MOHAVE COUNTY BOARD OF SUPERVISORS MOHAVE COUNTY, KINGMAN, ARIZONA SPECIAL WORKSHOP MEETING MARCH 12, 2001 The Board of Supervisors of Mohave County met in a Special Workshop Session this 12th day of March, 2001, at 9:14 AM. In attendance were Pete Byers, Chairman; Tom Sockwell and Buster Johnson, Members. The meeting was called to order by Chairman Byers, with the Pledge of Allegiance led by Supervisor Johnson. The following Mohave County Elected Officials and Department Heads were also in attendance and addressed the Board: Richard A. Skalicky, P.E., Interim County Manager; Duc Ma, Chief Finance Officer; Dave Wolf, Community Services Manager; Deborah Herbert, Chief Civil Deputy County Attorney; Linda Semm, Human Resource Officer; Beverly Payne, County Assessor; and Pat Chastain, Clerk of the Board. At the request of Chairman Byers, Interim Manager Skalicky advised that, per the Boards request, at the last Workshop, held on February 27, 2001, a group of Department Heads, consisting of Mike Matthews, Information Technology Director; Patty Mead, Health and Social Services Director; Christine Ballard, Planning and Zoning Director; Mike Hendrix, Acting Public Works Director; Dave Seward, Purchasing Director; Linda Yarbrough, Superior Court; Duc Ma, Financial Services Officer; Linda Semm, Human Resources Officer, and Deborah Herbert, Chief Civil Deputy County Attorney, had met and developed a recommended Plan as requested by Supervisor Johnson. Officer Ma reviewed the plan that outlined a seven year cent sales tax revenue projection and use plan that would raise a total of $26.7 million that could be used to finance motor vehicles, Information Technology equipment, (including a Geographic Information Systems), Communication Lines enhancement, and contingency which would then free up funds to allow employee salary market adjustments. Officer Ma noted that the market adjustment report, prepared using a comparison of the cities of Bullhead City, Lake Havasu City, Kingman, and the counties of Cochise, Coconino, Navajo, Pinal, Yavapai, Yuma, Pima, Maricopa, and the State of Arizona, showed that Mohave County was below market from 3% to 51% and would cost $4.3 million to implement. Officer Ma advised that the five year salary implementation plan contained: option one, which would bring up all County positions within five years; while option two would address the highest percentage below market (based on a liability factor, and training factor), with groups 1 through 5 receiving market adjustments over a five year period, as suggested by Supervisor Johnson. Officer Ma reviewed cost versus revenue of both options. Oficer Ma stated that the Plan did not have an impact on the General Fund in which the following years budget would still have a $2,500,000 deficit. Officer Ma cautioned that revenue projections (for the additional cent sales tax) could be affected by the sunset clause. In response to Supervisor Johnson, Acting Director Hendrix stated that Mohave County could be facing a 25% increase in electricity and 60% increase in gas costs, on top of the $300,000 for electric and $75,000 for gas as budgeted this year. In response to Supervisor Johnson, Officer Semm stated that Mohave County could be facing a 13 to 15% increase in medical benefit costs. Discussion ensued regarding cuts through re-organization; 6% cut to all County Departments; identifying programs and services that could be cut, or retained; and/or the Boards direction regarding additional revenue. In response to Chairman Byers, Officer Ma advised that 66 positions would need to be cut, or cuts made to outside services amounting to approximately $250,000, such as Food Banks, Mohave County Economic Development Authority, and the Extension Office. Officer Ma advised that if the Fire District Assessment was re-instated, it would generate $115,000 which could be used to address rising utility costs. Supervisor Johnson noted that Mohave Countys 21.3% turnover rate was not far behind the States average of 19%. In response to Supervisor Johnson, Officer Semm noted that exit interviews with employees showed that employees left for a higher salary to other agencies, or were moving out of the Kingman area. Tom Sheahan, Mohave County Sheriff, advised that he supported Option 2 of the market adjustment study, and that elected officials and department heads were committed to make the plan work and to make the necessary budget cuts. Sheriff Sheahan noted that he lost most employees to Lake Havasu City, Bullhead City, Department of Public Safety and the Kingman Police Department. Robert Holsinger, Golden Valley resident, addressed the Board in support of studying the efficiency of County Government and stated that of the two revenue options before the Board, he supported an additional sales tax as opposed to a raise in the property tax. Recorder McCall advised the she had fine-tuned her budget and made a ten and one-half percent cut to her budget. Recorder McCall reminded the Board that an unknown amount would be needed for re-districting. Chairman Byers stated that he had only received three calls regarding an additional sales tax that would affect large ticket items, and that property tax would continually need to be raised. He, therefore, supports the sales tax. Assessor Payne verified that Proposition 104 will freeze property values for three years; and that while complicated to