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Joyce Clark Unfiltered

For "the rest of the story"

It has been 17 years and 309 days since the city’s pledge to build the West Branch Library.

PLEASE NOTE: SINCE THE INCEPTION OF MY BLOG I HAVE REACHED ANOTHER MILESTONE. AS OF NOVEMBER 4, 2015 THERE HAVE BEEN OVER 300,000 READS OF MY BLOGS. MY THANKS GOES OUT TO ALL WHO HAVE SIGNED UP TO RECEIVE THEM ON A REGULAR BASIS AND A SPECIAL THANKS TO ALL WHO HATE MY COMMENTARY BUT KEEP COMING BACK TO FIND OUT WHAT I AM SHARING ABOUT GLENDALE AND ITS PLAYERS.

On October 20, 2015 at city council workshop council was presented with a menu of city properties that could be sold. Amazingly, not one…let me repeat that, not one property was put on the block.

Cushman & Wakefield, the city’s consultant, proposed the possible sale of nine city owned facilities:

  • Water services lot at the northeast corner of 99th Avenue and Bethany Home Road for $7.5 million
  • Glen Lakes Golf Course at 54th Avenue and Northern Avenue for $5.2 million
  • Desert Mirage Golf Course at 87th Avenue and Maryland Avenue for $450,000
  • St. Vincent de Paul Thrift store in downtown Glendale for $300,000
  • Thunderbird Lounge and adjoining properties in downtown Glendale for $545,000 to $727,000
  • Bead Museum in downtown Glendale for $400,000 to $500,000
  • City Court site in downtown Glendale for $3 to $5 million
  • Bank of America building in downtown Glendale for $7.35 million

The only properties that can legitimately be taken off the sales block are the two golf courses. Desert Mirage Golf Course has long term contractual obligations that could prove problematical and Glen Lakes Golf Course land would be used for residential development that would violate a long standing commitment to every home owner surrounding the property. In addition, these two properties offer a genuine amenity to every Glendale resident.

So, why won’t council sell off any of the downtown properties? Well, we might use them sometime in the future…the very distant future. Or we can’t sell them because the sale price is less than the city paid originally. Reality…since the Great Recession, many properties nationally and regionally have sold for less than their purchase price.

Each of these properties, vacant or developed, have annual operating & maintenance (O&M) costs. What is the total annual O&M cost to the city for each of these properties? If they were sold the city would no longer have to pay the O&M costs in addition to receiving the purchase price.

The sale of these properties accomplishes several goals. It takes the annual O&M costs off the books permanently. It earns the city an estimated $20 million plus. These funds should go directly into the city’s Contingency Fund (Unappropriated Fund Balance).  That, in turn, would take pressure off of putting every available nickel in the General Fund into Contingency. It would create the opportunity to utilize General Funds for needs long ignored since the Great Recession.

The sale of these properties also creates a major benefit for downtown Glendale. How many Task Forces, over the years, have made recommendations for the revitalization of downtown Glendale? Too many, going all the way back to the Miracle Mile Citizen Task Force. What has been achieved as a result? Nothing. In one fell swoop, with the sale of these properties the city has the opportunity to kick start downtown’s revitalization. No one is going to buy a downtown property without plans to develop. That’s illogical. An investor in a downtown property expects a return on that investment and that can only occur with the development of the investment. The beneficial and productive use of these properties immediately will do more to revitalize downtown Glendale than the unanswered recommendations of another dozen Task Force groups.

It’s time for the city council to let go of these properties. There are genuine benefits to be achieved with their sale. In the meantime, as long as the council digs in its feet and refuses to sell anything, I have a bridge in Brooklyn to sell…interested?

© Joyce Clark, 2015

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It has been 17 years and 235 days since the city’s pledge to build the West Branch Library.

On Tuesday, August 25, 2015 the Glendale city council will go into executive session. One of its topics is sure to be council’s setting of goals for and approval of a Request for Proposal (RFP) for future management of Glendale’s arena. It is a good move.

An RFP will provide information on what is the fair market value for management of its arena. The previous RFP yielded results that indicated that a fair management fee was in the $6 million dollars per year range. Those results can lead to a totally independent firm managing the arena and removing that responsibility from the Coyotes. It sets up a scenario that has the Coyotes as tenants only.

One area that will have to be resolved is that of the parking fees. Apparently under the temporary 2 year agreement the Coyotes continue to keep parking and ticket surcharge revenues. Why? These schemes…for that’s what they were…were created specifically to generate revenue for the city. They were designed to reimburse the city for the $15M a year it was paying as a management fee.

The  amount generated was approximately $8-$9M a year, not enough to cover the $15M annual management fee. Ticket surcharge revenues had always gone to the city even before the latest agreement with IceArizona. In all previous agreements there had been an escalator clause that incrementally raised the surcharge annually.

Whether the arena manager is a new entity or the Coyotes, it’s time to deal with these surcharges to the benefit of the city. Either parking is once again free as it had been before IceArizona or the parking revenue, if utilized, should go to the city. The same can be said of the ticket surcharge…either it goes away entirely or the revenue goes to the city. If the surcharges were to go to the city and the city continues to pay a $6M annual management fee it is possible that the city may actually cover that annual cost and perhaps generate some revenue to be used for the benefit of Glendale’s citizens. Now, that’s a nice thought, isn’t it? Glendale’s taxpayers have been subsidizing the arena for quite some time. It would be wonderful if the arena actually made some money. It’s time for the city to play hard ball and to stop giving away the farm.

