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Joyce Clark Unfiltered

For "the rest of the story"

When my blog site was reconstituted after being down for two weeks four recent blogs disappeared. This is a reposting of one of the four “lost” blogs.

Disclaimer: The comments in this blog are my personal opinion and may or may not reflect an adopted position of the city of Glendale and its city council.

For the next 6 weeks or so, the city council will be focused on Glendale’s budget. There will be a series of workshops devoted to it. The first one was held on March 7, 2017 and reviewed revenue projections, sources of the city’s revenues and the areas in which those revenues are spent. Keep in mind, per state law, Glendale and every other municipality must adopt a balanced annual budget. What does that mean?  That means the total of the city’s expenses must be shown to be covered by the revenues it receives.

There are 2 parts to the city’s budget: its General Fund budget and the Enterprise Funds’ budgets. The General Fund budget covers all expenses incurred by the city except for: Water, Sewer, Sanitation and Landfill. These 4 areas are called Enterprise Funds and they get their revenues from rate payers or users.

The pot of money for the General Fund has 2 components: all revenues and a fund balance (a rainy day fund). The money is paid out to 5 areas: expenditures, operating costs, the Capital Improvement Plan, our debt payments and a contingency fund. Except for debt payments which are a fixed cost, the other 4 areas compete against one another for the available money.

Where does the city get its money? From 5 sources:                                                                        

  • Sales tax                      44%                   
  • State shared revenue    26%                  
  • Other                           17%                  
  • Transfers In                  11%
  • Property Tax                   2%

There is one special note about the sales tax the city collects and that is, it no longer manages or collects it. A year or two ago, the state legislature, in its wisdom, mandated that it would collect every city’s sales tax and distribute those funds collected to each city. Now Glendale has to pay the state nearly half a million dollars to collect its sales tax…a new expense that Glendale never had before. To add insult to injury, this program rolled out completely in January of this year, 2017. To date, the state has only collected and dispersed approximately 66% of the money Glendale itself usually collected. I contend that in addition to our regular budget planning for next year, the city should be planning an alternate budget in case the worst happens and it does not receive all of the sales tax from the state to which it is entitled. 

There’s also another gimmick the state uses and that is with regard to state shared revenue. The largest component is state shared income tax. Every year we pay income tax to the state but cities do not get their share the following year. Instead the cities are paid two years later. That means the income tax you pay this year for 2016 won’t be seen by the cities until 2018. Think of the interest the state makes on millions and millions of dollars in income tax for that extra year until they disperse the money to the cities. 

There are no certain figures for expenses within the General Fund budget for this year as we are in the process of crafting this year’s budget. In last year’s Fiscal 2016-17 General Fund budget, here were the areas of expense:

  • Police department                   43%
  • Fire department                      22%
  • Other                                     16%
  • Non-departmental                     9%
  • Public Facilities, Rec & Events     6%
  • Public Works                             4%

Note that 65% of the city’s money goes to pay for Police and Fire. When you see the city’s total budget of approximately $500 million remember that only a portion of that is the General Fund Budget (should be an estimated $200 million).  The remainder (an estimated $300 million) is either Enterprise Funds or other special funds, such as the dedicated public safety sales tax or the transportation sales tax and as dedicated funds, cannot be used for any other purpose, such as the General Fund.

Out of a General Fund budget of approx. $200 million, 65% or approx. $130 million is for Public Safety (Police and Fire). That leaves about $70 million in the General Fund to pay for operating expenses (examples: all other employees’ salaries and benefits; our debt payments and our Capital Improvement Plan). Over half of the remaining $70 million (approx. $45 million a year) goes to pay the city’s debt service. That leaves us with an annual General Fund budget of $25 million a year.

As you can see, the city’s annual budget and the processes to create it are pretty complicated. It’s all in the numbers and a basic understanding of what numbers go where.

