Inside the financial crisis at La Paz County

A cash shortage, outstanding accounts payable and a deficit of over $13 million: challenges mount for new Board of Supervisors as they get help to formulate a recovery plan

A new review has revealed a “financial crisis” at La Paz County. The findings were detailed in a well-attended public meeting on Tuesday that, for the first time in many years, put the County’s finances and accounts in full and graphic view.

Robert Smith, the Interim County Administrator hired since the election of Duce Minor to the Board, opened by saying that he had assembled a team to get an idea of how big the problem is and what would need to be done about it.

“We have a pretty good idea of what the number is that needs to be offset,” he told the boardroom.

Jay Parke, an auditor with the CPA firm Walker & Armstrong who has worked with the County before, then gave a full presentation that set out the financial situation in stark terms.

“What we’re saying is that there’s a real, immediate need to tackle some challenges that we have,” Parke said. “Some of these issues that we’re dealing with have actually been out there for many years.”

Although the County’s General Fund is running a positive cash balance above $4 million, it is more than canceled out by serious deficits in other funds, many of which the General Fund is ultimately responsible for covering. Because the County’s money is pooled together, some funds have been subsidizing others.

Many of the County’s Special Revenue Funds have been allowed to carry negative balances from year to year, leading to an accumulated current deficit total of around $6 million. Programs like the Monsoon Emergency Fund (-$861,589 ‘in the red’), the Rabies Control Fund (-$307,506) and the La Paz County Park (-$491,753) all have their own story to explain why they are running a negative balance, but all contribute to the hefty total.

Many programs are generally expected to run a deficit, and are expected to be covered by the General Fund, but money must be transferred from the General Fund to subsidize them. When the transfers don’t get made, sometimes for years in a row, the deficits in those programs continue to grow. The La Paz County Health Department is a good example of this, Parke said, because it is supposed to be covered by the General Fund but transfers have not been made, and it is currently running an accumulated deficit of $892,670.

The General Fund must also cover the costs of programs that are grant-funded or reimbursed from other agencies while they are waiting for the money, something which Minor said should not be happening.

“We like to talk about grant money,” he said. “Well, where I come from, it’s not a grant until we get the money. If you get it approved and you spend the money, that’s General Fund expense until the money comes back. That has to be addressed.”

As an example of this, Parke says the Monsoon Emergency Fund should be reimbursed by the Arizona Department of Emergency Management.

“The state owes us money,” Parke said. “The state knows they owe us money and it’s taking a while to get that money. But if we have a deficit of $860,000, for this County of La Paz, you don’t have a whole lot of reserves to begin with. So when the state owes us money, this has a really, really, really big effect on our cash flows.”

A list of inactive Special Revenue Funds was also released, showing deficits that in some cases date back almost 13 years and total over $1.5 million, part of the $6 million.

The La Paz County Jail District was another big topic, which is currently running a separate negative balance of over $4 million.

“Since 2013 the Jail District in particular has accumulated a fairly substantial deficit that is something that the County will need to address,” Parke said. “The jail district is borrowing money from the general funds in order to continue operations. This is something that’s happened relatively quickly with respect to the Jail District.”

The most oft-cited reason for the jail’s deficit, which has accumulated since 2012, is that the federal government, which historically pays the County to take federal inmates, has not been sending inmates to La Paz County, so the costs of running the jail are falling on the County itself significantly more than it did in the past.

Parke also drew attention to the fact that the County has been using its line of credit to pay its bills for the first time.

“The County has a $1 million line of credit, and starting in 2015 the County started using that line of credit,” he said. “So what that means is we are basically borrowing money to meet payroll and pay vendors and basically pay our bills. [In 2017] we continue to use that line of credit and currently we have outstanding accounts payable as well as a fairly substantial balance.” That balance is reportedly around $500,000.

Minor ran on a platform of transparency and fiscal responsibility, saying repeatedly during his 2016 campaign that the County’s finances were in trouble. He also vowed to vote to remove Dan Field as County Administrator, who then stepped down after the election in December and has now been replaced on an interim basis by Smith.

Minor now joins incumbents on the Board D.L. Wilson and Holly Irwin, who came in for some criticism on Tuesday for allowing the financial crisis to escalate.

County Assessor Anna Camacho said she was very upset as a taxpayer. “I’m sorry I’m going to put this on you but remember this, you guys are also responsible,” she told the Board. “Maybe not [Minor], you weren’t here, you’re a newbie. But you guys are responsible. You are supposed to be watching.”

Irwin, who as a third-term Supervisor has been on the Board the longest, responded: “I’d like to intervene here because Robert, I do appreciate what you’ve done in the short amount of time, I’m sorry we didn’t have that for all of you in the past, however, I’m hoping that we can continue to move that forward, that way you do see what’s going on. There’s certain things I was just made aware of myself, so I’m just letting you know. You can shake your head all you want, that’s a fact. Okay?”