© 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.

When the announcement first hit the pavement regarding the resignation of former City Manager Brenda Fischer of Glendale, her prepared statement included the phrase, “she has accomplished all of her goals at the city.”

After an extensive online search no publicly stated goals could be found. Her biography on Glendale’s website (her bio is no longer available and has been replaced with Interim City Manager Dick Bowers’ bio) offered the following: “during her tenure Fisher implemented a five-year budget forecast and presented short-term budget solutions or reductions in service to the community; she reorganized the city’s structure and operations leading to a streamlined organization that has increased productivity, efficiency without layoffs and created future cost savings.” In a February 12, 2015 story written by Eric Toll of the Phoenix Business Journal Fischer is quoted as saying, “We have a totally different management staff, a young council, and a community beginning to trust the city’s performance.” She pointed out that Moody’s and Standard & Poor’s had rated the city’s finances as stable. She said the city organization was healthier and doing good things.

Before checking Ms. Fischer’s “Pinocchio rating” (every time he told a lie, his nose grew), some Glendale sports debt in a historical context is in order.

Glendale’s hockey arena known as the Gila River Arena opened in December, 2003. A little known fact is that until Jerry Moyes declared the Phoenix Coyotes bankrupt in 2009 Glendale had collected enough money every year to pay for the arena except for the period of the NHL lockout in 2005-06. From December, 2003 through June, 2010, when the NHL took over management of the arena, the city had received $22,803,757.54. The city never paid a management fee through 2009. Everything changed with the Moyes’ bankruptcy and begins the era of the city’s having to pay a management fee. To keep the Coyotes in Glendale and the arena open, Glendale paid the NHL $25 million dollars as a management fee in 2010 and 2011 while a new Coyotes owner was secured. Those funds came primarily from two sources, the city’s contingency fund and enterprise funds. The city’s contingency fund was depleted dramatically and reached a low of approximately $11 million dollars. Instead of receiving revenue from the arena as in years past, now the city was paying a management fee: $25 million a year to the NHL and $15 million a year to IceArizona. The original debt for the arena was $180 million dollars but over the years additional debt such as for infrastructure has made that figure greater. The current annual debt payment for the arena is approximately $13 million dollars a year meaning that each and every year the city must outlay $28 million dollars (debt plus management fee) just to keep the doors of the arena open.

Camelback Ranch, the city owned spring training facility cost $152 million to build. It opened in February, 2009. The original deal called for the Arizona Sports and Tourism Authority (AZSTA) to replay the city for 66.7% of the cost not to exceed $90 million dollars. Many issues unrelated to Glendale have put into question whether the city will ever be repaid by AZSTA and when. In 2014, the original loan that Glendale took out as a reserve to pay the baseball construction debt is used up and in 2018 the city will be making debt payments of $15.2 million annually. When Glendale pays off its sports construction debt for hockey and baseball it will have paid out about $849 million dollars.

Brenda Fischer came on board in July of 2013, the same month that the city council approved the annual management agreement with IceArizona for $15 million dollars. Under her watch two short-term solutions she implemented were: making the temporary sales tax increase permanent and refinancing the city’s bond debt. Fischer’s solutions in partially dealing with Glendale’s tremendous debt were not new or innovative.

The temporary sales tax increase was set to expire in 2017 because council believed that with the implementation of further cost saving solutions over the original five year period it could be sunset at that time.  Fischer’s solution was to make the tax increase permanent. It was making the temporary sales tax permanent that caused Moody’s and Standard and Poor’s to rate Glendale’s finances as stable and to remove its negative rating. Moody’s said the improved rating was tied to a Glendale City Council decision in June of 2014 to make a 0.7% sales tax increase permanent. Keep in mind that while the city’s bonds related to its General Fund debt had been downgraded, Moody’s continued to reaffirm an A1 rating for Glendale’s water and sewer revenue bonds.

Refinancing the city’s bond debt was not a new, innovative solution either. Not just Glendale but many cities make it a habit and practice to refinance their debt when market conditions are favorable. Prior to Fischer’s coming on board Glendale had refinanced its debt in February, 2012. Every time the city refinances debt, it saves money in terms of future debt payments because the interest rate is usually lowered. Anyone who had been City Manager during the past 17 months would have implemented the very same solutions. These are steps that would have been taken with or without Brenda Fischer. What about the city’s Finance Director, Tom Duensing? He deserves the lion’s share of the credit (or blame) for making the sales tax permanent and using the historical tool of refinancing the debt.

Another accolade that Fischer claims is the use of the five-year budget forecast. The city council in previous years before Fischer’s appearance had rejected the notion of a five-year budget forecast as being highly unreliable. City staff had acknowledged that the only relatively certain information to be obtained would be for the following one year — not another four years out. We know how well long range financial forecasting works — not one financial “expert”, national, regional or local, had the Great Recession on the radar screen.

