MOHAVE COUNTY BOARD OF SUPERVISORS MOHAVE COUNTY, KINGMAN, ARIZONA SPECIAL WORKSHOP MEETING FEBRUARY 27, 2001 The Board of Supervisors of Mohave County met in a Special Workshop Session this 27th day of February, 2001, at 9:00 AM. In attendance were Pete Byers, Chairman; Tom Sockwell, and via telephone, Buster D. Johnson, Members. The following Mohave County Elected Officials and Department Heads were also in attendance: Dora Goodmiller, Mohave County Treasurer; Beverly Payne, Mohave County Assessor; Tom Sheahan, Mohave County Sheriff; Joan McCall, Mohave County Recorder; Gary R. Pope, Presiding Judge of the Superior Court; Christine Ballard, Planning and Zoning Director; Dave Seward, Procurement Officer; Ron Gilleo, Legal Defender; Bonnie Campbell, Library Director; Mike Matthews, Information Technology Director; Linda Semm, Human Resource Officer; Jim Benson, Public Defender Investigator; Richard A. Skalicky, P.E., Interim Mohave County Manager; Deborah Herbert, Chief Civil Deputy County Attorney; Duc Ma, Chief Finance Officer; and Pat Chastain, Clerk of the Board. Chairman Byers called the meeting to Order, followed by the Pledge of Allegiance. At the request of Chairman Byers, Interim Manager Skalicky presented a re-cap of the February 26, 2001, Special Workshop that was held in Lake Havasu City, at which time it was noted that in order to balance the 2001-02 budget, $2,500,000 was needed by either finding extra revenue or making cuts. Interim Manager Skalicky advised that enacting another quarter cent sales tax would produce $3,400,000 and raising property tax would produce $2,000,000. Chairman Byers advised that he and Supervisor Sockwell agreed that the County needed a sales tax increase, while Supervisor Johnson stated that he would not support an increase unless it was tied to something in particular. Chairman Byers advised that he would support either one to allow for revenue growth as cut backs would cause pressure on those employees that stay, as the County would be asking them to work harder with no more salary or help with the insurance issue, however, in his opinion, an increase in the property tax would not fix the problem. Interim Manager Skalicky advised that the $2,500,000 needed did not include salary increases. Supervisor Sockwell advised that he was in favor of a sales tax, preferring to holding off any property tax increase, because of sewer related problems in Bullhead City, as a fall back position Supervisor Johnson advised that he was not opposed to a sales tax provided an audit of County offices (to be funded from the present sales tax revenue) produced a plan to tell employees exactly what they would or would not be getting in the future. Chairman Byers noted that if that is what it would take to get Supervisor Johnson to support the sales tax, he too would support a study. Supervisor Johnson reiterated his position that he needed something to show to the public and the employees that would justify any increase. At the request of Chairman Byers, Interim Manager Skalicky advised that it was estimated a study would take from six months to a year to complete. Supervisor Johnson stated that, in his opinion, without a study it would be a big disservice to the public and a bigger disservice to the employees if the County was not able to continue to give raises to County employees in future years. Supervisor Johnson advised that he would support raising property taxes to cover the over-spending or deficit within the next years budget. Supervisor Sockwell advised that, in his opinion, raising property taxes would not solve the problem. Interim Manager Skalicky stressed the need for direction today, as the budget process was beginning. Officer Ma advised that, in his opinion, the property tax increase was the only option the Board had, and that employee cuts, along with some market adjustments for the positions left, would still be necessary. Treasurer Goodmiller advised that closing satellite offices would only result in an $8,000 savings (not including salaries), and that she would need to cut two employees to make a 5% cut to that departments budget. Treasurer Goodmiller concluded with the suggestion that $59,000 could be saved if tax bills were not sent out. Director Campbell advised that while the Library District was not general funded, salaries were affected. An increase in the property tax would help the Library District, as operational costs were starting to show signs of pain, which could result in cutting library hours and cutting the book budget by half. Director Matthews advised that while he agreed with an efficiency study, employees could not survive another year without salary increases, and without a revenue increase, layoffs would be needed. Director Matthews suggested that the sales tax be increased, even if only for one year, and the revenue be set aside for an efficiency study which would review all positions with a goal of a more efficient work staff. Director Matthews concluded by stating that, in his opinion, if a sales tax was not possible, a property tax increase was better than nothing, as employees needed hope. Supervisor Johnson advised that, in his opinion, the Merit Rules needed to be thrown out and new ones adopted; and with no salary plan in place to address inequities in the pay scale, or assurance of continual salary increases in the future, he could not support an increased sales tax. A brief discussion ensued between Supervisor Johnson and Director Matthews regarding what an efficiency study could do. Officer Semm advised that data, that was a year old, showed that it would take $3,000,000 or $3,800,000 with benefits to bring salaries up to a competitive average. Chairman Byers suggested that a plan could be to bring positions to market over a five to six year period. In response to Supervisor Sockwell, Assessor Payne advised that new construction projections and how they affects property tax was complex, as the taxable portion of significant growth had leveled off. Assessor Payne advised that, in her opinion, an increase in the sales tax, property tax, and an efficiency study was needed to promise the public that the County would do better. Assessor Payne concluded by noting that the Assessors office was understaffed by 1/3 compared to other Arizona counties. In response to Supervisor Sockwell, Attorney Herbert advised that the sales tax could contain a sunset clause, have a shorter term, or could be repealed. Sheriff Sheahan advised that he had submitted a sales tax plan and was disappointed that it had not been considered and, in his opinion, something needed to be done immediately, and supported the additional sales tax as well as an efficiency study. Chairman Byers suggested that the County consider giving up the sales tax revenue