State lawmakers take aim at Pima County over bond debt - Inside Tucson Business: Top Stories

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State lawmakers take aim at Pima County over bond debt

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Posted: Friday, February 24, 2012 12:00 pm

State lawmakers have once again cast their eyes south, this time with Pima County’s debt in their gaze.

Rep. Terri Proud, R-Tucson, has sponsored a bill that would remake how Pima County administers voter-approved bonds.

Proponents of the bill (HB 2656) have argued that Pima County has a checkered history with bond spending that mandates the increased oversight.

In a guest editorial piece that recently that ran on some online opinion sites, Proud took specific aim at Pima County Administrator Chuck Huckelberry.

“Since he’s (Huckelberry) repeatedly taken bond money and spent it on projects other than what voters intended, it’s only fair to have those who he’s taking it from be fairly represented by the people they have elected,” Proud wrote.

The bill would not apply to Arizona’s 14 other counties.

She and other proponents also have criticized the level of Pima County’s bond debt.

“Pima County alone has almost $1.5 billion in bond debt, more than two-and-a-half times all the other counties in Arizona — combined,” Proud wrote.

The $1.5 billion figure, which others also have cited, appears inaccurate.

Pima County carries $997.8 million in bond debt, according to an Arizona Department of Revenue report of government bond indebtedness published in late 2011. Other counties have a combined bond debt of $227.9 million.

Even that clarification, however, doesn’t tell the whole story of municipal debt in Arizona.

While it’s true that Pima County has considerably more debt than other counties, overall bond indebtedness in Pima pales in comparison to Maricopa County.

Taken together, cities, towns, school districts, special districts and Pima County, have a total outstanding bond debt of $3.4 billion. Maricopa County governments together carry more than $18.5 billion in bond debt, according to the Arizona Department of Revenue.

By way of comparison, the per capita governmental debt load in Pima County stands at $3,560. The per-capita debt in Maricopa stands at $4,859, the most in the state.

Proud did not return calls requesting comment.

Part of the reason Pima County carries a heavier debt load lies in the demographic peculiarities of the region.

More than a third of all residents of Pima County, 350,000 people, live in unincorporated areas. Because of the large unincorporated population, many of whom live in urban areas in the Tucson metro region, Pima County provides many of the governmental services.

In southern Arizona, Pima County has taken the lead on the majority of bond-funded infrastructure projects.

Since 1974, voters have approved 11 bond issues giving Pima County authorization to borrow billions of dollars to fund transportation improvements, build bridges, construct libraries, create parks and establish new sheriff’s department substations.

The legislation would require the creation of a regional bond accountability committee, whose membership would be made up of appointees from each incorporated city and town in the county.

Tucson, Marana, Oro Valley, Sahuarita and Pima County all would have one member on the new board. The new body would give prior approval to the Pima County Board of Supervisors to put a bond question before voters.

County officials have said the new body would give disproportional representation to smaller incorporated areas.

The bond accountability committee also would give approval for any proposed changes to bond programs before the board of supervisors would.

Bill co-sponsor Vic Williams, R-District 26, said the county’s debt load wasn’t why he decided to sponsor the legislation.

Rather, he said he wants there to be more openness and accountability in the bonding process.

“Pima County is about ready to issue a bond request for a quarter of a billion dollars,” Williams said. “I can’t think of a better time to do this.”

The county has proposed a new bonding plan that would improve traffic and other infrastructure around the airport and Raytheon south of Tucson to facilitate industrial development.

Williams said he’d support changes to the bill to make it applicable to all Arizona counties, saying the goal of the proposed law would be to provide more transparency in county bond spending.

Pima County Supervisor Richard Elías said the bill’s sponsors appear to have ulterior motivations.

“It appears to me to be politically motivated,” Elías said, noting that all of the seats on the board of supervisors are up for re-election, one of which Williams has begun a run for. Elías is one of the three Democrats on the five-member board.

He also said that Pima County has been successfully retiring its debt.

Pima County bonds have come under scrutiny in the past as well.

The most glaring example was the 1997 bond package that prompted an Arizona Auditor General report, which found many projects’ costs were underestimated and financial reporting was often inaccurate or incomplete.

Since then, the county passed a truth in bonding ordinance.

Pima County leaders have been critical of the bill, saying the truth in bonding ordinance already provides transparency.

Elías said the bill would strip municipal governments of local control over their own affairs.

“It’s totally undemocratic,” he said.

Proud also fired a shot at the City of Tucson in her online opinion piece.

“Tucson ranks among the worst in the nation for foreclosures yet has the highest property taxes in the state,” Proud wrote.

Just two incorporated cities or towns in Pima County charge a property tax, Tucson and South Tucson. Tucson’s combined primary and secondary tax rate is $1.16 per $100 assessed property value while South Tucson’s combined rate stands at $2.66.

Contact reporter Patrick McNamara at pmcnamara@azbiz.com or (520) 295-4259.

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