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.

As I had indicated in my previous blog, “Erosion of council authority”, I did indeed pull 9 Consent Agenda contracts off for a separate vote in keeping with my stance that it is a usurpation of council authority. For each vote I formally recorded my ‘no’ vote. Per usual, the rest of council voted to approve those 5 year contracts. However there was another block of items that I want to bring to your attention.

Consent Resolutions #28 through #36 were all Mobilite applications to place small cell sites at various city right-of-way locations for a fee of $5,000 over a ten year period ($500 a year per site). Currently every municipality in the state has the right to negotiate the fees it charges telecom providers for locating cell sites in its community. That is about to change big time.

The Arizona legislature at the behest of the telecom industry and its lobbyists is about to stick it to every Arizona city with the successful passage of HB 2365. The bill mandates that as of February 9, 2018 Arizona’s cities can no longer impose their own fee structure on cell site locators. Instead the legislature has banned cities’ ability to negotiate their own fee structure and instead has created a flat fee of $50 a year which is the maximum amount any city may collect for a cell site.

On February 10, 2018 Glendale will no longer be able to collect a $500 per year licensing fee for each cell site. Instead it will be allowed to collect no more than $50 per site…one tenth of its current fee. Generally over a ten year period Glendale realizes an estimated million dollars that goes into its General Fund. As current ten year contracts are completed and renewed and as new leases are paid Glendale stands to receive between an estimated $100,000 to perhaps $200,000 over a ten year period. That is a radical decrease in income into our city’s General Fund.

The legislature accommodated a very rich and powerful industry…the telecom industry. It is one of the industries making money hand over fist and can certainly afford the higher licensing fees. One has but to look at your monthly cell phone bill to intuitively come to that conclusion. Multiply your monthly bill by thousands, no — millions, of customers and you can see that their revenues are very healthy indeed. And, yes, you do pay tax on your cell phone bill. Do you really expect to see your tax portion of the bill reduced by a few dollars to reflect the smaller fee your provider is paying? Don’t count on it.

This is not the first time the legislature has worked against the interests and concerns of Arizona’s municipalities. There is a list as long as your arm.  Just one example is the Highway User Revenue Fund, commonly known as HURF. When you fill up the tank on your vehicle a percentage of the cost per gallon is a state tax. The tax paid goes into HURF. It is a separately held state fund to be used exclusively for the construction, maintenance and repair of state highways, regional and local transportation and streets. A portion of HURF is included within state shared revenues.

State shared revenues, by percentage, are to be shared between the state, counties and municipalities. There is a specific formula for its division and distribution. The state acts as the central collection point and then is charged with distribution with its partners. It was enacted to make tax collection less complicated and confusing by creating just one collection point…the state.

By the way, the state has also been very slow historically in distribution of portions of state shared revenue. Another part of state shared revenue is the income tax we all pay annually to the state. I doubt many people know that the state shares that revenue two years after it is collected. A pretty neat trick as those funds sit in a state held investment account somewhere for a year or two, earning interest which it does not share.

Historically when the state gets into financial trouble and needs more revenue, instead of reducing costs it turns to piggy banks such as HURF and reduces the percentage that is shared with counties and municipalities. Currently these entities do not receive their full share of HURF from the state and have not received their full share for years.  They have lobbied for years to reinstitute their full and fair share to no avail.

So, there you have it. Yet another state legislative mandate has taken aim at municipalities’ revenue generation and enacted a law that benefits a very powerful lobby.

© Joyce Clark, 2017                 


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