In Part 2 of Glendale’s budget 101 we will look at the proposed Capital Improvement Program or CIP. This is the budget portion that will be discussed by city council on Tuesday, March 21, 2017 at its 9 AM workshop. This will be televised live on Cox’s cable channel 11.

© Joyce Clark, 2017                 

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This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

On Tuesday, October 18, 2016 the city council had only one item on its workshop agenda…the performance of its Civic Center. The Civic Center opened in 1999 and is now 17 years old. It is a beautiful building. Former Mayor Scruggs wanted it and sold it under the guise of becoming a destination location in downtown Glendale. Has this facility performed up to its expectations? Let’s take a look.

City personnel made their Tuesday presentation based on figures for the last 5 years of the Civic Center’s operation. I have taken staff’s 5 year average and derived estimates that reflect the entire 17 years of its operation. My figures could be a little too high or a little too low as I did not look up the figures in 17 years of budget books. Hence the estimated were arrived at by multiplying the average annual figures times 17 years.

Over the 17 year life of the facility the General Fund Budget allocation was an estimated $11,422,000.00 and there had been an additional General Fund Subsidy over those 17 years of another $4,400,000. The 17 year total of budget allocations and subsidies is an estimated $15,822,000 or an average of $930,000.00 per year. Not included in this amount are the costs of maintenance and repair that have been expended over the 17 year period as staff did not provide any figures relative to this expense.

What kind of revenue does the Civic Center generate to offset its expenses? Over 17 years an estimated $850,000 had been earned from the catering contract and during the same period the Civic Center had earned an additional $6,800,000.  The total estimated revenues over the 17 year period is approximately $7,650,000.

The Civic Center had earned an estimated $7,650,000 over its life span and had cost the city an estimated $15,822,000. It has cost the city an estimated $8,172,000 to keep the doors of the Civic Center open for the past 17 years.

According to the staff presentation over the last 5 years the Civic Center had drawn an annual average of 51,888 patrons or for the past 17 years an estimated total of 882,096 patrons. That averages about 141 patrons per day. However, there are days when the Civic Center has no business and days when it is booked for large gatherings. It should be mentioned that the Center has very little, if any business, in December due to Glendale Glitters. There simply is not enough parking during that period for Civic Center patrons and over the years patrons have not wanted to deal with the traffic generated by Glendale Glitters.

Has this facility fulfilled its promise? Everyone, even staff, says no.  In their presentation staff offered a plan with a new growth goal of an increase of 5% in patronage per year. Since the average annual patronage is 51,888 patrons, their goal is to increase that number by 2, 594 additional patrons this year. They believe they can accomplish that goal because new funding has been allocated to market the Center; there will be enhanced collaboration with the Glendale Convention and Visitor’s Bureau; their absorption into a new department will create new synergy; and there will be an enhanced building maintenance and repair fund. Staff has also asked for authorization for up to 6 community events at no charge; consideration of rental fee adjustments as part of the Fiscal Year 2017-18 budget; and the flexibility to negotiate rental fee packages.

Will all of this work? Everyone hopes so. The jury is still out. City council is willing to give the Center more time.  Staff’s first annual performance report is due in a year. Make no mistake. Challenges remain. Not having a major hotel nearby as well as inadequate parking space during downtown events will have to be overcome, if possible. Add to this equation the Convention Center space owned by the city and managed by the Renaissance Hotel at Westgate is a direct competitor for the same business.

If staff cannot turn the Civic Center around then it may be time for council to consider whether it will ever meet its purpose financially and philosophically. Perhaps repurposing will become its fate. It was originally designed to be a draw for downtown Glendale. A true destination place is exactly what downtown Glendale desperately needs to become more robust and to grow to its potential.

© Joyce Clark, 2016          

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 18 years and 92 days since the city’s pledge to build the West Branch Library.

The media recently reported on Sammy’s questionable spending of tax dollars for trips and meals. Here is the link: http://www.azcentral.com/story/news/local/glendale/2016/03/04/glendale-councilman-sammy-chavira-charges-24k-trips-3-years-taxpayers/78857734/ .

