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State May Withhold Superior, Mammoth HURF Funds

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Charges by the Arizona Office of Auditor General (OAG) that the towns of Superior and Mammoth misdirected funds targeted for road, bridge and transportation projects to other municipal uses could soon result in the state withholding further highway funds to both communities. Without such funding, local construction and maintenance of streets and bridges could grind to a halt.

Both towns, plagued by declining populations and tax bases, reportedly loaned these highway funds to cover shortfalls in the budgets of other municipal projects. But because of the economic downturn in late 2008, the two towns were unable to immediately pay the monies back into the highway fund.

OAG uncovered the loans in a 2011 audit, declared them outside the scope set by Arizona law, and has ordered the towns to restore the redirected funds. But due to continued revenue shortfalls, Superior and Mammoth have been unable to restore these funds, prompting OAG to ask the Arizona Treasurer’s Office to suspend sending further highway funds, which are derived from state and local taxes, until the lost monies are repaid.

For Superior, the loss of highway funding would put an $18K per month hole in the town budget.

With such funds, Superior maintains 46 miles of road and Mammoth 36 miles of road in Pinal County (out of 4,229 miles total).

According to the 2011 audit, Superior owed $1.5M to the various highway funds which it had used to pay for excess grant expenditures that it made over grant reimbursement monies it received. This sum has since grown to $2.6M, though the exact amount is uncertain as Superior has yet to complete annual financial statements for 2009 and 2010, OAG said.

Mammoth likewise was cited by OAG in 2011 of owing $389K on highway-targeted funds the town loaned itself to cover cash deficits in its general and grant funds. The owed amount has since grown to $646K, OAG said.