As last week’s meeting of the Holbrook City Council was about to begin, Councilmember Robert Black entered the chambers with a sledgehammer, a heavy hammer used for forceful tasks like demolition, breaking rocks, or shaping metal, which he took with him up to his seat on the dais. When asked to show what he’d brought, he lifted the tool and responded, “The Mayor has her gavel, I have mine.” Council appeared puzzled and attempted to make light of the demonstration. It was later learned that Black bringing the tool brought discomfort to staff and council alike.
After approving the agenda, a public hearing and discussion was held for an increase in the city’s Transaction Privilege Tax (TPT) and the Lodger’s Tax pertaining to hotels, motels, short term rentals and campgrounds. Currently the city has 3% TPT tax and a 2% Lodger’s Tax. The state allows for cities to go up to 5% on both taxes.
During the hearing Robin Gonzales asked the council to clarify the increase in taxes. City Manager Randy Sullivan explained that if it is increased, those staying at those spaces will have a total increase of 5%, a 3% increase on lodger’s tax and a 2% increase on the TPT tax, for a total 10% tax for their stay.
Following the public hearing Mayor Kathleen Smith clarified that the ordinance under consideration was only pertaining to increasing the tax, not a determination on what the funds will be spent on. “That will be done in a work session. If we’re talking about going to bond, we will want to get public input.”
Black stated that he felt that how the funds would be spent would have bearing on whether or not the ordinance should be passed or not, adding that he would like a work session before it was voted upon.
Councilmember Teri Tafoya asked if the motels that have been converted into long term rentals would be taxed under this tax. “Are they zoned as motels still?” to which Sullivan stated that they were not zoned properly. “That was the whole reason we had our work session last time…. Because none of the businesses down in that area are zoned properly.”
“Technically they should still be paying, because they are still technically zoned as a motel even though they are operating illegally they are still required, in my book, to follow the law,” stated Smith.
Black made a motion to table the item, stating that he wanted to have a work session to discuss how the funds would be spent before making a decision to increase the taxes.
Mayor Smith followed by stating her support for the increase, “We need some help financially and this is one way to do it that doesn’t tax our citizens.” She spoke to a recent trip she made and that it’s the same everywhere. “It didn’t impact us at all. I think most tourists are the same. It’s just the cost of lodging. It’s everywhere.”
She stated that she didn’t want to go through numerous work sessions and then vote it down, wasting all their time. She explained that if they pass it now, that money will start coming into the city in January. “We’ve got so many things coming up and so many projects. Some of it can go for infrastructure and some for tourism, some can go for a pool. We can sit down in a strategic planning session later, but I’m tired of talking, I want some action.”
Councilmember Roxanne Pergeson stated that she researched other cities, looking at those that were comparable to Holbrook, “This is something that has been a common theme. The City of Thatcher and the City of Maricopa have all passed similar resolutions to increase their tax rates in the same way.” She added that she would support it but didn’t think it was a bad idea to decide ahead of time what the money would be earmarked for either. “If we’re looking at it not going into effect until January, I don’t know why we can’t wait until after a work session.”
Smith informed the council that the ordinance could not go into effect until 60 days after it is approved by council. So, waiting longer would mean less revenues. Sullivan followed by stating that if the item is tabled, the process would have to start all over with the public notification and hearing.
Black continued his motion to table the ordinance until another work session could be scheduled. Pergesen seconded with Tafoya also in agreement. Voting against were Smith, Vice Mayor Mike Nilsson and Councilmember Karina Pack. Councilmember Arcenia Pacheco was absent from the meeting making it a tie vote, so the motion died.
Following the vote, Smith made a motion to pass the ordinance with a second by Nilsson. Smith reiterated that decisions regarding spending can be made at a work session once they know the revenues will be available and Sullivan added that the money in this fund is kept separate from the general fund and each year, the choices on what to use those funds for will be made by council.
Black stated that if approved, he wanted to make sure everyone knew what they were passing. “I don’t want to get into a work session and say, ‘well we passed it so now how are we going to spend the money.’
Smith said, “That could be six months until we come to that conclusion, but in the meantime that money is going to be accumulating and so when we’re ready to go, we’ve got money to go and not six months behind.”
Pack agreed. “If we can just get it going, we can have our work session and we can hash out everything instead of hashing out everything and then having one work session, then another and then we may not even pass it.”
Black said, “I’ve spoken with ex-mayors and ex-councilmembers and people from Holbrook telling me ‘Why do you people want to mess with one of the best things we’ve got going, one of the only things we’ve got going for Holbrook.’” With the public hearing just held and only one citizen speaking with a question of clarification, Smith replied, “I wish they were here to talk about it.”
Both Pergesen and Tafoya stated they were comfortable with switching their vote, with Tafoya saying, “We need some income coming in. We don’t have the businesses like Winslow does and Show Low does, and Lakeside and Pinetop. They have that business that brings in more taxes into their towns. This is about all that we have.”
Councilmember Pack noted that those people who were opposed could have come to the meeting to say so. She believed she was the only locally owned motel owner and she was in support of the increase.
