© 2016, Citizens Tax Committee.

Special Districts in Yavapai County

January 10, 2017

 

 

Most everyone is aware of and understands the need for fire districts and school districts.  But do you know how many other special districts exist in Yavapai County?  There are 41 including sanitation districts, road improvement districts, waste water treatment districts, etc.  

 

Why should you care?

 

If you reside in these districts, each district has the authority to create bonded indebtedness and can raise taxes with just two or three votes of their board members.  If the district is the one you reside in, you’ll be paying for it on your property tax bill. Most likely you’ve never voted on a ballot for a board member who is granted such direct financial power. The reason is the election process is so obscure and expensive that no one attempts to file for candidacy.  

 

Election rules allow Yavapai County to charge these districts between $2.50 and $4.30 per district voter just to conduct an election.  This can lead to election costs that far exceed the district’s annual budget.  Here’s an example: The Central Yavapai Hospital District (CYHD) would be charged anywhere from $100,000 to over $200,000 to conduct an election yet its annual budget is only about $55,000.  Consequently, these districts do everything they can to avoid an election.  Many district boards will even ask a current board member to resign rather than risk the cost of an election.  Usually vacancies are filled by appointing a friend or colleague of an existing member to a vacated position for the remainder of the term thus creating an incumbent and perpetuating the process. So would it surprise you to learn that in September 2016 your county supervisors appointed over 40 members of various boards that had nearly 70 open positions simply because of this election process?

 

Folks, we fought a revolution over “Taxation without Representation.” I am making no accusation of graft, corruption or malfeasance.  I am saying that without TRANSPARENCY and ACCOUNTABILITY special district boards operate well off the radar screen. Appointed rather than elected board members, difficult to locate meeting notices, vague or obscure agendas, nonspecific minutes, and missing or unavailable records all increase the risk for bad things to happen.

 

Let’s look at CYHD again as an example.  Only one of its five directors has ever filed for candidacy. No election for a board member has occurred in over 20 years. Taxpayer assets owned by the district total over $50M with ZERO taxpayer return on those assets.  Years of records are missing or extremely difficult to find and review. Meeting notices are hard to find and agendas are vaguely worded.

 

Most districts had good reasons for their original formation and the public has to vote to approve that formation along with the taxes or bonds that were issued for their capital projects.  It’s the operations and ability to dissolve the districts that are the real problem.

 

Arizona Revised Statutes, Title 48 with 39 chapters and over 8000 pages governs the formation, operation and dissolution of special districts.  The problem is they are almost impossible to eliminate.  The only conditions by which a district can be dissolved are fraud, bankruptcy or inactivity for five years (a meeting is considered activity).

 

So what can be done?

 

Make elections mandatory.  This would require transparency and representatives would be duly elected.  If there were no legitimate activity requiring the cost of elections, then there would be a good chance that the dissolution of the district would be accelerated. Cap the costs for the elections and have the county absorb the majority of the costs.  This would incentivize the county to take a serious look at these districts and support their dissolution if appropriate.

 

Make operations of these districts accessible.  Meetings, agendas and minutes should be required to be posted on the currently existing county website (in addition to public posting requirements).

 

Require record keeping that is subject to random state Auditor General inspections  and fines/penalties for inadequate or missing records. Again if there is real, legitimate activity this should not be a burden or unreasonable expense.  It would also accelerate a district’s dissolution when appropriate.

 

Make dissolution easier once districts are nearing inactivity or actually at a standstill.  If an election can create a district then an election should be able to dissolve it without the five-year inactivity requirement.  

 

Enlist the county board of supervisors to take responsibility for minimal management of the dissolved district functions.  The supervisors are elected, they are accountable, and they have economies of scale to fulfill these functions at minimal costs.

 

In conclusion, these special districts as they currently exist are a significant risk to good government and should be reformed by the state legislature. Contact your state representative or senator and ask them to support the reform of special districts. Look up “Special Districts” on the Yavapai County website and identify the districts that you reside in.  Find out who represents you on those boards.  Attend a meeting and ask questions about the need for the district to continue to operate and what the district’s goals and plans are. Get informed. Monitor your “elected” officials and hold them accountable.  

 

About the Author:

Phil Goode qualified as a candidate but was appointed to the Central Yavapai Hospital District by the Yavapai County Board of Supervisors in September, 2016 due to no filing by a qualified oppositional candidate.  He is a Prescott resident and a member of the Citizens Tax Committee where he serves as Chairman of both the Public Policy group and the Special Districts group.

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