County Slaps Eac With $5.9 Million Demand

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Almost $6 million is at stake in a war of words which is threatening to turn into a legal battle between Gila County and Eastern Arizona College.

Gila County Attorney Daisy Flores initiated the latest volley with a certified letter mailed Oct. 2 to Lois Ann Moody, president of the governing board of the Graham County Community College District. Because Gila County is not large enough by state standards to have its own community college district, Graham County had been the contractor of the Payson and Globe campuses from 1968 to its official end last July 1.

Since that time, Gila County began a new association with Pima County Community College District, resulting in the transformation of EAC into Pima Community College Rim Country Learning Center.

The central issue of Flores' letter is EAC's position that funds received from the state or county for educational services provided by EAC belong to EAC.

EAC provided educational services to Gila County for a set contract amount and the state funded a portion of the programs. EAC then hired teachers and purchased equipment to provide the services. After incurring those expenses, however, the EAC administrators have thus far failed to repay the county an amount beyond the amount spent funding Gila County programs.

According to Flores' letter, the tally owed consists of a $1 million cash carry-forward, $3.4 million in state aid, and $1.5 million in personal property, for a total of $5.9 million.

By law, according to Flores' letter, tax funds approved for this purpose may not be used in any other way.

"The voters did not then, and certainly would not now, vote to levy a tax if that money went to Graham County to be spent on anything other than a program in Gila County," the county attorney wrote, and doing so represents "unjust enrichment at Gila County's expense" and "a breach of the intergovernmental agreements between EAC and Gila County."

Six months ago, EAC Vice President Brent McCuen in a May 3 letter sent to Gila County Administrator Steve Besich appeared to agree with Gila County's position.

"All revenue generated by Gila County operations is allocated in support of programs within Gila County," McCuen wrote in the May 3 missive. "This includes state aid, tuition and fees, secondary tax levy support, and all interest earnings on these funds."

Neither McCuen nor Flores returned phone calls by press time. But Besich was at a loss to explain McCuen's apparent flip-flop.

"Quite honestly, because I'm on this side of the fence, I can't understand any hesitation when it comes to relinquishing control of any Gila County property," Besich said Wednesday. "If you go back to the contract that the (Graham Community College District) refused to sign, we left every program, job, senior benefit and activity in place."

That contract, presented to EAC officials by the Gila County Board of Supervisors last June, proposed two changes for the 2002-2003 school year:

Reserving $125,000 for the Gila County Community College Advisory Committee to use for audits, master plans and other expenses.

A clause stipulating that monies collected in Gila County stay here in the event that the county and EAC ever part ways.

EAC's position was that the county is making unnecessary changes to a longstanding working arrangement that has stood the test of time.

EAC agreed to the first change, but not the second.

"All the (Gila County Board of Supervisors) asked was, if they, we or the provisional governing board decided not to renew that contract, that they would acknowledge based on what they had been telling us for the last 30 years that all Gila County assets would remain intact and in Gila County for the benefit of Gila County citizens," Besich said. "They basically answered, 'No. We're going to keep that $1 million in cash that we've got holed away, and we're going to keep all the state aid that was generated by Gila County activities.'

"I think our legal theory is very clear," Besich said. "The county attorney and our outside counsel have very thoroughly researched this issue."

To assert a claim against Graham County, Arizona law requires Gila County to file its claim Flores' letter with the Graham Community College District Governing Board.

In November, Gila County voters will be asked to approve a provisional college district which the county is entitled to form under state law. While it will still be necessary to contract with another full-fledged community college district, as a provisional district, Gila County would no longer have to pay nonresident tuition.

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