D.L. Wilson also responded to the criticism. “I understand what you’re saying,” he said. “I’ve been here 4 years. Frankly I’m embarrassed that we’re in this condition. So I’ll accept my part of that responsibility. I think we have a great team here. I have faith that this team will work together to resolve the issue. We’ll be looking for any and every idea that you can come up with.”

“There are other failures that put us here,” Smith said. “It’s not just a money problem. We do have to fix the financial problem, but there’s underlying managerial and performance processes that we need to tune up.”

He went on to say that the County has some “organizational dysfunction” that he believes are the cause of the financial problems as a symptom of a bigger need for change. Personnel policy, regulatory issues, process and reporting and investments in Information Technology were all mentioned as being in need of repair or overhaul, together representing what would be essentially a fundamental makeover for the County as an entity.

By March, Parke said there would be a detailed written recovery plan detailing the solutions available to the County, which he said would represent “a lot of work” for the County.

Smith’s estimate is that the County needs to save $5.3 million per year for 5 years to break even and create appropriate reserves. He admitted that this is a significant jump, but said he thought it was necessary.

Meetings with departments were being scheduled immediately, with some departments reportedly meeting this week about what can be cut from their budgets. Other possibilities mentioned include revenue bonds by increasing the jail excise tax, selling County real estate assets and leasing them back to generate cash, or borrowing money from the bank. In addition, recently elected Sheriff Bill Risen said his office is diligently looking at the potential of getting federal inmates back to the jail again.

Smith: “It’s doable, we can make this happen, but things are going to have to change. We can’t continue to do the same things we’re doing today and effect this kind of an impact on our finances. And I hate to say it, but some things are going to be uncomfortable.”

27 comments

  1. Alicia Shillito

    Keith Shillito, Andrea Hoff Roberts

  2. Lillian Stulce

    I’m surprised there is no mention of possible inappropriate accounting practices.

  3. How can you be on the board for two terms already and NOT know this? Sounds like the past board had their heads in the sand. Did Field really hide things that well? It sounds like to me it was just easier to sweep under the rug. Thank you Duce for putting your foot down and making these two other board members open their eyes. Let’s get this county back in the order it should be in. People are getting promoted and NOT getting the proper pay for that new promotion. These board members need to NOT get any pay increase an maybe should re-evauate their pay scale and scale it down. Why not start crunching money going out from the top instead of maybe having to cut more jobs? I can see that coming soon.

  4. Well well well. Thats what happens when u hire people that cant do the job. Remember the supervisors have no knowledge or experience at there job. You must have a good administrator to run the county. Maybe in 5 years the county will be solvent. I love how everytime we ger a new deputy dog aka sheriff they cant wait to make chsnges with the uniforms

  5. Candyce Kidd

    Hollie Lucas is that u lol

  6. Nathaniel Cooper

    I’m sure all those new cop cars last year were needed 🤕. Does that come out of the city budget? How on earth can this town be so behind when representatives themselves say they don’t earn that much money?

  7. Parker Live Updates

    Lillian- That may be part of the story, but it wasn’t a focus of this particular meeting. There will definitely be followup articles on this topic. Thanks.

  8. Joe Duran

    That’s la paz county not town of parker

  9. Oh wait. Didn’t the “stupid” recall folks in 2006 say this was gonna happen? I think they spelled it out to the T. And here we are and folks are surprised? Holy cow. This isn’t a NEW story. The supervisors knew all about this. Like the guy said this isn’t a NEW problem it has been going on since Fisher and Edey decided to sue and millionaire and pretend he was an impoverished fool. Jokes on you Low Pay County. Holly is a 3 term supervisor and said that she was JUST learning this. Yup, thats your rep Quartszite. She voted for the bonds. And now we are ALL screwed. Congrats.

  10. Just out of curiosity, how is the Rabies fund so far in the negative? Is there an epidemic there we should know about?

  11. Why these irresponsible people want to spend the money they hope to get, instead of the money they have is beyond belief! The rest of us would be in jail for this sort of incompetence!

  12. Tim I may be wrong, but I think ‘Rabies Fund’ may mean ‘Animal Control’, in which case it’s the whole department. Not 100% on that though.

  13. Betty Dresselhaus

    Randal Dresselhaus Donald Dresselhaus

  14. Alan Nelson

    Replacing 200,000 mile vehicles is a MUST DO item. The liability on the County for excessive miles, unsafe police vehicles is tremendous. A vehicle failure while responding to an emergency doesn’t do anyone any good. A plan, put in place many years ago, was to replace 5 vehicles every year. That would ensure that patrol vehicles would be no more than 5 years old, when taken out of service. That plan went out the window due to budget issues, and there are vehicles out there many years older. My issued vehicle was a 2007. I retired in 2015, but that same vehicle is still in use. There are patrol vehicles older than that still in use.

