KINGMAN – The sales tax that was approved in August and designated for “capital improvement projects” can still be ratified within the next 30 days despite a violation of the state’s open meeting law, City Attorney Carl Cooper said Wednesday.
According to state law, the City has 30 days to “ratify” the discrepancy, as noted in a Jan. 2 letter from the Arizona Attorney General’s Office informing the city of its findings.
“This is a simple procedure that will cure the issue and allow the City to move forward,” Cooper said.
City Council will hold a budget workshop Tuesday and will follow with a work session to discuss the ratification. The ordinance would then be added to the Jan. 16 business meeting and could be voted upon in special session or at the next regular meeting on Jan. 22.
“The statute is pretty straight forward,” Cooper said. “It allows a do-over to fix the error.”
City Council voted 5-2 on Aug. 15 to increase the Transaction Privilege Tax, or sales tax, from 2.5 percent to 3.5 percent. The discrepancy involved designating the money to capital improvement projects that would include the I-40 interchanges at Kingman Crossing and Rattlesnake Wash, whereas the agenda stated the funds would go toward “pavement preservation.”
Cooper said the new ratification of the vote would include pavement preservation as well as capital improvement projects.
Interim City Manager Jim Bacon noted that the AG’s opinion applies to all three actions regarding the sales tax on the Aug. 15 agenda, including removal of the Dec. 31, 2017, “sunset” date for the TPT.
The increase in the TPT rate from 2.5 percent to 3.5 percent was approved in two halves, Bacon said Wednesday.
The rate change from 2.5 percent to 3.0 percent was for local streets, and the increase from 3.0 percent to 3.5 percent was for the interchanges on Interstate 40, he explained.
After reviewing a citizen complaint, the city’s website and responses from Council members and City Attorney Carl Cooper, the AG’s office determined that no fair reading of the agenda gave public notice of a tax rate increase for “capital improvement projects.”
“If the Council’s intention was to discuss an increase to the TPT rate for use other than ‘pavement preservation,’ the provided notice was not only confusing, but likely misleading,” Oramel Skinner, chief of government accountability and special litigation unit, wrote in the Jan. 2 letter to City Council and its attorney.
At the Aug. 15 meeting, Mayor Monica Gates asked Finance Director Tina Moline about what had been advertised on the City’s website, and Moline answered that the TPT increase would be dedicated to pavement preservation.
She said the 0.5 percent tax that was to sunset on Dec. 31 would go to the general fund, but anything additional would go toward pavement preservation to address road issues in Kingman.
That’s how the ordinance was written and presented that evening, Moline said.
The City has 30 days to correct the open meeting law violation, said Ryan Anderson, director of communications for the AG’s Office.
“If they don’t cure (the violation) within 30 days, that’s a different story,” he said. “Other aspects of the tax … were not reviewed by this office, and the letter should not be a determination of other potential remedies.”