2/28/2013 9:24:00 AM HITTING HOME: Sequester's local impact remains unclear
Sequestration cuts slated to begin tomorrow could cost Yavapai Regional Medical Center $2.1 million per year, representing 2 percent of its annual Medicare revenues.
Photo courtesy Matt Hinshaw
An ERAU aircraft takes off from the Prescott Municipal Airport Wednesday. The airport’s control tower is not on the FAA’s list of 100 such operations that could be closed nationwide.
Photo courtesy Matt Hinshaw
Special to the Tribune
Despite the political rhetoric coming out of Washington about the possibly disastrous budget cuts set to take place Friday, many on the ground in Yavapai County say they have little or no surety about how "sequestration," the forced cutting of about $55 billion per year in non-defense federal spending, will affect them.
At this late date, it appears as if no one believed these arbitrary, across-the-board cuts would ever come to pass.
Local governments operate mainly on local money, and that revenue will not be directly impacted by the federal cuts. At the same time, federal grants from various agencies supplement a wide range of local programs, from public safety to help for the less fortunate.
The City of Prescott is a perfect example. Community Development Grants Administrator Kathy Dudek said Community Development Block Grant (CDBG) funds and other HUD funding could be impacted. HUD funding can include affordable housing, anti-poverty programs, job-search funding, and other programs.
"While we don't know about CDBG funding, in preparing for the upcoming program year, the Phoenix HUD Field Office indicated we should estimate funding at 5 percent less than last year. This amount would be $211,750, down from $222,897," Dudek said. "That's all we know right now."
According to City of Prescott Public Affairs Manager Mel Preston, 2012 CDBG funds provided $615,000 in benefits to low- to moderate-income clients. That total includes $238,000 to West Yavapai Guidance Clinic for facility rehabilitation and $32,000 to Prescott Meals on Wheels.
In Prescott Valley, Community Development Director Richard Parker said sequestration will not affect the $440,000 HUD grant from the Arizona Department of Housing for home repairs that the Town Council accepted Feb. 14.
"The state already has the money," Parker said.
Yavapai County Administrator Phil Bourdon said he was certain there would be financial effects on the county, but it was too early to know what they might be. The county's major concern is $12.3 million in federal grants that pay for all or part of myriad county projects.
"It's a little premature to gauge how the impacts would filter down and what government grants might be affected," he said. "There's not a lot of information" on what cuts might happen.
In the long run, local law enforcement will likely be affected if the cuts come to pass. The White House estimates that Arizona will lose about $298,000 in Justice Assistance grants that support police, prosecution, courts, crime prevention, corrections, drug treatment, and crime victim initiatives.
But Yavapai County Sheriff's Office spokesman Dwight D'Evelyn said that agency is unaware of any direct impact on operations, and Prescott Valley Town Manager Larry Tarkowski said PVPD operations will "continue as usual." At the same time, Tarkowski allowed that that the department does receive grants, and that it is "unclear at this point in time what those effects on federal grants will be."
Prescott's Preston echoed that sentiment in regard to the Prescott PD.
Central Yavapai Fire District has not applied for federal grants and should not be affected by that, CYFD Fire Marshal Rick Chase said, but cuts to the National Forest Service budget mean that, if a large wildfire strikes, local fire agencies will need to commit more personnel to fight it.
Potential cuts to local school districts and charters are likewise a mix of certain and unclear.
Yavapai County School Superintendent Tim Carter said cuts for each school district within the county will differ and he had no specific amount for schools countywide.
"It will be district/charter specific depending on how many federal programs they receive funding for, if any," Carter said.
Prescott Unified School District would have $94,247.25 less, according to Chief Financial Officer Renee Raskin. About $48,831 of that amount would be cut from PUSD special education funding.
Humboldt Unified School District Human Resources Director Dan Streeter said the district does not have "enough information to determine the total impact of the potential impending sequestration," while acknowledging that any more cuts could "affect resources required to meet student needs."
Cindy Daniels, assistant superintendent for Chino Valley Unified School District, said the district has examined the potential impacts, but has not finalized plans to "adjust for the change."
Yavapai Regional Medical Center stands to face a 2 percent cut, about $2.1 million a year, in patient-care revenues for Medicare, hospital spokeswoman Robbie Nicol said.
YRMC received $104 million this calendar year for services that its hospitals in Prescott and Prescott Valley are providing for Medicare patients, said Brian Hoefle, YRMC's chief financial officer. He added Medicare represents 44 percent of the hospitals' total patient revenues.
"We would still project a positive (financial) line with sequestration, but it would be much less," he said.
"We are still trying to weigh everything. I'm sure it will have some effect," Prescott Precision Die owner Cliff O'Brien said of the company, which makes parts for military helicopters.
"I'm sure it would mean less business if those military price cuts take effect," he said.
O'Brien founded the company about 29 years ago and has 35 employees.
Lockheed-Martin, which employs about 50 people at its Prescott Valley flight center, issued a statement that said the firm is "working closely with our customers to understand how sequestration could impact all of our programs."
Corporate Media Relations Manager Kelli Raulerson added that sequestration "stifles investments in plants, equipment, people, and future research and development essential to the future health of our industry."
Dwight Weber of Precision Precast Corp., which recently bought Fortner Aerospace in Prescott, emailed to say that "it would be difficult or, quite frankly, impossible for us to comment on the effect of sequestration."
Some appear safe
The Prescott Regional Airport may mostly dodge the sequester bullet. The biggest issue at many airports is staffing for the FAA control tower, but Prescott's is not on the list of 100 facilities the FAA said could be closed, nor is it on the list of 60 control towers that will eliminate overnight shifts.
Asked what cuts could hurt Prescott, FAA spokesman Ian Gregor said that, "Flights to major cities ... could experience delays of up to 90 minutes during peak hours because we have fewer controllers on staff," and that "delays in these major airports will ripple across the country."
How much that will delay flights of Prescott's single commercial carrier, Great Lakes Airlines, is unclear.
Airport manager Jeff Tripp said he's not sure what other effects the cuts could have, but one area of concern is the airport's on-going runway relocation project, which uses federal grant funds.
The money already is in place, he said, but FAA employees administer that money, and if they are furloughed, that could hold up work.
The Bob Stump VA Medical Center also will likely see little or no effect.
"The Veterans Administration is exempt from sequestration," said Ame Callahan, spokeswoman for the Northern Arizona Veterans Affairs Health Care System.
However, the Department of Labor's Veterans Transition Assistance program and the Jobs for Veterans State Grants Program would have to reduce operations, should the scheduled cuts become reality Friday.
Daily Courier reporters Lisa Irish, Scott Orr, Ken Hedler and Patrick Whitehurst contributed to this report.