As cities and towns across the state of Arizona prepare for the state Legislature to pull its financial strings, the town of Queen Creek is taking a proactive approach to the pending budget crisis.

The Queen Creek Town Council last week held a special budget meeting to discuss plans of action for a possible cut to the tune of $5 million from the town’s already approved, balanced fiscal year 2009-10 budget.

As of press time, the state Legislature had not had its billion-dollar budget ratified by Gov. Jan Brewer’s office.

"We need to account for impacts," said Town Manager John Kross during the special meeting, held June 25. "The real draconian cuts we have been talking about."

What the town is bracing for is this: a three-year moratorium on impact fees coupled with the state Legislature’s plan to pull vehicle license tax remits, which will have a devastating impact on town departments and services.

The most drastic of these measures is the impact fee grab, which would equate to, over the next three fiscal cycles, a $13.9 million drop in general fund dollars, town officials say.

In an effort to replace lost development fees, Queen Creek Town Council instilled a cost of service fee at its June 17 meeting, which among other things, replaces lost impact fee revenues, according to Mr. Kross.

The cost of service fee allows the collection of money from builders during the three-year moratorium timeframe. Similar to impact fees, monies derived would pay for debt obligations of infrastructure already in the ground, Mr. Kross explained in a phone interview.

"The Legislature in its attempt to define what it considers an essential service, it will lead, perhaps, to some very serious decisions," Mr. Kross told council. "Frankly, hopefully this conversation is all for not."

The town of Queen Creek adopted a balanced $20 million budget on June 17, but with the possibility of the state Legislature’s impact fee and vehicle license tax grab, the town could be looking at making ends meet with about $15 million.

Despite what happens, the town of Queen Creek must continue to move forward, Mr. Kross said.

"We have obligations and a responsibility to this community," he said. "We are literally looking at raising revenue, cash."

A major part of last Thursday’s meeting was town staff asking council what measures ought to be explored to balance the town’s budget if the state Legislature does swoop in and take about $5 million to balance its budget next fiscal year, which starts July 1.

"We have been doing what we need to do," Assistant Town Manager Patrick Flynn told council. "We are always preparing for the worst-case scenario."

Mr. Flynn pointed to the fact that at the beginning of fiscal year 2008-09, the town had 210 employees. It now has 151, which is a direct result of budget cuts.

"We will need to cut from 25 to 50 percent in departmental budgets," Mr. Flynn said of how significant a $5 million decrease to next fiscal year’s budget could be. "Staff doesn’t take any of these questions lightly."

According to the discussion, town council is comfortable looking at every option, which includes an increase in sales tax, sewer and water rates; cuts across the board to every department budget; a reduction in contributions to not-for-profit organizations; the possibility of halting all ongoing transportation projects and the liquidation of town assets.

"This council (and) past councils have been very responsible," Mr. Flynn contends. "We had to build infrastructure to handle the growth of the area."

Mr. Flynn said the brunt of any cuts will be felt by the taxpaying citizenry of Queen Creek.

"We don’t have the luxury of saying we are not going to write that check," he said of his contempt for the federal bailout system seemingly rewarding the private sector for poor business management. "I had to get that editorial comment in."

Mr. Flynn said rapid growth in the community required infrastructure to be built — including properties such as fire stations, a wastewater treatment plant and a state-of-the art public library.

"We had to build infrastructure to handle the growth of the area," Mr. Flynn said of what translates into an $11 million dollar debt service fee payment for infrastructure, and $3.2 million to be paid for water debt service. "I have never defaulted on anything in my life."

"We have a balanced budget," Queen Creek Mayor Art Sanders said during the meeting. "Somewhere at the state level they managed to not balance a budget."

Mayor Sanders says the state Legislature’s plan to take precious dollars from the town of Queen Creek is like a "big bomb that is about to explode."

"It almost sounds like an abusive spouse," he said of how the state is attempting to balance its $4 billion budget shortfall. "Don’t make us play a different game that has a different set of rules."

Mayor Sanders, along with all members of council, say they are proud of the work town staff has accomplished.

"I really appreciate all that you have done," he told town staff. "We have more than done what we are supposed to do. It’s not like you buy character — we built this character."

Queen Creek Councilman Jeff Brown called the town employees’ willingness to embrace pay cuts and shorter work weeks a "show of solidarity."

While Councilman Brown agrees all options need to be explored, the selling of town assets — namely park properties held by the town — needs to be carefully scrutinized.

"We can build this community for $15 million, but I don’t think it is going to be a town anyone wants to live in," he said of the prospect of selling open land the town has fought to preserve. "This goes contrary to everything we need to do in this community." Councilman Brown says if cuts need to happen, they need to be across the board.

Queen Creek Vice Mayor Gordon Mortensen says everything has to be on the table — even public safety.

"I think we need to look at that area because it is one of our healthiest by design," he said of monies set aside for public safety operations. "Everything is on the table, but there are some priorities ... that we are not just going to throw out the window."

Vice Mayor Mortensen was not in favor of increasing the sales tax, which ultimately would be an equalization of tax throughout the town.

According to the town’s Web site, the town’s sales tax is 2.25 percent. The construction transaction privilege tax rate is 4.25 percent.

"If we raise sales tax we shoot our business owners in the foot," Vice Mayor Mortensen said. "We want growth to come here and this offsets that. We have got to keep our eyes on that fact."

Queen Creek Councilman Jon Wootten says the only thing he is concerned with is making sure the town of Queen Creek maintains its municipality status.

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