Fischer also claims to have reestablished trust in Glendale government. Her bio stated, “she reorganized the city’s structure and operations leading to a streamlined organization that has increased productivity, efficiency and created future cost savings.”  Yet employee trust was further eroded when she named Julie Frisoni as an Assistant City Manager or when she allowed certain employees to leave and to be rehired at a higher pay.  Citizen trust was seriously eroded recently with the proposal to sell the Foothills Library and to relocate its remnants to the Foothills Recreation Center. City council lost trust in her when she requested the emails of three councilmembers (her bosses) that she apparently believed were against her.

Fischer claimed a lot but anyone would as a face saving tactic. Don’t forget, she’s still got Frisoni who nominated her for the Phoenix Business Journal’s Businesswoman of the Year Award and who is busy issuing glowing statements about Fischer’s accomplishments to the media. They ignore Frisoni’s press releases at their peril for they could be frozen out of obtaining any information from Glendale on any issue.

Fischer is receiving $152,000 or 9 months pay as the council’s parting gift. Many people are upset about the largesse she is receiving. Holding my nose, I support council’s decision. If they would not fire her then their only option was her resignation and it was going to cost them to obtain it. Don’t forget…there were 3 councilmembers in her corner: Sherwood, Chavira and Aldama.

What is Fischer’s “Pinocchio rating?” I will leave that for your decision. It will be interesting tothG5SHRA7E see, on a scale of 1 to 5, with 5 being the most falsehood or exaggeration, what you think.

© 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.

About a month ago I was contacted by Robin Respaut, a reporter for Reuter’s News Agency. We sat down and had a face-to-face interview as a result. I also had several phone conversations with her. I asked to be alerted when her article was published. It was published on October 30, 2014. Here is the link and the full text of the article.

http://www.reuters.com/article/2014/10/30/us-usa-superbowl-glendale-insight-idUSKBN0IJ1GL20141030

 Bad bets take a big toll on the Super Bowl’s host city

By Robin Respaut

GLENDALE Ariz. Thu Oct 30, 2014 11:49am EDT  Reuters Edition

 (Reuters) – Welcome to the sports-crazy home of February’s Super Bowl.

Over the last decade or so, this city of 230,000 on Phoenix’s northwest border, has reinvented itself from farm town to sports Mecca. It has built the dome stadium where the National Football League’s Arizona Cardinals play, the National Hockey League’s Arizona Coyotes arena, and the new baseball facility where the Los Angeles Dodgers and the Chicago White Sox appear every spring for their pre-season training.

But Glendale’s love of sports has come at a cost: red ink and jobs lost. All told, said Glendale Mayor Jerry Weiers, the town’s sports fetish has produced “a house of cards.”

And even the Super Bowl, the NFL’s annual championship extravaganza, will add to the pain. The game, and the partying that comes with it, will rake in hundreds of millions of dollars for Arizona. For Glendale? Another bill. This time because of the security costs.

A visitor to Glendale doesn’t have to look far to find evidence of its shattered dreams. At the edges of the sports district are vacant lots where there were supposed to be stores and other commercial developments that would generate taxes to pay off the debt taken on to build the sports facilities.

Glendale now spends over $40 million annually on sports-related expenses, including $15 million to manage the hockey arena, and about $25.5 million on debt service. The city’s general fund, the pool of tax money used to support city services like police and fire, has suffered big deficits.

It’s scorecard: Standard & Poor’s Ratings Services downgraded the city’s bonds three times since 2012. The Tax Foundation ranks the city’s sales tax, at 9 percent, as seventh highest in the nation, and Moody’s Investor Service says the direct debt burden is the largest among rated cities in Arizona.

Of course, Glendale’s problems aren’t uncommon. In 2010, professional sports facilities cost taxpayers roughly $10 billion more than what was typically reported – thanks, in part, to subsidies related to land and infrastructure, said Harvard professor Judith Grant Long.

But “Glendale is a particularly sad story,” said Holy Cross Professor Victor Matheson.

FOOL’S GOLD

In the 1950s, Glendale was citrus groves and cotton fields. Then came the housing boom. From 1990 to 2001, population soared 48 percent to nearly 215,000. The city had to beef up public services, but there wasn’t enough revenue-generating commercial development. “We had a mall and not much else,” said Elaine Scruggs, Glendale’s recently retired mayor of 20 years.

So when the Coyotes, in 2001, wanted to move from Phoenix proper and suggested Glendale, Scruggs pounced. The proposal included 1.6 million square feet of flashy new retail, dubbed Westgate City Center. To build the arena, the city agreed to float a $180 million bond with hopes the development would generate taxes to pay off the debt.

Before the ink was dry on that deal, Glendale was presented with another opportunity. In 2002, the Arizona Cardinals owner, Bill Bidwill, was also looking for a new home. The team targeted a site across the street from the future hockey arena. A stadium would lure more visitors to Westgate, which would mean more tax revenue — and, possibly, more development.

Mayor Scruggs couldn’t believe Glendale’s good fortune: “It was like a little kid who caught the fly ball,” she said.

By 2006, Glendale was hot stuff. The Cardinals stadium had just opened, and big name acts like the Rolling Stones were headlining.

