MOHAVE COUNTY BOARD OF SUPERVISORS MOHAVE COUNTY LIBRARY LAKE HAVASU BRANCH SPECIAL WORKSHOP MEETING FEBRUARY 26, 2001 The Board of Supervisors of Mohave County met in a Special Workshop Session this 26th day of February, 2001, at 9:00 AM. In attendance were Pete Byers, Chairman; Tom Sockwell and Buster D. Johnson, Members. The following Mohave County Elected Officials and Department Heads were also in attendance: Richard A. Skalicky, P.E., Interim Mohave County Manager; Deborah Herbert, Chief Civil Deputy County Attorney; Duc Ma, Chief Finance Officer; Tom Sheahan, Sheriff; Jim McCabe, Chief Deputy; and Pat Chastain, Clerk of the Board. Chairman Byers called the meeting to Order. Interim Manager Skalicky advised that the purpose of the meeting was to review the Countys financial position, review the estimated General fund budget for fiscal year 2001-02, and give direction to staff regarding budgeting options. Interim Manager Skalicky advised that the next years budget either required a cut of expenditures or an increase in revenues of approximately $2,500,000. Interim Manager Skalicky estimated that a property tax increase of $0.21 would increase property tax revenue by $1,965,000 and that an additional quarter cent sales tax would increase revenue by $3,400,000. Interim Manager Skalicky stated that a property tax increase, up to the $1.96 per $100 net assessed value, computed to an increase of $21 a year on a $100,000 home. Interim Manager Skalicky and Officer Ma reviewed comparison documentation regarding sales tax, property tax rates, and assessed values between all other Counties and Mohave County, which noted that with the exception of Pima and Mohave, (and Maricopa County who does not have authority to levy the tax), all other Counties have levied a half-cent sales tax Officer Ma, reviewed several schedules in which it was noted that general fund revenue sources were down in the areas of Court fees, fines (which included the Moccasin, Kingman, and Lake Havasu Justice Courts), Planning and Zoning permits, Treasurer, Jail and Animal Control, and showed as well, that Information Technology received the bulk of general fund supplements, general fund cash balance projections, general fund financial analysis, projected budget for FY 2001/02 showing expenditures under revenues by $2,527,783, current year and the five year schedule of revenues, expenditures, and fund balances forecast which estimated a deficit of $16,150,419. Other documentation, showing the total number of employees in each Department with the number of Supervisors and/or Management FTEs, was also presented and reviewed. Considerable discussion and debate ensued regarding Chairman Byers and Supervisor Sockwells support of an additional quarter cent sales tax, and Supervisor Johnsons support of a raise in property tax provided there was a plan in place for use of revenue, such as vehicles, equipment, etc., and the need for a total re-organization of the County (through an un-biased efficiency study), changes in merit rules, and a salary adjustment study that would address inequities and funding positions that pose potential liability. A brief recess was called at 10:05 AM and the meeting was reconvened at 10:20 AM. The Board briefly reviewed the General Fund aid to other outside agencies. Interim Manager Skalicky advised that the average County salary was $37,500. Sheriff Sheahan, as well as Chief Deputy McCabe, addressed the Board in support of the additional sales tax, citing calls for service up 11% and that personnel should be the number one issue addressed, as deputy salaries had a potential of being between 30 and 35% behind surrounding agencies. Sheriff Sheahan noted that off-duty deputies had been used in the jail because of the lack of Corrections Officers. Sheriff Sheahan suggested reviewing, for cost effectiveness, the leasing of vehicles, and bringing medical services under the Health Department, as well as meals prepared under Senior Programs. Discussions ensued regarding the need for employee raises; indigent defense qualifications; review of reinstating the fire district assistance tax; review of duplicate services provided, i.e., trash enforcement; debate between a quarter cent sales tax and property tax increase, or combination of both; reorganization and/or an efficiency report, current unfilled positions, the possible need to cut positions; and the need for direction to staff from the Board. Attorney Herbert noted that the Countys portion of the health insurance cost would end July 1, 2001, and, therefore, the $230,000 cost would need to be budgeted as well. Interim Manager Skalicky suggested dedicating additional sales tax revenue as follows: $1,000,000 a year for vehicles; $1,000,000 a year for computers to include a GIS system; $300,000 for voting machines; $230,000 for insurance benefits; $500,000 a year for contingency; noting that using the revenue for vehicles was the only item that would free up funds. Sheriff Sheahan reiterated that, in his opinion, personnel was the number one issue that needed to be addressed. Interim Manager Skalicky advised that every 1% salary increase would cost $125,000. A brief recess was called at 11:14 AM and the meeting was reconvened at 11:20 AM. Attorney Herbert noted that Statutes give no limitations on what a general excise sales tax can be used for, and that there was a new Statute that allows a County to enact a use tax for electricity, that requires an unanimous vote of the Board of Supervisors. Chairman Byers noted that the Board needed to digest the material overnight and be prepared to give direction to staff the next day, and that he was willing to compromise. Debate ensued once again regarding Supervisor Sockwells support of a sales tax increase, and Supervisor Johnsons desire for a reorganization survey and that he would not support raising property tax to support raises for employees. Chief Deputy McCabe advised that, in his opinion, Mohave County had lost the edge of offering better benefits. Chairman Byers advised that, in his opinion, if something was not done to assist employees with raises and/or insurance, there would be a mass exodus. Dave Mizer, member of the Mohave County Transportation Commission, member of the Planning and Zoning Task Force, Boating Safety Officer with the Sheriffs Office, and a member of the Friends of the Library, addressed the Board in support of County employees as he had found the majority were hard working and under paid, and that it would be difficult to sell either a raise in property tax or a sales tax. An unidentified member of the audience stated that, in his opinion, he supported the sales tax as opposed to property tax, and he questioned why it took so long to get new construction on the tax rolls. Donald Scott, Lake Havasu City resident, advised that he was a part of the petition drive to stop the previous quarter cent sales tax, and that while he was sympathetic toward the need for additional revenue, the public felt Mohave County was not abiding by what the first tax revenue was for. Mr. Scott felt the general mood of the citizens was anger as they felt funds were going to Kingman, and could be the birth of the end of Kingman. Chairman Byers stated that he took exception to those statements as the sales tax funds were building facilities, the Sheriffs office. An unidentified member of the audience stated that, in his opinion, he received no services from the County, resented taxes being raised, and resented having to pay for government. Chairman Byers declared the meeting in recess at 11:50 AM and the meeting was reconvened at 1:00 PM. Interim Manager Skalicky reiterated that the Board needed to send direction to staff to either enact a sales tax, raise the property tax, or cut the budget. Debate ensued between the Board once again regarding what options the Board could agree upon with Interim Manager Skalicky advising that the Request for Proposal (RFP) for an efficiency study (to be paid from the existing sales tax revenue) would take between 3 and 4 months to complete. Interim Manager Skalicky offered a compromise if the Board were to agree to the additional sales tax, that vehicles, computers (which would include data processing and GIS), voting and communication equipment, and the remainder be parked until after the efficiency study was complete. Debate and discussion ensued once again regarding what revenue options the Board might approve and how possible salary increases could be implemented. Interim Manager Skalicky noted that County facilities were in desperate need of repair, and no funds had been identified for any maintenance in several years. Interim Manager Skalicky stated that even with a raise in the property tax, or sales tax, $500,000 in cuts from the General fund would still need to be made in next years budget. Interim Manager Skalicky summarized by stating that the Board would support a study, or plan, auditing departments for efficiency, and a plan to implement salary increases. There being no further discussion, Chairman Byers declared the meeting adjourned at 1:50 PM. 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