At that point in the meeting Black showed his frustration. “This does not surprise me that you want to pass this without knowing all the facts.” Smith replied, stating they all knew the facts and Black snapped back, “No you don’t.” Smith cautioned him that he was out of line and that he could have his opinion, but he could not speak to the other councilmembers’ knowledge of the situation. Black raised his voice and doubled down commenting, “You don’t. Do you want to keep going on this?” Smith informed Black that she would have order in the meeting and continued with the motion to pass the ordinance, which was seconded by Nilsson and supported by Pack, Tafoya and Pergesen, with Black voting against.
The next item to approve the increase of the TPT was also approved by the same councilmembers, with Black opposed.
The council then approved a contract with Aldridge Consulting, LLC, a professional bookkeeping service that provides professional tax review and taxpayer compliance services. The contract is for one year at a cost of $18,000, last year the company was able to collect an additional $163,535 in revenues after auditing 15 businesses over the year. The hope is that they will be able to similar in the coming year.
Smith asked if it would be possible for them to focus on Hopi Drive and Sullivan stated they could. He noted that they can also request that a specific business be looked into if it is suspected that it is not paying taxes. “There’s a big education piece too. When working with the businesses they (Aldridge Consulting) will educate them on how they collect the tax and how to pass that on to the consumer. So hopefully in the future they don’t get behind on taxes again.” Sullivan said he can provide the council with numbers but not names due to confidentiality requirements.
The motion passed with Smith, Nilsson, Pack, Pergesen and Tafoya in favor, and Black voting against.
It should be noted that other than voting ‘nay’ on an item he is opposed to, Black typically does not vote on other items but remains quiet. According to Holbrook charter, when a councilmember does not vote it is considered a yes vote unless in the case of a tie, when it is considered a vote against.
Another item on the agenda was about a request by the Calvary Chapel Church, located at 1202 W. Hopi Drive. The church has purchased the land west of its building, with a portion of the land part of an Arizona Department of Transportation’s right-of-way. The request is that the city waive the four-year right-of-way notification in this section so that ADOT can then abandon this section and provide a permit to legally approve access. The council approved the request. Without the approval from council, the church would not be able to improve the land without ADOT approval.
Mayor Smith proposed changing the bi-monthly council meetings so that the meeting held on the second Wednesday of the month be a council meeting and the second meeting on the fourth Wednesday of the month be a work session instead of a council meeting, as it is currently scheduled.
The charter only requires that the council meet once per month. The reason provided by Smith was to have the time to broaden the discussion on items pertaining to the city without having lengthy council meetings followed by lengthy work sessions. If there is a timely item that requires approval, a special meeting can be called along with the work session on the second meeting of the month. If there were no items for a work session, that meeting would not be required to be held.
The motion in favor was made by Tafoya and seconded by Pergesen, with the motion passing unanimously.
During a discussion on current events Mayor Smith noted that there is a vacancy on the planning and zoning commission to finish the term of Buddy Dupeé who recently passed away. The term to be filled will be until December 2027. Interested residents must apply at the city offices by 12 noon on Nov. 5. The position is appointed by the mayor with support of the council.
Smith stated that she and Manager Sullivan met with a representative of Invenergy regarding the high rate of speed of trucks traveling back and forth along McLaws Road to the worksite located west of Holbrook. The issue will be addressed by the company who also encouraged residents to write down any license plate numbers of speeding trucks and contact the city if it should continue so that the company can address the issue.
Smith thanked former Mesa mayor, John Giles who is working with Local First Arizona to do a Lunch with the Mayor series which features through video special places in communities throughout the state. They visited Studio 66, Wigwam Motel, Jim Gray’s Rock Shop and more sites throughout the city. The visits were videotaped for promotion.
Smith also thanked city employees for their efforts in collecting photographs for the veteran’s banners that will be displayed along Navajo Blvd. and Hopi Drive.
During his update, Black stated that citizens have questioned him regarding the water treatment bond that expired in 2020, but the city is still collecting taxes for. Sullivan addressed the concern stating that when the bond was paid off in 2020 it was supposed to sunset but the council at that time adopted another ordinance to continue with the 1% tax.
Sullivan also reported that the renovation of the bathrooms at the golf course near Hole 4 have been completed, with the club house remodel to begin soon.
He said that the water station for Well 4 has been ordered, to be received and installed in January. It was also noted that the audit was recently held, and it went well.
Sullivan also informed the council that when the city’s old grader was traded in, it received a higher value credit meaning that the purchased grade was $151,000 rather than $155,000. He also noted that grass is coming at the new ball field, with another seeding to take place in the spring.
In other business, the council:
* Approved the purchase of an HVAC system for the golf club house at the Hidden Cove Golf Course, with the cost of $25,938 to come from the city’s contingency fund. The item was not budgeted as it was not known that the existing system was unable to be repaired.
* Approved the purchase of an Aurora pump impeller assembly in the amount of $22,560 from James Cooke Hobson to be paid out of the Water Improvement Fund.
* Approved the purchase of six new SCBA’s (Self-Contained Breathing Apparatus) for the Holbrook Volunteer Fire Department in the amount of $59,812. This is a budgeted item.