already received for buildings, repeal that tax and re-instate it for employee raises, vehicles, and other problem areas. Supervisor Johnson advised that without a plan on how funds would be spent, he could not support the Chairmans suggestion or offer of compromise. Chairman Byers stated that, in his opinion, the main problems were trying to keep employees and operating revenue. In response to Recorder McCall, Supervisor Johnson stated he did not say that employees were inefficient. Recorder McCall advised that, in her opinion, without direction from the Board there will be no employees to worry about. Director Mead advised that, in her opinion, the public perceived government employees as being lazy, that Mohave County had no managed system, they pay too many taxes, while not realizing what huge cuts in services just within the Health Department would be necessary to balance the budget. Director Mead advised that the Health Department was already down 11 employees. Director Ballard advised that the Planning and Zoning Department was unable to attract and retain employees resulting in a 21% turnover rate and that 33% of vehicles assigned to that department have over 100,000 miles. Director Ballard reviewed possible cuts and how they would affect services provided by that department. In response to Officer Seward, Supervisor Johnson advised that he only supported a sales tax if there was a plan in place, i.e. to purchase equipment, etc., which would free up funds for raises and other items, and he would support an increase in the property tax now with hopes that a plan could be completed by August that might allow him to support a sales tax at that time. In response to Officer Ma, Supervisor Johnson advised that he would support an efficiency study done by the County with findings for a long range plan to be presented to the Board to commit revenue for buildings, vehicles, computers, as well as equitable salaries. Attorney Gilleo advised that, in his opinion, you cant have services without revenue and when popular programs were cut, the Board would hear from the public. Supervisor Johnson advised that, in his opinion, public perception, image, and selling it to the public was the key. A brief debate ensued between Supervisor Johnson and Chairman Byers regarding the publics perception. Supervisor Sockwell suggested enacting the additional cent sales tax for two years, and during that time complete a study and give County employees one budget session to make necessary adjustments and if the sales tax is not needed, that it be repealed. Recorder McCall noted that the Recorders office has had the same budget, with the exception of postage, with the same amount of employees for ten years. Treasurer Goodmiller noted that, in her opinion, if something was not done there would be no employees to give services, and supported an in-house analysis. Director Campbell concurred with the Treasurers statement as the Library District could evolve without revenue, and that the study should include departments working together. Debate ensued between Supervisor Johnson and Chairman Byers once again regarding the need for an additional sales tax versus a property tax. Officer Semm offered to present a phased-in salary plan, with Supervisor Johnson stating that he wanted the highest inequity addressed first. A brief discussion ensued regarding what Supervisor Johnson wanted included in the plan and the length of time required to address all issues. Director Hendrix advised that while Public Works employees were not funded by the general fund those salaries have not been raised in the spirit of cooperation, and felt that it would be a disservice to County employees and the residents for the County to slip backwards. Investigator Benson advised that, in his opinion, not wages, but having a job was the issue, along with the need to become solvent; and the Plan was the yearly budget, and efficiency was covered under yearly evaluations. Investigator Benson concluded by supporting both the additional sales tax and the property tax, or a combination of both. Judge Pope addressed the Board urging the adoption of an additional sales tax and stated that, in his opinion, an audit will show that additional employees are needed. Judge Pope concluded by stating that employees were the Countys greatest asset and, therefore, there was no need for buildings if there were no employees. Supervisor Johnson noted that he had supported the half cent sales tax when the quarter cent sales tax was adopted, and reiterated that he had no problem voting for the additional tax if he could show how the revenue was to be spent, as he would not support increasing taxes only for raises for County employees. Judge Pope stated that, in his opinion, a compromise was needed, the revenue being first with no spending of that revenue until a plan was in place, with capital expenditures addressed before salaries. Attorney Herbert noted that the current sales tax had brought in $3,800,000 in revenue to be used toward the estimated $5,000,000 needed for a new Sheriffs office, and that there have been plans prepared in the past that earmarked revenue as follows: 1/3 for the Contingency fund, 2/3 for motor vehicles, purchases and/or repairs of County communications and Information Technology infrastructure. Attorney Herbert stated that while a salary plan to address the biggest inequities first (those positions with the greatest inequity being addressed first), she felt that a salary plan should give something to everyone. Attorney Herbert advised that an additional sales tax, if adopted by the Board, would have a ninety day delay to enact and it would be two months after that before revenue was received. Director Mead suggested that elected officials and departments heads could meet today to form a plan that may be agreeable to Supervisor Johnson. A brief discussion ensued regarding what the plan should include. In response to Interim Manager Skalicky, Supervisor Johnson confirmed that if staff put together a seven year salary plan, where the highest inequity would be considered first as opposed to a percentage raise for all employees, as well as a capital improvement program, he would support an additional sales tax. Interim Manager Skalicky advised that the salary and capital improvement program could be done in two weeks, but not the efficiency plan. A brief discussion ensued regarding the preparation of budgets with the additional sales tax or a property tax. It was a consensus that the Board meet at 9:00 AM on March 12, 2001, to consider staffs seven year salary plan and capital improvement program. There being no further discussion, Chairman Byers declared the meeting adjourned at 11:35 AM. 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