And it was about to get better. The next year, Glendale announced its third venture: the Chicago White Sox and the Los Angeles Dodgers were looking for a new pre-season training facility.

This time, Glendale joined with Phoenix to construct a 10,000-seat ballpark and 14 practice fields. A 10-minute drive from Westgate, the facility was located just over the Glendale border in Phoenix. But Glendale agreed to issue a $200 million bond if Phoenix pledged 80 percent of the tax revenue. The anticipated economic impact to the region amounted to $19 million per year. And a new retail complex, of course, would generate revenue to pay off the debt.

Glendale’s finances were in good shape. The general fund had completed 2006 with $72.5 million in its coffers. And the city’s operating budget was $46 million in the black. So the town fathers agreed to pave a road through the desert and waited for new business to arrive.

WELCOME TO THE NIGHTMARE

After the real estate crash, Glendale’s property values dropped by half. Property tax collections slumped by 40 percent in two years. And unemployment in the city eventually spiked to 10.2 percent in 2009 from 3.1 percent in 2007.

That wasn’t all.

The Coyotes hockey team filed for Chapter 11 bankruptcy in 2009, triggering an NHL takeover. A year later, the land surrounding the new ballpark was foreclosed on without ever breaking ground. The Westgate developer also lost the property to foreclosure. Only a fraction of the proposed development had been built.

By 2012, the city was looking at $105 million in debt payments and not enough revenue to cover it: expenses of $289 million exceeded revenues by $59 million. “The city,” recalled city councillor Ian Hugh, “was sinking in its own debt.”

COYOTE UGLY

Town officials were also worried about losing the hockey team. After the NHL took over, the league asked the city to pay $25 million to manage the arena as it searched for an owner. Why cave in like that? Simple economics. If the Coyotes left, the city would be stuck with a largely empty arena. “This was the beginning of the city’s demise,” said former city councilor Joyce Clark.

In 2011, the city pulled $25 million fee from Glendale’s sanitation and landfill funds. When no owner was found by the second year, the NHL asked for another $25 million, which came from water, vehicles, technology replacement, and the general fund. “By the third year,” said Clark. “We were bleeding.” The general fund plummeted from a $66.4 million surplus in 2006 to a $26.7 million deficit in 2012.

To make up the difference, the city raised its sales tax by a third, cut 22 percent of its workforce, and, in a terrible irony, eliminated some youth sports like t-ball and flag football. Emergency Medical Service calls increased by 23 percent over a five-year period, but there were fewer workers to respond. And Glendale’s firefighters claimed 911 response times increased by two minutes.

Meanwhile, the NHL found a new owner, IceArizona, that would keep the team in Glendale. But there was a catch. The city had to pay $15 million a year in arena management fees, a cost equal to its entire parks, recreation, library and human services budget.

Glendale signed the deal, but the arena had already turned into a financial sinkhole. After dropping $50 million on NHL fees, Glendale still had an average $12.8 million in annual debt service related to building the arena. In return, the city earned back just $5.9 million during the first year in arena-tied revenues.

A WAY FORWARD?

Today, the city is preparing for the big game. The Super Bowl could bring in $500 million for Arizona, but Glendale budgeted a $2.1 million expense for security. State lawmakers have refused to help, some citing “an awesome display of fiscal mismanagement.”

Still, city officials say there’s hope. A new management team and the now-permanent sales tax increase has made Moody’s more optimistic. In September, the rating agency switched Glendale’s outlook to stable from negative.

The city is also trying to wean itself off sports. For example: A huge American Furniture Warehouse could generate $2.9 million for Glendale in its first year. In August, the city also blessed a $400 million casino resort.

Glendale won’t be on the hook for the casino’s costs and expects to receive an estimated $26 million over 20 years. Still, critics worry that the deal is another misstep. “Money going into the casino,” said Mayor Weiers, “isn’t going to the businesses that hung on by their fingernails to stay open.”

(Reporting by Robin Respaut; Editing by Hank Gilman)

During my last four years on city council, from the time the Tohono O’odham publicly announced their intent to build a casino within Glendale, I would take notes from presentations and comments of staff regarding the casino’s impact on Glendale. While they retain the essence of the statements made, I did not have the time or opportunity to write the comments verbatim. The other day I was cleaning out some old folder files and I ran across the file where I had been keeping these notes. The following was represented to me and the rest of city council by staff from 2009 to 2012.

This was said with regard to the Nation’s gaming application—  However, the issue of “first impression” within Arizona is a major one. It means that this action if granted would be precedent setting in that it would establish an Indian reservation where one did not previously exist. It may be the first attempt to do so in the nation. It is the first step to create a free for all system that establishes “off-reservation” gaming, not just in Arizona but in the nation.

