Payson council reviews budget rollovers, fund shifts and payroll proposal ahead of August hearing

At a July Payson City Council work session, city finance staff reviewed changes to the tentative 2025–26 budget including rollovers for capital projects, added design funding for a fire station and proposals to reallocate fund transfers to finish storm‑drain work. Council members discussed a proposed payroll adjustment and indicated a council consensus for a 3% merit increase and 2.5% cost‑of‑living adjustment to present at the public hearing in August.

Kathy, who presented the budget changes, summarized the largest items: “we added the fire station design, 400,000 in the capital fund. We increased the property tax revenue to reflect potential increase to the debt service for the fire station.” She said staff had also rolled over multiple unfinished projects from the expired budget, including a $109,000 repair-and-maintenance item and an $800,000 BNC project, and had added “$33,000 to storm drain for [a] storm drain rate study.”

Why it matters: the rollovers and new additions reduce available fund balance and change near‑term pressure on utility and capital funds. Kathy warned that staff had to reallocate internal transfers and reduce some miscellaneous line items to balance the books: “Sometimes the result is Alright. When we roll projects over after we set the budget, that means we have to find a way to pay for it.”

Major budget adjustments and clarifications discussed by staff (figures from the staff presentation): - Fire station design: $400,000 added to capital fund; projected property tax increase to offset some debt service. - Box culvert project (grant funded): $990,000 (grant funded, staff said this is self‑funding). - 300 South storm drain rollover: $81,300; staff reduced the transfer to the general fund and temporarily removed the storm drain master‑plan expense to balance the fund. - Other rollovers/changes: a $109,000 repair-and-maintenance project; an $800,000 BNC rollover; a $600,000 PI Dawn rollover; $283,000 in water state assistance; $115,000 added to mayor and council budget for economic development studies related to a sports complex; $25,000 added to cover costs for the Onion Days concert; updated revolving‑loan amortizations and a change to loan amortization schedules (moving new revolving loans from five to three years going forward). - Equipment and staffing: $80,000 added for a sewer dump body; a full‑time parts position added; engineering software subscription increases; a $7,500 police fingerprint machine replacement.

On payroll, Kathy said the city had originally budgeted a 6% payroll adjustment scheduled for October (it had previously been planned for January) and noted an accrual‑adjustment offset in the payroll estimate. The council then discussed how to allocate any payroll increase between a cost‑of‑living adjustment (COLA) and merit pay. Several council members described differing preferences; after discussion the council converged on presenting a 3% merit pool and a 2.5% COLA at the public hearing. Council members emphasized that final pay decisions require clear expectations and documented evaluation criteria for employees before awarding merit increases.

The council did not take a formal, binding vote on these budget changes at the meeting; staff said an official public hearing on the full budget will be held at the first August council meeting, where final decisions, rates and levy choices will be set.

Looking ahead: staff asked council members to review the distributed budget packet and raise any concerns before the August public hearing. Kathy and other staff said they will continue to track fund balances closely, particularly in the storm‑drain, water and BNC funds, which staff described as “tight.”

Ending: The council scheduled a public hearing on the full budget for August; staff will bring revised figures and the merit/COLA proposal for the council to consider formally during that hearing.