During my 16 years of service as your Yucca district councilmember I spent your tax dollars on pilot projects for the benefit of the entire city and infrastructure improvements in the district. I always tried to be mindful of the fact that it wasn’t my money but the people’s money.

Councilmembers have 2 discretionary accounts. One is for communications/professional development  and the other is for district improvements. I can’t remember every project or improvement but here are examples of how I used your tax dollars:

  • In 1995 I spent $1,387.57 for street identification signs as a pilot project in my district. They are placed lower than most city signs and a hundred feet or so before
    Street identification signs

    Street identification signs

    major intersections. Their purpose was to announce to the driver what street they were approaching. I saw them on trips to Tucson and thought they were very useful while driving in an unfamiliar town. It was a pilot program adopted by the city and today you can see them all over town.

  • That same year I placed two, recycled plastic gazebos, benches and waste receptacles for approximately $2000 each; one in Windsor Park and one in Pasadena Park. The
    Recycled plastic gazebo

    Recycled plastic gazebo

    photo I am using is of a much more elegant gazebo than the ones from 20 years ago. They lasted for quite some time (approx. 15 years) but eventually after years of use they became beyond repair and were removed.

  • In 2002 for $14,356.52 a radar speed trailer was purchased and donated to the Glendale Police Department with the agreement that Yucca district neighborhoodsradar-trailers222[1] could request its use at any time. That same year $2,109.00 went for sidewalk installation and repair for Desert Mirage Park.
  • In 2003 $3,000 was used to purchase an Advanced Life Support Unit for the Glendale Fire Department.
  • In 2008 a surveillance camera was purchased for approximately $1,500 for use in the Grand Canal Linear Park. It was another pilot project designed to improve security and I worked very closely with the manufacturing company. Unfortunately, it did not live up to its claims and was returned with the money being reimbursed.
  • In 2010 in another pilot project, 6 e-book tablets, were purchased (I no longer remember the exact purchase price but it would have been approximately $600 each) and lent to Yucca district residents for several weeks at a time. The purpose was to find out how well they would be received and how easy or difficult they were to use to access the library system to download and read books. They were a hit and were donated to the Glendale library system. The concept was adopted but I am sure the original tablets are so out of date technologically that they are no longer in use.
  • That same year approximately $5,000 was spent to place a graveled gecko design in a retention basin along 83rd Avenue. There are 3 retention basins of just dirt that are the responsibility of the city on the east side of 83rd Avenue between Camelback and Bethany Home Road. Two of them remain as dirt basins to this day.

I did attend National League of Cities Conventions out-of-town or within Arizona. Travel costs averaged between $600 to $900 with the largest expense being a hotel room and registration for a convention. I also was on the League’s Public Safety Steering Policy Committee that generally met an additional two times per year.

I communicated with constituents on a regular basis. I issued two district newsletters per year (spring and fall) at a cost of approximately $5,000 per newsletter. The major costs were printing and postage. I also held a minimum of 2 district meetings per year. Costs for those meetings ranged between $50 to $300. If a school charged a room rental the cost was generally in the $250 range. No more than $50 was used to purchase refreshments for the attending citizens.

My expenditures of your tax dollars as a councilmember were used to promote innovation as pilot projects, to improve district infrastructure or to communicate with constituents on a regular basis. That is quite a contrast to Sammy’s use of your money to travel to D.C. to see the Pope on a TV screen or buying $400 dinners for his bosses including the Phoenix Fire Chief or spending $8,000 on a failed Watermelon Festival.

© Joyce Clark, 2016

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 17 years and 139 days since the city’s pledge to build the West Branch Library.

The cost to host the Super Bowl is estimated at $3.4 million to $4.1 million dollars. Let’s take a look at the revenue earned by the city. The oft touted public mentioning of Glendale as the host city will not be considered. It is an intangible that cannot be quantified. It has been my experience as a councilmember when the city hosted its first Super Bowl in 2008 that whatever publicity there was did not attract any new business to Glendale. Public safety will not be considered. The costs and reimbursements to and for public safety have been related in a previous blog. Instead we will focus on any revenue earned by any Glendale department.

