Cochise County Board adopts tax rates and levies after discussion of pension shortfalls and special districts

The Cochise County Board of Supervisors voted 3-0 to adopt tax rates and levies for county taxing entities, the board announced after a motion to adopt the figures contained in the meeting exhibit. The board's action follows a publicized truth-in-taxation process and a discussion among supervisors and staff about pension liabilities, special districts and how Arizona's expenditure limits affect county budgeting.

The vote was taken after staff displayed levy charts and supervisors discussed several related matters, including the county's obligations to the Public Safety Personnel Retirement System, commonly known as PSPRS. County staff reported that the Cochise County sheriff's office had $975,154 in excess from the prior year's budget that could be available to put toward PSPRS obligations. "Yes, sir. We are still closing out the fiscal year, but currently, the sheriff has an excess from last year's budget of $975,154," County staff member Fenhouse said.

Why it matters: supervisors and staff said rising PSPRS unfunded liabilities—cited in the discussion as about $40,000,000 for Sierra Vista's fire and police PSPRS and about $36,000,000 for the county PSPRS—affect many local taxpayers and shape decisions about whether to use one-time funds for pension payments. Supervisors also debated the fiscal effects of Arizona's special districts, which levy secondary taxes for services such as fire protection, roads, hospitals and water supply.

During the discussion, Cochise County Treasurer Stacy Traywick described how some services are funded. "It is not a primary levy. It is a secondary tax, and it has gone to the community people to decide that they want those services badly enough that they will be taxed for," Traywick said, explaining that many special districts were formed by local vote to provide services the county could not fund directly. She also noted that fire services are supported in part by a countywide Fire District Assistance Tax (FDAT) that is levied on parcels and distributed to fire districts.

Supervisors raised two practical constraints on using surplus funds for pensions. A county staff member identified as Jonathan cautioned that paying down pension liability can interact with Arizona's expenditure limit, meaning that large one-time payments could push the county against statutory spending caps. The board also discussed how some counties use special districts to shift expenditures and the political and administrative trade-offs that creates.

Board members and staff reviewed the levy charts on display and noted most jurisdictions in the exhibit showed effective decreases in the tax levies (indicated on the charts by parentheses), which staff attributed to local taxing entities lowering rates to offset increased property valuation. The board flagged that a minority of districts—including some fire districts and certain school districts—showed increases in levies.

The formal motion before the board was: "I move we adopt the tax rates and levies for Cochise County taxing entities as set forth in the attached exhibit." A second was entered. The board approved the motion by voice vote: motion carried, 3-0. The chair instructed staff to forward the adopted levy rates to "Mister Leyendecker." Treasurer Traywick was also noted as the county official who would receive and temporarily invest the funds until they are appropriated and spent.

The meeting record shows the discussion included questions about oversight of special districts; staff reiterated that most special districts have elected boards responsible for their budgets and operations, and that the clerk's office receives annual district budgets and reports for tracking. One clerk's office staff member, Lowenheim, said annual budgets and reports are submitted to the clerk's office and processed there.

The board concluded the item and moved on to other business. No separate formal motion to transfer the sheriff's excess funds to PSPRS was recorded in the minutes; supervisors discussed the option and asked staff to provide follow-up information.

Votes at a glance: Agenda item 1—adopt tax rates and levies for Cochise County taxing entities. Motion: "Adopt the tax rates and levies for Cochise County taxing entities as set forth in the attached exhibit." Outcome: approved. Vote: 3 yes, 0 no. Mover: not specified in the audio. Seconder: not specified in the audio.

The board scheduled a work session later in the meeting addressing a health and detention medical director position; the tax-levy adoption was the principal action recorded under this agenda item.