Salem and company address funding ideas

KINGMAN - Speaking before a modest town hall audience Wednesday night, four city officials spent about an hour highlighting Kingman's current and ongoing capital improvement project priorities and addressing residents' ideas to fund them.

Accompanied by Financial Services Director Coral Loyd, City Manager Jack Kramer and Councilwoman Robin Gordon, Mayor John Salem produced a long list of the city's top priorities, which include the relocation of one fire station and expansion of another, constructing and equipping a stand-alone 911 call center, building the Rattlesnake Wash and Kingman Crossing Interstate 40 interchanges, and upgrading the fire and police emergency radio system.

The big questions, Salem said, was how the city should fund these projects, which projects should be the first to get funding and whether now was even the time to consider funding at all, given the myriad economic issues at the state and federal level.

"Should we just wait for another couple of years before we even entertain the idea?" Salem asked. "If we don't do anything, it's just going to put us further and further behind."

Salem said some of the funding options currently available include asking the voters to approve a bond, securing a loan, issuing general obligation bonds, seeking partnerships with private companies, setting up improvement districts, or even tapping into the city's extra fund balance, though he admitted that last option was probably a bad idea, given that the state Legislature has been looking at an assortment of ways to raid state-shared revenues to pay off its own $3 billion deficit.

"I don't know if you've heard this, but $11.8 to $12.1 million is what we get from sales tax, yet our (operations and maintenance costs are) up closer to ($14.5 million)," Salem said.

"That's quite a deficit there, and that's made up with state-shared revenues, vehicle licensing tax and other things we get from the state. They start to cut those things, and it's going to affect us."

Salem noted that a bond election was also unlikely given the current economic mood in Kingman, though Mike Bihuniak of the advocacy group Residents Against Irresponsible Development said he believed Kingman residents might be willing to support a bond if it were specifically dedicated to a capital improvement.

"I would make a suggestion that if you do try doing a bond issue, that you dedicate it - say 'We need x amount of dollars for a bond issue for this,' and give people a chance to vote for it," he said.

Salem admitted that it was something he and the Council had considered for the 2010-2011 fiscal year, but even then, he said, the question would remain what to fund, since the full capital improvements wish list covered nearly $300 million, well above the city's bonding capacity.

RAID president Harley Pettit asked about the possibility of raising the city sales tax from 7.85 percent to a full eight percent, which he said would be unnoticeable to most consumers.

"An increase to eight percent wouldn't really hurt people because we're already kind of paying that," Pettit said. "When you pay a dollar, you're not paying $1.0785, you're paying $1.08 already."

Gordon said the main objections to raising the sales tax came from retailers of big-ticket items, like cars. Even if the city did go through the process of raising the sales tax, Salem noted, it would only raise an additional $600,000 to $800,000, barely putting a dent in the capital improvements plan, while possibly making it even harder for already hard-hit auto dealers to sell their wares.

"What if we commit to (an increase of) .15 (percent), and we find out next year that our state-shared revenue's going to be cut in half?" Salem said.

"What if GM for some reason has a problem and they start to close other automobile retail facilities?"

Resident Loyd Peterson commended the city for tightening its belt over the last two years and expressed his desire to see the cuts continue, noting that when the economy does eventually improve, the leaner-operating city will have a much larger budget surplus to spend.

"A lot of what I call city glut has been removed here, and it hasn't been at the expense of city services. City service is, I think, pretty darn good," Peterson said.

"This provides a solution to what you people are dealing with here. The answer is in downsizing government ... When revenues come back up here, you've got 10, 15, 20 million dollars a year to apply to your capital improvements projects."

Gordon acknowledged that Kramer and his staff had done a good job of paring redundant positions and combining others while continuing to maintain city services, but she questioned how many more positions could remain vacant before citizens would start noticing.

Salem agreed, but he also concurred with Peterson's essential point that lean government is better government.

"There's no question we are operating far more efficiently and offering the same amount to the public with less money, and it would be my philosophy to do just as you say, to keep us operating as efficiently with less bodies as much as we possibly can," he said.

"We can look at every city category and find more fluff and we cut that fluff out, but pretty soon there's not going to be much left."