Payson Council Work Study: FY26 Budget & Annual Agreements - May 6, 2025
Payson Town Council Work Study – May 6, 2025
The Town of Payson Common Council met in a work study session on May 6, 2025, from approximately 3:00 p.m. to 7:43 p.m. to discuss renewal of annual nonprofit agreements and a comprehensive overview of the draft FY26 budget. No formal action was taken, as work studies are intended for discussion only. The meeting focused on balancing ongoing revenues and expenditures, with particular emphasis on personnel costs (74% of the general fund), capital improvement priorities, and the financial sustainability of community events and services.
Consent Calendar
- No consent calendar items were presented; all agreements were discussed individually.
Public Comments & Testimony
- No public comment was taken, as per the stated purpose of the work study.
Discussion Items
Renewal of Annual Agreements
- Blattner Brush Pit (Resolution 3446): Kevin McCully (Fuels Manager) and Frank Aspelagh (President, Mogollon Valley Pit Program) presented. The agreement includes a 10% increase from $7,000 to $7,700. Last season the pit collected over 4.6 million pounds of biofuel, with 56% of drops from Payson residents. Funds support equipment maintenance, fuel, and road base to cover ash. The pit operates on Forest Service land and cannot charge fees, relying on donations. Council members expressed support, with Council Member Bell stating it is a “necessity.” The $7,000 is already in the FY26 budget; the additional $700 increase will be included with council consensus.
- Humane Society of Central Arizona (Resolution 3445): Police Commander Joshua Haines reported that animal incidents doubled in the last year. The Humane Society requested a $10,000 increase (from $95,200 to $105,200). Mark Van Earn (Vice Chair) noted a $36,000 operating loss for the quarter ending March 2025. The Humane Society is a no-kill shelter, provides animal control services for Payson and Star Valley, and covers approximately 10% of its budget from the town. Council acknowledged the importance of the partnership and agreed to include the requested amount in the budget.
- Senior Center (Resolution 3442): Janice Chesser (Director of Development) and Steve Richardson (Parks and Recreation Director) presented. The Senior Center requested $135,000 (same as prior year), covering 17% of its operating budget. Services include 5,925 congregate meals (up 2.36%), 18,424 home-delivered meals (down 14.52%, seen as positive for social interaction), and 3,849 transportation rides (up 8.8%). The center also provides medical equipment loans. Council expressed support and included the amount in the budget.
- Consolidated Court Agreement (Resolution 3444): Tracie Bailey (Town Clerk) noted a decrease of $8,126 annually, with a new monthly fee of $13,910. Council agreed to keep the agreement in the budget.
FY26 Draft Budget Presentation and Discussion
- Overview: Acting Town Manager Sheila DeSchaaf and Finance Director Dana Ohanesian presented the draft budget. The general fund projects $35.9 million in revenues and $35.5 million in expenditures, with an available fund balance of about $5.8 million after reserves. Personnel costs account for 74% of general fund expenditures. Police and Fire together represent 56–57% of the general fund budget. Highway User Revenue Fund (HURF) has a projected uncommitted balance of $470,000, with about $5.7 million in total revenues.
- Revenues: Revenue growth has flattened. The one-percent sales tax increase approved previously did not generate the anticipated surplus due to increased costs. Council discussed TPT (transaction privilege tax) audits and contractors on the “honor system.” Tourism-related taxes (bed tax) are separate. Council Member Bell challenged the council to examine consultants, attorney fees, and temporary staffing costs.
- Expenditures: Departments were advised not to exceed FY25 budgets; most are at or below prior year levels. The largest expenditure increases are in personnel costs. Community Development’s increase is due to the Beeline Bus project (partially funded by HURF). Council expressed caution about “co-mingling” of funds (general, HURF, water), but staff confirmed no violations.
- Personnel Requests: Human Resources Director Lynne O’Donnell reviewed new personnel requests: water utility billing clerk, airport admin from part-time to full-time, library page to clerk, visitor center variable hours, fire community risk reduction specialist reclassification, police analyst, police volunteer coordinator, and two patrol sergeants plus a lieutenant. Staff recommended “no” for most general-fund positions due to lack of ongoing revenue surplus; water-funded and bed-tax-funded positions were recommended as “yes.”
- Capital Improvement Projects: The draft includes about $600,000 in recommended “yes” projects (e.g., conference room technology, security cameras, Beeline bus replacement with 15% town share). Over $14 million in “maybe” projects were identified, including the aquatic center (Phase Two), event center upgrades, evidence facility, and Green Valley Parkway. Council debated the pool project, with several members noting lack of cost certainty and the need for external financing.
- Ice Rink Discussion: Parks and Recreation Director Steve Richardson reviewed the 2024 ice rink: 1,372 skaters, $49,660 revenue, $142,500 total cost (excluding staff). Options for 2025 range from $184,000 (existing vendor) to $241,000 (higher-quality vendor). Council discussed sponsorships, volunteer staffing, and potential cuts to other events (e.g., NIRA College Rodeo cost ~$35,000) to offset costs. No decision made.
- Beeline Bus: Julie Leonard and Doni Wilbanks presented. Total FY24 cost was $362,801, with ADOT reimbursement $241,758, and contributions from Gila County ($73,000) and Star Valley ($10,000), leaving a net town cost of $38,043. A new bus would cost the town $24,693 (15% of total). Ridership increased 120% since the town took over in 2023. Council discussed youth access and route efficiency.