My Public Records Request generated the following information related to revenue earned by the city:

  • The Glendale Media Center provided figures that reflect both the Pro Bowl and the Super Bowl. It seems reasonable to attribute 40% to the Pro Bowl and 60% to the Super Bowl. Total revenue earned less expenses was $8,480.57. Attributing 40% of the revenue earned to the Pro Bowl revenue was $3,392.23. Attributing 60% of the revenue earned to the Super Bowl was $5,088.34.
  • Planning Review (all departments) submitted a figure of $23,297.94 as revenue earned.
  • Permits earned $36,129.39 in revenue to the city.
  • Total Airport earned revenue for the Super Bowl was $12,686.00.

Super Bowl revenue earned as reported by the city for the above areas totaled $77,201.67.

That leaves the burning question of sales tax revenues earned by the city. City provided sales tax figures for January, February and March of 2014 and 2015 are:

City Sales Tax Revenue

Category January 2014 February 2014 March 2014
Retail sales $9,972,625.07 $5,637,641.32 $6,051,941.00
Contracting 745,079.38 518,696.33 616,690.00
Rentals 1,288,183.21 1,231,427.59 1,198,958.00
Utilities 601,681.64 583,784.06 530,215.00
Telecom/cable TV 405,525.87 416,381.31 448,315.00
Restaurant/Bar 1,495,519.46 1,323,988.20 1,308,653.00
Amusement 273,379.62 164,735.96 **
Other 558,426.02 445,446.71 1,116,070.00
TOTAL $15,335,417.00 $9,905,713.90 $11,271,212.00
  January 2015 February 2015 March 2015
Retail sales $9,372,364.50 $5,907,360.87 $6,747,767.00
Contracting 875,261.45 364,980.35 313,977.00
Rentals 1,491,967.04 1,202,529.74 1,324,516.00
Utilities 550,498.45 652,889.28 533,143.00
Telecom/cable TV 413,887.84 399,566.79 378,533.00
Restaurant/Bar 1,672,493.84 1,470,676.34 1,795,488.00
Amusement 313,548.98 110,242.04 **
Other 626,308.30 648,248.08 3,702,783.00
TOTAL $15,316,326.00 $10.756,493.00 $14,796,226.00

Total revenues for 3 months (Jan. – Feb. – Mar.)

Year 2014 Year 2015
$36,512,342.90 $40,869,045.00

** You will note that the city supplied no figures for the Amusement category for March of 2014 and 2015. I requested the March 2014 and 2015 seperately and received the following with the figures provided: “The requested information is included below with the exception that the category of Amusements has been combined into the category labeled Other.  Due to laws regarding taxpayer confidentiality, the information on Amusements had to be aggregated.  Therefore, the Other category includes Amusements, Hotel/Motel, Use Tax,  Printing, Publishing, Advertising, Jet Fuel, and other small dollar categories.” When I asked for a further explanation of this new practice the explanation offered by Ms. Vicki Rios, Glendale’s Acting Finance Director (now that Tom Duensing has been named as Interim Assistant City Manager replacing Julie Frisoni) was: “Mrs. Clark, 

“Section 21.1-450 (a) of the Glendale City Code states in part, “Except as specifically provided, it shall be unlawful for any official or employee of the City to make known information obtained pursuant to this Chapter concerning the business financial affairs or operations of any person.” 

“We take our obligation to protect taxpayer information very seriously.  During the month of March 2015, the mix and volume of taxpayer transactions in the Amusement category was such that if we were to disclose that category separately it would compromise the confidentiality of one or more taxpayers.  Therefore, we had to aggregate the category with other items for that month.  Because the taxpayer base and volume of transactions changes monthly, we evaluate each request independently.  Therefore, we were able to provide that information in the prior months.” The Amusement category would include sales tax receipts related to the Pro Bowl and Super Bowl.

