Gila County staff outline $38M in flood repairs and propose up to $18M borrowing to meet $14.2M cash shortfall

Gila County supervisors on Jan. 20 spent a work session reviewing a package of flood‑recovery projects staff say totals about $38 million and discussing options to bridge roughly $14.2 million in near‑term county cash needs.

Homero Vela, staff lead on flood recovery, told the board the projects include about $7.9 million of proposed NRCS (Natural Resources Conservation Service) restoration work and about $5.3 million of FEMA/DEMA emergency projects, and that the county faces an immediate cash‑flow requirement to meet near‑term deadlines. "Total project cost, a little over $38,000,000," Vela said during the presentation. He said NRCS would cover about 75% of eligible project costs while the county must front a local match and pay invoices that are later reimbursed.

Why it matters: the county must meet program deadlines (NRCS uses a 220‑day completion clock once funding approval begins) and could lose funding or face greater costs without prompt action. Vela said the state granted an extension on debris and sediment deadlines to June 25, giving the county additional time but not removing the immediate cash‑flow challenge.

Vela described project specifics and recent testing results: county contractors tested sediment piles for metals, hydrocarbons and other contaminants and returned results "below detection level" for Russell Gulch samples, he said; staff estimate more than 14,000 cubic yards of sediment and roughly 740 tons of household debris across piles that must be managed, some containing asbestos and requiring special disposal in Apache Junction under ADEQ requirements.

To address the cash‑flow gap, the board heard an options briefing from bond advisor Mark Reeder. Reeder presented scenarios for borrowing in the $15 million to $18 million range to provide the county immediate cash while it pursues federal and state reimbursements. "Let's go with $18,000,000 for the moment," Reeder told the board as a conservative placeholder; he described a 10‑year illustrative amortization with annual debt service roughly $2 million and emphasized structuring to permit early payoff with 30 days' notice.

Board members raised budget and operational concerns. Supervisor Humphrey asked whether county crews would be asked to perform work that would undercut regular operations; Vela replied most NRCS projects would be contractor‑led and that project management and contracting capacity remain concerns. Supervisor Klein pressed staff for long‑term sediment disposition strategies, warning that removed material can re‑deposit without durable solutions.

The board did not take a final financing vote at the work session. Staff proposed the next procedural steps: return on Feb. 3 with a reimbursement resolution the board could adopt to preserve bonding options, publish notice and hold a public hearing on March 3, and proceed toward a bond package in spring if the board directs. Reeder said the county could close financing in May or June to meet cash needs.

What to watch next: staff will return with conservative financing numbers, a proposed reimbursement resolution for Feb. 3, and detail on project management costs (staff estimated an additional $1 million–$3 million could be required for project management).