Council Oks ‘Emergency' For Project Bonds

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Voting 6-1, the Payson Town Council has obligated sales tax revenues to pay a $1.5 million, 15-year bond for a new maintenance building and hangars.

The action at the Jan. 30 council meeting included an emergency clause, which protects the issue from a referendum by the public.

In October, the council discussed a similar project, which also included the purchase of 12 acres of property belonging to the Garcia family bordered by Main Street and South McLane and the Payson Humane Society building.

The October proposal was approved, but without the emergency clause. A referendum against it was organized and the council rescinded the action.

Now, the proposal is for only a new public works maintenance building and the hangars.

According to Chief Financial Officer Glenn Smith, the actual building costs will be $1.15 million. The balance is for bond costs.

The public works maintenance building will cost $750,000, while the hangars are expected to cost $400,000.

The only vote in opposition to the action was by Mayor Ken Murphy, who said he was not in favor of the emergency clause.

While the emergency clause may protect the proposal from referendum, there has already been talk in the community about recalling the council members who approved the measure.

Marla Johnson reminded the council that 772 residents signed the referendum petition. She then asked why was there an emergency for these projects.

The primary argument for the emergency clause is to take advantage of the interest rates.

"Further delay will result in increased construction expense and increased financing costs. In fact, the interest rate on the airport went up from 5.250 percent to 8 percent. The interest rate on the public works shop went from (a range between) 1.750 and 4.8 percent to 2.1 and 4.8 percent," Smith wrote in the memorandum to the council describing the proposal.

Councilor Robert Henley said with the emergency clause, the bonds can go out in 30 days; without it, providing there was no referendum, they would go out in 60 days.

Additionally, the quick action will get the projects off the ground faster and the hangars could bring in estimated revenue of $1.5 million in rent. Pilots wanting hangar space are already on a waiting list and have made down payments.

"The public works building is a no-brainer. People want streets. We need a building to house the equipment so more money can be sent into streets instead of equipment maintenance. The hangars will pay for themselves," Henley said. "We need the two projects (for the larger bond) for a more efficient bond sale.

"We need to move ahead on this to take advantage of interest rates. There will be no impact on taxes, it is a pledge of sales tax."

Paul Pitkin backed up Henley's assessment. He said having a maintenance building will cut costs and save money.

"Have a mechanic on staff to take care of the town vehicles and you have better control of what's being done," Pitkin said. "Build the hangars. About 90 percent of the hangars around the state are owned by municipalities. The airport can be an economic engine for the town. There will be an airplane waiting to go into it as soon as it's built."

Councilor Dick Reese said he did not believe the town should be in the real estate business, but this is a different situation.

"I look forward to seeing the improvement to the airport," he said. "The public works building is no contest."

Roger Schwartz said he had no dispute with the projects, but the emergency clause gave him some concern.

"This is not an emergency. The biggest reason (for the clause) is to circumvent a referendum," he said. "We are in a recession, and very nearly a depression. We are looking at the threat of war. This is not the time to take on long-term debt. The aim is good, but it is not a good idea financially at this time."

The public works maintenance building will be built at 1001 W. Airport Road. It will have a ground floor of 5,242 square feet and a second floor of 2,400 square feet. There will be three vehicle maintenance bays, one with a grease pit and one with a hoist; lubricant storage room; machine shop room; compressor room; parts and supplies storage; an office for the head mechanic and rest rooms.

The site of the current maintenance yard, on the north end of Green Valley Park will be turned into additional parking space.

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