Supervisors to decide on holding $50M loan for 30 days
The Yavapai County Board of Supervisors during a special meeting Thursday plans to discuss and possibly vote to delay returning a $50 million construction loan that it signed more than a year ago.
The board voted 2-1 in January to return the loan May 15 and downsize its construction program because of the declining economy. Board Chairman Tom Thurman asked for the special meeting to discuss holding the loan until June 15.
"Chairman Thurman is negotiating with the banks for a 30-day extension," County Administrator Julie Ayers said Tuesday. Thurman wants to keep half of the loan and return the other $25 million, she said.
"The problem is that there is no provision in the loan agreement to return only half," she explained.
In April 2008, the board signed a $50 million lease-purchase agreement as part of the county's capital projects construction program. A large percentage of the loan was to pay for a new juvenile detention center and two government office buildings along Prescott Lakes Parkway near its intersection with Highway 89 and Sundog Ranch Road.
Thurman's proposal is a reversal of his previous stance about the loan. Thurman and District 3 Supervisor Chip Davis consistently agreed that they would rather pay to finish construction projects already started, such as the new Superior Courthouse in Cottonwood, and eliminate other projects under a "pay as you go" philosophy.
District 1 Supervisor Carol Springer disagreed with that philosophy.
She voted against returning the loan because she did not like the idea of spending the county's reserve cash. She previously called the approach "fiscally irresponsible" and told Thurman and Davis that they were guiding the county toward financial risk.
Since Thurman and Davis voted to return the loan, she has voted against agenda items that dealt with construction projects.
Thurman and Springer were unavailable to comment for this story.
The loan costs county taxpayers $1.1 million in interest every six months. Ayers said that she is not sure that if the banks grant the board a 30-day extension on the loan, if they also would waive the extra month of interest payments.
"We are prepared to go either way Friday depending on which way the board votes," Ayers said. "We have everything ready to return the loan."
The board meets at 9 a.m. in the first floor supervisors' video-conference room, 1015 Fair St., Prescott. The meeting is open to the public.