Glendale staff in meeting with the Tohono O’odham attempted to ascertain more specific information. The Nation would not offer anything beyond conceptuals. Staff, after meeting with the Nation, offered the scope of the project as it was presented to them:

  • 134 acres of land
  • 1.2 million square foot complex
  • Cost of construction approx. $550 million
  • 6,000 construction jobs
  • 3,000 permanent jobs

Gaming portion:

  • 150,000 square feet
  • 1,089 machines
  • 50 tables
  • 25 poker tables
  • 1,000 seat bingo hall 

Spa/Hotel portion:

  • 480 rooms
  • 120 suites
  • 180,000 square foot convention center
  • 40,000 square foot event center

Amenities/Services:

  • 30,000 square feet of retail
  • 5 restaurants
  • 1 food court
  • 2 buffets
  • 1 coffee shop 
  • 2 bars
  • 1 nightclub

Issues identified by staff during the years of 2009 to 2012 included:

  • City’s General Plan has area designated as Corporate Commerce Center with less density and impact.
  • Sales tax revenue anticipated to be lost is $2 million a year or $40 million over 20 years as city cannot collect sales tax from federal land and that removes the land from producing sales tax for the city with other non-Indian uses.
  • There are revenues that flow to the state from gaming. However 88% percent goes directly to the state. The other 12% is distributed to all cities and counties with no larger share or preference to the host city or county.
  • The project will generate jobs but nearly all will be minimum wage employment.
  • Gaming revenues siphon off discretionary income that could have been spent elsewhere in the City
  • Staff projects water demand to be 600,000 gallons per day gpd (gallons per day). Projected wastewater demand to be 400,000 gpd. If they use the on-site well that is available to them it would impact our groundwater table. 
  • Estimated Impact fees loss is $299,500.
  • Police estimate an additional 8,500 calls for service necessitating an additional 11 officers at a cost of $950,903. There is also the problem of suspects committing crime in adjacent areas and fleeing to reservation where Glendale Police have no jurisdiction. Anticipated calls for service expected to be high due to the casino being open 24 hours a day, 7 days a week. 
  • Fire anticipates the need for an additional fire station costing:
  • 18 additional fire fighters
  • $2.8 annually for Operating & Maintenance costs
  • $14.6 million for land acquisition and construction
  • In addition, there is no mutual aid agreement for off-site service (reservation). Can be negotiated perhaps but no guarantee of total cost recovery.
  • Transportation estimates 20,000 one-way trips per day on weekdays and 30,000 one-way trips per day on weekends. It will generate 8.34 million additional trips in the area per year. There could be traffic conflicts on stadium and arena event days.
  • There is a possible impact on the Northern Parkway Project. 225 feet of right-of-way is needed on the south side of Northern between the Loop 101 and 91st Avenue. Tribe may or may not participate.

 

There are several reasons why I decided to use my old, newly discovered notes. Despite the city council’s inappropriate action this issue is not yet decided. There is still Tribal litigation to be decided and there is still Congressional legislation pending. I would anticipate Referendum petitions on the 2 council actions taken on August 12, 2014. If successful, the voters will decide Glendale’s final position.

Another reason for using them is to ask the question, was this information given to the current council? With senior administrative staff knowing that a majority of council now supports the proposed casino, they may have thought it unwise to fully inform the council. That is no excuse. Council should have had this information. If council did have this kind of information and a majority chose to ignore it and its implications of cost to Glendale, then they are not serving the best interests of Glendale.

Lastly, it is information that should be public. The citizens of Glendale have the right to know that there are costs to Glendale that have not been addressed in the recently approved agreement. I would expect the current senior administration to disavow the facts presented above, especially with regard to water and public safety. They have been given their marching orders to embrace the casino project. The question remains, why weren’t these issues and the costs associated with them addressed in the approved agreement? So much for transparency.

© Joyce Clark, 2014

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.

Please note: Some of the information presented here is repetition of information from my previous blog on Cholla candidate Gary Deardorff and applies to all candidates. Some of you reading this blog for the first time may not have read the previous one.

If you have relatives, friends or acquaintances that live in the Cholla district, please consider passing this series of blogs on to them as another tool to help them evaluate the Cholla candidates prior to casting their vote.

Early ballots are mailed at the end of July, 2014. Candidates (well, most of them) have their websites up, are raising campaign money (or not) and beginning to stake out their positions on Glendale issues.

We begin with the Cholla district council candidates in alphabetical order: Gary Deardorff, Van DiCarlo, Robert Petrone and Lauren Tolmachoff. These 4 candidates share some commonalities. They are running, generally, because they were encouraged by friends or family to do so and obviously, they all believe that they can contribute solutions to fix Glendale’s financial situation.

All of the information to be discussed will be based on the candidates’ websites and their June 30, 2014 Campaign Finance Reports. Some of the candidates I had met previously and am familiar with their positions on various issues. Others I have never met and so I arranged an interview with them.

We’ll take a look at each candidate’s Campaign Finance Report of June 30, 2014. Here is the link to Glendale City Clerk’s posting of each candidate finance report: http://www.glendaleaz.com/Clerk/2014PoliticalCommitteeCampaignFinanceReports.cfm . Go to that page and you can choose which candidate’s campaign finance report you wish to read.

Each report totals 19 pages. The first 2 pages are summary pages. Section A will show all contributions from individuals. Section B shows all political committee contributions. Section C shows loans either the candidate made to the campaign or any other loan received. Section D deals with all expenditures. Section E is for In-Kind contributions and Section F shows miscellaneous items.

