COTTONWOOD – When it comes to putting together a city budget, a six-month window of time can be like the blink of an eye.
For the Cottonwood City Council and administrative staff, the clock is ticking toward June 19, 2018. That’s the date the city council hopes to adopt Cottonwood’s 2018-19 fiscal year budget.
During Tuesday’s meeting of the city council (Jan. 16, 6 p.m., Council Chambers, 826 N. Main St.) council members will receive a broad overview of the city’s financial picture and the time-frame within which the council must make the often-difficult decisions that lead toward the June 19 deadline for adoption of the municipal spending plan.
For the city’s administrative staff, that process began in November when Cottonwood’s various department heads received the parameters for devising their individual departmental budgets. Tuesday’s presentation to the council will be a general overview of the budget process for the coming year and the anticipated revenue streams the city expects to receive in 2018.
“We finished last fiscal year, June 30, about 6 percent ahead of the prior year with overall sales tax revenue at about $14 million for the year,” explained Cottonwood’s Deputy City Manager Jesus “Rudy” Rodriguez. “Sales tax has been fairly steady, around $1 million a month.”
But sales tax is just one part of the revenue stream that keeps the city in business. Council members Tuesday also will hear reports concerning state-shared revenue, grants funding, the city’s various user fees and fund balances and the prospect of the addition of a property tax for Cottonwood.
“Property tax, it’s been talked about it for several years,” Rodriguez said, “what’s been referred to as the third leg of the stool. At some point we need to decide to put it to the voters or get it off the menu.”
Rodriguez described the city’s overall financial picture this way: “We are running pretty thin, but there are opportunities based on the council’s guidance. There are cost-cutting opportunities, some more drastic than others.”
Also on Tuesday’s agenda will be the second public hearing on Cottonwood’s proposed “use tax,” described as “a tax on tangible property, such as a vehicle or furniture, which is purchased (or leased) for use or storage in Cottonwood on which tax was not paid at the time of purchase (or rental.) The tax will not apply to property worth under $1,000 or property where a Transaction Privilege Tax of 3 percent or more was paid.”
The aim of the Use Tax is to protect local vendors by removing incentives to shop outside of the city or state, explained Rodriguez, adding that the tax would place minimal burden on local citizens, leveling the playing field for local businesses, provide reduction of tax leakage and additional revenue at no additional cost.
“The impact to the city is estimated to be $75,000 annually and will be used to support current as well as future community needs … the City of Cottonwood provides more services than any other community in the Verde Valley on only a 3 percent Transaction Privilege Tax,” Rodriguez previously told the Verde Independent.
Following the public hearing on the proposed tax, the city council can choose to “adopt or not adopt, change or modify,” said Rodriguez.
Appointment of vice mayor
Also on Tuesday’s agenda will be the annual appointment of a vice mayor as well as appointments to the city’s various organizations, committees and boards related to intergovernmental and regional concerns.
More like this story
- Cottonwood holds first reading of proposed use tax ordinance
- Cottonwood City Council Roundup for Jan. 19, 2018
- Council adopts $85M tentative city budget
- Cottonwood balances need for more revenue vs. cutting costs on 2018 budget
- What is a Use Tax? Cottonwood Deputy City Manager Rudy Rodriguez explains