Tusayan Home Rule ballot proceedings begin, council discusses $2M capital improvement loan
TUSAYAN, Ariz. — On May 6, the town of Tusayan held the first of two public hearings regarding the adaptation of an alternative expenditure limitation, otherwise known as Home Rule.
The hearings are required by the state of Arizona for the purpose of including the Home Rule option on the ballot this November. If the town votes in support of Home Rule, the town council will be able to access its current available savings, estimated at $9 million, beginning in fiscal year 2021-22. These funds will be used to fund a variety of programs and projects that are currently on hold because of lack of funding.
Historically, Tusayan has been counted among an estimated half of towns and cities across the state who have operated under Home Rule, which is a provision that allows a city’s council to determine its own budget every four years versus operating under a state-imposed limit. The limit is based on a formula created in 1980, when Arizona voted to amend the state constitution to keep cities’ spending in check.
After an error in paperwork in 2018 caused the town to lose its Home Rule option of just under $15 million, the alternative expenditure limitation went to a special election in 2019, where it failed to pass.
The town is currently operating under the state-imposed $1.4 million budget. The town lost its ability to provide subsidies of up to $40,000 to a variety of educational programs and scholarships at the Kaibab Learning Center. It also caused capital improvement projects such as the Ten X Affordable Housing Development to be placed on hold indefinitely, as necessary services such as law enforcement, sanitation and other public health and safety programs make up the majority of the current budget.
Normally, Home Rule can only be put to vote every four years, however, a law stating that a citizen initiative referendum of 11 persons may allow for Home Rule to be placed on a ballot in lieu of renewal.
In the meantime, the town has been pursuing a $2 million loan to fund “shovel ready” capital projects such as the Community Trails Plan, as well as other improvements relating to water issues.
“If you finance capital projects (via loan) that is outside of your state-imposed spending limit,” stated Town Manager Cynthia Seelhammer.
Therefore these projects will not affect the current budget in terms of immediate expenses.
On April 6, the council announced the loan has been secured with Zions Bank, which is headquartered in Salt Lake City, Utah. Projects slated to begin once the funds are available will likely receive funding within the next 6-8 weeks, according to Seelhammer.
Tusayan Mayor Craig Sanderson suggested the loan could also offset expenditures relating to COVID-19, as the town plans to access up to $800,000 of its savings under the current state of emergency. Under a state of emergency, the town is allowed to exceed the state-imposed limit for the purpose of ensuring public health and safety.
“(The town) could exceed it (the state-imposed limit) from an emergency standpoint, but we don’t need to, by virtue of this loan. We are able to spend a significant amount of funds and still stay within the Home Rule limitation,” Sanderson stated.
In other words, monies that were previously part of the budget for capital projects would not have to be utilized from the town’s fiscal budget, as the loan would take over those expenditures for the remaining year.