explain, exemptions take away any growth factor. Attorney Herbert advised that the Statutes regarding excise tax do not allow the exclusion of certain industries, etc., and that the tax would be on each person. Attorney Herbert also clarified that under both the market adjustment compensation, a 60% below market, 20% Liability, and 20% training factors were used to determine the groupings, and that under Option 1 each of the various groups would receive something in each of the five year plans, while under Option 2, just the first priority group would receive compensation, then group 2, 3, etc., and, therefore, there could be some employees not receiving anything until the final year of the plan. A recess was called by Chairman Byers at 10:00 AM and the meeting was reconvened at 10:10 AM. At the request of Chairman Byers, Interim Manager Skalicky summarized by stating that the proposed plan would free up funds for vehicles, computers, employee benefits, while the budget would still require cutting by $2,500,000. Officer Ma advised that the majority of departments have agreed that they would review and choose what cuts would be made, within their budgets, to make up the $2,500,000 deficit. Sheriff Sheahan re-addressed the options regarding the market adjustment as he had conducted a study himself that showed that Sheriffs deputies were 12% below market, compared with the 1.7% increase they would receive under Option 2. Manager Wolf addressed the Board requesting that the Board consider grant funded positions and that he would support funding something for everyone as outlined under Option 1. Assessor Payne and Clerk of Superior Clerk Tinnell advised they supported everyone getting something. Supervisor Johnson advised that, in his opinion, adjustments should not be tied just to General fund positions, and those other positions should be reviewed. At the request of Chairman Byers, a show of hands from elected and department heads showed unanimous support for Market Adjustment Option 1. Supervisor Sockwell advised that, in his opinion, the sales tax was the only avenue to go, as he had received only two calls opposed to the sales tax. Chairman Byers advised that he too had received minimal objections to the sales tax, and more calls regarding a possible increase to property tax. In response to Supervisor Johnson, Officer Ma confirmed that the raises included in the Plan were for only General Funded employees. Supervisor Johnson read the following prepared statement: As I reviewed the information that has been provided by the professional staff I was struck by the lack of verifiable data in the report. We are being asked to proceed down a path that will financially encumber this County for millions of dollars in the long term and yet I do not see any objective data that would provide historical context from which to reach a decision. It appears to me that what we have had here is a staff that assumed an advocacy role, which is fine, except that I believe staff should also make every effort to ensure that the governing body is given all of the possible scenarios and all of the relevant information in order to make a decision that maintains due diligence. In all fairness, I am sure this is due to the short time provided. For example, how do we arrive at the projected figure for our revenue from the additional quarter cent sales tax? By simply doubling the amount taken in with the first quarter cent? Did we do any kind of in-depth research to find out what the experience of other jurisdiction has been when they have raised their sales tax? I know that Bullhead City, for example, doubled their sales tax from one to two percent about ten years ago. Did we check with them to see if there was any kind of fall off? What did we do in terms of factoring in the possibility of a drop off in the economic activity that we hear so much about regarding the national economy? Has there been any research to determine how closely our own local economy parallels national trends? Did we check to see how Kingman, Bullhead or Lake Havasu City have done in terms of projected sale tax collections actually keeping up with projections? Is our staff satisfied that their own projections for estimated revenue from the original quarter-cent tax were accurate? I raise these questions because I see in some of the local media outlets that the thinking among the average man on the street, or at least in the Kingman Club, is that this whole thing comes down to me, and I find that to be rather shortsighted. I am sure that both of my colleagues are just as interested in getting a comprehensive financial picture before making such a far-reaching decision. I am reminded that a little over a year ago, the prior Board of Supervisors just jumped into some decisions on 2-1 votes that I believe were not grounded in solid analysis. We opted into a employee benefit quagmire with health insurance that cost us a bunch of money in the long run when Premier turned out to be a dud. I remember being criticized at the time for being overly cautious and conservative in my approach at that time. I also remember being the lone dissenter when the Board decided to pay an extra million dollars for architects who this Board just decided to rescind about three weeks ago. The bottom line to me is that when were spending the publics money, I think we need to be conservative and cautious. That is the very