College abandons for now strategy announced at October 2024 meeting that it would increase annual property tax rate by one percentage point 

Readers may recall that at its October 2024 District Governing Board meeting, Yavapai Community College (YCC) leadership informed the Board of its plan to adopt an annual strategy of requesting a one percent increase in County property taxes. According to the College, this incremental approach was intended to soften public reaction to periodic tax hikes.

However, within a matter of months, the College appears to have reversed course. At the April 22 Board meeting, Dr. Clint Ewell, Vice President of Finance and Administrative Services, indicated that the College would not seek a property tax rate increase for the 2025–26 budget year.

The reason for this strategic shift remain unclear. Some speculate that the decision may be linked to political considerations, particularly with District 5 Representative Steve Bracety facing re-election in 2026. College-affiliated incumbent Ray Sigafoos lost his seat in 2024, possibly due in part to voter dissatisfaction with his consistent support for tax increases.

Another possible reason is that College leadership recognizes the lack of sufficient support on the Board to pass a property tax rate hike amid the current political climate.

It is noteworthy that at the April meeting Mr. Bracety stated he would not have supported a tax rate increase if one had been proposed, citing recent conversations with business leaders who expressed concern about the economic impact of tariffs on consumers. In that context, he said, a tax rate increase would have been untenable.

Inflation, last year’s increase, living on fixed income, and the camp purchase is a luxury are a few of the reasons given for opposing the increase

The Yavapai Community College District Governing Board is receiving significant opposition from Yavapai County residents regarding the proposed 3.4% tax rate increase. The Board will vote on the proposed tax rate increase during its public tax hearing on Tuesday, May 21, at 1:00 p.m. at the Rock House on the Prescott Campus. Here are a few samples from the many emails being sent to the Board of what opponents of the tax increase are saying:

“We are retired couple living on a fixed income yet scramble to find the funds to live in today’s economics. We simply cannot afford any tax increases. . . . How can you possibly think we can survive?”

“With the rise in inflation our monthly expenses have almost doubled. However, as retirees on a pension, our income has remained the same. Although we support education, this proposed increase for a land grab, will not directly impact education.”

“While I think it’s honorable that you want to provide affordable housing to students and faculty and give faculty raises, why don’t you raise the tuition at the college so the people who actually use the college pay for their expenses?  That’s what I did when I went to college.  I paid tuition, room and board which paid the college’s expenses to provide those services to me.  Why burden retired citizens?  This has got to stop now.”

“This tax is a financial burden on me and my husband. We are retired and on a limited income.”

“This tax is a pocketbook issue for hundreds of our residents in Yavapai County. If anything, given rising housing costs, surging inflation and recessionary fears, this proposed tax does not help build a partnership with Yavapai College.”

“I am concerned that this tax increase which taxpayers don’t get to vote on will kill the tax increase likely being proposed for the City of Prescott for fire and police likely to be on the November ballot.    These increases surpass current inflation and their regularity has to change.  I think increase should also align with student growth. I don’t believe the growth has justified the increased.”

 “The college cannot continue to pass these increases on to the property owners.  Cutting the ADMINISTRATION and their salaries would be important to consider.”

“I feel strongly that purchasing the Prescott Pines Camp is a “luxury” instead of a requirement for the college.” 

So far, the Blog has found only one vocal supporter of the proposed tax rate increase. That person wrote, in part that: “I am 100% in support of the moves Yavapai College is making to better support their students, the education being provided, and the goal of helping with our dire housing situation. The community members at large that are ranting about the taxes are the ones that live comfortably and have zero concern for their own housing needs and really demonstrate a cold hearted attitude to the youth and educators in our community.” 

Yavapai Community College considering this tax rate increase, which follows on the heels of last year’s 4% tax rate increase

The Yavapai Community College District Governing Board meeting will be held at the Sedona Campus on Tuesday, March 19. The session will commence promptly at 1:00 p.m. Residents are invited to voice their concerns or opinions to the District Governing Board during the call to the public, typically held at the outset of the meeting.

This meeting presents an important chance for community members to weigh in on the proposed 4% cumulative tax rate increase for next year’s budget. Your input matters, and this forum offers a platform for your voice to be heard.

Please note that in order to accommodate all speakers, the Board typically limits public comments during the open call to three minutes per person.

Revenue bonds versus General Obligation bonds

Yavapai Community College employs two primary methods to secure additional funding for major capital projects.