    The vehicle in the SO wreck article, a few below this one, is a 2007 that had close to, if not more than, 200,000 miles. If it was caused by a mechanical failure, there is real possibility of legal action against the County.

  15. Nathaniel Cooper

    Awesome, thank you for your detailed response. I actually appreciate that you responded to give me the facts i need to actually understand what was going on.

  16. Wedostupidright

    supervisors just don’t care about the people of this county. Been raping us for 20+ years and nobody cares. When we have a goverment of the people the people need to pay attention. Or this. Get ready for the real pain. 25% furloughs will be just the start. We might be down to a 1 day work week soon!!

  17. Candi Evans

    Dan Fields is mainly to blame for the condition our finances have been in over the last several years. Why have these board members not gotten rid of him years ago? It’s not like he was sweeping it under the carpet. ya all knew what he was doing.

  18. My hat is off to Duce Minor and Robert Smith for finally exposing the fraud and criminal conduct that has been going in this town and county for over 2 decades. The “local” crooks have always included ######## ############## ########### ############ ########## ############ ###########, to name a few, as well as some recent newcomers.
    For the current board to act “surprised” is ridiculous. This is not the first time this kind of activity has plaqued Parker and La Paz county–did everyone forget that the county and hospital had similar problems over 10 years ago? and let us not forget the Yakima fiasco in 2010 that resulted in the La Paz taxpayers being stuck with over a $12 million dollar judgement to repay. It’s time we , as taxpayers and residents of this county, stood up to the few people responsible for this mess and hold them accountable for both criminal and civil acts. Then, and only then, will the county be able to move forward.

  19. BC- I edited your comment for libel. You can’t name a list of people and call them crooks! Make your point without the ad hominem, it’s much better that way.

  20. Sam, You don’t wear those uniforms therefor you don’t know what they’re like in extream heat and how they may not be the best or most comfortable material for certain tasks Deputies need to do on their jobs. Directing traffic in 120 degrees due to a traffic collision or power outages at traffic lights is better in the proper material for uniforms to avoid dehydration or heat strokes. Conducting tactital details deputies need to have good movement with all the gear they carry on them so not to get injured and be out on industrial claims. Most of our past Sheriff’s have only considered “looks” as in how professional our employees look to the public. I believe funds for uniforms have to be spent on uniforms and can’t be alocated to other debts. Maybe someone on the department can confirm that. The last administration didn’t care a bit of safety or comfort.

  21. I hope all you district 3 residents are proud of your choice of Supervisor you voted into office. How many times has Holly said, she didn’t know? REALLY!!! Just where has she been last 8 years? Just like a certain new LT blames the past Sheriff for all the bad decisions. Maybe you district 3 residents should start thinking recall on your supervisor. AND D.L., you have so much past experience from APS in MONEY making decisions. Which was the voters main reason for voting you in vs someone who has only run hair/nail salon and sold Mary K. What the heck happened from the time you ran APS and got voted in as a board member? Almost think Fields had at least 2 relected suprevisors brained washed.

  22. Regarding uniforms for Deputies, each Deputy, including jail Detention Officers, receive a set uniform allowance every quarter (3 months). Out of that, they must purchase, maintain or replace all uniform items, including leather “gun belt” items, hand cuffs, baton, practice ammunition, etc. The only things supplied by the Department are ballistic vest, duty firearms, holster, magazine holder, and duty ammunition. Everything else the individual deputy has to purchase. And that includes the initial (new) deputy uniforms. The now phased out uniforms cost nearly 3 times as much as previous or currently authorized uniforms, meaning Deputies would have to dig into their own pockets to pay for them. This was especially hard on new Deputies who had to buy several complete sets, including gun belt, etc., without anything more than the initial uniform allowance.

  23. Although you think your new County administrator is competent and there to help you, Beware! He was a HORRIBLE manager in Chino Valley-pitted managers against each other, went after staff in an inappropriate fashion. beware…

  24. Wedostupidright

    Yo John you say that BC is speaking libal? They were elected officials in their capacity as such. You can’t LIBEL them in respect to their office as they are PUBLIC OFFICIALS. Look at all the LIBEL against TRUMP! Is that LIBEL. You have used that BS to protect your father in law Clifford Edey since 2007. Where was the LIBAL when KLPZ was speaking of the people behind the “STUPID” recall in 2006?? HUH??? Or when KLPZ let ONLY the supervisors Edey, Fisher and Scott talk about the “STUPID” judgement by the La Paz county jury that came to the conclusion in 2007 AGAINST the county? Where was your concern then? Yeah KLPZ is the LAST Medium of Freedom! PROVE IT!!! Or will you delete this to and call it LIBEL??

  25. Those are a lot of thoughts. Since I don’t much care what you think about our comment moderation process, I’ll just let your rather weird little rant speak for itself. Have a good night. 🙂

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