Mon, Jan

Faced with the biggest economic downturn in years, Camp Verde Town Manager Mike Scannell said he thinks the town should hire an accountant to help make sure local businesses are paying their fair share of taxes.

But some local business people have been vocal in their opposition to the idea, claiming it’s an unfair harassment of hard working people who are already suffering due to slow business.

The Town Council thinks the idea needs some time to sit with the public before taking action on the matter. The measure was tabled until January at last week’s council meeting.

Scannell said he feels people need to be educated about what the measure would and wouldn’t mean.

The state government distributes what it calls the model municipal tax code to cities and towns across Arizona, basically a recommendation of what it considers to be effective tax rules for local government.

The auditing program has been the responsibility of the state to make sure businesses everywhere are in compliance with tax laws. This new measure, if passed by Town Council, would give the local government the power to audit its own businesses.

It wouldn’t create any new taxes, Scannell said, and would level the playing field, making competition fair for businesses that already follow the rules.

Camp Verde gets most of its income from sales taxes; the council has had to make drastic budget cuts in the current economic slowdown, the most severe in years. While the auditing job is currently the state’s responsibility, Scannell said he hasn’t seen a state auditor in Camp Verde since he came on the job in October 2007.

Scannell said he’s done everything he can to juggle the amount of money the town spends. The town has eliminated its Housing Department, instituted a hiring freeze and slashed funding to the Camp Verde Chamber of Commerce, among other things.

So far the town has managed to avoid laying employees off. That won’t be the case if the economy gets any worse, Scannell said. With options on the spending side exhausted, Scannell said he turned to the revenue side.

The rate of compliance with town business and tax codes is “abysmal,” Scannell said, and having an auditor could help make sure the town is getting its share.

It’s not necessarily a matter of business owners deliberately not paying taxes, said Donald Zelechowski, a Scottsdale accountant who performs this service for several other municipalities, it’s often just a case that business owners might not be aware of all the details of the law.

“A lot of people just don’t know if they need to be paying taxes,” Mayor Tony Gioia said.

Ginger Mason, owner of Mason’s Jewelers, said the word audit has got people scared.

“It instills fear,” Mason said. “Especially when we are worrying to see if we’re going to make it from day to day.”

The type of audit in question doesn’t mean auditors with badges will come kicking down the doors demanding to see the books, Zelechowski said.

Instead, an auditor would send out letters informing businesses about what their responsibilities are and inspections would be a “minimal desk-type of audit.”

Not everyone at last week’s council meeting seemed convinced. Charlotte Floyd, who runs the Treasure Box in Wingfield Plaza, said she felt like this would be an intrusion.

“I don’t need a bunch more paperwork because [the town] hired someone to check on us,” Floyd said.

Scannell again pointed to low rates of compliance, and said he didn’t care one way or the other if Town Council chooses to enforce its codes, but said if the town doesn’t want to enforce its rules and continue to provide a certain level of service to citizens, the rules shouldn’t be on the books in the first place. The manager pointed out paying sales tax should have nothing to do with the viability of a business that operates above board, because the money collected goes directly from the consumer to the business to the state and then back to the town.

According to paperwork submitted by Zelechowski, the program would cost less than $10,000 the first year with an expectation for the town to recoup as much as three times the investment based on his experience, or at the least, to break even.

Zelechowski said while the law allows the town to go after money they discover might have been owed in the past, he recommends against it.
“I think the program should start from here and into the future, not the past,” Zelechowski said.

Scannell told council, and people in attendance at last week’s meeting, that he sees the program as “compliance through education.”

“I’m trying desperately to save jobs,” Scannell said. “Not to have people thumb their nose at the system.”

First, the Town of Camp Verde bought a park.

It was 118 acres just over the river, and the town picked it up from the U.S. Forest Service for a cool $2.4 million.

Then the bottom fell out from the economy, bad news for a town that gets most of its money from sales tax revenue.

But the park has been on the town’s wish list for decades; now that the land is in hand, the Town Council wants to see ball fields up and running as soon as possible. The town’s one field at Butler Park doesn’t come close to meeting current demand. Local fields are not only practical, they’re a matter of civic pride, when so many of the town’s little league teams have to travel to other cities just to play ball.

Despite the current state of the economy, the town has a plan that could see the fields built by 2010.

The money could come from a grant from the Arizona State Parks Department, but there’s a catch. Any money awarded has to be matched 50/50 by funds from town coffers. After recent rounds of painful budget cuts, there’s just no money left over for parks.

The town could still get as much as $750,000 from the grant program under a plan floated last week by Town Manager Michael Scannell. Instead of putting up cash, the town could claim the money spent on the park land as its share of the match.

The grant paperwork needs to be complete by Feb. 27, 2009 in order to meet the 2010 construction schedule, Scannell said. Delays could push construction back by a year or more.

Mayor Tony Gioia implored the town’s staff to research every possible angle that could improve the town’s chances of getting a check from the state; it’s necessary given the economy, Gioia said.

“It’s going to be more competitive than ever before,” Gioia said.