This could be considered nit-picky but the finance report is 19 pages. Each candidate’s report should consist of a minimum of 19 pages (there may be multiple pages especially in Sections A and D). Some candidates did not submit the minimal 19 pages. It could be assumed that if they had no financial activity to report in certain areas they just did not bother to include those pages. Technically, that is not a complete report. All pages should be submitted and if there was no activity to report in certain categories, the candidate can leave the page blank, draw a line through the page or indicate “NA,” no activity. Even if a candidate has a treasurer who fills out the report the candidate is still ultimately responsible for the accuracy and veracity of his or her filing.

There is another kind of Campaign Finance Report a candidate can submit and that is a No Activity Statement. That means the candidate didn’t receive any contributions and did not spend any money. Some of the council candidates filed this kind of report.

The items to look for are: what individuals are contributing; are they Glendale residents, relatives, attorneys or other professionals; or Political Action Committees (PACs)? Did the candidate loan his or her campaign any money? How much? Are the expenditures typical of a campaign; signs, printing, bank charges, food for fund raising events or volunteers; web site design or hosting? Is the candidate using a paid political consultant? At what cost?

At this stage of the game candidates are often reluctant to reveal too much about their finances. They may ask that large contributions be made after June 1, 2014 to be reported in the Pre-Primary Report or after August 15, 2014 for the Post-Primary Report.

Van DiCarlo

Campaign Finance Report – His report consists of only 6 pages. He submitted the 2 summary pages, Schedule C showing his loan to his campaign, Schedule D indicating expenditures and Schedule E showing In-Kind contributions.  The rest of the pages, including Schedules B and F…are simply not there. This is not his first run for the Cholla district council seat. He ran in 2006 and by now should certainly be able to fill out the report fully. Mr. DiCarlo loaned his campaign committee $1,937.00. He has no treasurer. Please remember, Mr. DiCarlo ultimately bears the responsibility for the accuracy and veracity of his report.

Campaign contribution limits have become very generous as a result of recent court rulings. In the last election of 2012, the individual contribution limit was $400. Now it is $2,500. A political committee’s limit is now $2,500 and a Super PAC’s limit is $5,000. The trick for local candidates is to get large contributions. It’s not an easy task.

Mr. DiCarlo has received no contributions from any source to date. He did receive 2 in-kind contributions for the use of a golf cart for a month valued at $350 and web design valued at $400.  He has no campaign consultant. DiCarlo employed Stephen Martin for nominating petition signature collection at a cost of $756.  The balance of his campaign expenditures are for usual items such as printing, web hosting and supplies.

The noteworthy take-aways from DiCarlo’s campaign report are: 1. His campaign is self funded in the amount of $1,937.27 to date; 2. He has received 2 in-kind contributions in the amount of $750 to date; and 3. He failed to submit all 19 pages of the Campaign Finance Report.

Website — his campaign website is http://www.electdicarlo.org  . His contact information:  Committee to Elect DiCarlo, 20280 N. 59th Ave, Suite 115-631 Glendale AZ 85308 Telephone:  623.695.6124                            E-mail: voterinput@dicarlo.phxcoxmail.com

His website provides you biographical information, a sparse blog, a photo gallery, campaign donation info and contact info. Under the Issues tab DiCarlo does address Glendale’s finances in part.  I have talked to Mr. DiCarlo and know him and his positions on the issues. We are not close, personal friends. I did not meet with him because I had discussed issues with him when he first declared his candidacy.

Mr. DiCarlo has lived in Glendale and the Cholla district for 13 years. He is married. He has not participated in Glendale community affairs. He has his own business and believes that his work schedule is flexible enough to accommodate the demands of serving as a councilmember.

His observations with regard to the relationship between council and staff are that staff could be more forthright. He indicated that he is not receiving fire or police union support and is relying on neighborhood donations and self-funding. Under his Issues tab he states that the sales tax increase should sunset in 2017. He advocates for the liquidation of city assets as a way to dig Glendale out of its debt problem. He understands that city council has no authority over school districts. He is not supportive of the Tohono O’odham’s proposed casino on the grounds of objecting to the placement of a reservation within Glendale’s boundaries.

After review of all 4 Cholla district candidates we’ll try to narrow the choices down to 2 people. In this district, as with the other council races, there are so many candidates none of them is expected to win outright in the primary and we can expect a run off in the general election in November.  Next up, Robert Petrone.

© Joyce Clark, 2014

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I have written about the proposed Tohono O’odham (TO) casino and its impact on Glendale too many times to count. The other day a thought occurred to me. We all know that Glendale is in a financial mess. Its debt burden has prevented the construction of so many much needed facilities such as a western branch library and has caused the cuts in service to residents’ quality of life.

We often hear Councilmember Alvarez complain about service cuts and the on-going lessening of basic infrastructure maintenance. Yet she is all too willing to support the construction of the proposed casino in the name of jobs. Realistically the job numbers touted by the TO are highly inflated and everyone seems to ignore the stipulation that 25% of them must go to Native Americans.

Has anyone considered the financial impacts to a city already struggling financially? I think not.

