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As another anticipated national recession looms, Coconino County is armed with something it didn’t have last time – a detailed plan.

“The question of a recession is not if it’s going to happen, it’s when,” said Mike Townsend, chief financial officer for the county.

Although the county switched from a five-year financial planning process to a 10-year process in the 2007 fiscal year, it did not have nearly enough time to implement the policy before the economy came crashing down in what is now known as the Great Recession.

During the recession, northern Arizona was not exempt from the heightened unemployment rates resulting from the reductions in consumer spending.

The State of Working America reported that in 2008 and 2009, 8.4 million jobs were lost nationally, becoming the most dramatic drop in employment percentage since the Great Depression of the 1930s.

Nevertheless, as an employer, the county fared rather well, Townsend said, with no layoffs of locally funded employees. It did experience some budget cuts and vacancies, though.

He hopes to do even better when the next recession hits through the allocation of funding for operations, employee pensions and long-term facility improvements that has been occurring since the end of the last recession.

The goal is not to predict when the recession may occur, but to be ready for it when it does happen.

For now, county finance representatives are now using the words of former Coconino County Manager Steve Peru as a sort of guiding slogan: “We don’t want the decisions we make today to put us in a worse position in the future.”

Townsend said the county’s budget works like a personal budget. Similar to an employee’s salary, the county does not have much control of the funding it will receive; however, it can control what it spends in the event that something unexpected occurs, like a costly roof or car replacement in a personal budget.

“We’re still balancing to the bottom of a recession,” Townsend said of current county operations. “We don’t want to be off [in our prediction] by several years, but being off by a year is not going to be a huge difference because we’ve already planned for how to deal with it.”

To do so, Townsend said the financial team has emphasized critical services like payroll and utilities, while setting funding aside for projects so they can occur even in the event another recession hits.

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The county website describes this as a “more accurate forecasting methodology” than a more reactionary form of short-term budgeting.

Townsend said he expects this process – planning ahead instead of merely reacting to crises as they arrive – could save the county more than $7 million over 25 years, allowing it to provide more services for its employees and customers.

Pre-planning can also save county residents money. In October, for example, the Board of Supervisors approved a one-time payment of $10 million of saved internal funds to public safety pensions, which is expected to save county taxpayers $30 million over the next 20 years.

The public safety pensions are now more than 75 percent funded by the county itself, compared to 25 percent three years ago.

“As we go through that next economic cycle, we’re going to be closer and closer to being 100 percent funded, which guarantees those pensions are going to be there for those staff in the future,” Townsend said.

He said that an accurate population count in Census 2020 will have a significant effect on revenues in the county, but the new jobs the census will bring to the area will not have a major impact on this planning process.

The annual county budgeting process, which occurs in addition to the long-term financial planning process, is scheduled to begin in April.

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Kaitlin Olson can be reached at the office at kolson@azdailysun.com or by phone at (928) 556-2253. 

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