Ball fields are great, said Councilman Charlie German, but they don’t mean a thing if the town can’t provide the needed infrastructure to the park site, including water and electricity.

Parks and Recreation Director Lynda Moore said a plan was already in the works to address that issue. Scannell said that an engineering report would be necessary to see what the town’s best options are, and that he would soon be asking the council to spend $100,000 from its $600,000 capital improvement fund to send out a request for engineering services.

Getting those plans completed sooner than later could improve the town’s chances of getting the grant, Scannell said, because the state likes to see that local governments have concrete plans in place before opening the checkbook.

Voting may be a sacred civic duty, but for those who want to take it a step further and actively participate in local government, time is running out.

There’s a Dec. 10 deadline to have all the proper paperwork filed to run for one of the five open seats on the Camp Verde Town Council.

It takes a lot of work to do the job justice, and it only pays $50 a month, but already at least seven people are considering throwing their hat into the ring for next year’s elections.

Seats up for grabs include a two-year term for mayor now occupied by Tony Gioia, three four-year seats currently held by Bob Kovacovich, Ron Smith and Brenda Hauser, and the remaining two years for the seat held by Greg Elmer.

Elmer, citing the need to spend more time at work and with family, resigned from the council effective Sunday, Nov. 30.

Gioia and Kovacovich have already signed out paperwork signaling a possible run for reelection.

They are joined by Robin Whatley, Samuel Plunkett, George McClure and Tim Sykes, all considering a run for a four-year term on the council.

Whatley and Sykes previously applied for a seat on the board left vacant by former Councilman Mike Perry. Whatley, who had previously worked as Gioia’s campaign manager, failed to garner enough council votes for the appointment and Sykes, at the time, didn’t meet residency requirements that require council members to live inside the political boundaries of Camp Verde.

It doesn’t matter if someone’s mail has a Camp Verde address, candidates need to make sure they live inside town limits.

The seat ultimately was awarded to Charlie German.

A seventh contender, Raymond Williams, is considering a run to fill the remainder of Elmer’s two-year term.

A candidate must have at least 67 signatures from registered Camp Verde voters, and the paperwork on the desk of the town clerk no later than Wednesday, Dec. 10, at 5 p.m.

Mark Lineberger
Larson Newspapers

Camp Verde firefighters, with assistance from the Montezuma Rimrock and Verde Valley fire districts, worked for more than an hour Monday, Oct. 20, to put out a fire that destroyed much of a two-story home on Butler Lane.

The call went out around 10:30 a.m. after the owner arrived to find her house going up in flames, Barbara Rice, spokesperson for the Camp Verde Fire District, said.

The fire started near the top of the house, Rice said, and spread quickly. The owner was able to save her dogs and cats, but two birds were lost in the blaze.

Crews remained on the scene well into the evening fighting occasional flare ups. The cause of the fire is unknown and still under investigation, Rice said.

Camp Verde fire crews also responded to a fire at a mobile home on Mockingbird Lane around 3:15 a.m. Friday, Oct. 24. The residents were awake at the time and were able to evacuate everyone, including children.
“It could have been pretty bad,” Rice said.

They’ve never been allowed under town code, but many downtown businesses have been relying on A-frame or sandwich board signs to attract customers off the street and into the shops.

Now faced with uncertain economic times, the Camp Verde Town Council is going to allow the practice to continue on Main Street.

The council voted last week to allow the signs on Main Street between Arnold Street and General Crook Trail; the signs are still prohibited anywhere else inside town limits.

The code changes require that the businesses using the signs are liable for any problems that arise from putting them in the town-owned right of way. The code now also allows businesses to hang signs as large as 12 square-feet from the tops of buildings, provided that they conform to the town’s rural western design aesthetic, don’t project above the roof of the business and aren’t lit internally.

Jerry Tobish, owner of the Ancient Bear Gallery on Main Street, has been an ardent supporter of the use of A-frame signs.

He told the council that much of his business depends on the signs, and that customers have told him they’re why they stopped to shop.
Removing the signs would “absolutely kill” business for the town’s struggling merchants, Tobish said.

Tobish was joined by a host of other downtown business people speaking out in support of the signs.

The argument convinced the council; while they would eventually like to see the signs replaced by other means of advertising, the council felt that now is not the time.

Instead, Councilman Greg Elmer said that more work should be done to find ways to bring in more traffic from the I-17 and Hwy. 260 interchange.
Councilman Ron Smith said that if the signs prove to be a problem, the issue can be revisited in the future, possibly by a different council. In the meantime, the council should do what it can to help business, Smith said.

“Merchants in the downtown are more endangered than the bald eagle,” Smith said.

The signs will only be allowed during business hours and for other special town-sponsored events.

Mark Lineberger can be reached at 567-3341 or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it..

The Camp Verde Town Council signed an agreement with the Camp Verde Sanitary District in 2007 promising $135,000 a year for 25 years to help pay for the current sewer expansion project.

Now the council wants to go directly to the sanitary district’s lenders to try and work out a better deal.