The first method involves the issuance of General Obligation (GO) bonds, a traditional avenue that necessitates a county-wide campaign to explain the necessity for such funds to Yavapai County voters. This approach mandates a transparent explanation of why substantial investments are directed toward certain areas within the County, potentially at the expense of others.

Approval or rejection of the GO bond request occurs through a county-wide election. While this route offers the potential of providing substantial funds for a variety of capital projects, there’s always the risk of taxpayers withholding approval.

The last time the Community College sought a GO bond was in 1999.  That was for $69.5 million.   The pros and cons of expending that much money for a bond to support capital construction and renovation was discussed and eventually approved in a County-wide election. 

The 1999 bond contained provisions for capital projects at the Sedona Center and the Verde Valley Campus, while a majority of the bond issue went to the Prescott side of Mingus Mountain.  It is noteworthy that this bond was fully paid off by taxpayers via a secondary property tax in 2022.

The second method, known as the “revenue bond” approach, allows the College to avoid much public discourse, if any, when targeting revenue bonds for specific renovation or construction projects. This process requires only three votes from the District Governing Board for approval, sidestepping the need for public explanation and validation. While advantageous for the College’s executives due to its ease of implementation, this method is subject to oversight solely by the District Governing Board, with minimal public awareness or input.

A revenue bond issue needs only three votes of the five member District Governing Board. Practically, because most of the major projects needed for capital funding support are on the west side of the County, the three member-majority representing the  west side of the county have little difficulty in approving a revenue bond issue.   

Difference in payment:  Revenue bonds, unlike GO bonds, are repaid from sources such as tuition, fees, rentals, and other charges, rather than directly from taxpayer funds. GO bonds are paid through a secondary property tax.

However, the repayment method associated with Revenue bonds indirectly impacts County taxpayers. It occurs because of the potential revenue reallocation of sources of revenue within the College’s budget. This shift may necessitate compensatory measures, such as increasing the county-wide tax rate, subject to approval by the District Governing Board major of three, without formal public recourse.

Currently, the Community College is considering issuing a $14 million revenue bond to finance anticipated 2024-2025 capital expenditures. It is also considering extending the payoff period of existing revenue bonds. The decision to extend the payoff period would prolong the financial obligation, but give the Community College additional cash. 

It is noteworthy that the current revenue bonds were anticipated to be paid off within the next four years.

It is also noteworthy that there’s a proposal to raise the property tax rate incrementally by a cumulative total of 4%, signaling potential future implications for County taxpayers.

SUMMARY: Yavapai Community College’s methods for raising money for major capital projects:

1. General Obligation (GO) Bonds:
   • The traditional approach involves issuing GO bonds.
   • However, there are specific requirements for doing so along with practical considerations:
   • A county-wide campaign of sorts is necessary to explain the need for funds to voters across Yavapai County.
   • Community College executives must justify why funds are allocated heavily to one part of the county, potentially affecting another part.
   • Voters then approve or reject the bond request in a county-wide election.
   • The last GO bond sought by the Community College was in 1999, totaling $69.5 million.
   • Despite risks, it was eventually approved in a county-wide election.
   • Notably, the 1999 bond funded capital projects at the Sedona Center and the Verde Valley Campus, with a majority going to the Prescott side of Mingus Mountain. Taxpayers fully paid off this bond via a secondary property tax in 2022.
2. Revenue Bonds:
   • The “revenue bond” approach allows pinpointing specific renovation or construction needs.
   • Approval requires only three votes from the District Governing Board.
   • Unlike GO bonds, there’s no need to explain to the public or hold a public vote.
   • This process  currently appears favored by Yavapai Community College executives for obtaining capital dollars.
   • The only check on revenue bond issuance is the five-member District Governing Board because it requires only three members to approve the issuance.
   • The only check on increasing the tax rate to make up for money now going to pay off the revenue bonds from non-tax sources is the District Governing Board.  It takes only a majority to approve a tax rate hike.

Follows on the heels of a 5% tax rate increase approved by District Governing Board in May 2023

Yavapai Community College Vice President of Finance and Administrative Services announced at the November 26 District Governing Board meeting that the administration will ask for a two percent tax rate increase in 2024. The increase is needed, according to Dr. Ewell, to help provide funds for an estimated $3.36 million in additional revenue.  If approved, the tax rate increase will add about one-third of the additional revenue the College says it needs.

If approved in May 2024, this will result in a total increase of seven percent in local property tax rates over two years that is associated directly with the College. This past May, the District Governing Board approved a 5% property tax rate increase. The administration also announced that it was seeking approval for a five percent tuition increase.