- Council Priorities & Concerns: Members debated whether to commit available fund balance to capital projects. Council Member Haws advocated for event center upgrades, evidence facility, and Green Valley Parkway, noting the pool likely requires bond financing. Council Member Ferris emphasized revenue-generating projects. Council Member Tubbs supported evidence locker, drainage improvements (Bentley Street), event center, and restrooms at Rumsey Park. Council Member Nossek suggested using the “rainy day fund” to offset costs. Council Member Bell called for a thorough review of personnel costs and consultants, but several members cautioned against cuts that would harm morale or public safety.
Key Outcomes
- Consensus on agreements: Council directed staff to include the Brush Pit ($7,700), Humane Society ($105,200), Senior Center ($135,000), and consolidated court (decrease to $13,910/month) in the tentative budget.
- Budget direction: Council agreed to continue refining the draft budget at a work session on June 3, 2025, with potential reductions or reprioritizations. No formal action was taken on the draft budget.
- Personnel and staffing: Council consensus to hold off on general personnel hiring decisions until a new Town Manager is hired, except for critical positions such as a town engineer. The Town Manager search is ongoing.
- Capital improvements: No final decisions were made. Council requested additional information on the pool (May 14 meeting), airport hangar presentation, and appraisal of town-owned properties. The pool was noted as possibly requiring a GO bond election in 2026.
- Events: Council expressed interest in increasing sponsorships for the ice rink and other community events. No events were cut or confirmed at this meeting.
- Next steps: The tentative budget will be presented for adoption of the expenditure limitation at the May 28 council meeting. Further discussion on reductions and staffing will occur after the new Town Manager is hired.
Meeting Transcript
We have a roll call. Let the records we collect that all council members are present except for Clarity is on his way. Work studies are intended for council to discuss business, and no action can be taken. As a result, public comment will not be taken during this meeting. Purpose of the meeting, number A, presentation and discussion regarding annual agreement. Thank you, Mr. Mayor, members of council. Annually, the town has contributed to three nonprofits that have been re-qualified in accordance with council's adopted ordinances, and those include the senior center, the humane society, and the brush pit. So essentially the town contributes to those organizations that are providing services that the town would otherwise be required to provide for its residents. And so each of those entities is here, and you can take them in whichever order you prefer. Each one has a staff representative. And the brush pit subsidy is going from 7,000 to 7,700. Start with a brush pit, it starts with B that is Kevin. What whatever is on the schedule. Well, good evening, Mr. Mayor and Council. I'm Kevin McCully with uh fire department. This is Frank Aspaslaw, he's uh manager of the Platinum brush pit. I've got a short presentation here for you. Um so what we're asking for is for to continue the support that we've always done for the the brush pit with like uh manager Sheila or DeShaft said uh with a 10% increase. Um so the bowy on pit program started way back in the early 2000s. Um Chief DeMacy and uh uh Tommy Martin Supervisor Tommy Martin kind of started the the uh rim or the Payson Regional Area project um and the the brush pits were part of that so the the brush pits are the only remaining part of that uh last season uh the brush pit collected over 4.6 million pounds of biofuel, which is up from like 4.4,000 from or 4.4 million from the year before that. Um we get that ground and taken to the power plant. Um 56% of the drops were uh town of pays and residents. They they collect the names and addresses as the people drop the material there so they are able to keep track of where it's coming from. Um so we're asking for uh we said a 10% increase, their their cost of uh operation increase to about 10% from last year. There's a picture of them loading it into the tractor trailers. Um it's a it's a very important program for the town and the residents of the town to be able to dispose of the material you can imagine uh trying to dispose of 4.6 million pounds some other way, it would be really difficult. Um this this funding supports that allows them to buy fuel for their the tractors and uh I'll let Frank talk a little bit more about that if he'd like after I'm done here. Um so the total budget was 35,000 for 2023, and we're a small part of that. You know, obviously the the county donates to that, and then they they collect donations as people drop material as well. So if uh one of the things we have to kind of go through to approve or to justify given donating funds to them is is showing you that it's uh a service that um townspeople would have to pay more somewhere else to get the same service. So um, like I said, 56% was uh town of pays and residents or the town itself, you know, our parks and rec and streets department use them as well. Um a good comparison was when we had the uh the pop-up brush pit at the at the vent center, it cost uh cost $8,000 to get rid of that uh material, and fortunately we were able to coordinate that with the guy that chips it, otherwise it would have cost us about 18,000. So it's an economical uh way of uh our residents to get rid of that material and helps us you know in the end run get the mitigation done that's necessary, Mr. Aspaslaw. Uh in case everybody doesn't know if it's Frank Aspaslaw, been running the uh brush pits roughly almost nine years now, so it's seen a lot of changes. Uh we used to burn it. Uh everybody who's ever been to the brush pit and knows about the black ashes all over everything. So last year, two years ago, we put in uh roughly 1200 tons of uh road base over top of all that ash so people didn't have to breathe it. All the customers used to go home with the black wall collar and everything because all the black ash and stuff. So now uh since Kevin's got it all, so we're doing the chipping. Um we've ran into problems with people putting trash into piles. I don't know if you read it in the newspaper and stuff. Uh we had a crankshaft and uh car rotor, brake rotor in the pile running through the chipper and had these big hammers or inch and a half bolts, shear the bolts right off. So we all got together and had to end up paying like two thousand dollars for uh just the parts they did the labor fixing the machine and all that stuff. So now we have uh cameras on everybody. Um we have uh uh metal detector, so just to stop this. I mean, we can I mean it's ruining it for everybody. I just saw uh a thing from the pine pit.
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