The sanitary district has placed two measures on the November ballot. If they pass, the district board hopes that it can borrow more money to complete the project after cost projections skyrocketed following an engineering failure during the construction of a new wastewater treatment plant.

It would also allow the district to refinance its loans at a potentially lower interest rate, saving thousands of dollars over the next couple of decades.

The town, still obligated for $135,000 a year, wouldn’t see a benefit. But Town Manager Michael Scannell said that if the town can work out a deal with the lender and the sanitary district to insure the town’s money is used to eliminate a required debt service fund, the cost of borrowing money, instead of the district’s operations, the town could potentially save $12,000 to $13,000 a year.

It would still allow the district to get the money it needs to finish the project, Scannell said, but would benefit all the taxpayers of Camp Verde with an overall savings.

The plan assumes that the district will be able to refinance their loans at a 3.75 percent interest rate. If the actual rate is higher, Scannell said, there’s no point in pursuing this plan since there would be little to no
financial benefit for the town.

The closer the rate gets to 5 percent, the less money the town can save when the actual costs of the loan, including attorney and consulting fees, are considered.

Mayor Tony Gioia said he had approached the leadership at the Water Infrastructure and Finance Authority, the agency the district is turning to for refinancing, with the idea and was told that such a plan was “unheard of.”

It’s not common for a third party to approach a lender like this, Gioia said. The town is obligated to pay the sanitary district, but Gioia said the town should pursue this idea because of the council’s responsibility to the taxpayers.

Town of Camp Verde employees were able to cut spending by nearly $500,000 last fiscal year, said Town Accountant Lisa Elliott, helping to manage a budget shortfall that forced town leaders to tighten the money belt.

Because of a drop in expected tax revenue and a previous budget process that Town Manager Michael Scannell called incomplete, the town had to find a way to fill a $1.8 million hole; departments that were able to curtail their expenses helped out a great deal, Elliott said.

According to preliminary figures, the town’s general fund had excess revenue of $360,000.

The previous budget for 2007-08 had counted on $6.7 million in spending before the shortfall was discovered. Continued declining revenues led to the town passing a $5.3 million budget for 2008-09.

Despite the shortfall, the town was still able to end the fiscal year on a “good note,” Elliott said.

But the town is still feeling the sting of an underperforming economy.

Scannell told the Town Council last week that the “lack of economic activity will manifest itself” when the numbers for the first quarter of the current fiscal year [July through September] come in.

Still, the town continues to work on improving its financial system, found by an auditor last year to be severely lacking in adequate internal controls.
To that end, Scannell and Elliot have been working on a new financial operations guide that will clearly define how the town handles its money.
“It’ll help everything run a little smoother,” Scannell said.

Mayor Tony Gioia said he was pleased with the work being done to overhaul the town’s finances.

“The council members have been looking for this type of action for a long time,” Gioia said.

Monthly sewer bills will increase if the Camp Verde Sanitary District approves a new long-term rate plan devised by a utility consulting firm.
Utility rates are on the rise nationwide, said Dan Jackson, with Economists.com, the group hired for the study.

It’s not easy to come in and tell people their rates are going up, Jackson said, but it’s today’s reality.

“It’s important to understand what’s happening in the industry,” Jackson said. “It’s not going to be as inexpensive as it was in the 20th century.”

The causes are numerous, Jackson said, from rising employee insurance premiums and inflation to stricter federal environmental regulations — often in the form of unfunded mandates that leave municipalities and districts holding the bill.

On average, Jackson said, Arizona utility rates increase about 5 to 6 percent a year.

If the rate plan is adopted, users’ bills will increase over the next few years before eventually decreasing, although the bill will still be higher than it is
right now.

Currently, the minimum monthly charge is $9. Since the district does not have access to water usage data controlled by the privately owned Camp Verde Water Company, bills are calculated based on the number of “fixture units” in a home.

An average home has around 16 to 20 fixture units, Jackson said, but that doesn’t mean that all fixtures are equal. A toilet is worth more units than a bathroom sink, for example.

The district now charges $1 per fixture for residential users and $1.50 for non-residential customers. Under the new plan, that rate would increase gradually to $1.97 and $2.81, respectively, by October 2012. A resident who pays $16 a month in usage fees today could expect to pay more than $31 in four years.

The plan calls for the tax rate to remain the same at $1.20 per $100 of home value, along with another tax levied to help pay off debt incurred by the new wastewater treatment plant and the new current sewer expansion project.

According to projections that assume a refinancing measure on the ballot passes in November, that rate would start at $1.82 per $100 and gradually decrease to $1.26 by 2012.

A customer with a $225,000 home and 16 fixture units could expect their monthly obligation to peak at around $76 in 2009 before dropping to nearly $71 in 2012.

The numbers also assume that connection fees will increase from $500 to $1,750 next year.

Jackson warned that his projected numbers depend heavily on growth and revenue. The current state of the housing market and economy aside, Jackson said he feels his growth projections are “extremely conservative,” with the number of customers almost doubling by 2018.

If growth is less than expected or something else unpredictable comes along, Jackson said these numbers would have to be readjusted.

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