The state of the county was reviewed Jan. 10 at the Navajo County Board of Supervisors meeting during presentations on the economy and industry from Assistant County Manager/Economic Development Director Paul Watson, followed by a financial update from Assistant County Manager Bryan Layton.
In the economic update, Watson reported on highlights from the November Real AZ Development Council meeting, which included a presentation on growth by Ron MacArthur, CEO at Summit Regional Medical Center in Show Low.
Watson referred to that presentation, noting, “Over the period of the last five years, the organization has gone from 650 to 1,100 employees and from revenue of $275 million to $570 million.”
He went on to read from the report, “We (Summit) have new expansions planned within the next three to five years, which include a lot of outpatient services. The hospital acquired the mobile home park adjacent to the hospital about 19 acres of land…the hospital plans to put the outpatient related facilities in there.
“We recruited 40 new doctors over the last five years and currently Summit contributes $90 million a year in salary and benefits, so, they are by far the largest employer in the area.”
In a very sobering industry update, Watson reported concerns over the expiration of the existing lease for the coal burning Navajo Generating Station in 2019 and the impacts that will result countywide.
“One of the owners of the operation has already pulled out, which leaves the burden on the rest to make up the difference and to make the decisions if they choose to retrofit to meet the current requirements,” reported Watson.
Even if the lease continues, due to increasing environmental, economic and other pressures, the plant owners may choose not to continue operations, which would then lead to the decommissioning of the plant by the end of this year. This would also lead to closing the Kayenta coal mine, which supplies the plant, and the combined loss of about 1,000 jobs in neighboring communities.
In addition to the lost wages and employment, the financial impact would be felt countywide.
According to the financial update presented by Layton, in 2016 the county experienced a drop of nearly $30 million in property value and a reduction of $206,000 in property taxes directly attributable to the closing of Unit 2 at the Cholla Power Plant in Joseph City.
“Our circumstance last year was the only time that a county has seen a net decrease in their levy…in the total property taxes they collected. Again, no other county has experienced anything like that. As we look forward, there are three other units, and we would expect to see similar impacts with each unit as they go off-line,” said Layton.
Watson noted that over the last year, Cholla had switched from producing base-load power to peak power, which is not use it was designed for, and he expects that Cholla will be facing the same kind of serious decisions in the next few years, which would lead to even more associated drops in property values.
“This would be devastating to our region,” remarked Supervisor Jason Whiting, noting employers in other local industries typically receive their income from in-state sources, unlike these manufacturing jobs, which bring revenue in from out-of-state sources.
“If there’s a bright side to (the closing of Navajo Generating Station), the plant was actually built to distribute water through it,” Watson noted. “It was built with extra capacity and that extra capacity, and the revenues from (it), would subsidize the production of power to get the water down to the Valley. If that extra capacity goes away, then those people that are receiving the water are going to have to pay the difference. So this issue is not just a local issue for us in Northern Arizona, it’s a statewide issue.”
Layton’s report also identified some new areas of concern for the county budget.
Due to recently mandated changes in court security by the State of Arizona, the county will now bear the cost for increased security personnel and equipment.
Two other areas of potential concern include increases in the cost of state retirement plans for 2018 and the potential loss of $1.3 million in revenue gained by housing federal inmates in county facilities.
In other action Jan. 10, the board:
* Elected District II Supervisor Jesse Thompson to serve as chairman for 2017, and presented a plaque of appreciation thanking outgoing chairman Whiting, for his dedication and service to the citizens of the county in 2016. Supervisor Steve Williams was named vice chairman.
* Welcomed new District 1 Supervisor Lee Jack Sr. to the board.
* Approved representation of the county in conjunction with the Arizona Department of Revenue by the Attorney General’s office in lawsuits filed by Transwestern Pipeline and UNS Energy Corporation operating as Tucson Electric Power. The suits allege a misevaluation of property value and seek the return of resulting excessive property taxes.
* Authorized acceptance of a High Intensity Drug Trafficking Area grant award through the City of Tucson in the amount of $6,000 to cover over-time costs for domestic highway enforcement activities.
* Cancelled the election for the Heber/Overgaard Sanitary District, board member elections for White Mountain Lakes and Timberland Acres Special Road Districts, elections for the McLaws Road, Sun Valley, Clay Springs-Pinedale and Woodruff fire districts, and the elections for the Timberland Acres, Porter Creek, Heber, 3-0-3, Misty Mountain and Overgaard Townsite domestic water improvement districts.
* Authorized County Manager Jimmy Jayne to sign a service agreement with Agenda Quick Software. The subscription fees are $5,200 for each of the first three years. The fees for the fourth and fifth years will be $5,980 each.
* Authorized Jayne to sign a professional services agreement with Callie Jensen for support in the Wellness Program for services from Jan. 1 2017, to Dec. 1, 2017, with a total monthly invoice not to exceed $1,800.
* Approved a professional services agreement beginning Jan. 1, 2017, and expiring Dec. 31, 2022, with Little Colorado Regional Medical Center for public health chest x-ray services for individuals at risk of having tuberculosis. The services will be provided for feasible rates to be paid by a tuberculosis grant.
* Approved an intergovernmental rental agreement for one classroom in the Kayenta Unified School District for use in the Navajo Nation First Things First Dental Program at a cost of $744.20 per month from July 2016 to June 30, 2017, with the money to be provided through the Navajo Nation First Things First grant.
* Approved funding in the amount of $60,364 for the Department of Public Safety’s Victims of Crime Act program for the 2016-17 fiscal year. The funding will provide two fulltime and one part time, on call victim advocates who will assist in providing more than 10,000 services a year to victims of crime in Navajo County.
* Awarded a contract for inmate commissary services to Keefe Commissary Network, LLC for three years with two annual extensions. The county agrees to provide a commission rate of 36 percent and annual guaranteed minimum revenue of $60,000.
* Awarded a $13,429 contract to Emergent Solution and Consulting LLC for countywide facilities site surveys for emergency operations upgrades to improve public notification during emergency events.
* Awarded a contract for 911 equipment upgrades to Durham Communications Inc. The upgrades will utilize $440,000 in Community Development Block Grant funds and $128,264 in funding the county received from housing of federal inmates.
* Awarded a contract to Shuck Development Corporation to excavate and crush red rock material to the Peabody Western Coal Company as the lowest responsible bidders.
* Authorized sympathy letters to Brandon Andrews, Doris Clark, Glenda Walters and the family of Tami Phillips.
