By Nick Worth
Financial needs related to the construction of the renovated Navajo County Jail and the proposed construction of the new Navajo County Road Yard in Holbrook were the subject of a public hearing at Tuesday’s Board of Supervisors meeting.
Finance Director James Menlove informed the board of up to $10.625 million of pledged revenue and revenue refunding obligations for the purposes of refunding the 2008 series revenue bonds, purchase of security system and equipment for the jail, and construction of the new Public Works Complex in Holbrook.
Menlove told the board of the need for additional detention facility expansion funds in a number of areas, including the kitchen and the laundry.
“The jail kitchen was built for a jail of less than 100 beds,” Menlove said. “We now have 400 beds.”
He said the jail construction will need $1,215,000.
Public Works Director Homero Vela spoke to the board again about the need for a new Public Works Complex in Holbrook.
Vela said the present road yard is adjacent to the Little Colorado River, and that the river meanders and has cut away at the bank near the yard. He said the new complex, to be built across Highway 77 from the Navajo County Complex, will house public works administration offices, a road yard, a fleet auto shop, flood control district headquarters, waste tire administration, and planning and zoning offices.
Vela also told the board there will be a large conference room, available to Navajo County and the public, which would also be wired for emergency management use.
He then showed the supervisors a schedule for the construction of the complex.
Building construction documents are to be completed by the architect in August. In August and September, the board will be asked to approve the plans and to award the construction contract.
In October construction will begin, and county crews will complete the site work and site utility design. The facility is scheduled to be completed in October 2014.
Vela said the cost would be $4,550,000.
Mark Reader of Stifel, Nicolaus & Company, Inc., underwriters for the county’s bond, went over the county’s fiscal objectives for the board. Reader said the county could refinance the 2008 bond at an interest rate of 2.17 percent by taking advantage of historically low interest rates and a surge in the number of companies financing such bonds, which created competition to keep the rates low.
He said $4.8 million would be needed to refund the series 2008 Revenue Bonds.
Menlove then told the board since it was a public hearing no action could be taken at that meeting, but that the issue would be on the agenda for the coming meeting.
The board also heard from Kevin McCarthy, president of the Arizona Tax Research Association (ATRA). McCarthy told the board each year ATRA reviews county budgets in Arizona and that he had several questions to address to the board.
“We want to ensure the truth in taxation rate,” McCarthy said. He pointed out a discrepancy of “about a penny” between the budgeted tax rate of .6996 cents as opposed to the truth in taxation rate of .6904.
County Manager James Jayne said the discrepancy was a surprise to him and to Menlove.
“It has always been the intent of the Board of Supervisors to adopt the truth in taxation rate,” Jayne told McCarthy.
“Our tax rates will be adopted by the third Monday of August,” Jayne told The Tribune-News. “If there is any kind of discrepancy in the rate, we have time to correct that.”
“A secondary concern is the amount of cash local governments have on hand,” said McCarthy. “In cash you have said $4 million (in the budget), but your Comprehensive Annual Financial Report (CAFR) said you had $6.5 million. We’re trying to ensure statewide that local governments estimate that number closer. If it is closer to $6.5 million, the budget should reflect that.”
Menlove explained to The Tribune-News that $4 million of the $6.5 million was in unrestricted general fund dollars that can be spent for anything, as directed by the board. The other $2.5 million came from contracts with the federal government and the State of Arizona for housing inmates, and those funds are committed dollars not available to the general fund.
“Those funds are committed to pay for staff at the jail and debt service at the jail,” Menlove said. “That revenue pays the significant portion of the expenses at the jail. On the budget, the $4 million are unrestricted in any way, except in that they are spent at the discretion of the Board of Supervisors. The other $2.5 million is the cash balance of the money in the jail fund. They are kept in separate accounts, but are just rolled together for the financial presentation.
“The difference is the contracts,” Menlove said. He added that the county lost the contract to house federal prisoners and so that money will not be present in this year’s budget.
McCarthy next addressed what he saw as an increase in fees charged.
Jayne told McCarthy that no fees have been raised and that the assessor’s office actually lost the assessor’s fee of $4 per transaction.
“Losing the assessor’s fee was a huge hit to our budget,” Jayne told McCarthy.
Menlove said the assessor’s office lost approximately $125,000 per year when the state legislature did not renew the fee.
“That fee helped us pay for the assessor’s software, which costs us about $225,000 per year,” Menlove said.
“The board has made a decision not to raise fees unnecessarily,” Jayne said.
Menlove said planning and zoning fee totals are going up in the budget, not because the fees themselves have been raised, but because he anticipates an increase in building in the county.
“There has not been an increase or decrease in our fees for a number of years,” said Jayne.
McCarthy then said the budgeted sales tax revenues showed less than the Department of Revenue (DOR) estimates.
“Since Mr. Menlove and I joined the county, we used DOR numbers only the first year,” Jayne said. “We have made a decision to recommend to the board that we not use DOR numbers because they are inaccurate. We recommended to the board that county sales tax remain flat.”
Jayne told The Tribune-News the DOR estimates have always proven to be higher than what the county has historically been able to collect.
“It would be fiscally irresponsible for us to use a revenue number higher than what we historically bring in,” he said. “We’re a lean organization and our budget is put together very conservatively.”