January sales tax reflects December; February sales tax reflects January; and March reflects February. That is because sales tax is reported and paid in the month following the actual sales.

At first blush, when looking at the total sales tax reported for Jan. – Feb. – Mar. in 2014 and 2015 the first inclination is to say the $4,356,702.10 increase year over year is due to the Super Bowl.

Not so fast. There are mitigating factors to be considered. Tom Duensing, in his May 19, 2015 presentation to the city council on sales tax, stated that much of the increase is due to growth within the city. He indicated that new businesses have located in Glendale and they contributed to the sales tax revenue increase. In fact, Tanger Outlets grew substantially. Since Glendale does not publicly further refine its sales tax receipts the assumption is that an estimated $500,000 of that sales tax increase can be attributed to Tanger Outlet growth. If $500,000 is subtracted from the $4,356,702.10 year over year increase the figure is now $3,856,702.100 in sales tax revenue that can be attributed to all 3 major events: the Fiesta Bowl, the Pro Bowl and the Super Bowl.

Using the 40%/60% assumption, 40% can be attributed to the Fiesta Bowl and the Pro Bowl arriving at a figure of $1,542,680.80 in sales tax revenue. The Super Bowl sales tax figure at 60% is assumed to be $2,314,021.20. Add to this figure $77,201.67 in direct revenue the city received for the Super Bowl and the assumed figure for revenue earned by the city for the Super Bowl is $2,391,222.87.

Mr. Duensing budgeted $2.2 million dollars for the Super Bowl. Under his scenario the city only lost $191, 222.87 to host the Super Bowl. However the assumption is that the Super Bowl costs ranged from a low of an estimated $3.4 million to $4.1 million dollars. Based upon the figures used in this and the previous Super Bowl blogs the estimated loss to the city to host the 2015 Super Bowl ranges from a low of $1,008,777.13 to a high of $1,608,777.13.

The city admittedly had no mechanism to track all costs associated with hosting the Super Bowl and while it may have the figures of sales tax directly attributable to the Super Bowl it does not publicly divulge them. It should be of concern to all Glendale taxpayers that the city does not track each and every Super Bowl related expense. Based upon available expense and revenue figures the city was able to provide an estimated loss of $1 million to $1.6 million dollars is a reasonably accurate estimate. If you accept that the city only lost an estimated $191,000 I have a bridge in Brooklyn for sale.

The last Super Bowl blog will share some interesting information on Super Bowl credentialed Glendale employees and how much some Glendale employees made in overtime or time and a half working these 3 major events. Some of the figures will astound you.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted from this material site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 17 years and 82 days since the city’s pledge to build the West Branch Library.

This afternoon, March 24, 2015 at 1:30 PM the city council will be meeting in workshop session to receive more information on the proposed Fiscal Year 2016-17 budget. The focus will be on the Capital Improvement Program.

The City of Glendale has posted the Capital Improvement Program (CIP) 2016-2025 on its website.  Here is the link: CIPDRAFT3_24v

The current proposed CIP has no funding from the General Fund for anything other than construction of a parking garage at Westgate. One note: you will see funding for water, sewer and sanitation projects but their bond repayment is not from the General Fund. They are paid from stand alone Enterprise Funds and the Enterprise bonds issued are paid back from the rate payers who use those services. You will also see funding for some street and airport projects but the funding for those does not come from the General Fund either. They are funded from the voter approved, dedicated portion of the sales tax that goes into the Transportation Fund.

