CLC Part 2

INTERDEPARTMENT MEMORANDUM

October 5, 2010

TO: Budget and Finance Teams

FROM: Jack Sprague, Town Manager

RE: Town Financial Crisis Update

The Water and Sewage Department and the Economic Security Department, who handle jobless benefits,

are in desperate need of examination and adjustment. We have spent some considerable time with both of

these departments, and would really like your analysis to help make some difficult decisions.

The Water and Sewage Department is somewhat unique in that it is supported entirely by user fees. We

have provided you with some analysis and projections of user fee revenue for both drinking water

production and water reclamation and treatment. We’ve also provided some projected expenditures for

the next 3 years, including a significant capital outlay project the town council has approved – the

construction of the Hadleyville Water Treatment Plant and Reservoir. This project is politically very

sensitive, and I’ll be honest with you, I don’t think taking it off the table is an option. However, what you

may explore is a different timeline or different priorities in budgeting that can help make the project more

successful given the budget constraints. We know that user fees will need increasing, but as you can

imagine that isn’t the most popular route we can take. We’d like to hear your recommendations for

reigning in operating costs as much as possible.

The Economic Security Department handles quite a few federal programs for the town in addition to

locally-funded programs. We have some initial projects for federal resources that we see increasing over

time and perhaps some opportunities for new federal revenue in the very near future. Specifically, we’d

like you to see if operating costs can be brought in line with revenues while maintaining a high level of

service and providing as much service as possible through these additional federal resources. Be as

specific as possible in your recommendations. Your Budget Briefing Book will have more detail on the

current state of both of these department’s operating budgets and the key decision points that the council

will need from your recommendations. As you develop the specific recommendations for these two

departments, my hope is that it will help inform your larger decisions surrounding the town’s overall

budget.

HADLEYVILLE

HADLEYVILLE DEPARTMENT OF FINANCE

1245 LINCOLN BOULEVARD HADLEYVILLE, AZ 85001