By Nolan Madden
The first financial shockwave of Cholla Power Plant’s looming closure is now being felt, Navajo County Finance Director James Menlove advised the Board of Supervisors on Tuesday.
“Of note, for this month in particular, is that our local county sales tax continues to struggle. For this past month, we were 6.6 percent below what we were at one year ago. Year-to-date, we are 2.86 percent below where we were a year ago,” he stated.
The finance director noted that current county sales tax revenues are now projected to be around $300,000 below the fiscal year estimates for 2015.
“I’m having to make difficult decisions as we enter into this budgeting season. We are always careful with the resources that we have,” he continued.
“The projection for this year is that there will be a $50,000 deficit. We continue to not spend more than we have, and will continue to monitor this and make adjustments as best we can.”
The board acknowledged and appreciated the director’s candor in delivering the unsettling news, and asked his general estimation to understand the reason for the worsening deficit.
“It’s a real challenge, because, for most of our municipalities that pay our sales tax, there is a year-over-year increase, except for Holbrook; Holbrook is slightly down from the rest. So it’s something that is not within a municipality. And most of our retail revenues reside within our cities and towns,” said Menlove.
After an extended and reluctant pause, he continued, saying, “I expect that it has to do with the coal-powered power plants. We know that they are in danger, and we have lost about a quarter of a million dollars in our property tax availability because of the closure of Unit 2 in Joseph City.”
The confirmation comes just five months after Arizona Public Service Co. halted power production at Cholla Plant Unit 2 on Oct. 1, and exactly four years after the utility first reported weighing whether it would continue to operate the plant.
APS officials powered down Units 1 and 3 at the facility last month, stating that they were not needed for load this past winter, other than coming online for environmental testing. Cholla Unit 2 will be permanently closed as scheduled next month.
Other county institutions also recently began bracing for budget impacts, with Northland Pioneer College administrators last month forecasting an unanticipated loss due to a decrease in the valuation of the utility.
NPC officials previously explained to The Tribune-News that if the primary property tax is assumed to be levied at the maximum rate, which is two percent higher than the current year tax levy, it would still produce a $150,000 decrease in revenues from last year. Without the levy, the loss would be approximately $400,000.
Menlove pointed out that signs of a county budget decline first began to appear in May 2015. “Something changed in May of that year that has affected our county sales tax for all our municipalities. Unless something additional compounds that problem, I don’t foresee that we will continue to have the year-over-year decreases,” he noted.
“Coal power plants are under threat, and it’s a continued threat to our county. The more they continue with the shutdowns, such as the ones we’ve had this winter, it will continue to be a very significant challenge that we will have.”
In other business March 23, the board:
* Approved a modification to the previously approved receipt of additional federal Emergency Management Grant Program award funding in the amount of $25,400 to support revisions to the county’s emergency operations plan. The county is required to provide an updated emergency operations plan each year.
* Denied an amendment to a special use permit to allow Kompo Care of Snowflake to expand its current growing facility.
* Heard a presentation by Emery La Barge and Kristopher Carter of Southern Arizona Legal Aid regarding the organization’s Volunteer Lawyers Program partnership with Navajo County.
* Heard a presentation and update of the Navajo County PUSH (People United Supporting Health) program by county Wellness Committee members.
* Approved a contract between Navajo County and Ellen P. Morse to provide psychiatric services for sheriff’s office Detention Division inmates beginning April 1. This continued service is required by state law for detained inmates.
* Approved Navajo County Public Works agenda items, including the purchase bid award of two backhoe loaders with the trade of a 1991 Case 580 Super K and a 1995 580 SL in the amount of $185,314.34 to Empire Southwest LLC.
Also approved was the award of a contract bid for the supply of various roadway materials for county roads maintenance to
Brimhall Sand and Rock and Building Materials, Inc., Hatch Construction and Paving, Inc., Perkins Cinders, Inc., and Dyna Rock & Sand, Inc., effective March 28.
* Approved a proclamation declaring the week of March 27-April 2 as Southwest Wildfire Awareness Week.
* Approved the consent agenda, including March 8 meeting minutes, February 2016 constable reports for Holbrook Precinct No. 1 and Pinetop-Lakeside Precinct No. 6, February 2016 Juvenile Probation and Clerk of Superior Court reports, and February Justice Court reports for Holbrook Precinct No. 1, Winslow Precinct No. 2, Snowflake Precinct No. 3, Kayenta Precinct No. 4, Show Low Precinct No. 5 and Pinetop-Lakeside Precinct No. 6.
Also approved was the sale of one back tax land parcel sold over the counter for $873.90.
A memorandum of understanding between the sheriff’s office and the Federal Bureau of Investigation for inter-agency cooperation for Northern Arizona Safe Streets Task Force operations was approved.
A letter of declaration to renew the line of credit by Wells Fargo Bank, National Association for Navajo County to issue less than $10 million in total debt during the 2016 calendar year was approved.
A Navajo County Continuously Achieving and Reaching Employees (CARE) bank policy revision was approved, correcting an administrative oversight, which omitted the clause “any request for accommodation of an extenuating circumstance outside the scope of this policy will need to be approved by the county manager.”
Letters to legislators in support of ECO, and a sympathy letter to the family of Mike Monahan were approved.
* Approved Navajo County Public Health Services District agenda items, including a professional services agreement with Tamra Cannon, RDH, for
dental hygiene services funded through Delta Dental of Arizona Foundation for the Navajo County First Grade Fluoride Varnish Program effective March 1 to Dec. 31 in the amount of
$45 per hour.
Professional services contracts with Candice Marissa Mathews-Penrod for dental hygiene services through the Arizona First Things First, White Mountain Apache Oral Health Fluoride Program, and the Arizona First Things First, Navajo Apache Oral Health Fluoride Program were approved effective Feb. 1 to June 30 in the amount of $45 per hour.
A professional services contract with Pinnacle Prevention for remote nutrition and breastfeeding consultation for high-risk women, infants and children enrolled in the Navajo and Apache County Women, Infants and Children Programs, as well as to provide nutrition education for staff, effective March 1 to Sept. 30 for a fee not to exceed $2,960 per month was approved.
A proclamation declaring April 4-10 as National Public Health Week in Navajo County was approved.
The next regular board meeting will be held at 9 a.m. on Tuesday, April 12, at the county complex in Holbrook.
By Nolan Madden