TPT, Kingman Crossing project stir up Council

Councilmembers voiced different opinions regarding a perceived link between the proposed KRMC development agreement and the City's TPT rate at Tuesday's meeting.

Photo by Travis Rains.

Councilmembers voiced different opinions regarding a perceived link between the proposed KRMC development agreement and the City's TPT rate at Tuesday's meeting.

KINGMAN – The weather was cool in Kingman Tuesday, but things got heated at Council’s meeting as one councilmember suggested the proposed development agreement with Kingman Regional Medical Center for Kingman Crossing shouldn’t go through if the Transaction Privilege Tax rate falls back to 2.5 percent.

Councilman Travis Lingenfelter was virtually on his own in suggesting the development agreement with KRMC should not move forward should the circulating Transaction Privilege Tax initiative put forth by Citizens for Responsible Taxation receive enough votes to drop the TPT rate back to 2.5 percent.

Under the proposed agreement, construction of the interchange would fall to KRMC and its proposed developer, Ault Companies. The companies would also pay for constructing Kingman Crossing Boulevard from the interchange to Southern Avenue, but that contribution would not exceed $3 million.

Kingman would not sell or enter into agreements with developers for the land at the proposed interchange site until 2024, according to the proposed agreement. In addition, sales tax revenues from areas surrounding the proposed interchange location would be shared for 20 years upon the project’s completion, or until the companies made their money back in the full amount of their contribution.

Interim City Manager Jim Bacon said that while he believes the current TPT rate is “important for the City,” he doesn’t see a correlation between the rate and the development agreement.

“At its core, and this is where Councilmember Lingenfelter and I just disagree, and that’s I think the development agreement is important for the City to go forward with,” Bacon said. “I think the TPT rate at 3.5 (percent) is important for the City to have to finance its capital, I just don’t think there’s linkage between the two of them.”

Lingenfelter disagreed about the linkage. He’s concerned about what happens to the City’s budget should it lose the additional 1 percent tax increase.

“I don’t feel comfortable with obligating a future Council unless I’m absolutely confident that those financial responsibilities are going to be able to be met,” Lingenfelter said.

He said those responsibilities refer to roadway maintenance and increased public safety, police and fire.

“If our revenue is cut this year, then those burdens are going to be on the backs of the city,” he said. “And maybe I’m being really super conservative, but I just don’t feel comfortable voting for something unless I know that revenue is going to be there.”

Bacon stayed firm in his recommendation that $4.5 million be budgeted for pavement preservation due to its vitality to Kingman, regardless of what happens with the TPT rate.

Vice Mayor Jen Miles said that while she believes the City should move forward with the agreement, she thinks it should be mindful of how it proceeds. She said in her mind, there was a relationship between the conditions in the development agreement and the outcome of the TPT initiative.

Lingenfelter was also concerned about the timeline for the project’s completion and its effects on revenue generation. The project won’t be completed for four years, he said, and it would be another two years before commercial TPT revenue could be generated. While Bacon agreed that there would be some delay in revenue generation, he noted that stream would come to fruition.

Bacon said he also thinks conservatively when it comes to budgets, but that he’d rather have something than nothing.

“If I was your city manager in 2026, I’d rather have the revenue stream that the KRMC proposal provides the City than to have none,” Bacon said. “So ideally you’d have the TPT revenue plus that (crossing), but at a minimum, you’d have that revenue stream from the crossing.”

Brian Turney, KRMC CEO, seemed to agree with Bacon.

“I honestly feel like you’re creating a straw man that moves something from an all-or-something scenario to an all-or-nothing scenario, and I don’t think that’s the right strategy,” Turney said during public comment. “I don’t doubt your sincerity as far as wanting to do what’s best for Kingman, but I’m just sharing with you that is not a good move. I urge you to rethink that.”

Mayor Monica Gates said she was “absolutely offended,” that the issue was included in the work session. She said it wasn’t about linkage between the agreement and the TPT rate, but between the agreement and the initiative.

“It’s the peoples’ right to create an initiative and have their voice heard,” she said. “There is no linkage, there is no correlation between the Kingman Crossing project and the TPT rate. I find this to be a veiled attempt to stop the Kingman Crossing project and the development agreement with KRMC, and I find it insulting to the intelligence of our community.”

Councilwoman Vickie Kress also chimed in.

“I don’t understand why some members of the Council are so afraid to have the TPT initiative put to a vote by our citizens,” she said. “I think it underestimates their intelligence. We all see what needs to be done. We’re not any smarter about spending their money than the citizens are. We should not be afraid of it.”

Lingenfelter opted to respond, and said he isn’t “afraid about it at all.”

“I’m not afraid at all, but I know that all of us sit through hours and hours and hours of budget discussions, and I don’t think 19,000 people do,” he said. “And that’s why we were elected, to try to make responsible decisions. All we are is messengers. I support the people voting. If they want to vote away pavement preservations and improvement money then that’s fine. But we get what we get.”