Supervisors and Hendrix: cash hoarders

Recently I threw away years of newspapers. Friends and family gave me grief for hoarding all those stacks. I reluctantly admitted my problem and stopped hoarding them. But it really hurt letting go.

Mohave County is also a hoarder – of taxpayer cash.

Far too many department funds have much more money than necessary, which they zealously guard. Prudent government accounting requires adequate reserves for legitimate reasons, but the excessive cash reserves from the general fund to the TV district, from the library to the landfill, are simply astounding.

First, the general fund has $35 million in reserves, which is 40 percent of the budget. This includes internal service funds, which provide goods and services to other county departments.

The vehicle purchase fund, for example, had seven years worth of reserves, over $7 million. The finance director wants a 25 percent level of reserves for the fund, but doesn’t include those internal service balances. Even after sweeping over $4 million out of those funds last year, they still contained $20 million. There’s an abundance of money available in the general fund.

The county built up huge cash balances in the TV district through over taxation, $8-12 million in the past decade, which were swept into other accounts. Currently the balance is over $2 million for a $450,000 budget. The county has swept more than $10 million for other county uses in the past decade.

The library fund had $3.3 million in cash reserves in the main fund two years ago, but Supervisor Buster Johnson wanted to reduce the tax rate to eat up $2 million, leaving 25 percent in reserves, which is the recommended amount. However, they conveniently ignored the $6 million in the so-called building fund for a new library instead of the addition they talked about last year. There’s a $4 million excess by some estimates.

There’s also the county’s landfill fund, which is mandated by statute. Mohave County contracts with vendors to operate the two landfills with county oversight. Another vendor transports tires to Phoenix for recycling as part of the waste tire program. The waste tire fund has built up a $2 million war chest from the state’s $2 per tire surcharge, and the use of which is restricted by statute. The user paid fees once could be withdrawn from the account, but that statute was repealed by the legislature effective Jan. 1, so that $2 million will be available.

The county must pay costs of closing and maintaining landfills for 30 years, which has an $8.5 million liability. However, the financials show almost $14 million in the fund. The landfill and waste tire funds have budgets of less than $500,000 to operate, but receives triple that amount. The county has added $1 million to the fund balance each year since 2012.

The board of supervisors and county administrator Mike Hendrix claim funds can’t be used for other purposes. However, two years ago he admitted that user paid fees in the waste tire program could be withdrawn from the fund. Why can’t excess cash in the landfill fund (which is exclusively user fees) be used?

Finally, this year’s state budget permits counties to withdraw up to $1.25 million from any restricted fund for any county obligation. Furthermore, it allows the county to use those same resources to cover most of the costs of state sweeps, almost $630,000, for those eligible costs. Restricted funds are available to the county, yet there’s no proposal to utilize the law.

The county wants to increase taxes, and the hell to anyone who opposes it. The administration constantly claims the county is broke and needs more revenue while hoarding millions. Supervisors Johnson and Watson are the longest tenured in the county, yet – along with Bishop – they work with the administration to protect fund balances. You can’t claim you need to raise taxes while hoarding cash.

It’s time for the county come clean about their cash reserves. Yes, they need to have a cushion because it’s prudent. But not the millions the county claims it needs. There are important priorities in the county such as public safety, road improvements and the pension liability. Instead of raising taxes as Watson and Bishop want to do, they should take a close look at the reserves that are often more than 100-300 percent of the budgeted expenses in several unrestricted funds. That’s simply too much.

The county wants to raise taxes, but they need to be more frugal. There may be legitimate reasons to raise taxes, but not until the county stops hoarding.