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Payson council approves transfers to cover grants-and-capital deficit tied to Granite Hill purchase
Summary
Council approved two transfers from the general fund contingency to eliminate a negative balance in the grants and capital projects fund and to replenish Fund 280, citing an earlier property purchase charged to capital accounts that lacked offsetting grant revenues.
The Payson Common Council on June 11 approved year-end transfers to clear a negative balance in the town's grants and capital projects fund and to restore contingency in another capital account. Finance Director Dana Ohanson told council the transfers are corrective bookkeeping to eliminate a deficit created after a large property purchase was charged to capital accounts without the anticipated grant revenue.
On Feb. 14 the council approved a property acquisition originally described in council materials as a $1.2 million purchase; about $548,000 of that cost had been charged to Fund 403 (Grants and Capital Projects), Dana Ohanson said. The budget chart in the packet showed Fund 403 had roughly $586,000 in revenue for the fiscal year but expenditures of approximately $1,468,000, leaving the fund with a negative balance recorded as a deficit of $242,516.
"We need to clean that up," Ohanson told the council, explaining staff proposed two transfers from the General Fund contingency line to bring Fund 403 to a zero balance and to transfer $121,000 to Fund 280 to restore that fund's balance. Ohanson said the General Fund contingency had about $800,000 available and noted the council's finance policy targets a $250,000 council contingency each year.
Council members asked about the purpose of the property purchased. Staff said the land (referred to in meeting materials as Granite Hill) is adjacent to the event center and is being considered as part of event center expansion planning; as part of that planning the town has had stakeholder conversations with Arizona State University and others. Rob Buchanan and Kimberly Horn were named as staff leads working on a conceptual plan for the property.
The council approved the transfers as presented (motion recorded as passed 7–0). Finance staff said they will move forward with the bookkeeping transfers and will return with routine updates as part of budget reporting.
Why it matters: The transfers move money from the general contingency into capital funds to comply with fund-balance rules and avoid carrying negative fund balances between fiscal years. The charges to Fund 403 stemmed from the Granite Hill purchase and from budgeted capital projects that lacked the projected grant revenue, requiring corrective transfers.
Clarifying details - Amount needed to eliminate negative fund balance: $242,516 (recorded as deficit in Grants and Capital Projects fund). - Additional requested transfer: $121,000 from General Fund contingency to Fund 280. - Source of transfers: General Fund contingency (finance director reported about $800,000 remaining in that line before transfers; council policy sets a $250,000 council contingency target).
Ending: Council approved the transfers and asked staff to return with updates; no additional action on the Granite Hill conceptual plan was approved at the June 11 meeting.
