Issuance of $1.3 million bond approved by county
County Commissioners approved issuing a $1.3 million gross receipts tax revenue bond Monday to fund building an annex for the county’s adult detention center.
But, County Manager Geneva Cooper said, in order to afford the bond payments — while avoiding a deficit — the commission also must pass two proposed gross receipts tax increases.
Cooper said construction on the annex should begin in mid-May. Contractors estimate the annex should be completed in 300 working days, she added.
She said the bond will be paid off over 10 years, with two installments each year of a little more than $80,000.
The payments will come from gross receipts tax revenue deposited in the county’s general fund. But Cooper also has said the county faces a $1.3 million deficit in the upcoming fiscal year.
The state’s Department of Finance and Administration, which approves county budgets, will not accept a deficit-spending budget. To avoid a deficit, county officials must find additional sources of revenue or cut jobs and programs, she said.
In a step toward providing the revenue, the commissioners approved notices of intent to adopt a 1/8 percent gross receipts tax dedicated to operation and maintenance of the detention center and a 1/16 percent gross receipts tax to help fund county operations. Both tax increases were authorized by the state Legislature in the last session.
The vote was 3-1-1, with Commissioner Tim Ashley voting “no,” and Commissioner Ed Perales abstaining.
The commissioners will consider final approval of the tax increases at their regular meeting May 18. The public may submit comments on the tax increase both before and during that meeting.
Ashley said he supports the taxes, but voted against them because he wants them dedicated to specific uses. He said he wants one half their amount dedicated to the detention center and one half dedicated to fire fighting, rescue services and the sheriff’s office.
Curry County receives fire and ambulance services from the city of Clovis through an exchange agreement under which the county houses city prisoners in its detention center. Ashley said some of the gross receipts tax money could go to the city.
“The city probably wouldn’t like that, because then they would have to start paying for prisoners in the detention center,” he said.
“I know most of that money could probably be absorbed by the sheriff’s office,” he added.
County Attorney Stephen Doerr told Ashley if the tax revenue authorized by the ordinances is dedicated, it would be difficult to reallocate the money at a later time. Once approved, the dedication would be in place for the life of the ordinance, he said.
If the commissioners wanted to change the dedication they would have to repeal the ordinance, then go through the ordinance approval process again to change it, he said.
On the other hand, once the ordinances are approved, the commissioners could approve a resolution dedicating the revenues to whatever they want. A resolution is much easier to change than an ordinance, he said.
“Hopefully the jail problem will be solved in the future. You may have more pressing concerns in the future,” Doerr said.
Ashley said he still preferred that the ordinances state the money is dedicated for a specific purpose.
“I’m very concerned about educating the public. The educational process would benefit from designating these tax increases,” he said.
Commissioner Pete Hulder said dedicating the tax increase is actually “a matter of semantics,” because most county departments are paid out of the same fund, the general fund.
“I tend to object to designating it, because I think you’re tying a future commission’s hands,” he said.
Commissioner Ed Perales said he abstained because he doesn’t completely disagree with either Ashley or the rest of the commission.
“I think it can be marketed better if it’s designated,” he said. “Regardless of the vote, we should all be on board to support this.”
According to the legislation that created the tax increases, residents can call a referendum on the tax increases by filing a petition with names equal to 5 percent of the number of county voters in the most recent general election with the county clerk within 60 days of the enactment of the ordinances.