reason that I have been so adamant about the extra costs involved in building the County facilities in Kingman. I would love to dedicate the $8 million or so in increased building costs that everyone knows well encounter in downtown Kingman to upgrading employee compensation. At the same time, I think we need to remember weve got to consider the fact that there are going to be some major cost issues involved with employee benefits and our self-insurance retention bond. I think this board is basically faced with a choice. We can do the quick, easy band aid fix, which will be a stop gap measure at best; or we can look to actually putting this County on a sound fiscal basis by actually maximizing each and every expenditure. The best way to do that is to look at some of these questions as basic business decisions. We have a valuable piece of property in Kingman that we could put on the sales market to help offset the cost of new facilities while we use 200 acres of free land to build new facilities. To me, that is a no-brainer. Its a simple business decision. In the same way, we have studies that have even been paid for by the City of Kingman which show there will be significant additional costs incurred by building in downtown Kingman. So go for the cheaper build and use the savings to improve the employee compensation package in a meaningful way. For years, weve all criticized government for what is called its tax and spend tendencies. I sincerely hope that this Board shows the resolve to resist that same path. With the thought that we are all looking to accomplish the same goals: new buildings, and a livable wage for our employees while still watching out for the taxpayers; I am willing to make some adjustments that I believe will give us the desired results and still be responsible to the public. If the Board wants to reconsider the original cent sales tax and agrees to build all of the County buildings on the Golden Valley site, we could take the 8 million dollars difference and use 5 million for a 2 year period to cover revenue shortfalls and the additional 3 million dollars to bring up our vehicle fleet, computers, etc. This would free up the money needed for employee pay adjustments, SIR fund, contingency fund build up, and medical benefits, while still moving ahead with the Sheriffs facility. This could be worked into the budget, but no action taken besides covering the shortfall until the new County Manager is on board so that we could have the benefit of his input as he will have to ultimately make the plan work. This will not only give us time for a more thorough evaluation of our goals, but an opportunity for the County Manager to be a leader in the plan and not just a person who is saddled with a plan that has used up all available revenue. This will accomplish everyones goals without an increase to the property tax or the sales tax. Chairman Byers stated that, in his opinion, it would not cost less to locate facilities in Golden Valley due to the value of the buildings (County) in downtown Kingman, which are owned (60%) by Bullhead City and Lake Havasu City, as they would depreciate by half if vacated and moved to Golden Valley, and, therefore, he would not waiver in his objection to moving County facilities to Golden Valley. Chairman Byers concluded by stating that perhaps he would compromise in raising the property tax, but feared they would need to be continually raised every year. Supervisor Sockwell advised that, in his opinion, the County was trying to build too much with too little and, therefore, did not support building a complete complex as proposed. Supervisor Johnson suggested that the Board review a buy back policy and while he supported giving County employee raises, employees would leave because of working conditions, as efficiency was linked to space limitations. A brief discussion ensued between the Board, and the Assessor regarding Officer Mas statement that ten and five years of financial data was used in projecting revenues and growth, and the possible need for having facilities in conjunction to one another, and the Countys assessed valuation. Officer Ma advised that he would contact the municipalities and secure sales tax data. Robert Holsinger, Golden Valley resident, addressed the Board in support of not moving the facilities to Golden Valley and questioned the cost of building on that rural property without all weather roads in the area. Interim Manager Skalicky summarized the meeting by stating that without further direction from the Board, staff would prepare a status quo do nothing budget, and cut $2,500,000 from the budget for the following year. There being no further business to come before the Board this 12th day of March, 2001, the Chairman declared the meeting adjourned at 10:46 AM. MOHAVE COUNTY BOARD OF SUPERVISORS __________________________________________ Pete Byers, Chairman ATTEST: ________________________________ Pat Chastain, Clerk of the Board SPECIAL WORKSHOP PAGE  PAGE 3 MARCH 12, 2001 #o6 AAABBBBBBBBBB"B'BBBϓϓϛ 0J5mHj0J5U 0J5 5>*B*H*5B*B*5#Cno9:5 6 Z [ < = x y  $ -$%@@ $ -$@ $ -$@$ -$  -$#Cno9:5 6 Z [ < = x y 78@ALM>?8-9-&'F G s!t! " """%#&#U:V:;;<<C=D=%>&>K???@@\A]AAABBc78@A $ -$%@@   0-LM>?8-9-&'F G s!t! " """%#&#U:   0-U:V:;;<<C=D=%>&>K???@@\A]AAABBB>BTBUB]B $  0- $  0-   0-BB>BTBUB]B^B_BBBBBBBBBBB"B"B'B'BBB ]B^B_BBBB"B"B'B'BBB'' !$  !H$ $ -$%@@@ $  0- # 0&P-/ =!"#$%