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Oct 052011
 

By Naomi Hatch –

“We’re responsible to our communities for our budgets and expenditures, and we want to share those with you,” said District 3 Navajo County Supervisor J.R. DeSpain at the Sept. 27 Snowflake Town Council meeting.

Despain then introduced Navajo County Assessor Cammy Darris, Sheriff K.C. Clark, Public Works Director Homera Vela, Hunter Moore and Assistant County Manager Dusty Parsons, who made the presentation.

“We are doing everything possible not to raise taxes,” said Parsons noting that county employees have taken a two percent salary reduction.

Parsons first outlined the organizational structure of Navajo County, then discussed the county’s revenue streams. Intergovernmental accounts for 66 percent of revenue with taxes at 23 percent fines, fees and forfeits at six percent and miscellaneous at three percent.

Intergovernmental is broken into several categories and Parsons gave dollar amounts for those as follows: state shared sales tax, $9,285,088; county sales tax, $5,846,576; vehicle license tax (VLT), $1,985,572; payment in lieu of taxes (PILT), $1,341,507; other federal and state revenues, $402,807; other intergovernmental, $206,051; and tax collection and assessment fee, $121,293; for a total of $19,188,894.

Parsons noted that collected taxes are down.

Taxes include: real property taxes, $5,735,117; personal property taxes, $114,182; and tax interest and penalties, $787,816; for a total of $6,637,114.

Navajo County has the second lowest primary property tax rate in Arizona at 59.84 cents per $100 of assessed valuation. Just lower is Coconino County at 43.03 cents. Gila County imposes the highest rate at $4.19. Maricopa County’s rate is $1.2407 and Apache County’s is 93.12 cents.

“We will continue to try and hold that,” said Parsons.

He explained that even though the budget showed $38 million, the actual revenue in 2010 was $31,883,920 and in 2011, $31,247,980. The expenses for 2010 totaled $31,135,769 and for 2011, $31,238,714. He explained that the budget must account for any grants the county applies for, because if they did not put that in the budget and the grants were received, they would be unable to use the money.

Revenues and expenses have both decreased, but increased costs from the state have made “breaking even” more of a challenge, explained Parsons.

A budget history chart showed that the total budget for fiscal year 2007-08 was $199,637,665, with the general fund budget at $45,913,040. For fiscal year 2010-11, the total budget was $114,014,704, with the general budget at $38,847,148. Those totals will decrease even more for fiscal year 2011-12, with the total budget set at $113,913,886 and the general fund budget at $38,692,033.

The budget is being impacted as the state mandates more in contributions and program shifts. Program shifts hit Navajo County with a $1,755,863 impact and $605,552 in lost revenue streams. The big hit is the loss of $2,190,554 in Highway User Revenue Funds (HURF).

The adopted fiscal year 2012 state budget negotiated by legislative leaders and the governor included $94 million in county impacts, but the state did delay the prisoner shift until July 1, 2012, when counties will have to pay $58 a day for prisoners who have less than a year of their sentences remaining. State leaders expanded the mandated county contributions to the five largest counties, so that will not impact Navajo County. They maintained flexibility language, allowing a county to meet any fiscal obligation from any source of revenue, including special taxing districts control by the board of supervisors. Parsons noted that Navajo County adopted a balanced budget without transfers from special taxing districts.

One of the largest mandates from the state included taking $20.8 million in HURF funds and shifting them to the Department of Public Safety (DPS), which will have a $746,317 impact on Navajo County.

All told, there is a loss of $1,301,219 to Navajo County under the 2012 state budget.

Vela, the county’s public works director, showed a month to month comparison of HURF funds, comparing August 2010 and August 2011. In August 2010 HURF funds received by the county totaled $658,496 and in August 2011, that total was $558,913. This will impact road maintenance, road improvements and procurement of capital equipment for Navajo County.

Vela said that for three years his department has not purchased vehicles or equipment, but there is a need, especially for heavy equipment. He noted that HURF is the primary source of funding to maintain 733 miles of roads, with 341 miles paved and in need of chip seal and overlay to maintain them. “For every one mile of road, it costs $200,000 to maintain,” said Vela, noting that if each road is done every 14 years, it will cost approximately $15 million.

He explained that HURF funds come from tax on gasoline and diesel fuel sold in the county, and sales have been down, causing Navajo County to lose $34,000 a month.

Another concern is the contract with the federal Bureau of Prisons, which notified Navajo County on June 24 that it was canceling the contract effective Aug. 31. Parsons said that revenues from this contract total approximately $2 million annually, and are used to fund the jail’s debt service and operations. There are 34 jobs tied to the revenue from this contract. It was noted that reducing the population of inmates would not automatically reduce the number of officers needed.

Sheriff Clark explained that two counties, Graham and Navajo, had Bureau of Prison Contracts. He said that the other counties house federal prisoners under the U.S. Marshal’s Office, so Navajo County has entered into an agreement with that office, which will give the county 50 inmates, just half the number covered under the Bureau of Prisons contract.

Parson’s explained that a new challenge was the new legislature, which included the largest Republican majority in state history with 40 in the House and 21 in the Senate, and the fact that there were 34 freshman legislators, with 27 of those in the House.

Significant time was spent by elected officials and staff in educating lawmakers and responding to a large number of bills with potential negative impacts on county operations, Parsons explained.

“An atmosphere of micromanagement toward counties and local government” was attributed to the legislature in Parsons’ PowerPoint presentation.

He noted that the state budget will balance for fiscal years 2012 and 2013, but in 2014 the state loses the one cent sales tax.

“Hopefully, the economy is growing (by then),” said Parsons.

The assistant county manager also outlined where the tax dollars go, with the largest portion of a dollar going to schools at 67 cents. Next is fire districts at 17 cents. (Snowflake does not have a fire district and receives none of this money.) Navajo County receives seven cents from each tax dollar; flood control and special districts, three cents; public health, two cents; and cities, one cent.

“We work together well,” said Parsons of the county’s relationship with the Town of Snowflake. “We may not always agree on things, but we work together well.”

Navajo County has partnered with the Town of Snowflake on several projects, spending $863,121 for the following projects: $600,000 in June 2006 for the Southern Solution project; $141,125 in July for the Snowflake Academy Library project through Community Development Block Grant funds; and $9,781 in August 2006 for the sub-regional transportation plan, but was reimbursed by the town.

Navajo County has obligated, but not spent, $50,000 for the dredging of Silver Creek. The operating cost share for the White Mountain Connection was $8,040 in June 2009, $7,225 in May 2010 and $7,950 in June 2011. A total of $39,000 is scheduled to be spent in 2012 to double chip seal Freeman Hollow road.

DUI (Driving Under the Influence) public information announcements by Sheriff Clark and County Attorney Brad Carlyon were shown. These will air on YouTube and Show Low Channel 4 TV, and are connected to Facebook and the county website. Sheriff Clark said one was played at a Diamondbacks game.