$464M proposed county budget 58% over last year

Recommendation: no property tax increase

Yuma County is looking at a proposed $464 million budget for fiscal year 2021/22, a 58% increase over the previous year.

County Administrator Susan Thorpe explained that the difference between the current budget and next year’s budget “reflects the conservative approach we took in budgeting revenues last year at a time of COVID-19 uncertainties.”

The budget includes onetime anticipated funds of $42 million in pandemic recovery aid from the federal government as well as record-setting highs in sales tax and state-shared sales tax revenues.

Thorpe on Monday presented a summary of the recommended budget to the Board of Supervisors, which discussed the budget over the course of two days.

Staff recommended no increase to the property tax rate of $3.6638 for all combined districts.

The recommended primary property tax levy is $34.3 million with a rate of $2.5082. This means that if someone’s individual property increases by 6.15% in value, their tax bill for all county districts property taxes would increase by $30.02. The actual effect on the taxpayer will depend on any change in the assessed value for their specific property.

The total property assessed values increased overall by $79 million, or 6.15% over the previous year. New construction increased by $13.3 million, or 63.8%.

Thorpe explained that staff looked at every expenditure “from the ground up to determine the necessity of that expenditure and the appropriate funding level.”

Other goals were to minimize increase in health care plan costs, consider wage adjustments for all employees, and ensure sustainability of all funds. The health insurance premium rate for employees will increase by a “modest” 3% in the coming year.

The budget includes a compensation adjustment of 3%, including a half-step of roughly 1% for all pay plans effective the first pay period in July and funding for an additional step of roughly 2% for eligible employees who meet or exceed expectations.

The budget also considers a state-mandated minimum wage increase effective Jan. 1.

KEY CHALLENGES

The COVID-19 pandemic continues to impact the county, in particular the Health Department, and recovery activities throughout the county. The recommended budget has a special revenue fund with a significant appropriation to account for the $41.5 recovery aid it will receive soon.

The Yuma County charges for the Arizona Long Term Care System will be going up by another $650,000.

Some bills being considered in the state Legislature might have a detrimental effect on the county. Therefore, the county has set aside funds to account for this.

The budget also includes increases for state pension plans for deputies and correctional officers that are driven by a formula and have to be accommodated as well. However, Thorpe noted that the pension bonds issued by the board this fiscal year to eliminate the county’s outstanding pension debt will save taxpayers $19 million over the next 30 years.

The county has been setting aside funds for several years for vehicle replacement funding. The budget includes a $1.5 million transfer to start up this fund.

HEALTHY FUND BALANCES

The county budgets a balance reserve in each fund in case of unexpected events because if the money isn’t appropriated, it cannot be spent.

“It’s important to keep a healthy fund balance in case of an emergency or some unexpected reduction of revenues during the course of the fiscal year, so the county can continue to provide needed services to the community,” Thorpe said.

The general fund has a very strong balance of 39%, well above the recommended 20%. “This balance of one-time funds allows the county to address needs that it would not otherwise be able to address,” she noted.

She listed some potential uses for the additional funds above above the 20%:

– $166,845 in paid time off buyback from employees, from 5 hours to 20 hours.

– Add $650,000 to the anticipated legislative impact, increasing it to $1 million.

– $11 million to pay off existing debt or reduce future building debt. At slightly less than $11 million, Yuma County has a very modest debt. “The board may want to use some one-time balance to pay off this debt or use $11 million in cash to pay down the cost of the future Administration Building so that the debt issuance is much smaller,” Thorpe said.

– $4.5 million loan to the Greater Yuma Port Authority. Market demand is heating up for land in the Magrino Industrial Park near the San Luis Port of Entry II. All

previously developed lots have been sold. The cost to develop the remaining vacant land and develop lots in the industrial park is estimated to be about $4.5 million. Funds would be recouped as the lots are sold.

– $3.9 million reserve fund for the Payment in Lieu of Taxes program. The federal funds are not guaranteed year to year, and $3.9 million is about 5% of the county’s general fund, which “would be a significant loss.”

Thorpe also recommended increasing the fund balances for the Health District from 5% to 15% and the Library District from 25% to 30% due to cash flow. Since the county receives property tax revenues in May and October, the Library District typically starts the new fiscal year operating on cash reserves.

CAPITAL PROJECTS

The proposed budget includes several ongoing projects, such as the new Administration Building at 197 S. Main St. and Adair Archery Range environmental remediation.

New projects include a facility for Information Technology Services, Public Fiduciary and Facilities Management; Health Department building renovation or new construction; Adult Probation HVAC equipment and controls replacement; Justice Center roof repairs; and Juvenile Justice HVAC controls upgrade.

The current county administration building at 198 S. Main St. needs exterior upgrades. Other new projects include the Justice Center smoke curtain replacement, countywide access control system upgrade, Foothills Multipurpose Complex, GIS Imagery Flight, ITS core switch upgrade, and Superior Court virtual storage system replacement.

The Special Revenue Funds capital projects include numerous road and flood control construction projects as well as a Public Works Tacna Shop, road construction chip seal and irrigation replacements, Library District Foothills book sorter and Main Library HVAC replacements, Jail District security camera and smoke control system upgrades, and a Tacna Water Supply and Treatment System.

The supervisors are expected to adopt the tentative budget on June 7. The board will hold combined budget and Truth in Taxation hearings and potentially adopt the final budget on June 28.