Several years ago senior Glendale staff presented a cursory assessment of the financial effects of the casino. It was made clear that a new water treatment facility would be required to service the intense demand for water that would be created by the casino and its ancillary uses.  The construction of such a water facility is upwards of $70 million. Who would pay for it? Certainly not the Tohono O’odham. The persons paying the construction bill would be water ratepayers through an increase in water rates.

Then there is the issue of public safety. While a TO reservation would have its own tribal police to handle issues within the reservation it would be Glendale’s police and fire that would respond outside the reservation boundaries. At the very least, Glendale taxpayers would have to bear the costs of an increase in personnel and could experience delayed response times.

Lastly there are transportation costs. Streets adjacent to the reservation may need improvement to handle the increased traffic that will occur 24/7. There may be a need for upgraded traffic signals, signage and upgrades to the city’s Intelligent Traffic System.

For all of those who support the coming of the TO casino, do you still want the casino if it means that you have to pay more for your water provided by the city?  For all of those who support the coming of the TO casino, do you still want the casino if it means that public safety response times get longer as Glendale’s public safety personnel deal with a major traffic accident on adjacent streets or respond to a heart attack victim on the reservation? For all of those who support the coming of the TO casino, do you still want the casino if it means that instead of resurfacing or improving your street the money is used to improve or maintain streets to accommodate the increased traffic adjacent to the reservation?

You know, of course, that because of reservation status, the TO pay no taxes of any kind – no federal taxes, no state taxes, no county taxes and no Glendale taxes. If you were counting on increased sales tax revenue from the casino to offset these new financial burdens to the city’s General Fund, you can forget it. It’s not going to happen.

There are those like Councilmember Sherwood that believe Glendale can negotiate reimbursement for its added financial burden to support the casino from the TO. Do you really think the TO will shell out $70 million for a new water treatment facility or pay the ongoing costs of an increase in public safety personnel or pay millions for new or upgraded street improvements?

Even if a deal is struck, how can you trust people who violated agreements and the trust of their sister Tribes or kept secret its purchase of land for 7 years? If they renege on any kind of agreement with Glendale how will those who have complained about the costs of law suits feel about yet another law suit to get the TO to honor an agreement with Glendale?  

Please don’t regurgitate that the TO are required to give a small portion (8%) of their revenue to non-profits throughout the state. That presupposes that the TO will give their entire portion to non-profits in Glendale and ignore those in the Tucson area (site of their real reservation). Not going to happen. None of that money can go to Glendale’s General Fund to offset the new financial demands created by the proposed casino.

For every action there is an equal reaction. It’s the age old law of unintended consequences. While you may support the proposed casino because it will “create jobs,” are you willing to place further financial burdens on a city already under financial stress? Are you willing “to put your money where your mouth is” and to pay more for your water, deal with longer public safety response times and watch your streets deteriorate even further? I’m not.

© Joyce Clark, 2014

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.

It appears that Glendale cannot catch a break financially. Camelback Ranch opened in 2009 as the new Spring Training home of the Dodgers and White Sox at a cost to Glendale of $158 million: The ballpark cost $121 million, plus $37 million for off-site infrastructure. Glendale knew that reimbursement from the Arizona Sports and Tourism Authority (AZSTA) would be a long time in coming but at least it knew that in the future it would be partially reimbursed for its investment (if I remember correctly, it was 70% of the cost) .

AZSTA utilized a 2000 voter approved tax on car and hotel rentals to pay for the construction of the University of Phoenix Stadium and various Spring Training facilities in addition to reserving a portion for youth sports. It issued bonds for stadium construction that are paid from the rental taxes.

On Tuesday, June 17, 2014 Maricopa County Superior Court Judge Dean Fink ruled that the car rental tax was unconstitutional because the tax was being used for what he determined were impermissible uses. Here is the link:  http://www.azcentral.com/story/money/business/consumer/call-12-for-action/2014/06/18/judge-strikes-rental-car-tax-stadiums/10723905/ .

There is a hotel industry suit waiting in the wings claiming that it’s tax is also unconstitutional. No doubt there will be an appeal of all rulings related to this issue so it may be at least a year or more until there is final resolution.

If the car rental industry and the hotel industry finally prevail Arizona will be forced to rebate all of the tax it collected to those industries. It will be an amount way, way north of $150 million. This action raises a host of questions. Will AZSTA come up with another taxing mechanism to replace the unconstitutional one? Will it take it to the voters for approval? Will it renege on its obligations? Will cities with new, spring training facilities be able to sue AZSTA for breach of contract if it fails to reimburse them? The implications of such a ruling, should it be upheld, are breath taking.

For Glendale it is not catastrophic in the short term because it knew AZSTA’s reimbursement was some time off. But, if AZSTA does not fulfill its obligation to reimburse Glendale and it is solely responsible for paying off the construction debt of approximately $17 million a year, it becomes another financial obligation that bond rating agencies will take into consideration when rating Glendale’s ability to pay its massive debt. This result, if not reversed on appeal, provides no light at the end of Glendale’s long and dark financial tunnel.

 © Joyce Clark, 2014

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.

