The Sun article, Flagstaff City Council postpones bond decisions but moves toward housing, 3/5/20, left out a critically important statement by city manager Greg Clifton during the council discussion. He said, “we came into the [budget] discussion a couple weeks ago with all [city] divisions in the negative without a lot of discretionary funds… Our discussions now are not about the add-ons and increasing services. It’s going the other direction.”
This means all city divisions are already over budget. All city divisions are already in the red. All city divisions are already discussing cuts.
With the frightening economic outlook and sales tax revenue plummeting this month in Flagstaff because of a sharp drop in tourism, Flagstaff appears woefully underprepared for the unfolding recession. Council is prioritizing new bond questions authorizing the city to borrow tens of millions of dollars over addressing head-on the $112 million pension debt. The city owes $112 million, and this figure increases $8 million a year. To put into context, the city’s general fund, which pays for most city operations other than divisions such as water services that have dedicated revenue streams, is $100 million.
Why is city council asking the voters to authorize borrowing more money when it has no viable plan to pay back its enormous debt? If the city can’t pay off its existing debt, if every division is in the red and is facing further loss in tax revenue, it really isn’t time to go on a shopping spree.