The Pinal County Board of Supervisors (BOS) meeting on June 19, 2019, covered two primary topics: collecting and spending taxpayer dollars. Agenda items included setting the annual tax rates, approving the 2019-2020 budget and determining the amount of general obligation bonds to be sold to fund new county construction and remodeling projects.
Tax Rates and Budget
After holding the requisite public hearings, the BOS approved maintaining the current tax rates for the Library District (.0965%) and Flood Control District (.1693%) and lowering the Pinal County property tax rate from $3.83 to $3.79 per $100 of assessed value for Funding Year 2019-2020.
Property assessed values, however, have increased over the last year. With the tax rates applied to increased values, the tax levy (the dollar amount collected from property owners) in all three categories discussed will be higher than the current year. According to County Manager Greg Stanley, the increase in valuation of existing properties was $105.5 million (increase of 4.48%). New construction in Pinal County has seen 2.56% growth, netting a valuation of $60 million.
District 4 Supervisor Anthony Smith commented, “The thing that we can control is the tax rate; we can’t control what the economy is doing to the various properties out there. In a good economy like we’re having, a lot of the properties have a higher assessed value, and that is why the tax levy is higher, even with a reduced rate.”
The Pinal County budget for 2019-2020 was approved 5/0 for $512,106,937. The property tax levy accounts for 49% of the county budget, with intergovernmental funding contributing 30%; county sales tax, 10%; and the remaining 11% is collected through miscellaneous fees, fines and permits.
Allocation of those funds will be:
63% Criminal Justice and Law Enforcement
25% General Government (Assessor, Recorder, Treasurer, Board of Supervisors and county-wide utilities and facilities)
11% Health (includes mandatory AHCCCS contributions and behavioral health)
1% Other (transportation, education, welfare and recreation)
Capital Improvement Bonds Approved
The Board of Supervisors approved 3/2 (Supervisors Todd House, Mike Goodman and Anthony Smith approving and Pete Rios and Steve Miller dissenting), a $64 million bond issue. Proceeds will fund new buildings for Development Services ($16 million), San Tan Valley County Complex ($16 million), County Attorneys Office Building ($20 million) and Maricopa County Complex ($11 million).
Proposed remodels of three county buildings located in Florence ($5 million each) were set aside to be funded at a future date from other county resources.
The sale of General Obligation bonds that will fund the construction does not require the approval of voters.
The designs for the buildings were presented at the May 29 BOS meeting.
Mark Reader, managing director at Stifel, informed supervisors that “There’s a lot of geo-political concerns out there with the tariff situation that’s spooking the market. A lot of investors are investing in the fixed income side of the equation, which is US Treasury and very high rated municipal bonds, which [includes Pinal County].
“If we’re going to move forward with a bond issue, we’re at a very low historical mark… If you so choose, we’re probably going to do a 20-25 year amortization on capital to allow future generations to help pay for buildings that last a long time… It will take us 90 days to go through the process. If things don’t go haywire on us, in terms of an increase, it looks like we’re going to be in the high 2%, low 3% [interest rate] money.”
The repayment schedule includes interest only payments of $2.6 million annually until 2025/2026 when pre-existing debt service will be paid off. At that time, the annual debt service for this bond issuance will jump to $4.4 million, as payments to principle are added.
In response to Supervisor Rios’ question as to the necessity of the new County Attorneys building, Chief Deputy Civil Attorney Chris Keller said, “I cannot tell you that our building is an absolute necessity. That said, it would increase our operational efficiency. The building, as designed, is only about 5% more space than we’re currently assessed to need… which would allow us to expand. We currently occupy three different buildings in Florence. This new building would put all of us and Victim Services in one location and leaves those three buildings for movement [of other growing departments].”
Supervisor Miller replied, “I’m looking for the need, not the want. I just don’t see the county growing by that big of a percentage in a short period of time.”
“I think we are building long term,” stated Stanley. “We are building excess capacity into these buildings, but we know the county is growing, and one of the things citizens desire is to get services out to them. That’s really the basis to some of these projects.”
“So we get to a ‘pay me now or pay me later’ situation,” commented Supervisor House. “If we can go ahead and get all of this capital improvement done now, while the rates are favorable…let’s just pull off the band-aid. Let’s take advantage of that in the interest of saving money for the taxpayers.”
Rios proposed dividing the proposed construction projects into two parts, so as to vote on the County Attorneys building separately; however, that motion failed for lack of a second.
County Employees to Receive Raise
The Supervisors also approved an across-the-board 2% raise for county employees, along with a plan for implementing the pay increase.