Two of Mohave County's three supervisors favor using the county's sales tax – intended for raising money for buildings – to pay off mounting debt, and hold off on building a proposed county complex.
District 2 Supervisor Tom Sockwell said he favors using some of the proceeds from the quarter-cent sales tax to pay off debt from issuing certificates of deposits.
COPs are a sale and lease-purchase or lease and lease-purchase financing method that are similar to government bonds.
Supervisor Pete Byers of District 1 agrees with Sockwell.
The debt on the COPs totals $15.2 million, Chief Financial Officer Duc Ma said.
The county issued COPs to finance wells and other improvements for the Interstate 40 industrial corridor – which includes the Griffith Energy Project – and for the juvenile detention center.
Sockwell figures the county will come out ahead by paying off the debt because the interest rate on the COPs for the I-40 corridor is around 7.3 percent, compared with the 5.6 percent interest rate earned on sales tax revenues.
He estimated the principal and interest for the I-40 corridor COPs at $6.9 million.
The county has raised more than $4 million in sales taxes since the tax went into effect on Jan.
1, 2000, Ma said.
The supervisors approved the tax in August 1999 and expect to raise $125.9 million over its 20-year lifespan.
"We are paying out more than we are earning" on sales taxes, Ma said.
"We (can) use the money to pay off COPs.
We'll save money on interest expenses."
Byers agrees with Sockwell that paying off the debt makes sense.
"I feel we need to have a look at the sales tax" and use some of it to reduce debt, he said.
A decision to that effect requires a majority vote of the three supervisors, Chief Deputy Civil Attorney Deborah Herbert said.
Supervisor Buster Johnson of District 3 could not be reached for comment.
Sockwell is suggesting that the supervisors focus on building a new building for the Mohave County Sheriff's Office and holding off on other projects.
Estimated cost for the MCSO building and adjoining medical examiner's office is $4 million.
"I'm wondering whether we should curtail new buildings with the exception of the sheriff's building and direct these funds for paying off some of these debts," he said.
"What I want to do is build the sheriff's building and then build a multilevel administrative building in downtown Kingman.
You don't need law offices.
You don't need a new courthouse."
Sockwell estimated the total bill at $30 million,
"You'd save close to $50 million by doing this," he said.
"We don't need to do anything with that for several years," he said.
The supervisors decided in February to building a new MCSO office at a location – West Beale Street – separate from the proposed county complex.
That decision sparked a petition drive in Lake Havasu City to repeal the quarter-percent sales tax.
Members of Stop Taxing Our People contend the supervisors plan to violate the intent of the sales tax by using its proceeds to renovate buildings.