The city’s General Fund is used to pay ongoing operating (the largest line item being employee salaries) and maintenance expenses (for city facilities) as well as to pay back bonds that have been issued for the following categories:

  • Fund 1980 – Street/Parking bonds
  • Fund 2140 – Open Space/Trails bonds
  • Fund 2060 – Parks bonds
  • Fund 2160 – Library bonds
  • Fund 2040 – Public Safety bonds
  • Fund 2080 – Government Facilities bonds
  • Fund 2130 – Cultural Facility bonds
  • Fund 2100 – Economic Development bonds
  • Fund 2180 – Flood Control bonds                                                                                              

The major General Fund bond issuance in the draft CIP 2016-2015 is for a parking garage at Westgate. It is Project 68124, Parking garage at Westgate with the following schedule of funding:

  • FY 2016 $  2,404,337
  • FY 2017 $20,000,172
  • FY 2018 $23,999,730
  • TOTAL  $46,404,239

Within the General Fund bond capacity funding are a few, small street projects (about 3), each less than $350,000; $1.6 million to upgrade storm drains; and an upgrade of the police digital communication system for $1.9 million. There is nothing even considered until after 2020 for Open Space/Trails, Parks, Library, Government Facilities, Cultural Facilities or Economic Development. These are all quality-of-life amenities that make a city great. They are the projects that attract new residents to Glendale and new businesses that appreciate the amenities that will help them attract quality employees. All of that is forsaken for a new parking structure at Westgate for over $46 million dollars. Trust me…that price tag will increase over time.

This new parking garage will cost a little under a million dollars annually for utilities and maintenance. A new operating expense will be added to the General Fund. For the past ten years staff was required to show where new money for a new operating expense would come from. The narrative for this expense within this CIP is cursorily dismissed with “Additional O and M will be absorbed within the current operating budget.”

The bottom line is that Glendale still has a structural deficit. To date, former City Manager Fischer and the Director of Finance, Tom Duensing, have used band aids. They have refinanced the city’s debt (done previously and historically when the market is favorable) and they have relied on making the temporary sales tax increase permanent. They have never attacked the real problem – the city is spending more than it takes in while it’s major debt components (construction debt for the arena and ball park and the annual $15 million dollar payment to Ice Arizona for managing the arena) bleeds the city dry.

Until senior management decides to live within its means by cutting General Fund expenses and resolves the construction debt burden and the $15 million annual payment burden we won’t see the city build amenities that can be used by its residents.

Apparently senior management believes there is some debt repayment capacity within the General Fund. What is it being used for? A parking garage at Westgate. Can you imagine what could be done with $46 million dollars? The city could build the West Branch Library, and still have money left over to renovate and upgrade existing parks and build some new parks as well. In other words, that money could be used to upgrade your quality-of-life and attract new business development to Glendale.

Why a parking garage at Westgate now? There is a 2002 contractual obligation with the Arizona Sports and Tourism Authority (I no longer have a copy of the agreement) that requires the city to guarantee 6,000 parking spaces for games. Those spaces have been located within Westgate since the stadium opened. As Westgate’s land is used for new development those 6,000 spaces diminish. However, there is still a great deal of raw land to the east and north within Westgate. The purpose of the Youth Sports fields construction just to the east of the stadium was to relieve any parking spaces lost in Westgate proper. It provides 4,000 to 6,000 overflow parking spaces that still fulfill the agreement’s requirement for parking. Apparently that’s not good enough for the Bidwill’s who have been grousing and pushing for this parking garage for several years. So, the city has caved and will build the parking garage to be completed by the end of 2017. Great for the Bidwills…not so great for the residents of Glendale.

It’s a matter of priorities. It seems the greatest priority is to build a parking garage in Westgate while bonding for another $46 + million dollars and lesser priorities — to be fulfilled someday — are the quality-of-life amenities that Glendale citizens can enjoy.  Is this your priority? If not, what are you going to do about it? Sit back and eat it? Or let your councilmembers know what matters to you?

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

 

Caitlin McGlade has an article in the January 25, 2014 edition of the Arizona Republic. The information she provided is old news – stale. Must be a slow news day and therefore a good day to bash Glendale again. I would imagine Coyotes fans are in a dither while Glendale’s citizens are just shaking their heads. There is no need to become hysterical – just yet.