This is always a difficult subject because of all of the facts and figures that are presented. The numbers can be confusing to those readers who have not followed my other blogs on the monthly reports. Here is a link to the report:http://www.glendaleaz.com/finance/documents/FY14MonthlyArenaReport-20140430.pdf . Here is the report itself:

April 2014 MonthlyArenaReport 

This monthly report publicly released by Glendale will reflect the last of the hockey games for this season but does not capture the supplemental ticket surcharge which is due and payable 60 days after each fiscal year. The new fiscal year begins July 1, 2014 so this line item would not be paid to the city or reflected in this report until September 1, 2014.

The Interest Income-Escrow Account still sits at $4,620 and has not been updated since the first monthly report.

The agreement revenues to the city to date total $4,686,412 and reflect a prorated 11 month fiscal year begun on August 5, 2013. The total city expenditures to date are $10,252,055. In this first year all figures are prorated. The total management fee the city will pay is $13,750,000 and total capital improvement expenditures are $450,685.   The report reflects a loss to the city, to date, of $5,565,643.

For purposes of discussion let’s include as revenue the supplemental ticket surcharge. It comes in at $774,452. Let’s add that amount to the total qualified ticket revenue received by the city; and new ticket revenue figure is $2,323,357. The total management fee of $13,750,000 and capital expenditure requirement of $450,685 paid by the city this fiscal year is a total of $14,200,685. Subtract revenues received from fees paid and the loss to the City of Glendale in this fiscal year is the grand total of $11,877,328.

Consider this. Next fiscal year even if all 17,700 tickets per hockey game were qualified tickets the maximum amount the city would receive is $2,537,000 in qualified ticket revenue. For this exercise, let’s add to that figure another $1,268,500 in supplemental ticket surcharge. Add an additional million dollars more in parking revenues to the nearly $1 million generated this year and the maximum revenue 42/43 hockey games per season can generate is approximately $6 million.  

Global Spectrum and IceArizona would have to have approximately 100 revenue generating non-hockey events in order to earn an additional $9 million annually to be paid to the city to offset the $15,000,000 the city must pay as an annual management fee to IceArizona. They will be fortunate to host 25 non-hockey revenue generating events next year.

Some folks dismiss the $6 million portion of the annual management fee because it was already budgeted. It’s not to be dismissed because it’s in the budget. The money still comes from General Fund sales tax revenue. It still counts. It is still money the city has to receive from sales tax revenue to pay all required arena expenditures. 

I added the Supplemental Ticket surcharge to the total revenues to be received by the city. Even with that “enhanced revenue,” the fact remains that this year the city’s loss is $11.8 million dollars. There is no more money forthcoming to the city from any magical or secret source.

For purposes of this exercise, here is how this year and the next 4 fiscal years worth of loss to the city may very well pencil out. For this exercise I reduce the annual loss by an estimated $2 million a year by increasing revenue to the city by an equal amount annually:

  • This year, FY 13-14           loss of $11.8 million
  • Next year, FY 14-15          loss of $  9.8 million
  • Year 3, FY 15-16               loss of $  7.8 million
  • Year 4, FY 16-17               loss of $  5.8 million
  • Year 5, FY 17-18               loss of $  3.8 million
  • 5 Fiscal Years                   Total loss of $39 million

Add to the $39 million deficit in earned revenues approximately $12 million a year in construction bond debt for a total of $60 million. In five years I estimate the city will pay $99 million dollars between paying annual construction debt and covering annual revenue losses generated by the management fee.

My disclaimer is that these estimates are my best, educated guess based upon the numbers that are publicly available. The actual loss number for five years could be higher or lower than estimated.

What is ironic about this IceArizona contract is that the “enhanced revenues” (with the exception of naming rights and the supplemental ticket surcharge) are not really new revenue. Before IceArizona and the NHL’s two years of management, the city paid no annual management fee…none…nada. Yet it collected the very same revenues — a ticket surcharge and a parking surcharge. They were included in the price of every ticket. Those revenues: sales tax earned inside the arena and the ticket/parking surcharges were used to pay down the construction bond debt because the city didn’t have to also pay a management fee.

With this new deal the management fee consumes all of ticket/parking surcharge revenues (in addition to the other revenues like naming rights) the city was already getting and leaves the city struggling to cover some portion of the $15 million deficit every year. Oh, and don’t forget, IceArizona takes $20,000 off the top of parking fees for every game. That comes to $860,000 this year.

Another irony is that when IceArizona took over, it didn’t subtract the existent ticket and parking surcharges that were historically already included in the price of the ticket. Those charges were absorbed and became part of the base price of the new IceArizona tickets to which they added the new, qualified ticket surcharge. In essence, every fan’s ticket now includes the old ticket and parking surcharges within the base price and the new IceArizona ticket surcharge is then added.

The management agreement was and is good for IceArizona but it’s not so good for Glendale. Earned revenues once applied to the construction bond debt are now used to cover the $15 million annual management fee. Those earned revenues simply are not adequate to cover the management fee.

The argument for keeping the Coyotes as an anchor tenant was to benefit all of the surrounding businesses in Westgate. With the totality of Glendale’s excessive debt burden the question must be, is it worth it to keep the team and struggle to pay the annual management fee? Or is Glendale better off going back to accepting one of the Beacon bids solicited last year? You decide.

© Joyce Clark,

2014 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.

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