Supervisors Consider Bond To Fund Several Capital Projects

By Linda Kor
   The Navajo County Board of Supervisors held a public hearing Tuesday regarding the possibility of obtaining a bond to fund capital projects outlined by county officials.
   Timothy Pickrell of the law firm Squire, Sanders and Dempsey L.L.P. of Phoenix advised those attend-ing of the process for securing the bonds.
   “This is the time allotted for a public hearing in order to understand and put forth questions regarding the acquisition of bonds in the amount of $8.4 million,” said Pickrell.
   County Finance Director James Menlove discussed the projects for which the bond proceeds would be used; including the construction of the Mogollon Complex in Heber/Overgaard at an estimated cost of $1.6 million; two new water towers at the Holbrook complex at an estimated cost of $660,000; replacement of the main workings of the electrical systems of the Holbrook complex at an estimated cost of $2.2 million; and the opportunity to finance one or more buildings in Show Low, one of which is located at 550 North Ninth Place and two at 904 E. Deuce of Club, where National Bank of Arizona is currently located at an estimated cost of $2.5 million. The structures would be purchased as county facilities available for commu-nity access.
   “It is anticipated that some or all of the projects may be financed by cash contribution, with almost half of the Mogollon Complex funded by cash. The purpose of these estimates is to establish a ceiling amount not to be exceeded, but it is not anticipated that the full bond amount will be needed. The amount is for a worse case scenario,” stated Menlove.
   Supervisor Jesse Thompson posed the question of how these bond funds would be repaid.
   “The terms have not yet been determined. The April 15 meeting will be when you will determine the terms of the agreement and take action. It can be paid for in as little as five years or as long as 25 years,” stated Menlove.
   During the public response phase of the meeting, Heber resident Steve Doncea expressed his concern that acquiring bonds may cause property tax rates to rise as a method of repaying the bond.
   County Manager Jimmy Jayne assured Doncea that repayment of the bonds would in no way affect the county property tax rate.
   “I can guarantee you that the bond issue will in no way affect county property taxes. As a matter of fact, county property taxes have gone down each year for the past several years,” said Jayne.
   Supervisor J.R. DeSpain asked Menlove to explain what monetary resources will be utilized to pay for the bonds once they have been procured.
   “The funds will be repaid with the county’s state shared revenue funds and the county sales tax,” Men-love responded.
   Supervisor David Tenney also emphasized that a good portion of the sales tax revenues come from visitors to the county and not the residents themselves.
   Supervisor Jerry Brownlow asked Menlove if the $3 million funding cost for the bond was included in the $8.4 million.
   “No, it isn’t. But what you have to realize is that this funding amount is based on the $8.4 million fig-ure. It’s highly unlikely that we’ll reach that ceiling,” Menlove replied.
   According to Jayne, the county is currently in debt for $5.5 million for the jail, but has no other debts. The jail debt payoff is split equally between the general fund and proceeds from the jail’s contract with the Bureau of Prisons.
   He added that more details on the proposed bond will be provided at the April 15 meeting.
   Thompson endorsed the project, stating that while he was in full support of the bond, he wanted to be certain that all potential projects were carefully reviewed throughout the county.
   “We may not have an opportunity for this type of funding for awhile, so let’s make sure that every issue is being addressed for the betterment of the people,” he stated.
   Tenney stated that he, too, felt the bond was a smart move for the county.
   “I believe that we ought to move forward and find out what the final numbers will be. I think that with the current economy and the possible cutbacks expected by the state over the next so many years that it will be a good idea to secure some long-term financing while the rates are as good as they are. If necessary, we have other holdings in Show Low that can be divested at a future time when the real estate market improves and that can help or even entirely pay for this debt,” said Tenney.
   Although supportive of the bond project, Deal said he was not certain if the timing is right.
   “Political and timewise, I think that the best we can do is put a good common education together so that we know this is truly in the best interest of the people,” he said.
   Brownlow decided to reserve his opinion of the bond until more information is provided.
   “I’m very conservative and I don’t like debt. I’m concerned about how incurring a bond may affect of workforce of Navajo County. Of course, we need to look at infrastructure. I haven’t made up my mind, but I would like us to move forward with this and take a look at it,” said Brownlow.
   At the request of County Attorney Mel Bowers, Menlove clarified that by funding these projects through a bond, the projects would no longer be included in the expenditure limits.
   The supervisors are expected to take action on the proposed bond approval during their meeting at 9 a.m. on Tuesday, April 15.