“We appreciate the transparency with which Navajo County operates,” McCarthy said in closing.
“We truly have nothing to hide here,” Jayne said. “We’re just trying to operate under the constraints placed on us.”
The three supervisors present for the meeting, Sylvia Allen, Dawnafe Whitesinger and Jesse Thompson, along with Jayne then expressed their trust and confidence in Menlove’s handling of the county’s finances.
In other action July 23, the board:
* Approved a request for redemption of waiver for 29 properties and two vehicles.
* Approved Nov. 5 elections for the Pinedale Domestic Water Improvement District (DWID), Porter Mountain DWID, Sky-Hi DWID and White Mountain Lakes Fire District to elect board members.
* Approved a contract signed by the county manager at the direction of the Board of Supervisors resolution for professional services between Navajo County and TGI Systems for service for maintenance of the county parcel search map.
* Approved sending sympathy letters to Linda Brimhall and family, Dave and Candace Reese, and the Clinton Pattea family.
* Approved sending a letter to the Arizona State Land Department expressing support of the Passport Potash mineral lease application.
* Heard a presentation on the Apache County Emergency Predator-Human Incident Ordinance given by Apache County Supervisor Barry Weller.
The ordinance, as adopted by the Apache County Board of Supervisors, addresses concerns over reintroduction of dangerous predators and other species by the federal government, and gives Apache County authorities some recourse to control those animals when they become troublesome.
Allen then told the board she would like to recommend adoption of a similar ordinance in Navajo County. The matter will be put on the agenda for the next meeting.
* Approved an expenditure of not more than $37,000 from District IV special road funds to cover 50 percent of the cost to double chip seal 1.2 miles of roads in the Timberland Acres Special Road District No. 1.
* Approved amendment No. 1 to the pavement markings contract with Pavement Marking, Inc. to extend the contract for one additional year through July 22, 2014.
* Approved task agreement No. 6 to a memorandum of agreement between the Bureau of Indian Affairs, Navajo Region and Navajo County for an amount not to exceed $12,000 in District I special road funds for the repair of a transmission and clutch on an L9000 Ford dump truck.
* Tabled adoption of a resolution approving a special use permit amendment for Verizon Wireless to extend the height of a wireless communication tower to a height not to exceed 198 feet, on Assessor’s Parcel No. 208-19-001E because the parcel number was listed incorrectly in the agenda.
* Approved a settlement agreement in Fairway Manor Apartments vs. Navajo County.
Deputy County Attorney Jason Moore told the board the tax appeal was settled because of changes in how the county assessor is supposed to value this type of property.
County Assessor Cammy Darris said the valuation changed from a previous amount of $3,808,388 to $1,484,000.
* Went into executive session to receive legal advice from its attorneys regarding possible board action on an offer of judgment received in Transwestern Pipeline Co. vs. Arizona Department of Revenue, Navajo County et al.
Following the executive session, the board took no action on the issue.
* Approved of the disposal of an “L” unit portable building by public auction to the highest bidder.
* Approved a $12,000 contract with Pine Rim enterprises, Inc. for a Community Development Block Grant (CDBG) project to replace the septic tank at the Rim Country Senior Center.
* Approved a $44,266 contract with Spring Valley Builders, Inc. for a CDBG project to rehabilitate the Pinetop-Lakeside Senior Center kitchen and dining room.
According to Deputy Finance Director Mary Springer, the work will bring the center up to code on electrical systems.
* Adopted a resolution approving the county’s fiscal year 2013-14 final budget.
* Adopted the final fiscal year 2013-14 budgets for the Navajo County Public Health Services District, Navajo County Library District, Navajo County Flood Control District, White Mountain Lakes Recreation District, Silver Creek County Road Improvement District, Victory Heights Road Maintenance District, Sutter Drive County Road Improvement District, Madison Lane County Road Improvement District, Scott’s Pine Meadow County Road Improvement District, Shumway Road County Road Improvement District, Bucking Horse County Road Improvement District, Hilltop Drive County Road Improvement District, Mountain View County Road Improvement District and the North Whistle Stop Loop County Road Improvement District.
* Made a presentation of awards of appreciation to public works employees for their work on the Porter Mountain Road Multi-Use Path.
* Saw a slideshow of the employee picnic.
* Approved personnel actions.
Acting as the Navajo County Public Health Services District Board of Directors, the board:
* Approved amendment No. 4 of a contract for Tobacco Education and Prevention with the Arizona Department of Health Services for July 1, 2013, to June 30, 2014, in the amount of $180,000.
* Approved a request to hire a subject matter expert as an independent contractor.
* Approved a memorandum of understanding between the Navajo County Public Health Service District and the City of Winslow to dispense medications during a public health emergency to the community of Winslow and surrounding areas.
* Approved a memorandum of understanding between the Navajo County Public Health Service District and the City of Winslow to dispense medications during a public health emergency to city employees to ensure continuity of government and continuity of operations.
* Approved a memorandum of understanding between the Navajo County Public Health Service District and the Heber/Overgaard Fire Department to dispense medications during a public health emergency to the communities of Heber/Overgaard.
By Nick Worth