The information used has been up on the Glendale website for quite some time and the numbers have not changed. Do not expect to see any new numbers until after January 31, 2014 when the December 2013 Arena Monthly Report and the first quarterly (Oct-Nov-Dec 2013) parking revenue numbers will be posted. Here are the numbers as they are presented on the city’s website today:   

  Fund ID     Amount  
Arena Event Operations

$247,457.06

Arena Special Revenue

$1,947,103.03

   
Account

Amount

Arena Annual   Rent

$326,712.33

Arena Base Team   Fees

$48,681.51

Arena Naming   Right Revenue

$60,000.00

Arena Parking   Fees

$18,835.49

Arena Parking   Rev-Hockey Games

$309,898.94

Arena Parking   Rev-NonHockey

$91,719.49

Arena Ticket   Surchg-Hockey

$896,393.39

Arena Ticket   Surchg-NonHockey

$194,861.88

No where could I find what the city has spent to date in capital improvements to the arena. I am sure the numbers are there — somewhere. It may be labeled as Arena Event Operations although that may be the costs of providing public safety or it could be the first quarterly payment of the capital improvement bill. It’s hard to tell.

The picture as it stands today is incomplete and no one will have a good idea of revenues and expenses until after the end of the current Fiscal Year, June 30, 2014. If the current trend holds it will not be a pretty picture for Glendale’s financial health.

Glendale must pay IceArizona $15 million dollars a year for arena management. It is smoke and mirrors. IceArizona has assigned its entire rights over to Fortress Lending and the National Hockey League and that $15M is the payment on the interest on the loans it has with both entities. IceArizona has become a “pass through” for the $15M. In this current Fiscal Year the council budgeted $6 million toward the arena management fee. The remaining $9 million to cover the management fee is to come from “enhanced revenues” produced by IceArizona. As you can see it doesn’t appear that IceArizona will produce the much needed $9 million. What about the supplemental ticket surcharge of $1.50? It appears that it will come in under $1 million for the Fiscal Year.

Under a generous scenario it looks like this:

  •      $15 million to be paid each year to IceArizona for management of arena
  •    -$  6 million in city budget to pay management fee  
  •      $ 9 million not in city budget to pay management fee
  •     -$ 4 million received from IceArizona as “enhanced revenue” (approx. estimate)
  •     -$ 1 million received from IceArizona from supplemental ticket surcharge (approx. estimate)
  •     $  4 million shortage of revenues not covered by city budget or receipt of revenues from IceArizona (approx. estimate)

These figures are estimates and we will have to wait until the final numbers are available. The estimated $4M shortage could end up being lower or higher. Where will the payment of the shortage come from? There is only one place – the city’s Contingency Fund (rainy day fund). No wonder there will be little to no money in Contingency this Fiscal Year (the year end estimate is approx. $800,000).

Two other financial debts associated with the arena are the construction bond payments of approx. $12 million a year and the obligation of the city to pay for capital improvements to the arena. This year it is a million dollars and in the next few following years it is half a million. Then it cycles up to a million followed by another couple of years at half a million. 

Immediately some will point to Camelback Ranch as the 800lb. gorilla and it is. Keep in mind that the city does not have to pay annual operating and maintenance costs for the facility. They are paid by the two teams: the Dodgers and White Sox. What the city does pay in the construction bond debt annually and that too, is a substantial payment of approximately $13 million. The sales tax generated which is very small in the scheme of things does go toward the bond debt. The only light at the end of this tunnel is that in the future, way in the future, the Arizona Sports and Tourism Authority (AZSTA) has an obligation to reimburse Glendale for approximately 70% of the cost of constructing the facility.  In the meantime, it is another debt that Glendale can ill afford right now.

So, everyone take a deep breath, relax and wait until we have a complete picture of the numbers at the end of the Fiscal Year. 

There is a new poll to the left of this column asking if you believe that Glendale can straighten out its fiscal mess. To the upper right of this column you can sign up with your email address to subscribe to notifications of my upcoming blog post. Check them out!

© Joyce Clark, 2014

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