him that they elected to come to Carefree due to the forethought and positive thinking of the current Council.  The Civana executives knew they could work together to get the necessary things done.  Mr. Kelly asked the Mayor to pass along his thanks to the Council members.  Mayor Peterson said he is amazed that the speed and quality of the work being done at Civana.


Anticipated local user fee revenue includes ROW utility fees ($350,000), building fees ($375,000), court fees ($300,000), rental fees which are derived from the office space above the Council chambers, the Rural/Metro ambulance parking space in the fire station, and the Carefree Water Company Offices ($85,000), special event fees & merchandise sales ($175,000), and agreements ($735,000).  These represent the Town's cost recovery model.


Carefree is in a position to, and must, produce events due to a lack a the critical mass of businesses that help to define and brand the town.  Cave Creek, for example, has an eclectic and sustainable western heritage that defines their brand and which attracts people.  Economic development is a process that evolves over time.  Larger communities have economic development departments.  Carefree's events have been very successful.  Critics have railed at the costs associated with the events in isolation.  There are now cost recovery models associated with every event.  The current budget estimated event cost recovery at $125,000, whereas the amount received came to approximately $140,000, over 2/3 of the costs to produce the events.  These events put Carefree on the radar screens.  This can attract tangible businesses that can eventually replace events as a natural transition occurs.

https://vimeo.com/265503524


State Shared Revenue is budgeted at $1,225,000.  This has recovered to pre-recession levels, but there are consistent proposals at the State level to reduce the shared revenues.  The League of Cities and Towns is the lobbying group to which all 91 of the incorporated municipalities belong and pay dues.  The League is a fantastic organization that works behind the scenes to protect local control and shared revenues.  Because State Shared Revenues are population based and the pot is not growing exponentially, Carefree will begin to see a more proportional reduction in revenues resulting from other rapidly growing communities.  The State estimates Carefree's State Shared Revenue as follows:  State sales tax-$370,000, State income tax-$460,000, the Vehicle License Tax (VIT)-$165,000, and the Highway User Revenue Fund (HURF) which is dedicated to street maintenance and repair-$230,000.


Mayor Peterson said a reduction in HURF will be long term problematic.  All the major arterial roads come into Carefree.  There has been a tremendous amount of surrounding development.  Construction trucks pound the roads.  All of this creates traffic that far exceeds traffic from those who live in Carefree.  The 8-15 year period road maintenance and repair estimate is in the range of $25 million.  HURF, derived from gasoline tax, is in decline with the advent of electric cars and better gas mileage.  Vice Mayor John Crane said there are 2 fronts. One involves per capita; the second involves the State's pressure to fund itself.  It is looking to sweep money away from towns.  Mayor Peterson added, "Who's going to argue against education?"




Expenses:
Expenses can be divided up into 4 categories.  These are Human Resources (HR), Operations, Public Safety, and Capital Projects/Assets.  It is a difficult balance that is readdressed each year.

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Human Resources is budgeted at $1,520,000, a 3% increase. This is on a par with the cost of living increases seen in the contracts of various vendors with whom the Town works.  "Employees are every organization's greatest asset, their competitive edge.  To attract and retain the best, organizations must provide encouragement, stimulus, and a feeling that they are an integral part of the organization's mission."  Carefree has cultivated an environment of respect and "family" that has resulted in a dedicated staff. 



Carefree has 15 Full Time Employees (FTE).  There are 4 in Public Works, 2 in the Court, 2 Clerks, 2 Support personnel, 1 in Building Safety, 1 Code Enforcement Officer, 1 in Marketing, and 1 in Management.  In comparison, Cave Creek has a 4 day work week with 25 FTE that do the same amount of work as Carefree's small cross-trained staff.  According to their 20117/18 budget, Cave Creek paid $1.4 million more in salaries and benefits than did Carefree.  Due to retirements and separation of services, there will be a savings of approximately $35,000 in salaries and benefits over FY 2017/18.  Carefree is enrolling in a health insurance pool that will significantly reduce annual increases and will increase predictability in reference to cost and available services.  The health insurance pool creates an economy of scale and greater buying power.  Carefree's staff in previous years didn't qualify due to it's small size, but the Town is now being allowed to participate.  The cost will be significantly less than going out to the market.
https://vimeo.com/265493298

Lyn Hitchon


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